EXHIBIT 4.10
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
EXEMPTION FROM REGISTRATION UNDER THE FOREGOING LAWS. ACCORDINGLY, THIS NOTE MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT (I) AN OPINION OF
COUNSEL SATISFACTORY TO VIPER MOTORCYCLE COMPANY THAT SUCH SALE, TRANSFER OR
OTHER DISPOSITION MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES
ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR (II) SUCH REGISTRATION.
PROMISSORY NOTE
$300,000.00 June 2, 2004
Minneapolis, Minnesota
FOR VALUE RECEIVED, the undersigned, VIPER MOTORCYCLE COMPANY, a
Minnesota corporation (the "Maker"), hereby promises to pay to the order of
[RFJM Partners, LLC/Xxxxx Xxxxxxxx, III] (the "Holder") at any place designated
in writing by the Holder, in lawful money of the United States of America and in
immediately available funds, the principal sum of Three Hundred Thousand Dollars
($300,000.00) (the "Principal Amount"), together with simple interest in like
funds on the unpaid balance thereof, computed on the basis of actual days
elapsed and a year of 360 days, from the date hereof until this Note is paid in
full, at a rate per annum of ten percent (10%). The Principal Amount, together
with all accrued and unpaid interest, shall be due and payable in full by the
Holder on or before the earlier of: (1) an Acceleration Date (defined below), or
(2) [May 26, 2005/May 27, 2005] (the "Maturity Date"). Interest on the unpaid
principal balance of this Note shall not be due until the Maturity Date.
The following events constitute an "Acceleration Date" under this Note:
(1) the closing of a financing in which the Maker receives a gross amount of no
less than $2,000,000 (including an initial public offering (an "IPO")) through
issuance of Maker's common stock or of securities convertible, exchangeable for
or exercisable for common stock, whether in the form of equity, debt or a
combination thereof (a "Financing"), (2) an Event of Default (defined below)
under this Note, or (3) closing of a Corporate Transaction (defined below). A
"Corporate Transaction" means (A) a sale of all or substantially all of the
Maker's assets, or (B) excluding an IPO, a transaction (or series of
transactions, including a merger, consolidation or other reorganization of the
Maker, or issuance of additional shares of capital stock of the Maker other than
in connection with capital raising transactions) which results in the holders of
the Maker's capital stock prior to the transaction owning less than 50% of the
voting power, on a combined, fully diluted, as-converted basis for all
outstanding classes thereof, of the Maker's voting capital stock after the
transaction.
The Maker agrees to provide Holder with written notice of any sale of
debt, equity or hybrid securities (the "Exchange Offering"), occurring prior to
commencement of an IPO, in which the Maker will receive gross proceeds in an
amount equal to or greater than $2,000,000 in additional capital. Holder shall
have the right, exercisable upon written notice delivered to the Maker, no later
than 10 days following Xxxxxx's receipt of the notice from the Maker describing
the Exchange Offering, to convert the Note into that whole number of securities
of the type issued in the Exchange Offering that is determined by dividing the
then outstanding principal amount of the Note plus any accrued and unpaid
interest by the issuance price of the securities issued in the Exchange
Offering. The Holder will take the securities in the Exchange Offering subject
to the terms and restrictions under which such securities are offered under the
Exchange Offering. Following delivery of the securities to the Holder under the
Exchange Offering, the Note shall terminate and shall be deemed fully paid and
satisfied.
Upon the occurrence of any Corporate Transaction, the Maker shall repay
this Note within five (5) business days of the closing of such Corporate
Transaction in an amount equal to 150% of the principal amount outstanding such
Note, together with all unpaid accrued interest.
In the event of an Event of Default of this Note, the Note will
automatically convert into that number of shares of the Maker's common stock
that is determined by multiplying 9.9% of the Maker's common stock actually
issued and outstanding at the time of the Event of Default by a fraction, the
numerator of which is the remaining principal amount of the Holder's Note and
the denominator of which is $600,000.
The outstanding Principal Amount hereof, together with accrued and
unpaid interest hereon, may be prepaid, without premium or penalty, in whole or
in part at any time and from time to time. All payments under this Note shall be
applied initially against accrued interest and thereafter in reduction of
principal. Any prepayments shall not extend or postpone the Maturity Date,
unless the Holder shall otherwise agree in writing.
If any one or more of the following events ("Events of Default") shall
occur, then, in any such event, the Holder hereof may, at the Holder's option,
declare this Note to be immediately due and payable, together with all unpaid
interest accrued hereon:
(a) The Maker shall default in the due and punctual payment of any
amount on this Note when the same shall become due and payable and such
default shall not have been cured by the Maker within 30 days; or
(b) The Maker applies for or consents to the appointment of a receiver,
trustee or liquidator of any of his properties or assets, makes a
general assignment for the benefit of creditors, is adjudicated a
bankrupt or insolvent and not removed within 120 days, or files a
voluntary petition in bankruptcy or an answer admitting the material
allegations of a petition filed against him in any proceeding under any
bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation law or statute.
THIS NOTE SHALL BE CONSTRUED AND GOVERNED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF
LAWS PRINCIPLES OF ANY JURISDICTION. THIS NOTE MAY ONLY BE ENFORCED IN THE
FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN HENNEPIN COUNTY, MINNESOTA.
VIPER MOTORCYCLE COMPANY
By: Xxxxx X. Xxxxxxxxx
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Its: Chief Financial Officer