Exhibit 99.2
SECURED &
COLLATERALIZED PROMISSORY NOTE
$1,700,000 PLUS INTEREST
DUE & PAYABLE
DOCUMENT
C-08102009
THIS NOTE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR APPLICABLE
EXEMPTION OR SAFE HARBOR PROVISION.
FOR VALUE RECEIVED, on the
Effective Date, as defined below, JMJ Financial (the
"Borrower,” or “Writer”), hereby promises to pay
to the Lender (“Lender” or “ Holder”), as
defined below, the Principal Sum, as defined below, along with the
Interest Rate, as defined below, according to the terms
herein.
The "Effective Date" shall
be:
August 10,
2009
The "Holder" shall
be:
MPhase Technologies,
Inc.
The "Principal Sum" shall
be:
$1,700,000 (one million
seven hundred thousand US Dollars); Subject to the following:
accrued, unpaid interest shall be added to the Principal
Sum.
The
“Consideration” shall be:
$1,700,000 (one million
seven hundred thousand US dollars) in the form of this $1,700,000
Secured & Collateralized Promissory Note as memorialized and
evidenced by the attached Exhibit A Collateral and Security
Agreement.
The "Interest Rate" shall
be:
13.2% one-time interest
charge on the Principal Sum. No interest or principal payments are
required until the Maturity Date, but both principal and interest
may be prepaid prior to maturity date.
The “Recourse”
terms shall be:
This is a full recourse
Note such that, for example, if the Writer defaults on the payment
of this Note, forcing the Holder to foreclose on the
security/collateral and there is a deficiency between (1) the
outstanding principal and interest amount and (2) the foreclosure
liquidation amount; then the Holder has the right to pursue
additional claims against the Writer for that
deficiency.
The
“Collateral” or “Security” shall
be:
1,700,000 units of
<<CONFIDENTIAL>> Investment Fund (or similar
equivalent), or $1,700,000 worth of any other assets, as
memorialized and evidenced by the attached Exhibit A Collateral and
Security Agreement.
The
"Maturity Date" is the date upon which the Principal Sum of this
Note, as well as any unpaid interest shall be due and payable, and
that date shall be:
August 10,
2012
The “Prepayment
Terms” shall be:
Prepayment is permitted at
any time by payment in the form of any of the following: (1) cash,
or (2) other negotiated form of payment mutually agreed to in
writing, or (3) by surrender of the Convertible Promissory Note
Document B-08102009, or (4) by surrender of the of the Collateral
or Security with which this Promissory Note is
secured.
ARTICLE 1 PAYMENT-RELATED PROVISIONS
1.1 Loan Payment Schedule.
While no principal or interest payments are required until the
Maturity Date, unless otherwise adjusted by Writer with written
notice to Holder, or unless otherwise prepaid as set forth above
whereby prepayment is permitted at any time by payment of cash, or
other mutually agreed and negotiated payment, or by surrender of
the Convertible Promissory Note Document B-08102009, or by
surrender of the Collateral or Security related hereto; provided
that all conversions are honored as set forth under Convertible
Promissory Note Document B-08102009 and provided that Rule 144 is
available to remove the restrictive legend from those shares
obtained in those conversions and such that the shares effectively
become immediately freely tradable, Writer will plan to make
payments in total monthly amounts of $300,000 beginning 180 days
from the execution of this agreement. Writer reserves the right to
(1) make payments prior to 210 days from the execution of this
agreement, and (2) to make payments in monthly amounts in excess of
$300,000, and (3) to adjust this payment schedule and payment
amounts with written notice to Holder. Please note: The $300,000
figure is based on recent liquidity, and is subject to change based
on change in liquidity.
1.2
Interest Rate. Interest payable on this Note will accrue interest
at the Interest Rate and shall be applied to the Principal
Sum.
1.3 Application of Payment.
Unless otherwise specified in writing by Writer, all payments made
on this Note will be first applied to the Principal
Sum.
ARTICLE 2
MISCELLANEOUS
2.1. Notices. Any notice
required or permitted hereunder must be in writing and be either
personally served, sent by facsimile or email transmission, or sent
by overnight courier. Notices will be deemed effectively delivered
at the time of transmission if by facsimile or email, and if by
overnight courier the business day after such notice is deposited
with the courier service for delivery.
2.2. Amendment Provision.
The term "Note" and all reference thereto, as used throughout this
instrument, means this instrument as originally executed, or if
later amended or supplemented, then as so amended or
supplemented.
2.3. Assignability. This
Note will be binding upon the Writer and its successors and
permitted assigns, and will inure to the benefit of the Holder and
its successors and permitted assigns, and may be assigned by the
Holder only with written co
