Document:

Blueprint

 

 

Exhibit 10.1

 

 

NOTE PAYABLE AGREEMENT

 

Between Infinite Group, Inc. and Harry A. Hoyen III,
IRA

 

Dated May 7, 2019

 

 

Whereas: Infinite Group, Inc.,
a Delaware corporation whose address is 175 Sully’s Trail,
Suite 202, Pittsford, NY 14534, (“ the Company”)
desires to borrow Five Hundred Thousand dollars ($500,000) from
Harry A. Hoyen.

 

Whereas: PENSCO Trust Company,
Custodian, FBO Harry A. Hoyen III, IRA, an individual retirement
account, with an address at PO Box 173859, Denver, CO 80217
("Lender"), desires to lend the
Company the principal sum of Five Hundred Thousand Dollars
($500,000.00). Lender agrees to provide principal advances to the
Company as follows:

● 

$200,000
on May 8, 2019;

● 

$150,000
on June 17, 2019; and

● 

$150,000
on August 19, 2019.

 

The Company may, at its option, defer payment of any principal
advance upon providing Lender with written notice of deferment of
at least ten business days prior to the scheduled advance date. The
Company may request payment of a deferred principal advance upon
providing Lender with written notice of at least ten business days
prior to a new advance date and the amount of the requested
advance. Written notice shall always be made by email message, and
secondly, by fax or first-class mail based on the date the notice
is sent.

 

The Company agrees to use proceeds for working capital
purposes including but not limited to auditor fees, business development, sales enablement,
marketing, and market development through structured activities and
events.

 

Wherefore: The Company and
Lender hereunder create this Note Payable Agreement
(“Agreement” or “Note”) between the Company
and Lender to memorialize the terms, conditions and consideration
to effectuate the foregoing.

 

PAYMENT TERMS: The Company shall pay Lender quarterly
interest only payments during the term of the Agreement.
Interest payments shall be due to the
Lender within ten calendar days from each calendar quarter end.
Each quarterly payment of interest shall be adjusted based on the
principal outstanding for the actual number of days in each period
and applying the interest rate.

 

INTEREST: Interest is
calculated at the annual rate of 7.5% (seven and one-half
percent). Interest shall be calculated based on the
principal balance as may be adjusted
from time to time to reflect advances and payments of principal
made hereunder. Interest on the unpaid balance of this Note shall
accrue daily.

 

DUE DATE: The outstanding principal balance of this Note
shall be due and payable on August 31, 2026. The Company shall have the right, at
its option and without prior notice to Lender, and without penalty,
to prepay all or any part of the outstanding principal amount and
accrued interest of this Note at any time.

 

FEE: In consideration for providing this financing, the
Company shall grant to Lender a stock option to purchase a total of
2,500,000 shares of the Company's Common Stock, par value $.001 per
share at $.02 (two cents) per share (“Stock Option”).
Such option shall become fully vested and exercisable on the date
of receipt by the Company of the first advance. This Stock Option
shall expire on August 31, 2026.

 

DEFAULT BY LENDER: If Lender
refuses or is unable to make any of the principal advances to the Company at the agreed upon dates,
Lender agrees to accept a reduction in
the Fee. The Fee shall be reduced by the total amount of principal
advances that are not made divided by $500,000 and multiplied by
2,500,000 Common shares. The Company and Lender agree that the
Stock Option shall be cancelled, and the Company shall issue a new
stock option agreement to the Lender with the number of shares of
the Company’s Common Stock as adjusted
herein.

