Exhibit 10.7
FORM OF
SUBORDINATED PROMISSORY
NOTE
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U.S.
$375,040.00
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February 11, 2005
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Greenville, SC
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FOR VALUE RECEIVED, COMPUTER
SOFTWARE INNOVATIONS, INC., a Delaware corporation F/K/A
VERTICALBUYER, INC. (the “Borrower”), hereby promises
to pay to the order of [Former CSI Shareholder] (the
“Lender”), the principal sum of Three Hundred
Seventy Five Thousand Forty and No/100 Dollars ($375,040.00) ,
with said principal to be paid in full on or before May 10, 2006
together with interest accruing at the Prime Rate of interest as
reported by Bank of America plus two percent (2%) on the unpaid
principal thereof to be paid in lawful money of the United States
in quarterly installments of interest commencing on April 5, 2005
and continuing on the 1st day of each quarter thereafter until May
10, 2006.
The Borrower hereby reserves and
shall have the right to prepay the indebtedness evidenced by this
Subordinated Promissory Note (“Note”), in whole or in
part, without penalty or premium.
The Borrower hereby agrees that if
at any time any sum due hereunder shall be past due and unpaid,
such amount, whether principal or interest, shall bear interest
from the date such payment was due until paid in full at the rate
of fifteen percent (15%) per annum.
The Borrower further agrees hereby
that if at any time any portion of said principal and interest
shall be past due and unpaid for a period of ten (10) business days
following notification thereof by the Lender, the whole amount
evidenced by this Note shall, at the option of the holder thereof,
become immediately due, and said holder shall have the right to
institute any proceedings upon this Note and any collateral given
to secure the same for the purpose of collecting said principal and
interest, with costs and expenses, and of protecting any security
connected herewith.
The Borrower further agrees hereby
that if any part of the money due hereon be not paid when due, or
if this Note be placed in the hands of an attorney for collection,
or if this debt or any part thereof be collected by an attorney or
by legal proceedings of any kind, a reasonable attorney’s fee
besides all costs and expenses incident upon such collection, shall
be added to the amount due upon this Note, and be collectible as
part thereof.
Anything in this Note to the
contrary notwithstanding, the indebtedness evidenced by this Note,
principal and interest, shall be subordinate and junior to the
extent set forth in the following paragraphs to all principal and
interest of all indebtedness of the Borrower for borrowed money
(except such indebtedness of the Borrower other than this Note
which is subordinate or junior in any respect to other indebtedness
of the Borrower (collectively, “Other Subordinated
Debt”), including but not limited to that certain
Subordinated Promissory Note of even date herewith payable by the
Borrower in the aggregate amount of $1,875,000.00 to Barron
Partners LP) whether outstanding at the date of this Note or
created or incurred after the date of this Note but prior to the
maturity of this Note by lapse of time, acceleration or otherwise.
Such indebtedness of the Borrower to which this Note is subordinate
and junior is sometimes hereinafter referred to as “Senior
Debt.”
Upon maturity of any Senior Debt by
lapse of time, acceleration or otherwise, then all principal of,
premium, if any, and interest on, all such matured Senior Debt
shall first be paid in full before any payment on account of
principal or interest is made upon this Note.
In the event of any insolvency,
bankruptcy, liquidation, reorganization or other similar
proceedings, or any receivership proceedings in connection
therewith, relative to the Borrower or its property, and in the
event of any proceedings for voluntary liquidation, dissolution, or
other winding up of the Borrower, whether or not involving
insolvency or bankruptcy proceedings, and in the event Borrower
makes any payment of principal or accrued interest on any Other
Subordinated Debt which is not applied pro rata against this Note
and such Other Subordinated Debt (other than payments in
