EXHIBIT 10.15


 


FINANCING TERMS AGREEMENT


 


ICOP
DIGITAL, INC.


11011
King Street, Suite 260


Overland Park,
KS 66210


Tel:
913  338-5550


Fax:
913 469-1662


Email:
dowen@icopdigital.com


 


SALE
OF SECURED PROMISSORY NOTES AND WARRANTS


 


PRINCIPAL
TERMS


 


Issuer:                                                                                                                                                                                                      Icop Digital, Inc. (“ICPD” or the “Company”)


 


Amount:                                                                                                                                                                                              Up
to $2,000,000.00 in twenty (20) Units of $100,000 in exchange for bridge notes
(“Bridge Note(s)”) and warrants to
purchase the Company’s Common Stock (“Warrant(s)”).  The Placement Agent has agreed with the Company
to allow a creditor to convert its $200,000 debt to identical Bridge Note(s) and Warrants.


 


Lender(s):                                                                                                                                                                                    All
“accredited” investors as defined in Regulation D of the Securities Act of
1933.  See signature pages hereto
for names, addresses, and principal amounts of Bridge Note(s) being purchased.


 


Term of Note:                                                                                                                                                                  Interest and Pre-Payment: 
Interest will accrue on the principal amount of the Bridge Note(s) at the rate of eight (8%)
percent per annum, based on a 365-day year. 
The Company will have the right to prepay without penalty any amount
owed under the Bridge
Note(s) in whole or in part at any time.


 


Maturity Date:  The principal amount and accrued and unpaid
interest on the Bridge
Note(s) will be due and payable six months from the first Closing (as defined herein),
except that in the event of the closing of a Public Offering (as defined herein), the
principal amount and accrued and unpaid interest will become immediately due
and payable.  The Company plans to raise
approximately $10 Million in a secondary offering of units (consisting of two
shares of common stock and one warrant) (the “Public Offering”).


 





















 


Closing Date/Escrow:                                                                                                                      The
first Closing
of the Bridge Note(s)
Offering will be on the second business day following the receipt by First National
Bank of Olathe, KS, as Escrow
Agent of not less than $1,200,000 of the loan principal from the
Lender(s)
(the “Closing).  In the event such amount has not been
received into Escrow on
or before January 21, 2005, unless extended by agreement between the
Placement Agent and ICOP for up to an additional 30 days, the Escrow Agent shall
promptly return all of the funds on deposit with it to the respective Lender(s).


 


Conversion Right:                                                                                                                                         In
the event there is no Public
Offering of the Company’s common stock and/or warrants within
twelve (12) months from the first Closing, the Lender(s) shall have the right to
convert the  principal and unpaid interest of the Bridge
Note(s) into shares of Common Stock at a conversion price of
$5.00 per share (assuming a 1:10 reverse stock split).


 


Security:                                                                                                                                                                                          Repayment
of the Bridge Note(s)  shall
be secured by a lien on all tangible and intangible assets of the Company.


 


Warrants:                                                                                                                                                                                   75 % warrant coverage:  At Closing each Lender(s) will receive Warrant(s) to
purchase a number of shares of the Company’s Common Stock equal to the quotient
of the principal amount of such Lender(s)’  Bridge
Note(s), divided by the Public Offering Unit Price and the product of
such quotient shall then be multiplied by 1.5 to yield the number of shares.  The Warrant(s)
will have an exercise price per share equal to 50% of the Public Offering Unit Price.  In the event there is no Public Offering
within twelve (12) months of the first Closing, the number of shares under the
Warrant shall equal the quotient of (a) 0.75 times the principal amount of
such Lender(s)’ Bridge
Note, divided by the lesser of $5.00 (assuming a 1:10 reverse
stock split): and   the average 4 PM NY
Time closing bid price as reported on the Bloomberg system for the 10 trading
days ending on the trading day immediately preceding the delivery of an
exercise notice to the Company. The exercise price of the Warrants shall be the
lesser of $5.00 (assuming a 1:10 reverse stock split) and the average 4 PM NY
Time closing bid price as reported on the Bloomberg system for the 10 trading
days ending on the trading day immediately preceding the delivery of an
exercise notice. The Warrants
will be exercisable for five years from the date of issuance,
provided that if the Company files a registration statement for a Public Offering, then
the  Warrant(s)
will not be exercisable until the earlier of 90 days after the Public Offering
closing and  six


