PROMISSORY NOTE WITH WARRANTS
Exhibit
10.4
NEITHER
THIS NOTE NOR THE SHARES ISSUABLE UPON CONVERSION HEREOF HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY
OTHER
APPLICABLE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES
LAWS. NEITHER THIS NOTE NOR THE SHARES ISSUABLE UPON CONVERSION
HEREOF MAY BE SOLD, PLEDGED, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED
OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT
OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS
OF
THE SECURITIES ACT AND ANY OTHER APPLICABLE SECURITIES
LAWS.
PRIOR
TO ANY REGISTRATION, TRANSFER OR EXCHANGE OF THIS NOTE, (I) THE LENDER SHALL
PRESENT OR SURRENDER TO THE COMPANY THIS NOTE, DULY ENDORSED OR ACCOMPANIED
BY A
WRITTEN INSTRUCTION OF TRANSFER IN FORM SATISFACTORY TO THE COMPANY DULY
EXECUTED BY SUCH XXXXXX, AND (II) THE LENDER SHALL PRESENT TO THE COMPANY
AN
OPINION OF COUNSEL THAT THE TRANSFER OR EXCHANGE OF THE NOTES IS BEING MADE
IN
RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND ANY OTHER APPLICABLE SECURITIES LAWS.
PROMISSORY
NOTE WITH WARRANTS
$25,000.00 |
Dated:
September 25, 2007
|
FOR
VALUE
RECEIVED, uVuMobile, Inc., a Delaware corporation (the “Company”), hereby
promises to pay Xxxxx Xxxxxx an individual and resident of the State of Georgia,
with a mailing address of 0000 Xxxxxxxxx Xxxxx, Xxxxxxx, XX 00000 or his
or her
assigns (the “Lender”) the principal amount of Fifty Thousand Dollars
($25,000.00), together with interest accrued thereon calculated from the
date
hereof in accordance with the provisions of this Note.
Interest
from the date hereof on the principal amount outstanding hereunder from time
to
time until maturity, and after the maturity hereof until paid, shall be payable
at a rate of Twelve Percent (12%) per annum. Interest shall be calculated
on a
year of three hundred and sixty (360) days based upon the actual number of
days
elapsed.
Except
as
otherwise described herein, principal together with all accrued and unpaid
interest thereon shall be payable in a single installment thirty (30) days
from
the date of this Note (the “Maturity Date”). Principal and interest shall be
paid in lawful money of the United States of America in immediately available
funds at the address of the Lender as first set forth above or at such other
place as the Lender may from time to time designate.
As
additional incentive to the Lender, the Company will issue to the Lender
a
warrant to purchase 50,000 shares of common stock at $.10 per share, which
warrant will expire five years from the date of issue. For purposes
of this provision, the shares of common stock issuable upon exercise of the
warrants will be issued as restricted shares with the appropriate restrictive
legend(s) and shall have piggy-back registration rights to be included in
the
Company’s next registration statement filed with the Securities and Exchange
Commission (other than a registration statement on Form S-4 or Form
S-8).
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The
unpaid principal balance of this Note may be prepaid in whole or in part
at any
time and from time to time without premium or penalty. Each prepayment amount
with respect to this Note shall be applied first to the principal balance
of
this Note and then to the accrued and unpaid interest of this Note.
In
lieu
of payment, the Lender shall have the right to convert the then outstanding
principal amount of this Note into shares or units of the equity securities
sold
in any sale of its equity securities (“Qualified Strategic Financing”) at a per
share sale price or unit sale price equal to the per share sale price or
unit
sale price of the Qualified Strategic Financing (the “Purchase Price”). Should
Lender exercise this right to convert, then Lender will be awarded an additional
warrant to purchase 25,000 shares of common stock at an exercise price of
$.10
per share. Each dollar of principal amount then outstanding under this Note
shall constitute a dollar of Purchase Price for the Qualified Strategic
Financing equity securities. At the time of conversion, the Company shall
have
the option of converting all accrued and unpaid interest on this Note on
the
same terms as the conversion of principal herein, or the Company may pay
accrued
and unpaid interest in cash at the time of conversion.
In
the
event the Qualified Strategic Financing does not occur on or prior to the
Maturity Date in lieu of the payment of principal together with all unpaid
and
accrued interest thereon by the Company on the Maturity Date, the Company
will
be allowed up to an additional 90 days to cure the default as described in
the
following paragraph. Should the default not be cured by the 90th day,
or should the
Company file for bankruptcy protection during the 90 days, the Lender will
be
immediately entitled to all rights under the Security Agreement (as hereinafter
defined).
Subject
to the previous paragraph, failure to pay, when due, the principal, any interest
or any other sum payable with respect to the Note, and continuance of the
failure for five (5) business days after the date on which the principal,
installment of interest or other sum is due (whether upon maturity hereof,
upon
any prepayment date, upon acceleration, or otherwise) shall constitute an
event
of default (“Event of Default”) with respect to this Note. Upon an Event of
Default, the interest rate payable in respect of this Note shall increase
from
the date of the Event of Default until the earlier of (1) the date all
outstanding amounts of this Note are paid in full and (2) the date on which
such
Event of Default shall be satisfied or cured, from Twelve Percent (12%) to
Fourteen (14%) and for each day in default the Lender will receive additional
$.10 warrants at the rate of .0333% per dollar lent.
The
Lender understands and agrees that the conversion of this Note into equity
securities of the Company may require the execution of certain agreements
(which
shall be in form reasonably agreeable to the Lender) relating to the purchase
and sale of such securities as well as registration, co-sale, and voting
rights,
if any, relating to such equity securities.
