EXHIBIT 10.49
THIS NOTE HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED.
IT MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF
1933, AS AMENDED, OR AN OPINION OF COUNSEL
SATISFACTORY TO
MAKER THAT REGISTRATION IS NOT REQUIRED UNDER
SUCH ACT OR UNLESS
SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
MODIFIED
SECURED PROMISSORY NOTE
$1,150,000
February 28, 2009
This MODIFIED SECURED PROMISSORY
NOTE ("Note") is issued pursuant to the
terms and conditions of that certain Asset Purchase Agreement,
dated as of
February 28, 2009 by and among iPRINT TECHNOLOGIES, LLC, a Delaware
limited
liability company ("Maker"), MTS PARTNERS, INC. (fka iPRINT
TECHNOLOGIES, INC.),
a California corporation ("Payee"), AMERICAN TONERSERV CORP., a
Delaware
corporation ("ATS"), and certain other parties (the "Purchase
Agreement").
Capitalized terms used herein and not otherwise defined herein
shall have the
meanings ascribed thereto in the Purchase Agreement.
1. Obligation. For
value received, and subject to the terms and
conditions set forth in this Note, Maker hereby promises to pay to
the order of
Payee the principal sum of One Million One Hundred Fifty Thousand
Dollars
($1,150,000), together with interest (at the rate set forth below)
on the unpaid
principal balance of this Note.
2. Maturity Date.
The Note shall be due in full on December 31, 2010,
(the "Maturity
Date").
3. Interest
Rate.
(a) Standard Rate. The interest rate on the unpaid
principal
during the term of this Note shall be ten percent (10%).
(b) Default Rate. Notwithstanding Section 3(a) hereof,
while an
Event of Default (as defined below) exists or after acceleration,
Maker shall
pay interest on the principal amount of all outstanding obligations
of Maker
under this Note, at the lower of (i) ten percent (10%) per annum,
or (ii) the
highest rate permitted by law.
(c) Computations. All computations of interest shall be
made on
the basis of a year of three hundred and sixty-five (365). Interest
shall accrue
during each period during which interest is computed from the first
day thereof
to the last day thereof and shall compound on a monthly basis.
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(d) Usury. If performance of or compliance with any
provision of
this Note or in any instrument now or hereafter securing or
guaranteeing this
Note results in Payee receiving interest in an amount which would
exceed the
maximum rate allowed by law, the amount of such interest which
exceeds such
lawful limits shall be applied to the reduction of the unpaid
principal balance
and not to the payment of interest. In determining whether or not
the interest
paid or payable, under any specific contingency, exceeds the
highest rate of
interest permitted under applicable law, Payee and Maker shall, to
the maximum
extent permitted under applicable law, (i) characterize any
nonprincipal payment
as an expense, fee or premium rather than as interest, (ii) exclude
voluntary
prepayments and the effects thereof, and (iii) allocate and
"spread" the total
amount of interest throughout the entire term of this Note so that
the interest
rate is uniform throughout the entire term hereof.
4. Payment.
(a) Scheduled Payments. Commencing on March 16, 2009
the first
payment of One Hundred Thousand Dollars ($100,000) shall paid with
all
subsequent payments due and paid according to Loan Amortization
Schedule in the
form attached hereto as Exhibit C-6. Upon full payment of all
amounts due under
this Note, Maker shall be forever released from all of its
obligations and
liabilities under this Note.
(b) Additional Payments. In addition to scheduled
payments, fifty
percent (50%) of every dollar raised through private offerings will
be paid
until Note is paid in full.
(c) General. All payments due hereunder shall be made
in lawful
money of the United States of America to Payee via electronic funds
transfer
directly to the account specified by Payee, or such other person or
at such
other place as Payee may from time to time designate in writing to
Maker. All
payments shall be made no later than 5:00 p.m. (Pacific Time) on
the date
specified herein. Any payment received by Payee later than 5:00
p.m. (Pacific
Time) shall be deemed to have been received on the following
business day and
any applicable interest or fee shall continue to accrue. Whenever
any payment is
due on a day other than a business day, such payment shall be made
on either (i)
the previous business day, or (ii) the following business day, and
such
extension of time shall in such case be included in the computation
of interest.
(d) Prepayments. There shall be no penalty for
prepayment;
provided, however, that any prepayment of less than all of the
outstanding
principal and unpaid accrued interest shall shorten the term of
this Note and
not reduce the amount of any installment payment otherwise becoming
due after
the prepayment date. Any prepayment made shall be applied first to
interest and
then to principal.
(e) Attorneys Fees. In the event suit is instituted by
Payee to
collect this Note or any portion thereof, Maker promises to pay
such additional
sums as the court may adjudge reasonable as attorney's fees in such
suit.
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5. Late Charge. If
any payment of principal or interest under this Note
shall not be made within seven (7) business days (the "Grace
Period") after the
issuance of written notice that such payment is due, a late charge
of five
percent (5%) of the overdue amount will be charged by Payee. Such
late charge is
in addition to the interest that shall continue to accrue during
the Grace
Period which additional interest shall be paid with the late
charge. The late
charge represents a reasonable sum considering all of the
circumstances existing
on the date of this Note and represents a fair and reasonable
estimate of the
costs sustained and the frustration suffered by Payee due to the
failure of
Maker to make timely payments. Maker further agrees that proof of
actual damages
would be costly or inconvenient. Such late charge shall be
immediately due and
payable and shall be paid without prejudice to the right of Payee
to collect any
other amounts to be paid or to declare a default under this Note,
or from
exercising any of the other rights and remedies of Payee.
6. Security.
Maker's obligations hereunder are secured by that certain
Security Agreement of even date herewith by and between Maker and
Payee (the
"Security Agreement"), pursuant to which Maker grants Payee a
security interest
in the Secured Assets (as defined in the Purchase Agreement).
7. Adjustment. The
principal amount of this Note may be adjusted in
accordance with the terms and conditions of Section 7.3 of the
Purchase
Agreement. In the event of such adjustment, the amount of any
payments due
hereunder shall be recalculated accordingly but the term of
th
