Edgewater/Epic - Edgewater Substitute Note









Exhibit 4.28




 




THIS

SUBSTITUTE CONVERTIBLE SECURED PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES

LAWS.  THIS NOTE MAY NOT BE SOLD,

OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE

REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND APPLICABLE STATE

SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO EPICEDGE,

INC. THAT SUCH REGISTRATION IS NOT REQUIRED.




 




SUBSTITUTE CONVERTIBLE SECURED PROMISSORY NOTE




 




	

  $1,600,000


  	

  Chicago, Illinois


  April      , 2002


  





 




FOR VALUE RECEIVED, EpicEdge, Inc.,

a Texas corporation (the “Company”), promises to pay to the order of

Edgewater Private Equity Fund III, L.P., a Delaware limited partnership (“Holder”),

the principal sum of One Million Six Hundred Thousand Dollars ($1,600,000), and

to pay interest on the outstand principal balance of this  Substitute Convertible Promissory Note (this

“Note”) in accordance with Section 3 of this Note.  This Note is delivered in connection with

that certain Note and Preferred Stock Purchase Agreement of even date herewith

(as may be amended, restated or otherwise modified from time to time, the “Purchase

Agreement”) between the Company, the Holder and certain other parties named

therein.  Capitalized terms not

otherwise defined herein shall have the meanings set forth in the Purchase

Agreement.




 




1.             Maturity.  To the extent not previously converted in

accordance with the Purchase Agreement, the Company shall repay the outstanding

principal balance of this Note and interest accrued thereon in full on

April       , 2003 (the “Maturity

Date”).  All payments received shall

be applied first against costs of collection (if any), then against accrued and

unpaid interest on this Note, then against the outstanding principal balance of

this Note.




 




2.             Interest.  Interest shall begin to accrue on the

outstanding principal balance of this Note commencing on the date hereof and

continuing until repayment of this Note in full at the rate of eight percent

(8%) per annum calculated on the basis of a 360 day year and actual days

elapsed.  However, upon the occurrence

of a Default (as defined herein) the interest on the outstanding principal

balance of this Note will accrue from the date of such Default until such time

as such Default is cured in a manner that is acceptable to the Holder at a rate

per annum equal to three percent (3%) plus

the interest rate then in effect.




 




3.             Prepayment;

Acceleration.  The outstanding

principal balance and all accrued interest payable to Holder hereunder may not

be prepaid without the consent of Holder in its sole and absolute

discretion.  All prepayments so

permitted by Holder shall be applied in the order provided in Section 1.  The outstanding principal balance of this Note

is subject to acceleration as set forth in Section 7.2 of the Purchase

Agreement.  Following any such




 





























 




acceleration,

Holder may pursue any and all legal or equitable remedies that are available to

it.




 




4.             Conversion.  This Note may be convertible into certain

securities of the Company in accordance with Section 2.7 of the Purchase

Agreement.




 




5.             Default.  The Company will be deemed to be in default

(“Default”) hereunder upon the occurrence of any “Event of Default”

described in Section 7.1 of the Purchase Agreement, and Holder shall have

all rights and remedies available to it upon any such Default as described

therein or in this Note.




 




6.             Miscellaneous.




 




(a)           The Company hereby waives

presentment, demand, protest, notice of dishonor, diligence and all other

notices, any release or discharge arising from any extension of time, discharge

of a prior party, or other cause of release or discharge other than actual

payment in full hereof.




 




(b)           Holder shall not be deemed, by any

act or omission, to have waived any of its rights or remedies hereunder unless

such waiver is in writing and signed by Holder and then only to the extent

specifically set forth in such writing. 

A waiver with reference to one event shall not be construed as

continuing or as a bar to or waiver of any right or remedy as to a subsequent

event.  No delay or omission of Holder

to exercise any right, whether before or after a Default hereunder, shall

impair any such right or shall be construed to be a waiver of any right or

Default, and the acceptance at any time by Holder of any past-due amount shall

not be deemed to be a waiver of the right to require prompt payment when due of

any other amounts then or thereafter due and payable.




 




(c)           Time is of the essence hereof.  Upon any Default hereunder, Holder may

exercise all rights and remedies provided for herein or in the Purchase

Agreement and by law or equity, including, but not limited to, the right to

immediate payment in full of this Note.




 




(d)           The remedies of Holder as provided

herein or in the Purchase Agreement, or any one or more of them, in law or at

equity, shall be cumulative and concurrent, and may be pursued singularly,

successively or together at Holder’s sole discretion, and may be exercised as

often as occasion therefor shall occur.




 




(e)           It is expressly agreed that if this

Note is referred to any attorney or if suit is brought to collect or interpret

this Note or any part hereof or to enforce or protect any rights conferred upon

Holder by this Note or any other document evidencing or securing this Note,

then the Company covenants and agrees to pay all reasonable costs, including

attorneys’ fees, incurred by Holder in connection therewith.




 




(f)            If any provisions of this Note would

require the Company to pay interest hereon at a rate exceeding the highest rate

allowed by applicable law, the Company shall




 





























 




instead pay interest

under this Note at the highest rate permitted by applicable law.




 




(g)           This Note shall be governed by and

construed in accordance with the laws of the State of Illinois without giving

effect to any choice or conflict of law provision or law that would cause the

application of the laws of any other jurisdiction other than the State of

Illinois.




 




(h)           This Note is issued in substitution

for but not in payment of that certain Substitute Secured Promissory Note dated

as of March 5, 2002 (the “Prior Note”), in the original principal amount of

Eight Hundred Sixty Thousand Dollars ($860,000) and does not and shall not be

deemed to constitute a novation thereof. 

Such Prior Note shall be of no further force and effect upon the

execution of this Note; provided, however, that the outstanding amount of

principal and interest under the Prior Note as of the date of this Note is

hereby deemed indebtedness evidenced by this Note and incorporated herein by

this reference.




 




IN WITNESS WHEREOF, the Company has executed this Substitute

Convertible Secured Promissory Note as of the date first above written.




 




	

   


  	

  EPICEDGE, INC., a Texas corporation


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

   


  	

   


  
	

   


  	

   


  	

  Name:


  	

   


  	

   


  
	

   


  	

   


  	

  Title: