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Exhibit
10.10
SECURED TERM NOTE
FOR
VALUE RECEIVED, SOUTHPEAK INTERACTIVE, L.L.C., a Virginia
limited liability company (the “
Borrower ”),
hereby promises to pay to FI Investment Group, LLC, a Virginia
limited liability company (the “
Holder ”),
or its registered assigns or successors in interest, the sum of Two
Million Dollars ($2,000,000) (the “
Principal Amount ”),
together with any accrued and unpaid interest thereon, on the six
month anniversary date of this Secured Term Note (the
“
Note ”)
(the “
Maturity Date ”),
if not sooner paid; or if this Note becomes convertible in
accordance with the terms set forth herein, the Principal Amount,
together with any accrued and unpaid interest, will be payable on
demand by the Holder.
Capitalized
terms used herein without definition shall have the meanings
ascribed to such terms in that certain Securities Purchase
Agreement dated as of the date hereof between the Borrower and
the Holder (the “
Purchase Agreement ”).
The
Borrower entered into that Agreement and Plan of
Reorganization (the “
Reorganization Agreement ”)
dated January 15, 2008 among the Borrower, SouthPeak Interactive
Corporation, Global Services Partners Acquisition Corp., GSPAC
Merger Company and the members of the Borrower. If the closing of
the transactions contemplated under the Reorganization Agreement
(the “
GSPAC Closing ”)
fails to consummate on or before April 30, 2008 (the “
Conversion Date ”),
then on the Conversion Date, this Note shall become convertible at
the option of the Holder and shall be referred to at such time as a
“Secured Convertible Demand Note” as more fully
described in Section 1.2(b) and Article III (but for purposes of
this Note, it shall be continued to be referred to herein as the
“Note”).
ARTICLE I
INTEREST AND INTEREST PAYMENTS
1.1
Interest, Rate .
Subject to Section 4.9 hereof, upon issuance this Note shall bear
interest, on a monthly basis, at a rate equal to fourteen percent
(14%) per annum.
1.2
Payments .
The Principal Amount shall be payable as follows:
(a)
If
the GSPAC Closing is consummated on or before the Conversion
Date, the Principal Amount shall be payable in cash in full on
the Maturity Date. Accrued interest payments shall be made
payable to Holder in cash on a monthly basis, beginning on the
one (1) month anniversary of the execution of the Note and
each month thereafter on the same date, until the Maturity
Date or until this Note has otherwise been paid in
full.
(b)
If
the GSPAC Closing is not consummated on or before the
Conversion Date, this Note shall convert to a “Secured
Convertible Demand Note” on the Conversion Date, and,
commencing on the Maturity Date, the Principal Amount shall be
payable in cash in full on written demand of the Holder within
ten (10) business days after Holder makes such written demand
(“
Demand Right ”).
Accrued interest payments shall be made payable to Holder in cash
on a monthly basis, beginning on the one (1) month anniversary of
the execution of the Note and each month thereafter on the same
date, until either (i) the Holder exercises its Demand Right, (ii)
the Holder exercises its Conversion Option, or (iii) this Note has
otherwise been paid in full. Notwithstanding the foregoing, the
Holder’s Demand Right, and all other rights to repayment of
the Principal Amount, terminate upon the Holder’s exercise of
its Conversion Option.
ARTICLE II
REPAYMENT
2.1
Optional Redemption of Principal Amount .
(a)
Consummation of GSPAC Closing .
At any time after consummation of the GSPAC Closing, the Borrower
will have the option of prepaying the outstanding Principal Amount
(“
Optional Redemption ”),
in whole or in part, by paying to the Holder a sum of money equal
to one hundred percent (100%) of the portion of the Principal
Amount to be redeemed, together with accrued but unpaid interest
thereon and any and all other sums due, accrued or payable to the
Holder arising under this Note, the Purchase Agreement or any
Related Agreement (the “
Redemption Amount ”),
on the Redemption Payment Date (as defined below). The Borrower
shall deliver to the Holder a notice of redemption (the
“
Notice of Redemption ”)
specifying the date for such Optional Redemption (the
“
Redemption Payment Date ”),
which date shall be not less than ten (10) business days after the
date of the Notice of Redemption. On the Redemption Payment Date,
the Redemption Amount shall be paid in good funds to the Holder. If
the Borrower fails to pay the Redemption Amount on the Redemption
Payment Date as set forth herein, then such Notice of Redemption
will be null and void. If
a GSPAC Closing fails to occur on or before the Conversion Date,
the Borrower’s Optional Redemption rights set forth in this
Section 2.1(a) shall terminate on the Conversion Date.
