EXHIBIT 10.9
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PROMISSORY NOTE
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FEBRUARY 28, 2005
JERSEY CITY, NEW JERSEY $500,000
FOR VALUE RECEIVED, the undersigned, DEEP FIELD TECHNOLOGIES, INC., a New Jersey
corporation (the "Company"), formerly known as IVOICE TECHNOLOGY II, INC.,
promises to pay CORNELL CAPITAL PARTNERS, LP (the "Lender") at 000 Xxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx, Xxx Xxxxxx 00000 or other address as the Lender
shall specify in writing, the principal sum of FIVE HUNDRED THOUSAND DOLLARS
($500,000) and interest at the annual rate of twelve percent (12%) on the unpaid
balance pursuant to the following terms:
On or about August 13, 2004, the parties entered into a Securities
Purchase Agreement (the "Securities Purchase Agreement"); a Secured Debenture
(the "Secured Debenture"); a Security Agreement (the "Security Agreement"); an
Investor Registration Rights Agreement (the "Investor Registration Rights
Agreement"); and an Escrow Agreement (the "Escrow Agreement") (collectively, the
Securities Purchase Agreement, the Secured Debenture, the Security Agreement,
the Investor Registration Rights Agreement and the Escrow Agreement are referred
to as the "Transaction Documents"). The parties hereby terminate the Transaction
Documents and the respective rights and obligations contained therein. None of
the parties shall have any rights or obligations under or with respect to the
Transaction Documents.
1. PRINCIPAL AND INTEREST. For value received, the Company hereby promises
to pay to the order of the Lender in lawful money of the United States of
America and in immediately available funds the principal sum of Five Hundred
Thousand Dollars ($500,000), of which Two Hundred Thousand Dollars ($200,000)
was previously funded on August 13, 2004 and Two Hundred Thousand Dollars
($200,000) was funded on November 17, 2004. The remaining amount of this
Promissory Note (the "Note") of One Hundred Thousand Dollars ($100,000) shall be
funded within five (5) days from the date hereof (the "Closing"). The Company
shall pay a commitment fee of ten percent (10%) of the principal sum of this
Note, which shall be paid and deducted from the gross proceeds available from
the Closing. The parties acknowledge that $40,000 of such fee due and owing has
already been paid. 2.
3. PAYMENTS. The first payment of principal shall be due and payable on
the first (1st) Monday of September 2005 (the "Initial Payment"), and with
weekly payments being due and payable each succeeding week thereafter until all
principal has been paid. The amount of each payment shall be Ten Thousand
Dollars ($10,000). Interest shall accrue from the date hereof. The Company shall
pay all accrued and unpaid interest at the time of the Final Payment (as such
term is defined herein). In the event all principal
and interest has not been satisfied by the one (1) year anniversary from the
Initial Payment, the Lender shall make a lump sum payment (the "Final Payment")
of all outstanding interest and principal on the one (1) year anniversary from
the Initial Payment.
4. WAIVER AND CONSENT. To the fullest extent permitted by law and except
as otherwise provided herein, the Company waives demand, presentment, protest,
notice of dishonor, suit against or joinder of any other person, and all other
requirements necessary to charge or hold the Company liable with respect to this
Note.
5. COSTS, INDEMNITIES AND EXPENSES. In the event of default as described
herein, the Company agrees to pay all reasonable fees and costs incurred by the
Lender in collecting or securing or attempting to collect or secure this Note,
including reasonable attorneys' fees and expenses, whether or not involving
litigation, collecting upon any judgments and/or appellate or bankruptcy
proceedings. The Company agrees to pay any documentary stamp taxes, intangible
taxes or other taxes which may now or hereafter apply to this Note or any
payment made in respect of this Note, and the Company agrees to indemnify and
hold the Lender harmless from and against any liability, costs, attorneys' fees,
penalties, interest or expenses relating to any such taxes, as and when the same
may be incurred.
