Exhibit 10.25
DPAC TECHNOLOGIES
CORP.
CONVERTIBLE TERM
NOTE
,
|
$500,000.00
|
August 5, 2005
|
For value received, DPAC
TECHNOLOGIES CORP., a California corporation with an address at
7321 Lincoln Way, Garden Grove, California 92841
(the “ Company ”), hereby promises to pay
to DEVELOPMENT CAPITAL VENTURES, LP, a Small Business
Investment Company, licensed by the U.S. Small Business
Administration pursuant to the Small Business Investment Act of
1958, as amended (hereinafter referred to as the “
Holder ”) the principal sum of Five Hundred Thousand
Dollars ($500,000.00), with interest from the date hereof on the
unpaid balance at a per annum rate of Twelve Percent
(12.00%). The outstanding principal amount of this Note,
together with any interest accrued but unpaid thereon (the “
Outstanding Amount ”), shall be due and payable on
February 3, 2006, unless otherwise converted as set forth in
Section 3 (the “ Maturity Date ”).
This Convertible Promissory Note, as the same may be amended or
supplemented from time to time is hereinafter referred to as the
“Note ”.
1.
Payments . Principal and interest shall be payable
in lawful money of the United States of America, by wire transfer
to a bank account designated by the Holder or by bank check
delivered to the principal office of the Holder or at such other
place as the Holder may designate from time to time in writing to
the Company. Interest will be calculated based on the actual
number of days that principal is outstanding over a year of 360
days. Interest shall be due and payable monthly, in arrears,
commencing on
,
,
and continuing on the
day of each month
thereafter until the Maturity Date, on which date all outstanding
principal and accrued interest shall be due and payable in
full.
2.
Default Rate
. Upon maturity, whether by
acceleration, demand or otherwise, and at the Holder’s option
upon the occurrence of any Event of Default (as hereinafter
defined) and during the continuance thereof, the Outstanding Amount
of this Note shall bear interest at a rate per annum (based on the
actual number of days that principal is outstanding over a year of
360 days) which shall be six percentage points (6.00%) in
excess of the interest rate in effect from time to time under this
Note but not more than the maximum rate allowed by law (the
“Default Rate” ). The Default Rate shall
continue to apply whether or not judgment shall be entered on this
Note. The Default Rate is imposed as liquidated damages for
the purpose of defraying the Holder’s expenses incident to
the handling of delinquent payments, but are in addition to, and
not in lieu of, the Holder’s exercise of any rights and
remedies hereunder, under the other Loan Documents or under
applicable law, and any fees and expenses of any agents or
attorneys which the Holder may employ. In addition, the
Default Rate reflects the increased credit risk to the Holder of
carrying a loan that is in default. The Borrower agrees that
Default Rate is reasonable forecasts of just compensation for
anticipated and actual harm incurred by the Holder, and that the
actual harm incurred by the Holder cannot be estimated with
certainty and without difficulty.
3.
Conversion
.
3.1
Upon Merger
. If the Company consummates
the merger of the Company and QuaTech, Inc. prior to
February 3, 2006 in a manner satisfactory to Lender (the
“ Qualifying Merger ”), then, simultaneously
with the effective date of the Qualifying Merger, the Outstanding
Amount of this Note shall automatically be converted into 3,289,473
registered shares of the Company’s common stock
