Document:

Unassociated Document

 

PROMISSORY NOTE

 

	
$30,000.00

	May 30, 2014

 

FOR VALUE RECEIVED, the undersigned, Magna-Lab Inc., a New York corporation (“Borrower”), HEREBY PROMISES TO PAY to the order of Magna Acquisition LLC or its registered assigns ( “Lender”), in lawful money of the United States of America, in the manner and at the times provided hereinafter, the principal sum of Thirty Thousand Dollars (US$30,000), together with Interest (as hereinafter defined) and Default Interest (as hereinafter defined) and all other amounts due and payable pursuant to and in accordance with terms of this Note.

 

Interest shall accrue on the unpaid principal amount of this Note from the date hereof until such principal amount is paid in full.  “Interest” shall mean twelve percent (12%) per annum.  Interest shall be computed on the actual number of days elapsed, predicated on a year consisting of three hundred and sixty (360) days.

 

Default Interest, if any, shall be payable on demand.  “Default Interest” shall mean interest computed at fifteen percent (15%) per annum, on (i) the entire principal balance of this Note from time to time unpaid from and after such amounts becomes due and payable (whether upon maturity, by acceleration or otherwise), and (ii) any and all other unpaid amounts due pursuant to the terms and provisions of this Note (including, but not limited to, accrued and unpaid Interest) from and after the respective date(s) on which those amounts become due and payable, whether upon maturity, by acceleration or otherwise; in each case from and after the expiration of any applicable grace period.  Default Interest shall be computed on the actual number of days elapsed, predicated on a year consisting of three hundred and sixty (360) days.  Notwithstanding anything to the contrary contained herein, for any period in which Default Interest is accruing on the entire unpaid principal balance hereunder, Interest shall not accrue.  Default Interest shall compound on an annual basis.

 

Unless otherwise accelerated pursuant to the terms hereof, this Note shall mature and all outstanding and unpaid principal and Interest shall be due and payable on the date that is 120 days from and after the date hereof.

 

This Note may be prepaid, in whole or in part, at any time by Borrower without premium or penalty.  Any prepayment of this Note shall be accompanied by payment of any Interest accrued and unpaid through the date of such prepayment, and all Default Interest, if any, accrued and unpaid through the date of such prepayment.

 

Notwithstanding anything to the contrary contained herein, upon the occurrence of any one or more of: (i) a default in the payment of any amounts due hereunder and a failure to cure such default within five (5) business days, or (ii) a default hereunder, and the expiration of any grace period applicable to any default as set forth herein, then at the sole option and discretion of Lender, and without further demand or notice of any kind, the following shall become immediately due and payable:

 

	
  

	
1.

	
the aggregate principal amount of this Note outstanding and remaining unpaid hereunder;

 

	
  

	
2.

	
unpaid Interest;

 

	
  

	
3.

	
Default Interest; and

 

	
  

	
4.

	
all other indebtedness evidence by this Note.

 

  

  

  

 

The following shall constitute events of default hereunder: (i) the assignment for the benefit of creditors by Borrower; (ii) the application for the appointment of a receiver for Borrower or for the property of Borrower; (iii) the filing of a petition in bankruptcy by or against Borrower; (iv) the issuance of an attachment or the entry of a judgment against Borrower; (v) a default by Borrower with respect to any other indebtedness due to Lender; (vi) the making or sending of a notice of an intended bulk sale by Borrower; (vii) the merger, consolidation, termination of existence, dissolution or insolvency of Borrower; (viii) the good faith determination by Lender that it deems itself insecure or that a material adverse change in the financial condition of Borrower has occurred since the date hereof and that Lender’s prospect of payment hereunder has been impaired; or (ix) any breach or default under any indebtedness of Borrower to any banking or financial institution, and the expiration of any grace period applicable to such breach or default.

 

If Borrower fails to pay any amounts when due hereunder, whether at maturity, by acceleration or otherwise, or if there occurs any event which entitles Lender to accelerate the indebtedness due under this Note and any grace period applicable to any such failure to pay or event as set forth herein expires, then Lender shall have all of the rights and remedies provided to it hereunder, and at law or in equity.  The remedies of Lender, as provided herein, shall be cumulative and concurrent, and may be pursued singularly, successively, or otherwise, at the sole discretion of Lender, and may be exercised as often as occasion therefor shall arise.  Lender may resort for payment hereunder to any of security for, or any guaranty of, this Note whether or not Lender shall have resorted for payment hereunder to any other security for or guaranty of this Note.  No act or omission of Lender, including specifically any failure to exercise any right, remedy or recourse, shall be deemed to be a waiver or release of the same, such waiver or release to be effected only through a written document executed by Lender and then only to the extent specifically recited therein.  A waiver or release with reference to any one event shall not be construed as continuing, as a bar to, or as a waiver or release of, any subsequent right, remedy, or recourse as to a subsequent event.  If this Note is placed in the hands of an attorney for collection or is collected on advice of counsel or through any legal proceeding, Borrower promises to pay, to the extent permitted by law, court costs and reasonable attorneys’ fees incurred by Lender.  Borrower hereby waives presentment, demand, notice of dishonor or nonpayment, protest and notice of protest in connection therewith.