6. EVENT OF DEFAULT. An "Event of Default" shall be deemed to have
occurred upon the occurrence of any of the following: (i) the Company should
fail for any reason or for no reason to make any payment of the interest or
principal pursuant to this Note within fifteen (15) days of the date due as
prescribed herein and after five (5) days following written notice to the
Company; (ii) failure by the Company for twenty (20) days after notice to it to
satisfy any of its other obligations or requirements or comply with any of its
other agreements under this Note; (iii) any proceedings under any bankruptcy
laws of the United States of America or under any insolvency, not disclosed to
the Lender, reorganization, receivership, readjustment of debt, dissolution,
liquidation or any similar law or statute of any jurisdiction now or hereinafter
in effect (whether in law or at equity) is filed by or against the Company or
for all or any part of its property; or (iv) a breach by the Company of its
obligations, or an event of default, under the Security Agreement, or any other
agreements hereunder between the Company and the Lender of even date herewith
which is not cured by any applicable cure period set forth therein. Upon an
Event of Default (as defined above), the entire principal balance and accrued
interest outstanding under this Note, and all other obligations of the Company
under this Note, shall be immediately due and payable without any action on the
part of the Lender, interest shall accrue on the unpaid principal balance at
eighteen percent (18%) or the highest rate permitted by applicable law, if
lower, and the Lender shall be entitled to seek and institute any and all
remedies available to it.
7. MAXIMUM INTEREST RATE. In no event shall any agreed to or actual
interest charged, reserved or taken by the Lender as consideration for this Note
exceed the limits imposed by New Jersey law. In the event that the interest
provisions of this Note shall
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result at any time or for any reason in an effective rate of interest that
exceeds the maximum interest rate permitted by applicable law, then without
further agreement or notice the obligation to be fulfilled shall be
automatically reduced to such limit and all sums received by the Lender in
excess of those lawfully collectible as interest shall be applied against the
principal of this Note immediately upon the Lender's receipt thereof, with the
same force and effect as though the Company had specifically designated such
extra sums to be so applied to principal and the Lender had agreed to accept
such extra payment(s) as a premium-free prepayment or prepayments.
8. SECURED NATURE OF THE NOTE. This Note is secured by the Pledged
Property as defined in the Security Agreement between the Company and the Lender
of even date herewith.
9. ISSUANCE OF CAPITAL STOCK. So long as any portion of this Note is
outstanding, the Company shall not, without the prior written consent of the
Buyer(s), issue or sell shares of Common Stock or Preferred Stock (i) without
consideration or for a consideration per share less than the bid price of the
Common Stock (the "Bid Price") determined immediately prior to its issuance,
(ii) any warrant, option, right, contract, call, or other security instrument
granting the holder thereof, the right to acquire Common Stock without
consideration or for a consideration less than such Common Stock's Bid Price
value determined immediately prior to it's issuance, (iii) enter into any
security instrument granting the holder a security interest in any and all
assets of the Company, or (iv) file any registration statement on Form S-8,
except for the registration of an employee stock option plan. Notwithstanding
anything to the contrary, the Company may issue Common Stock issuable pursuant
to the Company's obligations upon the conversion of stock options, convertible
debt or Class B Common Stock. For purposes of this Section, Bid Price shall
mean, on any date, the closing bid price (as reported by Bloomberg L.P.) of the
Common Stock on the principal market (the "Principal Market") or if the Common
Stock is not traded on a Principal Market, the highest reported bid price for
the Common Stock, as furnished by the National Association of Securities
Dealers, Inc. The Principal Market shall mean the Nasdaq National Market, the
Nasdaq SmallCap Market, the American Stock Exchange, the OTC Bulletin Board or
the New York Stock Exchange, whichever is at the time the principal trading
exchange or market for the Common Stock.
10. CANCELLATION OF NOTE. Upon the repayment by the Company of all of its
obligations hereunder to the Lender, including, without limitation, the
principal amount of this Note, plus accrued but unpaid interest, the
indebtedness evidenced hereby shall be deemed canceled and paid in full. Except
as otherwise required by law or by the provisions of this Note, payments
received by the Lender hereunder shall be applied first against expenses and
indemnities, next against interest accrued on this Note, and next in reduction
of the outstanding principal balance of this Note.
11. SEVERABILITY. If any provision of this Note is, for any reason, invalid
or unenforceable, the remaining provisions of this Note will nevertheless be
valid and enforceable and will remain in full force and effect. Any provision of
this Note that is
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held invalid or unenforceable by a court of competent jurisdiction will be
deemed modified to the extent necessary to make it valid and enforceable and as
so modified will remain in full force and effect.
12. AMENDMENT AND WAIVER. This Note may be amended, or any provision of
this Note may be waived, provided that any such amendment or waiver will be
binding on a party hereto only if such amendment or waiver is set forth in a
writing executed by the parties hereto. The waiver by any such party hereto of a
breach of any provision of this Note shall not operate or be construed as a
waiver of any other breach.
