EXHIBIT 4.10
TERM SHEET
Between
CellPoint Inc.
and
Castle Creek Technology Partners, LLP
1. The Parties will proceed promptly to enter into a new agreement
(which would supersede all prior agreements and the Stipulation and Order,
subject to paragraphs 7,8, and 9 below) governing the convertible note.
2. The two outstanding warrants held by Castle Creek would not be
modified by the new agreement but would continue to be governed by the
provisions of the Stipulation and Order applicable thereto.
3. One-half (50%) of the outstanding principal amount of the
convertible note (approx. $5.4 million), plus interest of approximately
$400,000, or approximately $2.9 million, would be converted into convertible
preferred stock of CellPoint, each share of which would be convertible into
common stock (the reference conversion price for the principal amount and
interest so converted is $.78 per share of common stock). The only anti-dilution
adjustments applicable to the preferred stock would be for stock splits, stock
dividends and the like. It is acknowledged that CellPoint does not have this
type of preferred shares at the moment. The parties agree to either try to find
an alternative solution that achieves a similar result, or that this part of the
agreement is delayed until a shareholders meeting can approve the new type of
shares.
4. The other 50% of the outstanding principal amount plus interest of
the convertible note (approximately $2.9 million) would be represented by a new
convertible note, due in two years, with interest at the rate of 6% per annum,
no principal or interest payments under which would be due until maturity.
CellPoint could prepay at any time all or part of the amounts outstanding under
the new convertible note, without premium or penalty. The new convertible note
would be convertible into common stock at a conversion price of $.78. The only
anti-dilution adjustments applicable to the new convertible note would be for
stock splits, stock dividends and the like, except that (1) if any portion of
the first $950,000 (if more than $950,000 is raised, then Castle Creek will be
entitled to convert such amount in excess of $950,000 at the same rate) raised
by CellPoint is a price less than $.50 per share for common stock (without
reference to any warrants issued in the financing), Castle Creek will have the
right to convert the same principal amount of the new convertible note into
common stock at that same price within five (5) days of when they are notified
of the closing of the financing; and (2) if any subsequent financings by
CellPoint are at a price less than $.70 per share for common stock (without
reference to any warrants issued in the financing), Castle Creek will have the
right to convert the same principal amount of the new convertible note into
common stock at that same price within five (5) days of when they are notified
of the closing of the financing. CellPoint would covenant not to issue equity or
equity-equivalent securities below market at a discount of more than twenty
(20%) percent of the lesser of: (i) the closing market price average on the
NASDAQ of the CellPoint common stock for the preceding five (5) trading days
immediately preceding the date of issuance of such equity of equity-related
securities or (ii) the average of the daily volume weighted average prices for
the preceding five (5) trading days immediately preceding the date of issuance
of such equity of equity-related securities. CellPoint will also not include
more than 50% warrant coverage in such financings.
5. CellPoint would file a Form 8-K with the Securities and Exchange
Commission disclosing the restructuring of its obligations to Castle Creek as
set forth herein within 10 days of execution of definitive documentation (a
draft of the Form 8-K to be provided to Castle Creek for review not less than
two (2) days prior to such filing). CellPoint will file a registration statement
registering all shares issuable to Castle Creek upon conversion of the preferred
stock and the new convertible note within ten (10) days of the execution of
definitive documentation (a draft of such registration statement to be provided
to Castle Creek for review not less than three (3) days prior to such filing).
6. CellPoint will issue a general press release no later than the
morning of March 13, 2002, disclosing general terms of this agreement, which
Castle Creek will have by or early on March 12 for review, changes and suggested
edits.
7. The balance of the existing notes would be either amended or
exchanged for a new note subject to legal assurances as to Castle Creek's
security interest.
8. The company will take all steps immediately after signing definitive
agreements to effectuate this deal, including filing a registration statement.
9. Castle Creek's willingness to complete this transaction is expressly
subject to final documentation agreed by both parties and a complete
finalization of the company's debt negotiations and completion of financing
necessary to address current needs without resort to bankruptcy.
Confirmed and Agreed this 13th day of March, 2002.
CELLPOINT INC.
By: /s/ Xxxxxxx Xxxxxx
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CASTLE CREEK TECHNOLOGY PARTNERS LLC
By: /s/ Xxxxxx Xxxx
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