Exhibit 10.14
Exhibit C
THIS NOTE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR UNDER
ANY STATE SECURITIES LAW AND MAY NOT BE PLEDGED, SOLD, ASSIGNED OR
TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT WITH RESPECT
THERETO IS EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND ANY APPLICABLE STATE
SECURITIES LAW REQUIREMENTS HAVE BEEN MET OR (II) EXEMPTIONS FROM
THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND THE
REGISTRATION OR QUALIFICATION REQUIREMENTS OF APPLICABLE STATE
SECURITIES LAWS ARE AVAILABLE.
$300,000
FINEPOINT INNOVATIONS, INC.
CONVERTIBLE PROMISSORY NOTE
July 27, 2005
Pursuant
to Section 4.2(b) of that certain Agreement and Plan of Merger
dated even date herewith (“ Merger Agreement ”),
FinePoint Innovations Inc., a Delaware corporation (the “
Company ”), the principal office of which is located
at 15220 South 50th Street, Suite 105, Phoenix, Arizona 85044, for
value received hereby promises to pay to InPlay Technologies, Inc.,
a Nevada corporation, or its registered assigns, the sum of Three
Hundred Thousand Dollars ($300,000), or such lesser amount as shall
then be outstanding hereunder. The principal amount hereof
and any unpaid accrued interest hereon, as set forth below, shall
be due and payable on the earlier to occur of (i) February 28,
2006, or (ii) when declared due and payable by the Holder upon the
occurrence of an Event of Default (as defined below). Payment for
all amounts due hereunder shall be made by mail to the registered
address of the Holder. Capitalized terms used but not
otherwise defined in this Convertible Promissory Note (“
Note ”) shall have the meaning ascribed to such terms
in the Merger Agreement. In the event that any provision of
this Note conflicts with any provision of the Merger Agreement, the
relevant provision of the Merger Agreement will control.
The
following is a statement of the rights of the Holder of this Note
and the conditions to which this Note is subject, and to which the
Holder hereof, by the acceptance of this Note, agrees:
1.
Definitions . As used in this Note, the following
terms, unless the context otherwise requires, have the following
meanings:
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(i) “
Company ” includes any corporation which shall succeed
to or assume the obligations of the Company under this
Note.
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(ii) “
Holder ,” when the context refers to a holder of this
Note, shall mean any person who shall at the time be the registered
holder of this Note.
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2.
Interest; Payment . On the first day of each month
during the period that any principal amount under this Note remains
outstanding, the Company shall pay interest at the rate of nine
percent (9.0%) per annum (the “ Interest Rate ”)
on the principal outstanding during the prior month. In the
event that the principal amount of this Note is not paid in full
when such amount becomes due and payable, interest at the rate
equal to the highest rate then permitted by law shall continue to
accrue on the balance of any unpaid principal until such balance is
paid.
3.
Events of Default . If any of the events specified in
this Section 3 shall occur (herein individually referred to
as an “ Event of Default ”), the Holder of the
Note may, so long as such condition exists, declare the entire
principal and unpaid accrued interest hereon immediately due and
payable, by notice in writing to the Company:
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(i) Default
in the payment of the principal and unpaid accrued interest of this
Note or any other amount owed by Company to Holder when due and
payable if such default is not cured by the Company within ten (10)
days after the Holder has given the Company written notice of such
default; or
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(ii) The
institution by the Company of proceedings to be adjudicated as
bankrupt or insolvent, or the consent by it to institution of
bankruptcy or insolvency proceedings against it or the filing by it
of a petition or answer or consent seeking reorganization or
release under the federal Bankruptcy Act, or any other applicable
federal or state law, or the consent by it to the filing of any
such petition or the appointment of a receiver, liquidator,
assignee, trustee, or other similar official of the Company, or of
any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the taking of corporate
action by the Company in furtherance of any such action;
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(iii) If,
within sixty (60) days after the commencement of an action against
the Company (and service of process in connection therewith on the
Company) seeking any bankruptcy, insolvency, reorganization,
liquidation, dissolution, or similar relief under any present or
future statute, law, or regulation, such action shall not have been
resolved in favor of the Company or all orders or proceedings
thereunder affecting the operations or the business of the Company
stayed, or if the stay of any such order or proceeding shall
thereafter be set aside, or if, within sixty (60) days after the
appointment without the consent or acquiescence of the Company of
any trustee, receiver, or liquidator of the Company or of all or
any substantial part of the properties of the Company, such
appointment shall not have been vacated.
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(iv) Any
declared default of the Company under any indebtedness owed to
Holder by Company under that certain Credit Facility Note dated
July 27, 2005; or
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(v) Termination
or abandonment of the Merger Agreement by the Company for any
reason.
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4.
Subordination . The indebtedness evidenced by this
Note is not expressly subordinated in right of payment to the prior
payment in full of all other Company’s
indebtedness.
5.
Prepayment . The Company may at any time prepay in
whole or in part the principal sum, plus accrued interest to date
of payment, of this Note without penalty.
6.
Conversion.
6.1
Voluntary Conversion . At any time during the period that
any principal amount remains outstanding under this Note, the
Holder of this Note has the right, at the Holder’s option, to
convert the principal and accrued interest under this Note, in
whole but not in part, into an amount not to exceed 10% of the
fully paid and nonassessable shares of the Company Common Stock on
a fully diluted basis at a rate equal to 10% of Company Common
Stock for each $300,000 outstanding on this Note.
6.2
Conversion Procedure.
6.2.1
Notice of Conversion Pursuant to Section 6.1 . Before
the Holder shall be entitled to convert this Note into shares of
Company Common Stock, it shall surrender this Note at the office of
the Company and shall give written notice to the Company at its
principal corporate office, of the election to convert the same
pursuant to Section 6.1 , and shall state therein the name
or names in which the certificate or certificates for shares of
Company Common Stock are to be issued. The Company shall have ten
(10) days from receipt of such notice within which to prepay all
amounts due under the Note pu