13. SUCCESSORS. Except as otherwise provided herein, this Note shall bind
and inure to the benefit of and be enforceable by the parties hereto and their
permitted successors and assigns.
14. ASSIGNMENT. This Note shall not be directly or indirectly assignable or
delegable by the Company. The Lender may assign this Note as long as such
assignment complies with the Securities Act of 1933, as amended.
15. NO STRICT CONSTRUCTION. The language used in this Note will be deemed
to be the language chosen by the parties hereto to express their mutual intent,
and no rule of strict construction will be applied against any party.
16. FURTHER ASSURANCES. Each party hereto will execute all documents and
take such other actions as the other party may reasonably request in order to
consummate the transactions provided for herein and to accomplish the purposes
of this Note.
17. NOTICES, CONSENTS, ETC. Any notices, consents, waivers or other
communications required or permitted to be given under the terms hereof must be
in writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) trading day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to Company: Deep Field Technologies, Inc.
000 Xxxxxxx 00
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Lender: Cornell Capital Partners, LP.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
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Attention: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three (3) trading days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a nationally recognized overnight delivery
service, shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
18. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The
Lender's remedies provided in this Note shall be cumulative and in addition to
all other remedies available to the Lender under this Note, at law or in equity
(including a decree of specific performance and/or other injunctive relief), no
remedy of the Lender contained herein shall be deemed a waiver of compliance
with the provisions giving rise to such remedy and nothing herein shall limit
the Lender's right to pursue actual damages for any failure by the Company to
comply with the terms of this Note. No remedy conferred under this Note upon the
Lender is intended to be exclusive of any other remedy available to the Lender,
pursuant to the terms of this Note or otherwise. No single or partial exercise
by the Lender of any right, power or remedy hereunder shall preclude any other
or further exercise thereof. The failure of the Lender to exercise any right or
remedy under this Note or otherwise, or delay in exercising such right or
remedy, shall not operate as a waiver thereof. Every right and remedy of the
Lender under any document executed in connection with this transaction may be
exercised from time to time and as often as may be deemed expedient by the
Lender. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Lender and that the remedy at law
for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the Lender shall be entitled, in
addition to all other available remedies, to an injunction restraining any
breach, and specific performance without the necessity of showing economic loss
and without any bond or other security being required.
19. GOVERNING LAW; JURISDICTION. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of New Jersey, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of New
Jersey or any other jurisdictions) that would cause the application of the laws
of any jurisdictions other than the State of New Jersey. Each party hereby
irrevocably submits to the exclusive jurisdiction of the Superior Court of the
State of New Jersey sitting in Xxxxxx County, New Jersey and the United States
Federal District Court for the District of New Jersey
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sitting in Newark, New Jersey, for the adjudication of any dispute hereunder or
in connection herewith or therewith, or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.
20. NO INCONSISTENT AGREEMENTS. None of the parties hereto will hereafter
enter into any agreement, which is inconsistent with the rights granted to the
parties in this Note.
21. THIRD PARTIES. Nothing herein expressed or implied is intended or shall
be construed to confer upon or give to any person or entity, other than the
parties to this Note and their respective permitted successor and assigns, any
rights or remedies under or by reason of this Note.
22. WAIVER OF JURY TRIAL. AS A MATERIAL INDUCEMENT FOR THE LENDER TO LOAN
TO THE COMPANY THE MONIES HEREUNDER, THE COMPANY HEREBY WAIVES ANY RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS AGREEMENT
AND/OR ANY AND ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH THIS TRANSACTION.
23. ENTIRE AGREEMENT. This Note (including any recitals hereto) set forth
the entire understanding of the parties with respect to the subject matter
hereof, and shall not be modified or affected by any offer, proposal, statement
or representation, oral or written, made by or for any party in connection with
the negotiation of the terms hereof, and may be modified only by instruments
signed by all of the parties hereto.
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IN WITNESS WHEREOF, this Promissory Note is executed by the undersigned as of
the date hereof.
CORNELL CAPITAL PARTNERS, LP
By: Yorkville Advisors, LLC
Its: General Partner
By: ______________________________
Name: Xxxx Xxxxxx
Its: Portfolio Manager
DEEP FIELD TECHNOLOGIES, INC.
By: _____________________________
Name: Xxxx Xxxxxx
Title: CEO
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