Contract
Exhibit
10.30
THIS
INSTRUMENT HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND VARIOUS
APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR ASSIGNED OR A SECURITY INTEREST CREATED THEREIN, UNLESS
THE PURCHASER, TRANSFEREE, ASSIGNEE, PLEDGEE OR HOLDER OF SUCH SECURITY INTEREST
COMPLIES WITH ALL APPLICABLE STATE AND FEDERAL SECURITIES LAWS (I.E., SUCH
SECURITIES ARE REGISTERED UNDER SUCH LAWS OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE THEREUNDER) AND UNLESS THE SELLER, TRANSFEROR, ASSIGNOR, PLEDGOR OR
GRANTOR OF SUCH SECURITY INTEREST PROVIDES AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT THE TRANSACTION CONTEMPLATED WOULD NOT BE IN
VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES LAWS.
COGNIGEN
NETWORKS, INC.
SECURED
SUBORDINATED PROMISSORY NOTE
$150,000 November 5,
2007
Salt Lake City, Utah
FOR VALUE
RECEIVED, Cognigen Networks, Inc., a Colorado corporation (the “Company”), promises to pay to
BayHill Capital, LLC, a Utah limited liability company (“Investor”), or its registered
assigns, in lawful money of the United States of America the principal sum of
One Hundred Fifty Thousand Dollars ($150,000), or such lesser amount as shall
equal the outstanding principal amount hereof, together with interest from the
date of this Note on the unpaid principal balance at a rate equal to ten percent
(10%) per annum, computed on the basis of the actual number of days elapsed and
a year of 365 days. All unpaid principal, together with any then
unpaid and accrued interest and other amounts payable hereunder, shall be due
and payable as follows: (i) on December 4th, 2007;
(ii) if the unpaid principal, together with any then unpaid and accrued
interest, has not been paid to Investor on or before December 4th, 2007,
Investor, at its option, shall have the right to have the full amount of the
unpaid principal, together with any then unpaid and accrued interest and other
amounts payable hereunder, repaid in shares of the Company’s common stock, based
upon a conversion price equal to $0.03 per share; and (iii) when, upon or after
the occurrence of an Event of Default (as defined below), such amounts are
declared due and payable by Investor or made automatically due and payable in
accordance with the terms hereof.
THE
OBLIGATIONS DUE UNDER THIS NOTE ARE SECURED BY AN AMENDED SECURITY AGREEMENT
(THE “SECURITY
AGREEMENT”) DATED AS OF THE DATE
HEREOF
AND EXECUTED BY THE COMPANY FOR THE BENEFIT OF INVESTOR. ADDITIONAL
RIGHTS OF INVESTOR ARE SET FORTH IN THE SECURITY AGREEMENT.
The
following is a statement of the rights of Investor and the conditions to which
this Note is subject, and to which Investor, by the acceptance of this Note,
agrees:
1. Definitions. As
used in this Note, the following capitalized terms have the following
meanings:
(a) “Company” includes the
corporation initially executing this Note and any Person which shall succeed to
or assume the obligations of the Company under this Note.
(b) “Event of Default” has the
meaning given in Section 5
hereof.
(c) “Investor” shall mean the
Person specified in the introductory paragraph of this Note or any Person who
shall at the time be the registered holder of this Note.
(d) “Purchase Agreement” has the
meaning given in the introductory paragraph hereof.
(e) “Obligations” shall mean and
include all loans, advances, debts, liabilities and obligations, howsoever
arising, owed by the Company to Investor pursuant to the terms of this Note or
the Purchase Agreement, including, all interest, fees, charges, expenses,
attorneys’ fees and costs and accountants’ fees and costs chargeable to and
payable by the Company hereunder and thereunder.
(f) “Person” shall mean and include
an individual, a partnership, a corporation (including a business trust), a
joint stock company, a limited liability company, an unincorporated association,
a joint venture or other entity or a governmental authority.
(g) “Securities Act” shall mean the
Securities Act of 1933, as amended.
(h) “Transaction Documents” shall
mean this Note, the Purchase Agreement, and such other documents as may
reasonably be required to carry out the intent of the transactions contemplated
thereunder.
2. Interest. Accrued
interest on this Note shall be payable at maturity of the principal amount
hereunder.
3. Prepayment. This
Note may not be prepaid.
4. Events of
Default. The occurrence of any of the following shall
constitute an “Event of
Default” under this Note and the other Transaction
Documents:
(a) Failure to
Pay. The Company shall fail to pay (i) when due any
principal or interest payment on the due date hereunder or (ii) any other
payment required under the terms of
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this Note
or any other Transaction Document on the date due and such payment shall not
have been made within five (5) days of the Company’s receipt of Investor’s
written notice to the Company of such failure to pay; or
(b) Breaches of
Covenants. The Company shall fail to observe or perform any
other covenant, obligation, condition or agreement contained in this Note or the
other Transaction Documents and (i) such failure shall continue for 15 days
after the Company receives notice thereof from Investor, or (ii) if such
failure is not curable within such 15-day period, but is reasonably capable of
cure within 30 days, either (A) such failure shall continue for 30 days or
(B) the Company shall not have commenced a cure in a manner reasonably
satisfactory to Investor within the initial 15-day period; or
(c) Representations and
Warranties. Any representation, warranty, certificate, or
other statement (financial or otherwise) made or furnished by or on behalf of
the Company to Investor in writing in connection with this Note or any of the
other Transaction Documents, or as an inducement to Investor to enter into this
Note and the other Transaction Documents, shall be false, incorrect, incomplete
or misleading in any material respect when made or furnished; or
(d) Voluntary Bankruptcy or Insolvency
Proceedings. The Company shall (i) apply for or consent
to the appointment of a receiver, trustee, liquidator or custodian of itself or
of all or a substantial part of its property, (ii) be unable, or admit in
writing its inability, to pay its debts generally as they mature,
(iii) make a general assignment for the benefit of its creditors,
(iv) be dissolved or liquidated, (v) commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or consent to any such relief or to the
appointment of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it, or (vi) take any
action for the purpose of effecting any of the foregoing; or
(e) Involuntary Bankruptcy or Insolvency
Proceedings. Proceedings for the appointment of a receiver,
trustee, liquidator or custodian of the Company or of all or a substantial part
of the property thereof, or an involuntary case or other proceedings seeking
liquidation, reorganization or other relief with respect to the Company or the
debts thereof under any bankruptcy, insolvency or other similar law now or
hereafter in effect shall be commenced and an order for relief entered or such
proceeding shall not be dismissed or discharged within 30 days of
commencement.
