EXHIBIT 10.3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR IN ANY OTHER JURISDICTION. THE SECURITIES REPRESENTED
HEREBY MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS
UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THOSE LAWS.
SECURED PROMISSORY NOTE
Date: May 31, 2005 $1,750,000.00
FOR VALUE RECEIVED, REMOTE DYNAMICS, INC., a corporation organized
under the laws of the State of Delaware (hereinafter called the "BORROWER" or
the "CORPORATION"), hereby promises to pay to the order of SDS CAPITAL GROUP
SPC, LTD., or registered assigns (individually, the "HOLDER", and collectively
with the holders of any and all other notes of same like and tenor, the
"HOLDERS"), the sum of One Million Seven Hundred Fifty Thousand Dollars
($1,750,000.00) on September 30, 2005 (the "SCHEDULED MATURITY DATE"), and to
pay interest on the unpaid principal balance hereof at the rate of eight percent
(8%) per annum; provided, however, that the Scheduled Maturity Date shall be
extended in the event that the SEC elects to review the preliminary proxy
statement relating to obtaining Stockholder Approval (as described in Article V
hereof) by the number of days, not exceeding 60, between the tenth calendar day
after filing such preliminary proxy statement and the date of filing of the
definitive proxy statement with the SEC. The principal amount hereof, together
with all accrued and unpaid interest thereon, shall be due and payable on the
Scheduled Maturity Date. Interest shall accrue on the unpaid principal balance
hereof from the date hereof (the "ISSUE DATE") until the same becomes due and
payable, whether at maturity, or upon prepayment, repayment, or otherwise.
Interest shall be calculated based on a 365-day year and shall be payable in
arrears. All payments of principal and interest shall be made in, and all
references herein to monetary denominations shall refer to, lawful money of the
United States of America. All payments shall be made at such address as the
Holder shall have given or shall hereafter give to the Borrower by written
notice made in accordance with the provisions of this Note.
The term "NOTE" and all references thereto, as used throughout this
instrument, shall mean this instrument as originally executed, or if later
amended or supplemented, then as so amended or supplemented. The obligations of
the Borrower under this Note are secured as provided in a Security Agreement,
dated as of the date hereof, by the Borrower in favor of SDS Capital Group SPC,
Ltd., (the "SECURITY AGREEMENT"). This Note, the Security Agreement, and the
related Registration Rights Agreement, dated as of the date hereof, between the
Holder and
the Borrower (the "REGISTRATION RIGHTS AGREEMENT") are collectively referred to
herein as the "NOTE TRANSACTION DOCUMENTS."
ARTICLE I
PREPAYMENT
A. Mandatory Prepayment. Upon the occurrence of an Event of Default (as
defined below), this Note shall be prepaid by the Borrower in accordance with
the provisions of Article VI hereof.
B. Prepayment at Borrower's Option. This Note may not be prepaid at the
option of Borrower without the prior written consent of the Holder.
ARTICLE II
CERTAIN DEFINITIONS
The following terms shall have the following meanings:
"COMMON STOCK" means the shares of common stock, $.01 par value per share,
of the Borrower.
"EXCHANGE DATE" and "EXCHANGE TRIGGER DATE" mean the date on which
Stockholder Approval (as defined in Article V) is obtained.
"SERIES B CERTIFICATE OF DESIGNATIONS" means the Corporation's Certificate
of Designation, Preferences and Rights of Series B Preferred Stock, as in effect
from time to time.
"SERIES B PREFERRED STOCK" means shares of the Corporation's Series B
Convertible Preferred Stock.
"SERIES C-1 WARRANT" means a warrant to acquire shares of Common Stock
substantially in the form of the warrant attached hereto as Exhibit A.
"SERIES C-2 WARRANT" means a warrant to acquire shares of Common Stock
substantially in the form of the warrant attached hereto as Exhibit B.
"WARRANTS" means the Series C-1 Warrants and Series C-2 Warrants issuable
upon exchange of this Note as described in Article IV.
ARTICLE III
[INTENTIONALLY OMITTED]
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ARTICLE IV
MANDATORY EXCHANGE
A. Automatic Exchange. If Stockholder Approval (as defined in Article
V) is obtained on or prior to the Scheduled Maturity Date, then the Note shall
be automatically exchanged for a Series C-1 Warrant and a Series C-2 Warrant to
purchase such number of shares of Common Stock as are determined in accordance
with the formula set forth in Article IV.B, and (ii) all accrued and unpaid
interest shall immediately become due and payable. The Corporation shall provide
immediate written notice to the holder upon obtaining Stockholder Approval and
the Corporation and the Holder shall follow the applicable exchange procedures
set forth in Article IV.C.