 

 

1

 

 

DEFAULT BY THE COMPANY: The
Company shall be in default of this Agreement on the occurrence of
any of the following events:

 

(i) 

failure of the
Company to pay the principal amount of this Note together with
accrued interest within twenty (20) business days following the
Lender’s written notice of default and demand;

 

 

(ii) 

the Company shall be dissolved or
liquidated;

 

 

(iii) 

the bankruptcy of
the Company or the filing by Company of a voluntary petition under
any provision of the bankruptcy laws; the institution of bankruptcy
proceedings in any form against the Company which shall be
consented to or permitted to remain undismissed or unstayed for
ninety days; or the making by the Company of an assignment for the
benefit of creditors;

 

 

(iv) 

the Company shall commence any case, proceeding, or other
action under any existing or future law of any jurisdiction
relating to bankruptcy, insolvency, reorganization or relief of
debtors, or any such action shall be commenced against the
undersigned;

 

 

(v) 

the Company shall suffer a receiver to be appointed for it or
for any of its property or shall suffer a material garnishment,
attachment, levy or execution; or

 

 

(vi) 

the taking of any
judgment against the Company, which judgment is not paid in
accordance with its terms, satisfied, discharged, stayed or bonded
within ninety (90) days from the entry thereof.

 

Upon the occurrence of any such Default event (Breach) Lender may
demand the entirety of the outstanding amount due from the
Company to Lender.

 

No
failure on the part of Lender to exercise, and no delay in
exercising, any of the rights provided for in this Note and
Agreement shall operate as a waiver thereof, nor shall any single
or partial exercise by Lender of any right preclude any other or
future exercise thereof or the exercise of any other
right.

 

This
Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York without reference to conflicts of
law principles. With respect to any matters that may be heard
before a court of competent jurisdiction, the parties consent to
the jurisdiction and venue of the courts of Monroe County, New York
or of any federal court located in the Western District of New
York.

 

This
Agreement and any exhibits attached hereto constitutes the entire
agreement between the parties concerning the subject matter hereof.
All prior agreements, discussions, warranties and covenants are
merged herein. This Agreement may only be amended in writing and
duly executed by all parties.

 

 

 

2

 

 

 

REMEDIES: Upon default of
this Agreement, Lender may
declare the entire amount due and owing hereunder to be immediately
due and payable. Lender may also use all remedies in law and in
equity to enforce and collect the amount owed under this
Note.

 

The Company hereby waives demand, presentment, notice of dishonor,
diligence in collecting, grace and notice of protest.

 

RECORDS: The Company
shall maintain records in compliance
with generally accepted accounting principles that provide
sufficient details of each borrowing, payments of principal and
interest, and computations of each periodic payment. Upon
Lender’s request, the Company shall reconcile such records to those of Lender to
assure each party is in agreement of the principal amount
outstanding, principal paid, interest paid, and interest accrued
under the terms of this Note.

 

This Agreement has been duly and validly authorized, executed and
delivered by the Company and this Agreement is the valid and
binding agreement of the Company enforceable in accordance
with its terms.

 

IN WITNESS WHEREOF, the Company and Lender have caused this
Agreement to be executed and delivered as set forth
above.

 

Infinite
Group, Inc.

 

 

By:
___/s/ James Villa_________________________________

 

James
Villa, President

 

 

 

PENSCO
Trust Company, Custodian, FBO Harry A Hoyen III, IRA

 

 

By:___/s/ Pensco
Trust Company_____________________________

 

 

 

 

 

APPROVAL OF AGREEMENT. Harry A. Hoyen III has
authorized the execution and delivery of this Note Payable
Agreement and has approved the transactions contemplated
hereby.

 

 

 

 

By:
__/s/ Harry A. Hoyen
III__________________________________

 

Harry
A. Hoyen III

 

 

 

 

3Blueprint

 

 

Exhibit
10.2

 

INFINITE
GROUP, INC.

 

Stock Option Agreement

(This
“Agreement”)

Dated:
May 14, 2019

(“Grant
Date”)

 

 

WHEREAS, Infinite Group, Inc., a
Delaware corporation (the “Company”) hereby desires to
compensate Harry A. Hoyen, III (the “Optionee”) with a fee pursuant to
the Company’s and the Optionee’s $500,000 Note Payable
Agreement dated May 7, 2019 (“Financing”); and

 

WHEREAS, the Optionee desires to provide
the Financing to the Company; and

 

WHEREAS, the Company and the Optionee
desire that the Optionee be compensated for the Financing by the
vesting of the options granted hereby.