 

If any provision of this Note is unenforceable, invalid or contrary to law, or its inclusion herein would affect the validity, legality or enforcement of this Note, such provision shall be limited to the extent necessary to render the same valid or shall be excised from this Note, as the circumstances require, and this Note shall be construed as if said provision had been incorporated herein as so limited or as if said provision had not been included herein, as the case may be.

 

Time is of the essence of this Note.

 

Upon maturity or following the occurrence of any event which entitles Lender to accelerate the indebtedness evidenced hereby, all payments received on account of the indebtedness evidenced hereby shall be applied, in whatever order, combination and amounts as Lender, in its sole and absolute discretion, decides, to all costs, expenses and other indebtedness, if any, owing to Lender by reason of this Note; Default Interest, Interest; and principal.

 

This Note, and the terms and provisions hereof, shall be binding upon Borrower and its successors, administrators, and assigns, and shall inure to the benefit of any holder hereof.

 

All amounts due hereunder shall be paid without deduction, set-off or counterclaim, Borrower expressly waiving any such rights to deduction, set-off or counterclaim.

 

  

  

  

 

Notwithstanding any provisions to the contrary contained in this Note or in any of the other documents or instruments referred to in this Note, if at any time or times the interest and any sums considered for such purposes to be interest, payable under or by reason of this Note or any such other documents or instruments, should exceed the maximum which, by the laws of the State having jurisdiction, may be charged with respect to the loan evidenced hereby, given the nature and all of the pertinent circumstances of such loan, than all such sums in excess of such maximum shall be deemed not to be interest, but rather to be payments on account of principal, and without further agreement of the parties shall be so applied without regard to any other provision of this Note, provided that Lender may elect instead that no sums shall be payable in excess of such maximum, whereupon this Note, and such other documents and instruments hall be deemed amended accordingly without further action by any party.

 

This Note shall inure to the benefit of Lender and its successors and assigns and shall be governed by, and construed in accordance with, the laws of the State of Delaware.

 

	
  

	
MAGNA-LAB INC., a New York corporation

 

 

	
  

	
By /s/Lawrence A Minkoff

	
  

	
Name: Lawrence A. Minkoff

	
  

	
Title: Chairman and Presidentfs12014a3ex10xxiv_cachetfin.htm

Exhibit 10.24

CONVERSION AGREEMENT

This Conversion Agreement, dated as of June 18, 2014, is by and among Cachet Financial Solutions, Inc., a Delaware corporation (“Cachet Delaware), its wholly owned subsidiary Cachet Financial Solutions Inc., a Minnesota corporation (“Cachet Minnesota”), and each holder (“Holder”) of one or more promissory notes issued in their favor by such corporations as detailed on the attached Schedule of Conversions (collectively, the “Promissory Notes”).  The parties hereby agree as follows:

1.             Conversion of Promissory Notes.  Each Holder agrees to convert those Promissory Notes held by them, as detailed as the Schedule of Conversions attached hereto, into shares of common stock of Cachet Delaware, effective upon the closing of the public offering of common stock of Cachet Delaware (the “Closing”) as contemplated by that certain Registration Statement on Form S-1 filed with the SEC (File No. 333-195782), as the same may be amended from time to time.  In this regard, the Promissory Notes of each Holder, will be converted as follows—

(a)           At the Closing, $1,000,000 in principal amount of the Promissory Note indicated on the Schedule of Conversions as held by Trooien Capital, LLC, together with then-accrued but unpaid interest thereon, will convert into shares of common stock of Cachet Delaware on the terms and conditions of such Promissory Note.

(b)           At the Closing, the entire principal amount of the Promissory Notes indicated on the Schedule of Conversions as held by Michael J. Hanson (aggregating to $725,000), together with then-accrued but unpaid interest thereon, will convert into shares of common stock of Cachet Delaware on the terms and conditions specified in paragraph (d) below.

(c)           At the Closing, the entire principal amounts of the Promissory Notes indicated on the Schedule of Conversions as held by James L. Davis (aggregating to $325,000), together with then-accrued but unpaid interest thereon, will convert into shares of common stock of Cachet Delaware on the terms and conditions specified in paragraph (d) below.

