Exhibit 10.27
CONVERTIBLE PROMISSORY NOTE
$75,000.00
February 17, 2005
Dallas, Texas
FOR VALUE RECEIVED, the undersigned, MedSolutions, Inc., a Texas
corporation (the " the
Maker"), hereby
unconditionally
promises to pay to
the
order of Winship Moody,
an individual and
resident of the State of Florida (the
"Payee"), at such place as
designated by the Payee, or at such other place or to
such other party or parties
as may be designated by the Payee from time to time,
in lawful money of the United States of America, the principal amount of
$75,000.00 (the "Principal Amount"), secured by certain of the assets
of the
Maker as described in each of the Security Agreement and the Deed of Trust
entered into by the Maker and the Payee
and dated as of the date hereof, with
simple interest at an annual
rate of 10.0%.
1. This Convertible Promissory Note (the "Note") shall be due and
payable in 36 monthly
payments of
principal and interest on the first day
of
each month, commencing on March 17, 2005, and each in the amount of
$2,420.04
(an "Installment"), with the final Installment due on February 17, 2008
(the
"Maturity Date"); provided, that each such Installment shall be deposited
directly, by means of an Automated
Clearing House (ACH),
into the Payee's bank
account, as may be designated
by the Payee. Each date on which a payment is due,
including the Maturity
Date, shall be referred to herein as a
"Payment
Date";
provided, however, that if a Payment Date
should fall on a Saturday, Sunday, or
bank holiday, then the
Payment Date shall be the next business day.
2. Notation of
Indebtedness and
Payments. The Payee is
authorized to
record the date and amount of
the indebtedness
evidenced by this
Note, and the
date and amount of each payment and prepayment of principal hereof on any
schedule annexed hereto and made a part
hereof, or on a
continuation
thereof
which shall be attached
thereto and made a
part hereof, and any
such
notation
shall be conclusive and binding for all purposes absent manifest error;
provided, however, that
failure by the Payee to make any such notation shall not
affect the obligations of the
Maker hereunder.
3. Prepayment.
This Note is subject
to prepayment in whole or in part
at any time or from time to time, without premium or penalty of any kind
whatsoever. All partial
prepayments shall be applied first to accrued but unpaid
interest and then to the
outstanding principal amount of this Note.
4. Default.
(a) Each of the following shall constitute an "Event of Default"
under
this Note:
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(i) The Maker shall
fail to pay when due any Installment or
any other amount due hereunder in the manner provided herein,
and such
default shall continue unremedied for a period of 10 business days;
or
(ii) A substantial
part of any of the
operations or business
of the Maker
is suspended, other than in the ordinary course of
business, which suspension has a material adverse effect on the
Maker's
financial condition; or
(iii) The Maker commences any case, proceeding or other
action
relating to it in
bankruptcy or seeking
reorganization,
liquidation,
dissolution,
winding-up,
arrangement, composition,
compromise,
readjustment of its
debts or any other
relief under any
bankruptcy,
insolvency,
reorganization,
liquidation,
dissolution,
arrangement,
composition,
compromise, readjustment of debt or similar act or law
of
any jurisdiction, now
or hereafter existing,
or consents to, approves
of or acquiesces in,
any such case,
proceeding or other
action, or
applies for a receiver, trustee or custodian for itself or for all
or a
substantial part of
its properties or
assets, or makes an
assignment
for the benefit of
creditors, or fails
generally to pay its
debts as
they mature or admits in writing its inability to pay its debts as
they
mature, or is adjudicated insolvent or bankrupt; or
(iv) There
is commenced against the Maker any case or
proceeding, or
any other action is taken against the Maker in
bankruptcy or
seeking reorganization, liquidation, dissolution,
winding-up, arrangement, composition, compromise, readjustment of
its
debts or any other relief under any bankruptcy, insolvency,
reorganization,
liquidation,
dissolution,
arrangement,
composition,
compromise,
readjustment of
debt or similar act or law of any
jurisdiction, now or
hereafter existing; or there is appointed a
receiver, trustee
or custodian for the Maker or for all or a
substantial part of
its properties
or assets; or there is issued a
warrant of
attachment,
execution or similar process against any
substantial part of the properties or assets of the Maker, and any
such
event continues for 90 days undismissed, unbonded or
undischarged.
(b) If any Event of Default shall have occurred and be continuing,
the
Payee may, by written notice to the Maker, declare this Note, all interest
hereon and all other amounts,
if any, payable hereunder or in respect of
this
Note to be forthwith due and payable, whereupon they shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Maker.
Notwithstanding the foregoing, upon the occurrence of any of the events or
conditions described in subsection (iii) or (iv) of Section 4(a)
above, this
Note, all interest hereon and
all other amounts, if any, payable hereunder or in
respect of this Note shall immediately become due and payable, without any
requirement on the part of
the Payee to give notice, or make declaration, of any
kind regarding such Event of
Default and without presentment, demand, protest or
any other requirement on the part of the Payee, all of which are hereby
expressly waived by the
Maker.
(c) From and after the
occurrence of any Event of Default, and for so
long as such Event of Default
shall continue,
the unpaid
principal amount of
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this Note shall bear interest at a rate per annum equal to the lesser of
(i)
18%, or (ii) the Highest
Lawful Rate (as defined below), payable on demand.
5. Waiver of Certain
Demands and Notices.
