Exhibit 10.3


 


SECURED PROMISSORY NOTE


 


	
  $1,100,000.00

  	
   

  	
  February
          , 2004

  
	
   

  	
   

  	
   

  



 


FOR VALUE RECEIVED,
the undersigned, CLIVE CORPORATION, INC., a Pennsylvania corporation and 1903 WEST
MAIN STREET REALTY MANAGEMENT, LLC, a Pennsylvania limited liability
company, jointly and severally referred to herein as “Borrower,” promise to pay
to the order of BEYOND THE WALL, INC.,
a Delaware corporation, its successors and assigns  (“Lender”), the principal
sum of ONE MILLION ONE HUNDRED THOUSAND DOLLARS ($1,100,000.00), together with
interest on the principal sum, in lawful money of the United States of America,
payable pursuant to the terms and conditions provided for herein.  This secured promissory note (this “Note”)
is being issued pursuant to that certain Asset Purchase Agreement, dated
February         , 2004 (the “Purchase
Agreement”), to which both Borrower and Lender are parties, as well as Lender’s
parent company, YouthStream Media Networks, Inc. (“Parent”) and is secured by
the Collateral, as such term is defined in the Security Agreement, dated of
even date herewith (the “Security Agreement”), to which both Borrower and
Lender are parties, and is further secured by a Mortgage against certain Real
Property purchased from Seller pursuant to an Agreement of Sale and Assignment,
dated February         , 2004 (“Real
Property Agreement”).  Any terms
capitalized but not defined shall have the meanings given to them in the
Purchase Agreement and the Security Agreement.


 


1.                                       Payment
Terms.  Borrower shall make payments
on this Note in three (3) installments of principal in the amount of
$366,666.67, plus accrued interest. The payments are due on October 31, 2004,
October 31, 2005 and October 31, 2006 (subject to a credit of $150,000.00 as
described below and subject to adjustment based on any accelerated principal
reduction of at least $400,000.00 pursuant to paragraph 3 below).  Except as otherwise specified, all principal
and interest shall be due and payable on October 31, 2006. The payment of
principal and interest under this Note shall be made to Lender in immediately
available funds, at such address or location as Lender shall designate.  All or any part of (i) the unpaid principal
balance and/or (ii) accrued but unpaid interest may be prepaid by Borrower at
any time without penalty.  Except for
any accelerated principal reduction made pursuant to paragraph 3 below, any
such prepayments shall be applied first to accrued but unpaid interest and then
to the unpaid principal balance.  With
regard to any accelerated principal reduction made pursuant paragraph 3 below,
such payments shall be applied only to principal.  Borrower shall be entitled to a credit in the sum of One Hundred
Fifty Thousand Dollars ($150,000.00), to be applied against the payment due on
October 31, 2006, provided that (a) there is no uncured default by Borrower
under this Note at any time prior to, on or after October 31, 2006, and (b)
there has been an accelerated principal reduction of at least Four Hundred
Thousand Dollars ($400,000.00) on or before June


 


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30, 2004 pursuant to paragraph 3 below.  If the conditions specified in sub-clauses
(a) and (b) above are not satisfied, the $150 000.00 credit shall be null and
void.


 


2.                                       Interest.   Interest shall accrue on the unpaid
principal balance at the rate of ten percent (10%) per annum, until paid in
full.


 


3.                                       Accelerated
Principal Reduction.  If Borrower
pays down the principal in a lump sum payment of at least Four Hundred Thousand
Dollars ($400,000.00) on or before March 31, 2004, then Lender agrees to reduce
the principal owing on the Note by 130% of the lump sum payment.  If such payment is made after March 31, 2004
but on or before April 30, 2004, then Lender agrees to reduce the principal
owing on the Note by 126.7% of the lump sum payment.   If such payment is made after April 30, 2004 but on or before
May 31, 2004, then Lender agrees to reduce the principal owing on the Note by
123.3% of the lump sum payment.  If such
payment is made after May 31, 2004 but on or before June 30, 2004, then Lender
agrees to reduce the principal owing on the Note by 120% of the lump sum
payment.  Any such principal reduction
on the Note will reduce the principal payments due on October 31, 2004, October
31, 2005 and October 31, 2006 by one-third of such principal reduction.  An example of such principal reduction is as
follows:  If the Borrower pays exactly
$400,000.00 on March 31, 2004, then the principal balance owing on this Note
would be reduced by $520,000.00 effective as of March 31, 2004, and the
principal payment due on October 31, 2004, October 31, 2005 and October 31,
2006 would be reduced by $173,333.33. 
The provisions of this paragraph shall not be applicable to any payments
made after June 30, 2004.