5. Rights of
Investor upon Default. Upon the occurrence or existence of any
Event of Default (other than an Event of Default described in Section 4(d) or 4(e)) and at any time
thereafter during the continuance of such Event of Default, Investor may, by
written notice to the Company, declare all outstanding Obligations payable by
the Company hereunder to be immediately due and payable without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived, anything contained herein or in the other Transaction
Documents to the contrary notwithstanding. Upon the occurrence or
existence of any Event of Default described in Section 4(d) or 4(e), immediately and without
notice, all outstanding Obligations payable by the Company hereunder shall
automatically become immediately due and payable, without presentment,
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demand,
protest or any other notice of any kind, all of which are hereby expressly
waived, anything contained herein or in the other Transaction Documents to the
contrary notwithstanding. In addition to the foregoing remedies, upon
the occurrence or existence of any Event of Default, Investor may exercise any
other right, power or remedy granted to it by the Transaction Documents or
otherwise permitted to it by law, either by suit in equity or by action at law,
or both.
6. Subordination. This
Note shall be subject to and subordinate to prior liens of the Company in favor
of Silicon Valley Bank (with respect to obligations arising pursuant to an
Amended and Restated Loan and Security Agreement dated as of April 23, 2007, to
be effective March 26, 2007), VenCore Solutions, Inc., (with respect to
obligations arising pursuant to a Loan and Security Agreement dated October 11,
2006) and the State of Washington (with respect to an Electronic Partial Payment
Agreement dated November 27, 2006).
7. Successors and
Assigns. Subject to the
restrictions on transfer described in Sections 9 and 10 below, the rights and
obligations of the Company and Investor shall be binding upon and benefit the
successors, assigns, heirs, administrators and transferees of the
parties.
8. Waiver and
Amendment. Any provision of
this Note may be amended, waived or modified upon the written consent of the
Company and Investor.
9. Transfer of this
Note. This Note is not
transferrable.
10. Assignment by the
Company. Neither this Note
nor any of the rights, interests or obligations hereunder may be assigned, by
operation of law or otherwise, in whole or in part, by the Company without the
prior written consent of Investor or by Investor without prior written consent
of the Company.
11. Notices. All notices,
requests, demands, consents, instructions or other communications required or
permitted hereunder shall be in writing and faxed, mailed or delivered to each
party to the respective addresses or facsimile number of the parties as set
forth below, or at such other address or facsimile number as the recipient of
any notice shall have notified the other in writing. All such notices
and communications will be deemed effectively given the earlier of (i) when
received, (ii) when delivered personally, (iii) one business day after
being delivered by facsimile (with receipt of appropriate confirmation),
(iv) one business day after being deposited with an overnight courier
service of recognized standing or (v) four days after being deposited in
the U.S. mail, first class with postage prepaid.
Company:
Cognigen Networks, Inc.
0000 Xxxxx Xxxxxxx Xxxxx, Xxx
000
Englewood, CO 80112
Attention: Xxxx X. Xxxx
Telephone: 000-000-0000
Facsimile:
000-000-0000
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Investor:
BayHill Capital, LLC
0000 X. Xxxxxxxxxx Xxx
Orem, Utah 84097
Attention: Xxxxxx X.
Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy
to:
Xxxx Xxxxxxxx Brown Gee &
Xxxxxxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx
0000
Salt Lake City, UT 84111
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
12. Payment. Payment shall be
made in lawful tender of the United States.
13. Default Rate;
Usury. During any period
in which an Event of Default has occurred and is continuing, the Company shall
pay interest on the unpaid principal balance hereof at a rate per annum equal to
the rate otherwise applicable hereunder plus five percentage
points (5%). In the event any interest is paid on this Note
which is deemed to be in excess of the then legal maximum rate, then that
portion of the interest payment representing an amount in excess of the then
legal maximum rate shall be deemed a payment of principal and applied against
the principal of this Note.
14. Expenses;
Waivers. If action is
instituted to collect this Note, the Company promises to pay all costs and
expenses, including, without limitation, reasonable attorneys’ fees and costs,
incurred in connection with such action. The Company hereby waives
notice of default, presentment or demand for payment, protest or notice of
nonpayment or dishonor and all other notices or demands relative to this
instrument.
15. Governing
Law. This Note and all
actions arising out of or in connection with this Note shall be governed by and
construed in accordance with the laws of the State of Colorado, without regard
to the conflicts of law provisions of the State of Colorado or of any other
state.
The
Company has caused this Note to be issued as of the date first written
above.
COGNIGEN
NETWORKS, INC.
a
Colorado corporation
By: ___________________________
Name: _________________________
Title: __________________________
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