Presentment
for payment,
demand, notice of dishonor,
protest, notice of protest and all other demands and
notices in connection
with the delivery,
performance
and enforcement of this
Note are hereby expressly
waived by the Maker.
6. Payment of Court
Costs. If this Note is placed in the
hands of an
attorney for collection,
or if it is collected
through any legal
proceedings,
the Maker agrees to pay court
costs, reasonable
attorneys' fees and other costs
of collection of the holder
hereof.
7. Usury. It is the intention of the Maker to conform
strictly to
applicable usury laws now or hereafter in
force, and therefore
all
agreements
between the Maker and the
Payee are expressly
limited so that in no contingency
or event whatsoever, whether by reason of advancement
of the proceeds
hereof,
acceleration of maturity of the unpaid
principal balance hereof or
otherwise,
shall the amount paid or agreed to be paid to the Payee, for the use,
forbearance or detention of the money to be advanced hereunder exceed the
highest lawful rate permitted by applicable
law. Regardless of any
provision
contained herein, or in any other documents or instruments executed in
connection herewith, the Payee shall never be entitled
to receive, collect
or
apply, as interest hereon, any amount in excess of the
Highest Lawful Rate
(hereinafter defined) and in the event the Payee ever
receives, collects or
applies, as interest, any such excess, such amount which would be
excessive
interest shall be deemed a
partial prepayment of principal and treated hereunder
as such; and, if the principal hereof is paid in full,
any remaining excess
shall be refunded to the
Maker. In determining
whether or not the interest paid
or payable, under any
specific contingency, exceeds the Highest Lawful Rate,
the
Maker and the Payee shall, to
the maximum extent permitted under applicable law,
(a) characterize any
nonprincipal payment
as an expense, fee or
premium rather
than as interest, (b) exclude
voluntary prepayments and the effects thereof, and
(c) spread the total amount
of interest throughout
the entire contemplated term
hereof; provided that if the interest received for the actual period of
existence hereof exceeds the Highest Lawful Rate,
the Payee shall either apply
or refund to the Maker the
amount of such excess as herein provided, and in such
event the Payee shall not be
subject to any
penalties provided by
any laws for
contracting for, charging or
receiving interest in
excess of the Highest Lawful
Rate. As used in this Note,
the term "Highest
Lawful Rate" means, at
any given
time during which indebtedness shall be outstanding hereunder, the maximum
nonusurious interest rate, if any, that at any
time or from time to time may be
contracted for, taken, reserved, charged or received on the indebtedness
evidenced by this Note under
the laws of the United States and applicable state
law currently in effect or,
to the extent allowed by law, under such applicable
laws of the United
States and
applicable
state law may
hereafter be in effect
and which allow a higher
maximum nonusurious
interest rate than applicable laws
now allow, in any case after taking into account, to the extent required by
applicable law, any and all
relevant payments or charges under this Note and any
documents executed in
connection herewith.
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8. Conversion.
(a) Subject to and upon compliance with the provisions of
this Section
8, the Payee shall have the
right (the "Conversion
Right"), at its
option, at
any time and from time to
time, subject to the
"Option" (as defined below), to
convert all or any portion of
the outstanding
principal amount of and accrued
but unpaid interest on this
Note into the number of fully paid and nonassessable
shares of common stock of the Maker, par value $.001 (the "Common Stock"),
obtained by dividing (i) the
amount of this Note to be so converted, by (ii) the
Conversion Price. For purposes of this Note,
the term "Conversion
Price" means
$1.00, as adjusted from time to time
pursuant to the provisions of this Section
8.
(b) In order to exercise the conversion right provided in subsection
(a) above, the Payee shall notify the Maker
in writing (a "Conversion Notice")
that the Payee elects to
convert this Note or a specified portion thereof, and
the Payee shall
contemporaneously surrender this Note at the office of the
Maker
for cancellation. Unless the
shares issuable upon conversion are to be issued in
the name of the Payee, the
Conversion Notice shall be accompanied by instruments
of transfer, in a form reasonably satisfactory to the Maker,
duly executed
by
the Payee or its duly
authorized
attorney and an amount
sufficient to pay
any
transfer or similar tax (or evidence reasonably satisfactory to the Maker
demonstrating that such taxes have been paid).
The Conversion Right
is subject
to the option of the Maker
(the "Option"), upon
receipt of a Conversion Notice,
to pay the then-outstanding
principal amount and any accrued but unpaid interest
theron in full to the Payee within 30 days of the date on which the Maker
receives the Conversion Notice, thereby effectively canceling the Payee's
Conversion Right.
Provided that the
Maker does not exercise its Option, as promptly as
practicable after the expiration of such
30-day period,
and the compliance
by
the Payee with any other
conditions set forth
in this subsection (b), the Maker
shall issue and shall deliver
to the Payee, or
otherwise in accordance with the
Payee's written instruction,
(i) a certificate or certificates for the number of
full shares of Common Stock issuable upon the conversion of this Note in
accordance with the
provisions of this Section 8 (and any fractional interest
in
respect of a share of Common
Stock arising upon such conversion shall be settled
as provided in subsection (c)
of this Section 8), and (ii) if applicable, a new
Note of like tenor in the
original principal amount equal to the portion of this
Note that has not been so
converted.
Each conversion
of this Note
shall be deemed to have been effected
immediately prior to the