 


4.                                       Negative
Covenants.   Until such time as the
principal amount of this Note, and all interest thereon, has been paid in full,
Borrower shall not:


 


(a)                                  enter
into any transactions with its affiliates without obtaining Lender’s prior
written consent, which will not be unreasonably withheld; and


 


(b)                                 enter
into any transaction that would materially impair, limit or otherwise diminish
the economic interests of Lender.


 


5.                                       Right
to Offset.  Pursuant to Section 13.1
of the Purchase Agreement, Lender and Parent are obligated to jointly and
severally indemnify Borrower from and against any Indemnified Losses (as
defined in Section 13.1 of the Purchase Agreement) that Borrower may incur
subject to certain limitations set forth in the Purchase Agreement.  To that end, Borrower shall have the right
to offset any sums which are due to it under Article 13 of the Purchase
Agreement on a dollar-for-dollar basis against any amounts owed to Lender under
this Note.


 


6.                                       Events
of Default; Acceleration.  Borrower
shall be in default under this Note upon the occurrence of any of the following
events of default (“Default”):


 


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(a)                                  Borrower
fails to pay principal and/or interest under this Note, when due;


 


(b)                                 Borrower
becomes insolvent or bankrupt; or if Borrower suffers a receiver or trustee for
it or substantially all of its properties to be appointed and, if appointed
without its consent, not discharged within sixty (60) days; or if Borrower
makes an assignment for the benefit of its creditors; or


 


(c)                                  Borrower
breaches any provision of this Note or the Security Agreement securing this
Note.


 


7.                                       Remedies Upon Default. 
Upon the occurrence of any Default, the principal balance hereof
together with all accrued interest shall become immediately due and payable
without notice or demand.  In addition,
upon the occurrence of any Default, Borrower shall pay all of Lender’s
reasonable costs of collection, including actual and reasonable attorneys’ fees
and disbursements.


 


8.                                       Subordination.  So long as Borrower is not in default under
this Note, Lender agrees to subordinate this Note to any secured debt incurred
by Borrower, provided that the proceeds of such debt were or are used to
finance Borrower’s purchase of the Assets of Lender or are used to fund the
operations of the Business acquired from Lender, the terms and conditions of
the subordinated debt is commercially reasonable, and the maximum amount of
subordinated debt does not exceed Seven Hundred Thousand Dollars ($700,000.00)
in principal amount.  Lender agrees to
take any and all actions, and to execute any and all documents, reasonably
requested by Borrower and reasonably acceptable to Lender, to effect Lender’s
agreement to subordinate as set forth in this Note.


 


9.                                       Due
on Sale.  All principal and interest
under this Note shall become immediately due and payable in the event that (a)
more than fifty percent (50%) of the Assets sold and/or transferred to Borrower
pursuant to the Purchaser Agreement or the Real Property Agreement, are sold,
transferred or hypothecated, in one or more transactions, or (b) more than
fifty percent (50%) of the ownership interests of any Borrower (each, a
“Borrower’s Sale”) are sold, transferred or hypothecated, in one or more
transactions; without the prior written consent of Lender. Not later than ten
(10) days before any Borrower’s Sale, Borrower shall give written notice to
Lender giving the details of Borrower’s Sale and the expected date of closing.
Upon Borrower’s Sale, all outstanding principal and interest shall be
immediately due and payable.


 


10.                                 Notices.  All notices, requests, demands and other
communications required or permitted under this Note shall be in writing and
shall be deemed to have been duly given, made and received the same day when personally
delivered or sent by telecopy with receipt confirmation, the next business day
when delivered by overnight courier,  or
three (3) business


 


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days after mailing, if sent in the United States by registered or
certified mail, postage prepaid, return receipt requested, addressed as set
forth below:


 


If to Lender:


 


Beyond the Wall, Inc.


c/o
YouthStream Media Networks, Inc.


244
Madison Avenue, PMB #358,


New
York, New York 10016


Attn: 
President


 


with a
copy to:


 


	
  Ronald J. Grant,
  Esquire

  
	
  Tilles, Webb,
  Kulla & Grant, ALC

  
	
  433 North Camden
  Drive, Suite 1010

  
	
  Beverly Hills,
  CA  90210

  
	
  Facsimile:  310-888-3433

  



 


If to Borrower:


 


	
  Clive
  Corporation, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 


1903 West Main Street
Realty Management, LLC


	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 


	
  with a copy to:

  
	
   

  
	
  Eugene C. Kelly,
  Esq.