 





















 


months after filing of the Public Offering registration
statement.  Subject to the exercisability
limitations in the foregoing sentence, the Warrant(s) will provide for cashless exercise
if, at any time after one (1) year from the date of issuance of the Bridge Note(s) and Warrant(s), the Company does not have
available both an effective registration statement and current prospectus
covering the issuance or resale of the Company’s Common Stock issued or
issuable upon exercise of the Warrant(s).  The Warrant(s) will be
non-callable.


 


SEC Reporting                                                                                                                                                          As
long as any of the Bridge
Note(s)
and/or Warrant(s)
is outstanding the Company will maintain the listing of its common stock under Section 12
(g) of the Securities Exchange Act of 1934, as amended (Exchange Act), and
will file all reports required by the Exchange Act in a timely manner.


 


Registration Rights:                                                                                                                            The
Company will (1) file a resale registration statement within 180 days of
the Public Offering
closing and (2) cause it to be effective within 240 days of the Public Offering
closing covering the resale of the common shares underlying the Warrant(s).  If the Company fails to satisfy either or
both of these requirements, it will be subject to 2% cash late registration fee
(“Late Fee”)
(i.e. 2% of outstanding Bridge
Note(s)
principal) per month or part thereof that such failure continues. Such Late Fee shall cease
to accrue on the earliest date more than one year from the first Closing that the
Company is current in its reporting obligations under the Exchange Act and has
been subject to such reporting requirements for at least 90 days.


 


Anti
Dilution Provisions:                                                                                                    If
at any time from the date of first Closing until the conversion of the Bridge Note(s) or
exercise of the Warrant(s)
the Company issues a stock dividend, combines outstanding shares into a lesser
number of shares (reverse split) or increases the number of outstanding shares
without the receipt of new consideration (forward split), then the number of
shares into which the Bridge
Note(s) may be converted or the Warrant(s) may be exercised for and the
conversion price shall be adjusted to reflect such event so that the relative
interests of the Lender(s)
shall be fully protected from dilution resulting from such an event.  Notice of the required adjustment including
the number of shares and the new exercise/conversion price shall be promptly
mailed to each Lender(s)
subsequent to each such adjustment event.


 





















 


Placement
Agent:                                                                                                                                           The
Company has retained Paulson Investment Company, Inc to assist it with
various financing matters, including the private placement of these Bridge Note(s).  Paulson Investment company, Inc will be
retained on a best efforts basis, and receive a fee not to
exceed 5% of any investment in the Bridge Note(s).  The Company also anticipates reimbursing
certain expenses of Paulson Investment Company, Inc and
indemnifying them, their directors, officers, agents, employees and
controlling persons against certain liabilities.


 


Jurisdiction/Choice of Law:                                                                                      All
transaction documents shall be governed by and construed under the laws of the
state of Colorado as applied to agreements entered into and to be performed
entirely within the state of Colorado, without giving effect to principles of
conflicts of law.  The parties irrevocably
consent to the jurisdiction and venue of the state and federal courts located
in Denver, CO in connection with any action relating to this transaction.  At or prior to any Closing, the Lender(s) shall
receive a legal  opinion from Company
counsel in form and substance satisfactory to each of them as to the validity
and enforceability of the Bridge
Note(s),  Warrants,
and Security Agreement.


 


Binding Agreement:                                                                                                                             All
parties executing this Financing Terms Agreement shall be legally bound by the
above terms and shall execute such further 
documents (“Further Documents”), including without limitation  Bridge Note(s),  Warrant(s) and a Security Agreement.  If there are any inconsistencies between  this Financing Terms Agreement and any
such  Further Documents executed in
connection with this transaction, the terms of this Financing Terms Agreement
shall govern.  This Financing Terms
Agreement may be signed in two or more counterparts, all of which taken
together shall constitute an original. 
Facsimile signatures shall be deemed to be original signatures.