B. Exchange Formula. The number and kind of warrants issuable upon
exchange of the Note shall be determined as follows:
Series C-1 Warrants. In exchange for the Note, the Borrower shall
issue to the Holder the Series C-1 Warrant.
Series C-2 Warrants. The Borrower shall also issue to the Holder the
C-2 Warrant.
C. Mechanics of Exchange. Following receipt by the Holder of written
notice of the Stockholder Approval, the Holder shall surrender or cause to be
surrendered this Note, duly endorsed, as soon as practicable thereafter to the
Corporation or the transfer agent. Upon receipt by the Corporation of a
facsimile copy of this Note from the Holder, the Corporation shall immediately
send, via facsimile, a confirmation to the Holder stating that this Note has
been received, the date upon which the Corporation expects to deliver the Series
C-1 Warrants and the Series C-2 Warrants (the "WARRANTS") issuable upon such
exchange and the name and telephone number of a contact person at the
Corporation regarding the conversion. The Corporation shall not be obligated to
issue Warrants upon an exchange unless either this Note is delivered to the
Corporation or the transfer agent as provided above, or the Holder notifies the
Corporation or the transfer agent that such certificates have been lost, stolen
or destroyed and delivers the documentation to the Corporation required by
Article IX.H hereof.
(i) Delivery of Warrants Upon Exchange. Upon the surrender of this
Note pursuant to paragraph C above, the Corporation shall, no later than the
later of (a) the second business day following the Exchange Trigger Date and (b)
the business day following the date of such surrender (or, in the case of lost,
stolen or destroyed certificates, after provision of indemnity pursuant to
Article IX.H), issue and deliver to the holder or its nominee the number of
Warrants issuable upon exchange of the Note.
(ii) Taxes. The Corporation shall pay any and all taxes which may
be imposed upon it with respect to the issuance and delivery of the Warrants.
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ARTICLE V
CERTAIN AGREEMENTS OF THE CORPORATION
A. [Intentionally omitted].
B. Reservation of Shares. Until the Scheduled Maturity Date or earlier
cancellation of this Note, the Corporation shall at all times have authorized,
and reserved for issuance as contemplated by this Note, a sufficient number of
shares of Common Stock to provide for the exercise in full of the Warrants.
C. [Intentionally omitted].
D. Certain Actions Prohibited. The Corporation shall not, by amendment
of its charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Note and in the taking
of all such action as may reasonably be requested by the holder of this Note in
order to protect the economic benefit inuring to the holder hereof and the
exchange privileges of the holder of this Note against impairment, consistent
with the tenor and purpose of this Note.
E. Successors and Assigns. This Note shall be binding upon any entity
succeeding to the Corporation by merger, consolidation, or acquisition of all or
substantially all of the Corporation's assets.
F. Stockholder Approval; Special Meeting of Stockholders. Promptly
following the Issue Date, the Corporation and its Board of Directors shall (i)
prepare proxy materials and solicit proxies requesting Stockholder Approval,
(ii) call a special meeting (the "SPECIAL MEETING") of the Corporation's
stockholders (which shall be held no later than August 1, 2005, subject to any
delay caused solely by the SEC's review of the preliminary proxy statement
relating thereto) for the purpose of obtaining Stockholder Approval, (iii)
recommend that the Corporation's stockholders vote in favor of such approval,
and (iv) otherwise use commercially reasonable best efforts to obtain
Stockholder Approval. If Stockholder Approval is not obtained at the Special
Meeting, the Corporation and its Board of Directors shall continue to use
commercially reasonable best efforts to obtain Stockholder Approval until
Stockholder Approval is obtained. A request for Stockholder Approval, unless the
Board of Directors receives an opinion of counsel advising that such
recommendation would constitute a breach of the Directors' fiduciary duties
imposed by applicable law, shall include a recommendation that the Corporation's
stockholders vote in favor of such approval. All expenses related to the
solicitation of proxies with respect to, or otherwise incurred in connection
with, obtaining Stockholder Approval shall be borne by the Corporation.
"STOCKHOLDER APPROVAL" means the affirmative vote by the holders of the
requisite number of votes cast at a meeting of stockholders to duly and validly
approve (i) the issuance of Series C-1 Warrants and Series C-2 Warrants upon
exchange of this Note in accordance with the terms hereof and (ii) any other
matter that the Borrower and Holder shall agree in writing to submit to the
stockholders for approval in connection with the issuance of this Note and
related transactions.
