Exhibit 2.7
PROMISSORY NOTE
$700,000.00 May 13, 2005
FOR VALUE RECEIVED, the undersigned, RELATIONSERVE, INC., a Delaware
corporation (the "COMPANY"), having an address at 6400 Congress Avenue, Suite
2700, Boca Raton, Florida 33487, hereby promises to pay on or before the
Maturity Date (as defined herein) to the order of STACY MCCALL (the "HOLDER"),
having an address at 6700 North Andrews Avenue, 2nd Floor, Ft. Lauderdale,
Florida 33309, the principal sum of seven hundred thousand dollars and No/100ths
($700,000.00) (the "PRINCIPAL AMOUNT"), together with interest thereon on the
unpaid principal balance at the rate or rates hereinafter provided (this
"NOTE").
In consideration of the premises contained herein, the Company agrees
and covenants as follows:
1. INTEREST. The unpaid principal balance from time to time outstanding
hereunder shall bear interest from and after the date hereof until the earlier
of (i) the Maturity Date and (ii) the date on which this Note is paid in full,
at a fixed rate per annum equal to six percent (6%). Interest on this Note shall
be computed on the basis of a 365-day year for the actual number of days
elapsed. Notwithstanding the provisions of this Note, if the rate of interest
payable hereunder is limited by law, the rate payable hereunder shall be the
lesser of: (a) the rate set forth in this Note and (b) the maximum rate
permitted by law. If, however, interest is paid hereunder in excess of the
maximum rate of interest permitted by law, any interest so paid that exceeds
such maximum rate shall, at the option of the Holder, either: (a) be considered
a payment of the Principal Amount and be applied in reduction of the Principal
Amount due on this Note to the extent of such excess or (b) be returned to the
Company.
2. PAYMENTS AND MATURITY. The entire principal balance of this Note plus
all accrued interest thereon shall be due and payable on May 13, 2007 or such
later date as the Holder may determine, provided that such date may be extended
only if the accrued interest payable as of May 13, 2007 has been paid (the
"MATURITY DATE"). Notwithstanding the foregoing, the Maturity Date of this Note
shall be accelerated (i) as to 50% of the original principal amount ($350,000)
and accrued interest on such amount to that date upon which Relationserve, or
any parent to Relationserve, shall close on a private placement or public
offering of its securities with aggregate gross proceeds (exclusive of
discounts, commissions, and expenses) of not less than $5,000,000; and (ii) as
to the remaining 50% of the original principal amount ($350,000) and accrued
interest on such amount to that date upon which Relationserve, or any parent to
Relationserve, shall close on a private placement or public offering of its
securities with aggregate gross proceeds (exclusive of discounts, commissions,
and expenses) of not less than $10,000,000. On the Maturity Date, the Principal
Amount and all accrued and unpaid interest thereon shall be due and payable
without notice or demand by the Holder. Any sums required to be withheld from
any payment to be made by the Company hereunder by operation of law or pursuant
to any order, judgment or execution may be withheld by the Company and paid in
accordance therewith.
3. DEFAULT INTEREST. Upon the occurrence of an Event of Default (as
hereinafter defined), the unpaid Principal Amount shall bear interest from the
date of the occurrence of such Event of Default, until such Event of Default is
cured, at the fixed rate of six percent (6%) per annum.
4. APPLICATION OF PAYMENTS. All payments made on account of this Note,
including prepayments, shall be applied, first, to the payment of any costs of
collection or enforcement then due hereunder, second, to the payment of accrued
and unpaid interest then due hereunder, and the remainder, if any, shall be
applied to the unpaid Principal Amount. All payments on account of this Note
shall be paid in lawful money of the United States of America by check or wire
transfer.
5. PREPAYMENT. The Company may prepay the unpaid Principal Amount, together
with all accrued and unpaid interest, in whole or in part, at any time or from
time to time, without premium or penalty. Any partial pre-payments of the unpaid
Principal Amount shall be applied to first to the Principal Amount in inverse
order of maturity.
6. EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an event of default (individually an "Event of Default"
and collectively "Events of Default") under the terms of this Note:
(a) the Company shall fail to pay to the Holder when due, any of the
Principal Amount, interest or other amounts payable by the Company to the Holder
under the terms of this Note;
(b) the Company's failure to perform, keep or observe any other
material covenant, condition, promise, agreement, term obligation,
representation or warranty under this Note, and such failure continues uncured
for a period of thirty (30) days after notice by the Holder;
(c) the Company becomes the subject of any voluntary or involuntary
bankruptcy, insolvency or similar proceeding and, in the case of an involuntary
proceeding, such proceeding is not stayed or dismissed within thirty (30) days
of filing;
(d) the Company shall liquidate, dissolve, terminate or suspend its
business operations;
(e) the Company makes a general assignment for the benefit of
creditors; or
(f) the Company admits its inability to pay its debts as the same
become due.
7. REMEDIES. Upon the occurrence and during the continuation of an Event of
Default, at the option of the Holder, the entire remaining balance of the unpaid
principal balance, together with all accrued and unpaid interest thereon in
accordance with Section 3 and other amounts due under this Note shall
immediately become due and payable. The Company shall also be responsible for
all costs incurred by the Holder to enforce or collect this Note, including,
without limitation, reasonable attorneys' fees and expenses and court costs. The
Company hereby waives presentment, protest and demand, notice of protest, notice
of demand and dishonor and expressly agrees that this Note, or any payment due
hereunder, may be extended from time to time, without in any way affecting the
liability of any company, guarantor or endorser.
8. GOVERNING LAW. The provisions of this Note shall be governed by the
internal laws of the state of Delaware without reference to the principles of
conflicts of laws.
9. CONSENT TO JURISDICTION. The Company hereby irrevocably consents and
submits to the jurisdiction and venue of any state or federal court in the
Florida Southern District over any suit, action or proceeding arising out of or
relating to this Note, waives to the fullest extent permitted by law, any
objection that the Company may now or hereafter have to the laying of venue of
any such suit, action or proceeding brought in an inconvenient forum and
consents to the service of process of any suit, action or proceeding in any
court by the mailing of copies of such process to the Company by certified or
registered mail at the Company's address set forth in the records of the Holder.
10. HEADINGS. The captions used in this Note are for convenience of
reference only and shall not be construed to affect any of the terms hereof.
11. NOTICES. All notices, requests, demands or other communications
hereunder shall be in writing and shall be sent to the receiving party at its
address as set forth above, or at such other address as it shall have notified
the other party of by notice properly given hereunder, and shall be effective
upon the earlier to occur of receipt, when delivered by hand or by overnight
courier, or three (3) days after being mailed, certified mail, return receipt
requested.
12. TERMS. For purposes of this Note, the term "Holder" shall include any
subsequent successors or assigns of this Note.
13. SUCCESSORS AND ASSIGNS OF COMPANY. This Note shall not be assignable by
the Company; provided, however, all of the covenants, obligations, promises and
agreements contained in this Note made by the Company shall be binding upon its
successors. In the event this Note is assigned by the Holder, the Company agrees
to issue new notes to any such assignee and agrees to sign any amendment to the
Pledge reflecting such assignment.
14. AMENDMENT. No amendment or waiver of any provision of this Note, nor
consent to any departure by the Company herefrom, shall in any event be
effective unless the same shall be in writing and signed by the Holder and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
15. MISCELLANEOUS. No failure or delay by the Holder to insist upon the
strict performance of any term, condition, covenant or agreement of this Note,
nor failure to exercise any right, power or remedy consequent upon a breach
thereof, shall constitute a waiver of any such term, condition, covenant or
agreement or of any such breach, or preclude the Holder from exercising any such
right, power or remedy at a later time or times. By accepting payment after the
due date of any amount payable under this Note, the Holder shall not be deemed
to waive the right either to require prompt payment when due of all other
amounts payable under the terms of this Note or to declare any Event of Default
for the failure to effect such prompt payment of any such other amount. No
course of dealing or conduct shall be effective to amend, modify, waive, release
or change any provisions of this Note.
16. WAIVER OF JURY TRIAL. THE COMPANY HEREBY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS NOTE OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the Company has executed this Note as of the date first
above written.
RELATIONSERVE, INC.
By: /s/ Jonathan Honig
------------------
Name: Jonathan Honig
Title: President