(d)           The number of shares of common stock of Cachet Delaware issuable upon conversion shall equal the number obtained by dividing (x) the total amount of principal and interest being converted, by (y) the Conversion Price.  In this regard, the “Conversion Price,” will equal the conversion price at which that certain series of Convertible Promissory Notes of Cachet Delaware, offered for sale in March-May 2014 (a copy of which is attached hereto as Exhibit A), convert into common stock of Cachet Delaware upon the consummation of an “IPO,” as defined therein. For clarity, this means that the Promissory Notes will convert at a rate that includes at least a 15% discount from the price at which common stock of Cachet Delaware is sold in the IPO.   In addition, each of Michael J. Hanson and James L. Davis will receive 100% warrant coverage for the aggregate principal amount of their Promissory Notes converted hereunder (i.e., where the value of Cachet Delaware common shares purchasable under the warrants, determined by reference to the price at which such shares are sold in the IPO, equal the principal so converted) with the exercise price of such warrants being 125% of the price at which common shares of Cachet Delaware are sold in the IPO.

(e)           In addition to the foregoing, the parties agree that those promissory notes held by Michael J. Hanson and James L. Davis and listed on the attached Schedule of Modifications, all of which contain terms and conditions that will require their conversion upon the Closing, hereby have the economic terms of conversion amended to match the “Conversion Price” specified in paragraph (d) above.

 

  

  

  

2.             Conversion Mechanics.  Upon the Closing, (i) the issuing corporation, as the case may be, will be entitled to cancel each Promissory Note or, if less than the entire Promissory Note is being converted, that portion of such Promissory as is being converted, on its books and records and (ii) each Holder will be required surrender the original of his Promissory Note (or execute a customary affidavit of loss containing an appropriate indemnity) and deliver an executed assignment or other instrument of conveyance in customary form, as a condition to receiving any certificate representing the shares of common stock of Cachet Delaware pursuant to this agreement; provided, however, that upon such surrender and delivery of an assignment by a Holder, Cachet Delaware will be obligated to provide the Holder, within no more than five business days thereafter, with a share certificate representing the shares into which the Holder’s shall have been converted.

3.             Representations and Warranties of the Companies.  Cachet Delaware and Cachet Minnesota (collectively, the “Companies”) hereby jointly and severally represent and warrant to each Holder as follows:  (a) the Companies have taken all necessary corporate action to authorize the execution and delivery of this agreement, and this agreement, once executed and delivered by the parties, is and will upon the Closing be a valid and binding agreement of the Companies enforceable against them in accordance with its terms; and (b) the shares of common stock of Cachet Delaware issued upon conversion of the Promissory Notes shall upon its issuance pursuant to this agreement constitute duly authorized, validly issued and fully paid and non-assessable shares of capital stock of Cachet Delaware.

4.             Representations and Warranties of the Holders.  Each Holder hereby severally, but not jointly, represents and warrants to the Companies as follows:  (a) this agreement, once executed and delivered by the parties, is and will upon the Closing be a valid and binding agreement of the Holder enforceable against it in accordance with its terms; (b) the rights of the Holder under the Promissory Notes delivered to the Companies for conversion at the Closing will be free and clear of all liens and encumbrances of any kind and nature; (c) the Holder is an “accredited investor” as defined in Section 501 under the Securities Act of 1933 (the “Securities Act”); (d) the Holder has been given access to full and complete information regarding the Company, including the opportunity to meet with representatives of the Companies and review all such documents as the Holder may have requested in writing; (e) the Holder is experienced and knowledgeable in financial and business matters, capable of evaluating the merits and risks of investing in the shares of Cachet Delaware, and does not need or desire the assistance of a knowledgeable representative to aid in the evaluation of such risks; (f) the Holder is acquiring the shares of Cachet Delaware common stock for its own account, can bear the economic risk of an investment in such shares for an indefinite period of time, can afford to sustain a complete loss of such investment, and has no need for liquidity in connection with an investment in such shares; (g) the Holder acknowledges and understands that neither the offer nor the sale of the shares of common stock of Cachet Delaware issuable pursuant to this agreement will be registered under the Securities Act, or any applicable state securities laws and, as a result, certificates representing such shares will contain a legend stating that the shares have not been registered under the Securities Act or applicable state securities laws, and that such shares may not be transferred in the absence of either (i) an opinion of counsel satisfactory to Cachet Delaware that such proposed transfer may be made lawfully without the registration under the Securities Act and applicable state securities laws, or (ii) the registration of such transfer of such shares.  Finally, Trooien Capital represents and warrants to the Companies that it has taken all necessary company action to authorize the execution and delivery of this agreement.