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ARTICLE VI
EVENTS OF DEFAULT
A. Events of Default. In the event (each of the events described in
clauses (i)-(vii) below after expiration of the applicable cure period (if any)
being an "EVENT OF DEFAULT"):
(i) the Corporation fails to pay the principal hereof, and/or the
accrued and unpaid interest thereon, when due, whether at maturity, upon
acceleration or otherwise;
(ii) except with respect to matters covered by subparagraph (i)
above, as to which such subparagraph shall apply, the Corporation otherwise
shall breach any material term hereunder or under the other Note Transaction
Documents, including, without limitation, the representations and warranties
contained therein (i.e., in the event of a material breach as of the date such
representation and warranty was made) and if such breach is curable, shall fail
to cure such breach within 10 business days after the Corporation has been
notified thereof in writing by the Holder;
(iii) the Corporation shall:
(a) sell, convey or dispose of all or substantially all of
its assets (the presentation of any such transaction for stockholder approval
being conclusive evidence that such transaction involves the sale of all or
substantially all of the assets of the Corporation);
(b) merge, consolidate or engage in any other business
combination with any other entity (other than pursuant to a migratory merger
effected solely for the purpose of changing the jurisdiction of incorporation of
the Corporation and other than pursuant to a merger in which the Corporation is
the surviving or continuing entity and its capital stock is unchanged) provided
that such merger, consolidation or business combination is required to be
reported by the Corporation on a Current Report pursuant to Item 1 of Form 8-K,
or any successor form;
(c) either (i) fail to pay, when due, or within any
applicable grace period, any payment with respect to any indebtedness of the
Corporation in excess of $250,000 due to any third party, other than payments
contested by the Corporation in good faith, or otherwise breach or violate any
agreement for monies owed or owing in an amount in excess of $250,000 which
breach or violation permits the other party thereto to declare a default or
otherwise accelerate amounts due thereunder, or (ii) suffer to exist any other
default or event of default under any agreement binding the Corporation which
default or event of default would or is likely to have a material adverse effect
on the business, operations, properties, prospects or financial condition of the
Corporation;
(d) on or prior to the second anniversary of the Issue Date,
issue or agree to issue any future equity or equity-linked securities or debt
which is convertible into equity or in which there is an equity component,
except for any Excluded Issuance (as such term is defined in the Series B
Certificate of Designations);
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(e) fail to issue the Warrants in exchange for this Note as
required hereunder;
(iv) the Corporation or any subsidiary of the Corporation shall
make an assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business; or such a receiver or trustee shall otherwise be
appointed;
(v) bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Corporation or
any subsidiary of the Corporation, and if instituted against the Corporation or
any subsidiary of the Corporation by a third party, shall not be dismissed
within 60 days of their initiation, or
(vi) a Redemption Event (as such term is defined in the Series B
Certificate of Designations) shall occur and be continuing under the Series B
Certificate of Designations,
(vii) an Event of Default (as such term is defined in the applicable
Note Transaction Document) shall occur and be continuing under any other Note
Transaction Document,
then, upon the occurrence of any such Event of Default, at the option of each
Holder, exercisable in whole or in part at any time and from time to time by
delivery of a Default Notice (as defined in paragraph C below) to the
Corporation while such Event of Default continues, the Corporation shall pay the
Holders (and upon the occurrence of an Event of Default specified in
subparagraphs (iv) and (v) of this paragraph A, the Corporation shall be
required to pay the Holders), in satisfaction of its obligation to pay the
outstanding principal amount of the Notes and accrued and unpaid interest
thereon, an amount equal to the Default Amount (as defined in paragraph B below)
and such Default Amount, together with all other ancillary amounts payable
hereunder, shall immediately become due and payable, all without demand,
presentment or notice, all of which are hereby expressly waived, together with
all costs, including, without limitation, legal fees and expenses of collection,
and the Holder shall be entitled to exercise all other rights and remedies
available at law or in equity. For the avoidance of doubt, the occurrence of any
event described in clauses (i), (iii), (iv), (v), (vi) and (vii) above shall
immediately constitute an Event of Default and there shall be no cure period.