(b)
No GSPAC Closing .
(i)
If
the GSPAC Closing fails to occur on or before the Conversion
Date, the Borrower will have the option, at any time after the
Maturity Date, to elect to make an Optional Redemption
by
paying the Redemption Amount on the Redemption Payment Date.
The Borrower shall deliver to the Holder the Notice of
Redemption, specifying a Redemption Payment Date, which date
shall be not less than fifteen (15) business days after the
date of the Notice of Redemption. Except
as otherwise provided in Section 2.1(b)(ii), on the Redemption
Payment Date, the Redemption Amount shall be paid in good
funds to the Holder. If the Borrower fails to pay the
Redemption Amount on the Redemption
Payment Date as set forth herein, then such Notice of
Redemption will be null and void. Partial
payment of the Redemption Amount is not permitted under this
Section 2.1(b)(i).
(ii)
Notwithstanding
receipt of the Notice of Redemption under Section 2.1(b)(i),
the Holder shall have the right to
exercise the Conversion Option by delivering written notice of
such exercise to the Borrower on or before the fifth (5
th )
business day prior to the Redemption Payment Date (the
“
Conversion Deadline ”)
in accordance with Section 3.3. The class of Equity Securities (as
defined below) to be issued to the Holder under this Section
2.1(b)(ii) shall
be common stock or membership interests, as applicable, and the
amount to be issued shall be determined though utilization of the
formula set forth in Section 3.1(a)(A) below. If
the Holder fails to exercise its Conversion Option on or before the
Conversion Deadline, the Borrower shall
pay the Redemption Amount in good funds on the Redemption
Payment Date. If the Borrower fails to pay the Redemption Amount on
the Redemption Payment Date as set forth herein, then such Notice
of Redemption will be null and void. Partial
payment of the Redemption Amount is not permitted under this
Section 2.1(b)(ii).
(iii)
If,
after the Holder exercises its Conversion Option
under
Section 2.1(b)(ii), a Financing Event (as defined below)
closes before June 30, 2009, the Holder shall have the right
to convert the Equity Securities it
received under Section 2.1(b)(ii) (which Equity Securities
shall be equal in value to the total outstanding Principal
Amount, accrued
interest and any failed payment fee(s) that was converted
under such Section) into Tag Along Conversion Stock (as
defined below) (the “
Securities Conversion Option ”),
with the number of shares of Tag Along Conversion Stock determined
through whichever of the methods/formulas set forth in Sections
3.1(a)(A) and 3.1(a)(B) results in the highest number of shares of
Tag Along Conversion Stock issued by the Borrower.
2.2
Issuance of Replacement Note .
Upon any partial prepayment of this Note, a replacement Note
containing the same date and provisions of this Note (to the extent
such provisions remain applicable at such time) shall, at the
written request of the Holder, be issued by the Borrower to the
Holder for the outstanding Principal Amount of this Note and
accrued interest which shall not have been paid. Subject to the
provisions of Article IV, the Holder will pay no costs, fees or any
other consideration to the Borrower for the production and issuance
of a replacement Note.
ARTICLE III
CONVERSION & DEMAND OF REPAYMENT
3.1
Conversion .
In the event that this Note converts to a “Secured
Convertible Demand Note” on the Conversion Date, then
commencing on the Maturity Date, the Borrower, upon demand by the
Holder (the “
Conversion Option ”),
shall be required to exchange and convert the Note into fully paid
and non-assessable shares of the Borrower’s
equity
securities (the “
Equity Securities ”,
it being understood that such Equity Securities may be in the form
of membership interests if the Company remains a limited liability
company at the time of conversion of
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