 





















 


SIGNATURE PAGE TO ICOP DIGITAL,
INC.


FINANCING TERMS AGREEMENT


 


ICOP Digital, Inc.


 


 


	
  By:

  	
   

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
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  PAULSON INVESTMENT COMPANY, INC.

  	
   

  	
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  BY:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
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SIGNATURE
PAGE OF LENDER(S) TO ICOP DIGITAL, INC.


FINANCING
TERMS AGREEMENT


 


	
   

  	
   

  	
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  Date:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Telephone No.:

  	
   

  	
   

  	
   

  
	
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  Tax ID#/SS#:

  	
   

  	
   

  	
   

  
	
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ACCREDITED INVESTOR DECLARATION


THE SECURITIES BEING OFFERED BY THE COMPANY
ARE SECURITIES AS THAT TERM HAS BEEN DEFINED IN THE SECURITIES ACT OF 1933, AS
AMENDED.  THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THAT ACT IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION PROVIDED
BY SECTIONS 3(b), 4(2) AND AS PROVIDED BY REGULATION D OF THAT ACT, AND
ARE SUBJECT TO RESTRICTIONS ON TRANSFER. 
FURTHER, THESE SECURITIES MAY BE SOLD PURSUANT TO EXEMPTIONS FROM
REGISTRATION IN THE VARIOUS STATES, AND MAY BE SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER IN SUCH JURISDICTIONS.


 


The undersigned represents that he qualifies
as an “Accredited Investor,” as defined in Rule 501 of Regulation D
promulgated by the Securities and Exchange Commission under the Securities Act
of 1933, because he is (check the appropriate numbered paragraphs):


 


o                                    (1)                                  A private business
development company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940;


 


o                                    (2)                                  An organization
described in Section 501(c)(3) of the Internal Revenue Code,
Corporation, Massachusetts or similar business trust, or Partnership not formed
for the purpose of investing in the Securities, with total assets in excess of
$5,000,000;


 


o                                    (3)                                  A director, executive
officer, or general partner of the issuer of the Securities being offered or
sold, or any director, executive officer, or general partner of a general
partner of that issuer;


 


o                                    (4)                                  A natural person
whose individual net worth, or joint net worth with that person’s spouse, at
the time of his purchase, exceeds $1,000,000;


 


o                                    (5)                                  A natural person who
had an individual income in excess of $200,000 in each of the two most recent
years, or joint income with that person’s spouse of $300,000 in each of those
years and has a reasonable expectation of reaching those levels in the current
year;


 


o                                    (6)                                  Any trust, with total
assets in excess of $5,000,000, not formed for the specific purpose of
acquiring the Securities offered, whose purchase is directed by a sophisticated
person as described in Section 506(b)(2)(ii); or


 


o                                    (7)                                  Any entity in which
all of the equity owners are accredited investors.


 


	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Please print name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Tax I.D. No.:

  	
   

  	
   

  



 





















 


ICOP
DIGITAL, INC.


$2M Bridge Note


 


WIRE TRANSFER INSTRUCTIONS


 


If you wish to wire transfer your funds, the
information is provided below:


 


First National Bank of Olathe


 


Olathe, KS


 


ABA# 101001720


 


FCT: 
ICOP Digital, Inc Escrow Account


 


Acct.# # 0161799


 


Delivery
Instructions:


 


All
Subscription Documents and any checks must be delivered as follows:


 


Overnight
or Mail to:


 


ICOP
Digital, Inc.


Attn:  David C. Owen, CEO


11011 King Street, Suite 260


Overland Park, KS 66210


Phone: 
(913) 338-5550


Fax: 
(913) 469-1662


 


All checks will be immediately deposited into
our escrow accounts at First National Bank of Olathe.