Upon the Corporation's receipt of any Default Notice hereunder, the Corporation
shall immediately (and in any event within one business day following such
receipt) deliver a written notice (a "DEFAULT ANNOUNCEMENT") to all Holders of
the Notes stating the date upon which the Corporation received such Default
Notice and the amount of the Notes covered thereby. Following the delivery of a
Default Announcement hereunder, at any time and from time to time, each Holder
of the Notes may request (either orally or in writing) information from the
Corporation with respect to the instant default (including, but not limited to,
the aggregate principal amount outstanding of Notes covered by Default Notices
received by the Corporation) and the Corporation shall furnish (either orally or
in writing) as soon as practicable such requested information to such requesting
Holder.
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B. Definition of Default Amount. The "DEFAULT AMOUNT" with respect to a
Note means an amount equal to the aggregate principal amount outstanding of the
Notes being paid plus all accrued and unpaid interest thereon through the
payment date.
C. Failure to Pay Default Amounts. If the Corporation fails to pay any
Holder the Default Amount with respect to any Note within five business days
after its receipt of a notice requiring such repayment (a "DEFAULT NOTICE"),
then the Holder of any Note delivering such Default Notice shall be entitled to
interest on the Default Amount at a per annum rate equal to the lower of
twenty-four percent (24%) and the highest interest rate permitted by applicable
law from the date on which the Corporation receives the Default Notice until the
date of payment of the Default Amount hereunder. In the event the Corporation is
not able to repay all of the outstanding Notes subject to Default Notices
delivered prior to the date upon which such repayment is to be effected, the
Corporation shall repay the outstanding Notes from each Holder pro rata, based
on the total amounts due on the Notes at the time of repayment included by such
Holder in all Default Notices delivered prior to the date upon which such
repayment is to be effected relative to the total amounts due under the Notes at
the time of repayment included in all of the Default Notices delivered prior to
the date upon which such repayment is to be effected.
ARTICLE VII
[INTENTIONALLY OMITTED]
ARTICLE VIII
CONSENT RIGHTS
Until the Scheduled Maturity Date or earlier cancellation of this Note,
the Corporation shall not, in each case without first obtaining the written
consent of the holder of this Note:
A. redeem, or declare or pay any dividends (whether in cash or stock),
or otherwise make any distributions with respect to any class or series of
capital stock of the Corporation, except for dividends and distributions payable
solely in the capital stock of the Corporation, (ii) prepay any outstanding
indebtedness of the Corporation, or (iii) create or sell any securities that
rank senior to or pari passu with the Note.
B. amend its certificate of incorporation or bylaws;
C. sell all or substantially all of its assets or stock, or consolidate
or merge with another entity;
D. enter into or permit to occur any Corporate Change transaction;
E. sell, transfer or encumber technology, other than licenses granted
in the ordinary course of business;
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F. liquidate, dissolve, recapitalize or reorganize;
G. make any Dilutive Issuance (as defined in the Company's Certificate
of Designation, Preferences and Rights of Series A Convertible Preferred Stock
or the Company's Certificate of Designation, Preferences and Rights of Series B
Convertible Preferred Stock);
H. enter into any agreement, commitment, understanding or other
arrangement to take any of the foregoing actions; or
I. cause or authorize any subsidiary of the Corporation to engage in
any of the foregoing actions.
ARTICLE IX
EXCHANGE RIGHT IN FUTURE FINANCINGS
If and when the Company completes an offering of (i) equity or
equity-linked securities, or (ii) debt that is convertible into equity or in
which there is an equity component ("ADDITIONAL SECURITIES"), the Company shall
offer a number of such Additional Securities to the holder in accordance with
the following provisions:
A. Prior to the closing of the offering, the Company shall deliver a
notice (the "NOTICE") to the holder stating (A) its bona fide intention to offer
such Additional Securities, (B) the number of such Additional Securities to be
offered, (C) the price and terms, if any, upon which it proposes to offer such
Additional Securities, and (D) the anticipated closing date of the sale of such
Additional Securities.
B. By written notification received by the Company within five (5)
trading days after giving of the Notice, the holder may elect to purchase or
obtain, at the price and on the terms specified in the Notice, up to that
portion of such Additional Securities that have a total purchase price equal to
the principal amount of the Note; provided, however, that any holder of this
Note who elects to purchase Additional Securities pursuant to this Article IX
shall be required to surrender to the Company the Note, plus all accrued
interest hereon, and the Company shall accept such Note as payment in full for
such Additional Securities.