  
	
  Hoegen, Hoegen
  & Kelley, LLP

  
	
  152 South
  Franklin Street

  
	
  P.O. Box 346

  
	
  Wilkes-Barre, PA
  18703-0346

  
	
  Facsimile: 

  	
   

  	
   

  



 


or at such other address
or addresses as either Lender or Borrower may from time to time designate by
notice to the other party, in writing.


 


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11.                                 Waivers of Presentment, Etc.    BORROWER EXPRESSLY WAIVES PRESENTMENT, PROTEST, DEMAND, NOTICE
OF DISHONOR, NOTICE OF NON-PAYMENT, NOTICE OF MATURITY, NOTICE OF PROTEST,
PRESENTMENT FOR THE PURPOSE OF ACCELERATING MATURITY, AND DILIGENCE IN
COLLECTION.


 


12.                                 Waivers and Amendments:
Non-Contractual Remedies: Preservation of Remedies. This Note may be amended,
superseded, canceled, renewed or extended and the terms hereof may be waived,
only by a written instrument signed by Lender and Borrower or, in the case of a
waiver, by Lender. The failure of Lender to insist, in any one or more
instances, upon performance of the terms or conditions of this Note shall not
be construed as a waiver or relinquishment of any right granted hereunder or of
the future performance of any such term, covenant or condition. No waiver on
the part of Lender of any right, power or privilege, nor any single or partial
exercise of any such right, power or privilege, shall preclude any further
exercise thereof or the exercise of any other such right, power or privilege.
The rights and remedies herein provided are cumulative and are not exclusive of
any rights or remedies that Lender may otherwise have at law or in equity.


 


13.                                 Headings. 
The headings in this Note are for reference only and shall not affect
the interpretation of this Note.


 


14.                                 Severabilitv. 
Whenever possible, each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note is held to be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or the
remaining provisions of this Note.


 


15.                                 Time of Essence. 
Time is of the essence for each and every provision of this Note.


 


16.                                 Mutilated, Lost Stolen or
Destroyed Note.  In case this Note shall be mutilated, lost,
stolen or destroyed, Borrower shall issue and deliver, in exchange and
substitution for and upon cancellation of the mutilated Note, or in lieu of and
substitution for this Note lost, stolen or destroyed, a new Note of like tenor,
but only upon receipt of evidence satisfactory to Borrower of


 


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such loss, theft, or destruction of such Note and reasonable indemnity
or bond, if requested, also satisfactory to Borrower.


 


17.                                 Further Assurances. 
Borrower shall execute such documents and other papers and take such
further actions as may be reasonably required or desirable to carry out the
provisions hereof and the transactions contemplated hereby.


 


18.                                 Legal
Fees.  In the event legal action is
instituted to enforce or interpret this Note, the prevailing party shall be
entitled to reasonable attorneys’ fees and all costs incurred.


 


19.                                 Miscellaneous.  This Note shall bind the parties and their
respective successors, and the benefits hereof shall inure to the benefit of
Lender and its successors and assigns. 
Borrower may not assign this Note to any third party.  All references herein to “Borrower” and
“Lender” shall be deemed to apply to the Borrower and Lender, and their
respective successors and assigns. Borrower waives all applicable statutes of
limitations. This Note and any other documents delivered in connection herewith
and the rights and obligations of the parties hereto and thereto shall for all
purposes be governed by and construed and enforced in accordance with the
substantive law of the Commonwealth of Pennsylvania without giving effect to
its conflicts of law principles. Each party signing this Note shall be jointly
and severally liable hereunder. Any individual signing this Note on behalf of an
entity represents and warrants to the Lender that such individual has the right
and authority to so execute this Note, and that this Note will be enforceable
against such entity in accordance with its terms.


 


IN
WITNESS WHEREOF, this Note has been executed and delivered on
the date first written above.


 


	
  Borrower:

  
	
   

  
	
   

  
	
  CLIVE CORPORATION,
  INC., a Pennsylvania corporation

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  
	
   

  
	
   

  
	
  1903 WEST MAIN
  STREET REALTY MANAGEMENT, LLC,

  
	
  a Pennsylvania limited liability company

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					



 


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