2
If
any
payment on this Note shall be due on a Saturday, a Sunday, or a day which
is a
legal holiday, the payment shall be made without default on the next succeeding
day which is a business day, but any interest-bearing portions of the payment
shall continue to accrue interest until payment during the
extension.
The
Company agrees to pay to the Lender and reimburse the Lender for any and
all
reasonable costs and expenses, including attorney’s fees and court costs, if
any, incurred by the Lender in connection with the enforcement or collection
hereof. The Company waives presentment, protest and demand, notice of
protest, notice of dishonor and nonpayment of this Note and expressly agrees
that this Note or any payment hereunder may be extended from time to time
without in any way affecting the liability of the Company
hereunder.
The
rights and remedies of the Lender hereunder, shall be cumulative and concurrent
and may be pursued singularly, successively or together at the sole discretion
of the Lender, and may be exercised as often as occasion therefor shall occur,
and the failure to exercise any such right or remedy shall in no event be
construed as a waiver or release of the same or any other right or
remedy.
The
Company hereby declares, represents, and warrants that the indebtedness
evidenced hereby is made for the purpose of acquiring or carrying on a business,
professional, or commercial activity and constitutes a strategic investment
by
the Lender in the Company.
The
Lender represents that he is an accredited investor as defined in Rule 501(a)
of
Regulation D promulgated under the Securities Act and is acquiring this Note
for
his or her own account as an investment and not with a view to the resale
or
distribution thereof.
After
all
principal of, and accrued interest at any time owed on, this Note have been
paid
in full, or converted into the Company’s equity securities pursuant to the terms
of this Note, this Note will be surrendered to the Company for cancellation
and
will not be reissued.
Neither
this Note nor the shares of common stock issuable upon conversion hereof
have
been registered under the Securities Act or any other applicable securities
laws
in reliance upon an exemption from the registration requirements of the
Securities Act and such other securities laws. Neither this Note nor
the shares of common stock issuable upon conversion hereof may be sold, pledged,
transferred, encumbered or otherwise disposed of except pursuant to an effective
registration statement under the Securities Act or in a transaction which
is
exempt from registration under the provisions of the Securities Act and any
other applicable securities laws. Prior to any registration, transfer
or exchange of this Note, (i) the Lender shall present or surrender to the
Company this Note, duly endorsed or accompanied by a written instruction
of
transfer in form satisfactory to the Company duly executed by such Lender
or by
his attorney, duly authorized in writing, and (ii) the Lender shall present
to
the Company an opinion of counsel that the transfer or exchange of this Note
is
being made in reliance upon an exemption from the registration requirements
of
the Securities Act and any other applicable securities laws. Any
purported transfer of this Note or the shares of common stock issuable upon
conversion hereof not in compliance with the provisions of this paragraph
shall
be null and void.
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Subject
to the immediately preceding paragraph, this Note may be assigned by the
Lender
or any subsequent lender at anytime or from time to time, provided, however,
that without the prior written consent of the Company, this Note may not
be
assigned by the Lender: (a) during the three (3) month period following the
date
hereof; or (b) to any competitor of the Company. This Note shall inure to
the
benefit of and be enforceable by the Lender and the Lender’s successors and
assigns and any other person to whom the Lender or any subsequent lender
may
grant an interest in the Company’s obligations hereunder, and shall be binding
and enforceable against the Company and the Company’s successors and assigns.
Prior to any sale, assignment, transfer or negotiation of this Note by the
Lender, the Lender shall notify the Company of such proposed sale, assignment,
transfer or negotiation at the Company’s address shown above, or at such other
address as the Company may designate by written notice to the Lender and
shall
comply with the requirements set forth in the immediately preceding paragraph.
Upon completion of such sale, assignment, transfer or negotiation, the
subsequent lender shall become a Lender for all purposes hereunder and shall
be
entitled to future payments of principal and interest and other distributions
under this Note, provided that the right to acquire shares or units of equity
securities of the Company pursuant hereto shall terminate.
This
Note
shall be governed by and construed in accordance with the domestic laws of
the
State of Georgia, without giving effect to any choice of law or conflict
of law
provision or rule (whether of the State of Georgia or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than
the
State of Georgia. Notwithstanding any other provisions of this Note or any
other
instrument or document executed in connection therewith, it is expressly
agreed
and understood that the Company does not intend or expect to pay, nor does
the
Lender intend or expect to charge, accept or collect any interest which,
when
added to any other charge upon the principal, shall be in excess of the highest
lawful rate allowable under the laws of the State of Georgia. Should
acceleration, prepayment or any other charges upon the principal or any portion
thereof result in the computation or earning of interest in excess of the
highest lawful rate allowable under the laws of the State of Georgia, any
and
all such excess is hereby waived and shall be credited to the outstanding
principal balance or returned to the Company.
The
Company’s obligations under this Notes are secured by liens on certain assets of
the Company as specified in that certain Security Agreement of even dated
herewith (the “Security Agreement”) among the Company, the Holder and the other
holder(s) of convertible promissory notes named therein.
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IN
WITNESS WHEREOF, the undersigned have duly executed this Note, or have caused
this Note to be duly executed on their behalf, as of the day and year first
hereinabove set forth.
a
Delaware corporation
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By:
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Name: Xxxxxxx X. Xxxxxxxx
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Title: Interim Chief Executive
Officer
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Accepted:
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By:
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/s/ Xxxxx Xxxxxx | |
Name: Xxxxx Xxxxxx |
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