C. The rights set forth in this Article IX shall not be applicable to
(A) the issuance or sale of shares of Common Stock (or options therefor) to
employees, officers, directors, or consultants of the Company for the primary
purpose of soliciting or retaining their employment or service pursuant to a
stock option plan (or similar equity incentive plan) approved in good faith by
the Board of Directors, (B) the issuance of Common Stock in connection with a
bona fide underwritten public offering at an offering price per share (prior to
underwriter's commissions and discounts) of not less than 200% of the Conversion
Price of the Series A Preferred Stock (if outstanding) or the Series B Preferred
Stock (if outstanding) (as adjusted to reflect any stock dividends,
distributions, combinations, reclassifications and other similar transactions
effected by the Company in respect to its Common Stock) that results in total
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proceeds to the Company of at least $25,000,000, (C) the issuance or sale of the
Series B Preferred Stock, the Warrants, or the shares of Common Stock issuable
upon conversion and exercise thereof, (D) the issuance of securities in
connection with mergers, acquisitions, strategic business partnerships or joint
ventures approved by the Board of Directors and the primary purpose of which, in
the reasonable judgment of the Board of Directors, is not to raise additional
capital or (E) any issuance of securities as to which the holder shall have
executed a written waiver of the rights contained in this Article IX.
D. The rights set forth in this Article IX may not be assigned or
transferred.
E. The provisions of this Article IX shall be of no further force or
effect upon the consummation of any transaction (other than those transactions
contemplated by the Securities Purchase Agreement entered into as of the date
hereof by and among the Company and the initial holders of the Series B
Preferred Stock) resulting in the issuance of the Company's Common Stock in
connection with a bona fide offering at an offering price per share (prior to
any underwriter's commissions and discounts) of not less than $3.10 (as adjusted
to reflect any stock dividends, distributions, combinations, reclassifications
and other similar transactions effected by the Company in respect to its Common
Stock) that results in total net proceeds to the Company of at least
$25,000,000.
ARTICLE X
MISCELLANEOUS
A. Failure or Indulgency Not Waiver. No failure or delay on the part of
any Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege.
B. Notices. Any notices required or permitted to be given under the
terms of this Note shall be sent by certified or registered mail (return receipt
requested) or delivered personally or by courier or by confirmed telecopy, and
shall be effective five days after being placed in the mail, if mailed, or upon
receipt or refusal of receipt, if delivered personally or by courier or
confirmed telecopy, in each case addressed to a party. The addresses for such
communications shall be:
If to the Corporation:
Remote Dynamics, Inc.
1155 Kas Drive, Suite 100
Richardson, TX 75081-1999
Telephone: (972) 301-2733
Facsimile: (972) 301-2263
Attention: J. Raymond Bilbao, Esquire
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with a copy simultaneously transmitted by like means (which
transmittal shall not constitute notice hereunder) to:
Locke Liddell & Sapp LLP
2200 Ross Avenue, Suite 2200
Dallas, TX 75201-6776
Telephone: (214) 740-8570
Facsimile: (214) 756-8570
Attention: Stephen L. Sapp, Esquire
If to the Holder, to the address set forth under such Holder's name on the
signature page to the Exchange Agreement executed by such Holder. Each party
shall provide notice to the other parties of any change in address or the
address of any transferee of the Note.
C. Amendment Provision. This Note and any provision hereof may be
amended only by an instrument in writing signed by the Corporation and the
Holders of a majority of the then outstanding principal amount of the Notes.
D. Assignability. This Note shall be binding upon the Corporation and
its successors and assigns and shall inure to the benefit of the Holder and its
successors and assigns. Notwithstanding anything to the contrary contained in
this Note or the Note Transaction Documents, this Note may be pledged and all
rights of the Holder under this Note may be assigned to any affiliate or to any
other person or entity without the consent of the Corporation.
E. Cost of Collection. If an Event of Default occurs hereunder, the
Corporation shall pay the Holder hereof costs of collection, including
reasonable attorneys' fees.
F. Governing Law; Jurisdiction. This Note shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware. The Corporation
irrevocably consents to the jurisdiction of the United States federal courts and
the state courts located in the State of Delaware in any suit or proceeding
based on or arising under this Note and irrevocably agrees that all claims in
respect of such suit or proceeding may be determined in such courts. The
Corporation irrevocably waives the defense of an inconvenient forum to the
maintenance of such suit or proceeding. The Corporation further agrees that
service of process upon the Corporation mailed by first class mail shall be
deemed in every respect effective service of process upon the Corporation in any
such suit or proceeding. Nothing herein shall affect the right of any Holder to
serve process in any other manner permitted by law. The Corporation agrees that
a final non-appealable judgment in any such suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on such judgment
or in any other lawful manner.