5.             General Provisions.  This agreement will be governed by the laws of the State of Minnesota, without regard to its conflicts-of-law provisions.  This is the entire agreement of the parties with respect to the subject of the conversion of all or some portion of the Promissory Notes and supersedes all prior agreements, be they oral or written, regarding such matters.   This agreement may be executed in counterparts and delivered by means of facsimile or electronic transmission.  Neither rights nor obligations under this agreement may be assigned or delegated without the prior written consent of the other parties.

*  *  *  *  *  *  *

 

  

2

  

In Witness Whereof, the undersigned parties have set their hands as evidence of their agreement to be bound hereby, effective as of June 17, 2014.

 

	 	
CACHET FINANCIAL SOLUTIONS, INC.

a Delaware corporation

	 
	 	 	 	 
	 	
By: 

	/s/ Jeffrey C. Mack	 
	 	 	

Jeffrey C. Mack, CEO

	 
	 	 	 	 
	 	

CACHET FINANCIAL SOLUTIONS INC.

a Minnesota corporation

	 
	 	 	 	 
	 	By:	/s/ Jeffrey C. Mack	 
	 	 	

Jeffrey C. Mack, CEO

	 
	 	 	 	 
	 	

TROOIEN CAPITAL, LLC

	 
	 	 	 	 
	 	By:	/s/ Gerald S. Trooien	 
	 	 	

Gerald S. Trooien, Manager

	 
	 	 	 	 
	 	/s/ Michael J. Hanson	 
	 	Michael J. Hanson	 
	 	 	 	 
	 	/s/ James L. Davis	 
	 	James L. Davis	 

  

3

  

SCHEDULE OF CONVERSIONS

	
Holder

	 	
Description

	
Trooien Capital, LLC

	 	
$4,000,000 in principal amount of Convertible Term Promissory Note dated December 12, 2013, issued by Cachet Minnesota *

	  	 	  
	
Michael J. Hanson

	 	
$100,000 in principal amount of 10% Short-Term Promissory Note dated October 23, 2013, issued by Cachet Minnesota

 

$250,000 in principal amount of 10% Short-Term Promissory Note dated December 31, 2013, issued by Cachet Minnesota

 

$50,000 in principal amount of 10% Short-Term Promissory Note dated January 10, 2014, issued by Cachet Minnesota

 

$225,000 in principal amount of 10% Short-Term Promissory Note dated February 11, 2014, issued by Cachet Minnesota

 

$100,00 in principal amount of 10% Short-Term Promissory Note dated April 11, 2014, issued by Cachet Minnesota

	  	 	  
	
James L. Davis

	 	
$75,000 in principal amount of 10% Short-Term Promissory Note dated December 11, 2013, issued by Cachet Minnesota

 

$250,000 in principal amount of 10% Short-Term Promissory Note dated December 20, 2013, issued by Cachet Minnesota

 

* it being understood that only $1,000,000 in principal amount, plus accrued but unpaid interest thereon, will convert pursuant to Section 1 of this agreement.

 

  

4

  

 

SCHEDULE OF MODIFICATIONS

	
Holder

	 	
Description

	
Michael J. Hanson

	 	
$225,000 in principal amount of 10% Short-Term Promissory Note dated September 9, 2013, issued by Cachet Minnesota

 

$100,000 in principal amount of 10% Short-Term Promissory Note dated September 30, 2013, issued by Cachet Minnesota

	  	 	  
	
James L. Davis

	 	
$200,000 in principal amount of 10% Short-Term Promissory Note dated April 25, 2013, issued by Cachet Minnesota

 

$225,000 in principal amount of 10% Short-Term Promissory Note dated August 29, 2013, issued by Cachet Minnesota

 

$100,000 in principal amount of 10% Short-Term Promissory Note dated September 26, 2013, issued by Cachet Minnesota

 

$100,000 in principal amount of 10% Short-Term Promissory Note dated October 23, 2013, issued by Cachet Minnesota

 

$150,000 in principal amount of 10% Short-Term Promissory Note dated November 14, 2013, issued by Cachet Minnesota

 

$250,000 in principal amount of 10% Short-Term Promissory Note dated November 22, 2013, issued by Cachet Minnesota

 

$75,000 in principal amount of 10% Short-Term Promissory Note dated December 11, 2013, issued by Cachet Minnesota

  

5

  

 

Exhibit A

Attached hereto is a form of Convertible Promissory Note referenced in the Conversion Agreement

 

 

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