Exhibit 10.2
EXHIBIT B
FORM OF CONVERTIBLE
PROMISSORY NOTE
THIS
CONVERTIBLE PROMISSORY NOTE AND THE SECURITIES ISSUABLE UPON
CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED,
TRANSFERRED, OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND STATUTES, UNLESS OFFERED,
SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN AVAILABLE
EXEMPTION FROM OR IN A TRANSACTION NOT SUBJECT TO THE REGISTRATION
REQUIREMENTS OF THOSE LAWS. THE COMPANY SHALL BE ENTITLED TO
REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
CIPRICO INC.
CONVERTIBLE PROMISSORY
NOTE
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$
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December ,
2007
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St. Louis Park,
Minnesota
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FOR VALUE
RECEIVED, Ciprico Inc., a Delaware corporation (the “
Company ”), hereby promises to pay
to ,
or any authorized holder hereof (the “ Holder
”), the principal sum
of
and no/100 Dollars
($ ), or
so much of said principal sum as may be outstanding, plus any
interest calculated in accordance with paragraph 2 below, on the
Maturity Date (as defined below) in accordance with the provisions
of this Promissory Note (the “ Note ”). This
Note is one of a series of Notes being issued pursuant to the terms
of that certain Convertible Note Purchase Agreement, dated
December , 2007, by and among the
Company and the original Holder of this Note and the other parties
named therein (the “ Purchase Agreement ”).
Capitalized terms not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Purchase
Agreement.
This Note is subject to the following terms and
conditions:
1.
Maturity Date
. The entire principal amount
of this Note and all accrued but unpaid interest thereon shall be
due and payable in full on March 1, 2009 (the “
Maturity Date ”).
2.
Interest
. Simple interest shall accrue
on the unpaid principal amount of this Note at a fluctuating annual
rate of interest equal to the LIBOR Rate, as in effect on the date
hereof and as the same may adjust monthly, plus 6.0%;
provided, that, notwithstanding anything to the
contrary
B-1
contained herein, upon the
occurrence and during the continuance of any Event of Default, the
rate of interest hereunder shall be the LIBOR Rate plus 9.0%
(the “ Default Rate ”). The interest rate shall
automatically adjust on the first business day of each month in the
event there has been any change in the LIBOR Rate. As used herein,
“ LIBOR Rate ” means the “London Interbank
Offered Rates (LIBOR)” for one month as published in the
“Money Rates” column of The Wall Street Journal on the
first business day of each month (or, if The Wall Street Journal
ceases to publish a rate so designated, any similar successor rate
as the Company shall in good faith designate). Interest shall be
computed on the actual number of days elapsed and a 365-day year,
and accrued interest shall be payable upon the Maturity Date of
this Note.
3.
Payment .
Payments on this Note will be made at the address of the Holder on
the Company’s books in legal tender of the United States of
America. All payments on this Note shall be applied (i) first
to the payment of any costs of collection that may be due
hereunder, (ii) then to the payment of accrued interest (if
any), and (iii) the balance shall be applied to principal.
This Note may be prepaid without penalty by the Company at any time
upon three (3) days prior notice to Holder.
4.
Conversion
.
4.1
General . The
unpaid principal balance of this Note and any accrued interest may
be converted into shares of the Company’s Common Stock
(“ Shares ”) in accordance with this
Section 4; provided, however, that the Holder acknowledges and
agrees that under no circumstances will the Company be required to
issue Shares exceeding nineteen and ninety-nine one hundredths
percent (19.99%) of the Company’s outstanding Common Stock
including the aggregate number of shares converted and/or exercised
in connection with the Purchase Agreement. Upon conversion, the
number of Shares that shall be issued shall equal the number
derived by dividing (a) the unpaid principal balance and
accrued interest, if any, by (b) the applicable conversion
price set forth below.
4.2
Optional Conversion
. At any time after the date
of this Note, the Holder may, in such Holder’s discretion,
elect to convert all of the unpaid principal balance of this Note
and all or none of the accrued interest into Shares in accordance
with the terms and conditions herein.
4.3
Automatic
Conversion . If the Company files a registration or offering statement
(the “Registration Statement”) with the Securities and
Exchange Commission to facilitate a public offering of its
securities under the Securities Act that is underwritten and
through which the Company raises gross cash proceeds of at least
$10,000,000 (a “ Qualified Offering ”) and
should the managing underwriter of such offering require,
all principal and accrued interest under this Note will be
automatically converted into Shares in accordance with the terms
and conditions herein; provided, however, that the Holder may elect
to be paid in cash for all accrued interest. Such automatic
conversion shall be effective upon the closing of the Qualified
Offering.
4.4
Conversion Price
. The conversion price shall
mean an amount equal to the average closing bid price of the Common
Stock for the five (5) consecutive trading days
ending
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on the trading day prior to
the date hereof, or $
per
share, subject to adjustment as set forth in this Section 4.4
(the “ Conversion Price ”). If, at any time, the
Company subdivides its outstanding shares of Common Stock into a
greater number of shares, the Conversion Price in effect
immediately prior to such subdivision will be proportionately
reduced, and conversely, in case the outstanding shares of Common
Stock of the Company will be combined into a smaller number of
shares, the Conversion Price in effect immediately prior to such
combination will be proportionately increased. All calculations
under this Section 4.4 will be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may
be.
4.5
Conversion
Procedure .
(a)
Optional
Conversion. To exercise the right to
convert this Note into Common Stock, the Holder shall
(i) provide the Company with a ten-day advance written notice
of conversion specifying the date and amount of such conversion and
the name in which the Shares shall be issued (if the name is other
than that of Holder), (ii) surrender this Note to the Company;
(iii) furnish any appropriate endorsements and documents
reasonably requested by the Company, and (iv) pay any
documentary, stamp, transfer or similar tax if
required.
(b)
Automatic
Conversion . If this Note is to be
converted automatically pursuant to Section 4.4 above, written
notice must be delivered to the Holder at the address last shown on
the records of the Company at least fifteen (15) days prior to the
closing of the Qualified Offering (i) notifying the Holder of
the conversion; (ii) specifying the principal amount of the
Note converted, and the amount of accrued and unpaid interest; and
(c) calling upon the Holder to (A) return an
acknowledgement to the Company within ten (10) days after
receipt of the notice specifying whether the Holder elects to
receive Shares or cash for the accrued interest and
(B) surrender this Note to the Company in exchange for Shares
and cash, if any, in the manner and at the place designated by the
Company.
(c)
Delivery of Shares and
Cash . As promptly as practicable
after the Company’s receipt of the written notice of
conversion or
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