G. Denominations. At the request of the Holder, upon surrender of this
Note, the Corporation shall promptly issue new Notes in the aggregate
outstanding principal amount hereof, in the form hereof, in such denominations
of at least $25,000 as the Holder shall request.
H. Lost or Stolen Notes. Upon receipt by the Corporation of (i)
evidence of the loss, theft, destruction or mutilation of any Note and (ii) (y)
in the case of loss, theft or destruction, of
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indemnity (without any bond or other security) reasonably satisfactory to the
Corporation, or (z) in the case of mutilation, upon surrender and cancellation
of any Note, the Corporation shall execute and deliver a new Note of like tenor
and date.
I. Payment of Cash; Defaults. Whenever the Corporation is required to
make any cash payment to a Holder under the Notes (whether a Default Amount or
upon prepayment, repayment or otherwise), such cash payment shall be made in
U.S. dollars to the Holder within five business days after delivery by such
Holder of a notice specifying that the Holder elects to receive such payment in
cash and the method (e.g., by check, wire transfer) in which such payment should
be made. If such payment is not delivered within such five business day period,
such Holder shall thereafter be entitled to interest on the unpaid amount at a
per annum rate equal to the lower of twenty-four percent (24%) and the highest
interest rate permitted by applicable law until such amount is paid in full to
the Holder.
J. Status as Note Holder. Upon an exchange of this Note for Warrants,
(i) the principal amount of the Notes (but none of the accrued and unpaid
interest thereon) shall be deemed converted into Warrants as of the Exchange
Date and (ii) the Holder's rights as a Holder of such Notes shall cease and
terminate, excepting only the right (A) to receive the Warrants and (B) to
exercise any remedies provided herein or otherwise available at law or in equity
to such Holder because of a failure by the Corporation to comply with the terms
of the Notes.
K. Remedies Cumulative. The remedies provided in this Note shall be
cumulative and in addition to all other remedies available under this Note, at
law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit a Holder's right to pursue
actual damages for any failure by the Corporation to comply with the terms of
this Note. The Corporation acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holders of the Notes and that the
remedy at law for any such breach may be inadequate. The Corporation therefore
agrees, in the event of any such breach or threatened breach, that the Holders
of the Notes shall be entitled, in addition to all other available remedies, to
an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.
L. Business Day. For purposes of this Note, the term "BUSINESS DAY"
means any day, other than a Saturday or Sunday or a day on which banking
institutions in the State of Delaware are authorized or obligated by law,
regulation or executive order to close. If any payment to be made hereunder
shall be stated to be or become due on a day which is not a business day, such
payment shall be made on the next following business day and such extension of
time shall be included in computing interest in connection with such payment.
M. Certain Waivers. Borrower and each endorser hereby waive
presentment, notice of nonpayment or dishonor, protest, notice of protest and
all other notices in connection with the delivery, acceptance, performance,
default or enforcement of payment of this Note, and hereby waive all notice or
right of approval of any extensions, renewals, modifications or forbearances
which may be allowed.
N. JURY TRIAL WAIVER. BORROWER HEREBY WAIVES, AND HOLDER BY ITS
ACCEPTANCE HEREOF THEREBY WAIVES, TRIAL BY JURY IN ANY LEGAL
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PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATED TO THIS NOTE
OR THE RELATIONSHIP EVIDENCED HEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR HOLDER TO ACCEPT AND RELY UPON THIS NOTE.
O. Severability. If any provision of this Note shall be prohibited or
invalid, under applicable law, it shall be ineffective only to such extent,
without invalidating the remainder of this Note.
P. Maximum Interest Rate. If the effective interest rate on this Note
would otherwise violate any applicable usury law, then the interest rate shall
be reduced to the maximum permissible rate and any payment received by the
Holder in excess of the maximum permissible rate shall be treated as a
prepayment of the principal of this Note.
[Remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, Borrower has caused this Note to be executed by its
duly authorized officer as of the date first written above.
REMOTE DYNAMICS, INC.
By: /s/ W. Michael Smith
--------------------
Name: W. Michael Smith
Title: Chief Operating Officer
[Signature page to Secured Promissory Note.]
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EXHIBIT A
FORM OF SERIES C-1 WARRANT
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EXHIBIT B
FORM OF SERIES C-2 WARRANT
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