Exhibit 10.45
CONVERTIBLE SECURED PROMISSORY NOTE
$500,000.00
March 15, 2006
Dallas, Texas
FOR VALUE RECEIVED, the undersigned, MedSolutions, Inc., a Texas
corporation on behalf of itself and its subsidiaries (MedSolutions,
Inc. and its
subsidiaries are
collectively
referred
to as the "Maker"), hereby
unconditionally
promises to pay to the
order of Tate Investments, LLC, a
Wisconsin limited
liability company (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 (the "Principal Amount") of
$500,000.00 secured
by certain of the assets of the Maker as described in the Security Agreement
entered into by Maker and Payee effective as of the date hereof
and the General
Business Security
Agreement dated as of
July 15, 2005 by and between Maker and
Payee (collectively,
the "Security
Agreements"),
with simple
interest at an
annual rate of (i) 10.0% during the period beginning on the date of the first
advance hereunder
and ending on the
12-month anniversary
of the date of
this
Note, (ii) 11.0% during the period beginning on the day immediately following
the 12-month
anniversary
of the date of this
Note and ending on the
24-month
anniversary of the
date of this
Note, and (iii) 12.0% during the period
beginning on the day immediately following the 24-month anniversary
of the date
of this Note and ending on the Maturity Date (as defined below).
From and after
an Event of Default (as defined herein or in the Loan Agreement
entered into by
Maker and Payee
effective as of the
date hereof) and for so long as such Event
of Default shall continue, the unpaid principal balance of
this Note shall bear
interest at an annual
rate equal to the lesser of: (i) the prime rate as
published in the Wall Street Journal from time to time, plus eight
percent (8%);
or (ii) the Highest Lawful Rate (as defined below), payable on
demand.
1. Payments. This Promissory Note (the "Note") shall be due and
payable
in (i) thirty-five
(35) monthly
installments of interest only on the Principal
Amount outstanding
from time to time,
at such rate as in
effect from time
to
time as set forth
herein, each due
monthly beginning on April 30, 2006 and
ending on February 28, 2009 and (ii) one final installment of the outstanding
Principal Amount and
all accrued and unpaid
interest thereon due
on March 31,
2009. 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. The Maker may prepay any portion or this entire
Note at any time in accordance with the provisions hereof. Any prepayment will
be applied first
against accrued but unpaid interest and then against the
outstanding principal balance.
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
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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.
The Maker may prepay any or all of the outstanding
Principal Amount under
this Note, and any accrued and unpaid interest thereon,
at any time and from time to time after March 31, 2007 without the
prior written
consent of the Payee and without any premium or penalty; provided,
however, that
the Maker shall
provide the Payee with
30 days' prior
written notice of its
intent to prepay any or all of such outstanding Principal Amount.
The Payee may,
after receipt of such prepayment notice, elect to convert, pursuant
to Section 8
below, any or all of such outstanding Principal Amount proposed to
be prepaid by
providing written
notice to the Maker of the Payee's intent to convert prior to
the effective date of
such prepayment.
Notice of prepayment
pursuant to this
Section 3 shall be
irrevocable, and in
the event the Maker fails to prepay the
amount specified in
the prepayment
notice (or to
effectuate
any conversion
requested by the Payee in connection therewith) upon the expiration of 30 days
from the date of the delivery of such notice, the outstanding Principal Amount
under this Note,
together with any accrued and unpaid interest thereon, shall
become immediately due and payable.
4. Default.
(a) Each of the following shall constitute an "Event of Default"
under
this Note:
(i) The
Maker shall fail to pay when due any payment of
principal or interest or any other amount due hereunder in the manner
provided herein; or
(ii) An Event of Default (as defined in the Loan Documents or
the Transaction Documents) shall have occurred; or
(iii) Any
representation or warranty made by the Maker in the
Loan Documents
or the Transaction Documents shall be false in any
material respect on the date made; or
(iv) The Maker fails
to materially
perform or
observe any
agreement, covenant, term or condition herein, or in the Loan
Documents
or in the Transaction Documents; or
(v) 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
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(vi) 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:
(i) declare
this Note, all interest hereon and all other
amounts, if any,
payable hereunder or
in respect of this Note, or the
Loan Documents or the
Transaction
Documents 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;
(ii) Proceed to
enforce its rights
hereunder, and under
the
Loan Documents and/or the Transaction Documents.
Notwithstanding the
foregoing,
upon the occurrence of any of the events or
conditions described in subsection (v) or (vi) 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.
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
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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 applicable 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.
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, 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 (x) $0.85 during the period beginning
on March 15,
2006 and ending on March 31, 2007, (y) $1.00 during the period beginning on
April 1, 2007 and
ending on March 31,
2008, and (z) $1.15
during the period
beginning on April 1, 2008 and ending on March 31, 2009,
each 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