 

NOW THEREFORE, the Company and the
Optionee hereby agree as follows:

 

1. 

Grant of Option.

 

The
Company hereby grants to the Optionee a stock option to purchase a
total of 2,500,000 shares of the Company's Common Stock, par value
$.001 per share (the “Common
Stock”), at $.02 (two cents) per share (the
“Exercise
Price”). Such option shall become fully vested fully
vested and exercisable on the date of receipt by the Company of the
first advance under the terms of the Financing.

 

If
Optionee fails, refuses or is unable to make any principal advance
to the Company according to the terms of the Financing, Optionee
agrees to accept a reduction in the Fee as stated in the Financing.
The Fee shall be reduced by the total amount of principal advances
that are not made divided by $500,000 multiplied by 2,500,000
Common shares. The Company and Optionee agree that this Stock
Option Agreement shall be cancelled, and the Company shall issue a
new stock option agreement to the Optionee with the number of
shares of the Company’s Common Stock as adjusted
herein.

 

2. 

Term.

 

This
option shall expire on the date stated in the Financing, August 31,
2026, or such earlier date as otherwise provided for herein (the
“Termination
Date”).

 

3. 

Characterization of Options.

 

The
option granted pursuant to this Agreement is intended to constitute
a non-qualified option, subject to §83 of the Internal Revenue
Code of 1986, as amended (the “Code”).

 

4.           

Exercise of Options.

 

(a)           
Subject to earlier termination or cancellation as provided in this
Agreement, this Option may be exercised at any time on or after the
date hereof, in whole or in part.

 

 

1

 

 

 

(b)         
To the extent vested prior to the Termination Date, this option
shall be exercisable by written notice of such exercise, in the
form prescribed by the Board of Directors of the Company (the
“Board”), to the
Secretary or Treasurer of the Company at its principal office. The
notice shall specify the number of shares of Common Stock for which
the option is being exercised (which number, if less than all the
shares then subject to exercise, shall be 500,000 or a multiple
thereof) and shall be accompanied by payment (i) in cash or by
check in the amount equal to the Exercise Price multiplied by the
number of shares to be purchased upon exercise, or (ii) in such
other manner as the Board shall deem acceptable. No shares shall be
delivered upon exercise of any option until all laws, rules and
regulations which the Board may deem applicable have been complied
with.

 

(c)         
The Optionee shall not be considered a record holder of the Common
Stock issuable pursuant to this Agreement for any purpose until the
date on which the Optionee is recorded as the holder of such Common
Stock in the records of the Company.

 

(d)
        In the event of death of the
Optionee, this option may be exercised, to the extent vested on the
date of death, at any time within twelve months following such date
of death by the Optionee's estate or by a person who acquired the
right to exercise this option by bequest or
inheritance.

 

(e)
        In no event shall this option
be exercisable after the Termination Date.

 

5.           

Anti-Dilution Provisions.

 

(a)        
If there is any stock dividend, stock split, or combination of
shares of Common Stock, the number and amount of shares then
subject to this option shall be proportionately and appropriately
adjusted; no change shall be made in the aggregate purchase price
to be paid for all shares subject to this option, but the aggregate
purchase price shall be allocated among all shares subject to this
option after giving effect to the adjustment.

 

(b)        
If there is any other change in the Common Stock, including
recapitalization, reorganization, sale or exchange of assets,
exchange of shares, offering of subscription rights, or a merger or
consolidation in which the Company is the surviving corporation, an
adjustment, if any, shall be made in the shares then subject to
this option as the Board may deem equitable. Failure of the Board
to provide for an adjustment pursuant to this subparagraph prior to
the effective date of any Company action referred to herein shall
be conclusive evidence that no adjustment is required in
consequence of such action.

 

(c)        
If the Company is merged into or consolidated with any other
corporation, or if it sells all or substantially all of its assets
to any other corporation, then either (i) the Company shall cause
provisions to be made for the continuance of this option after such
event, or for the substitution for this option of an option
covering the number and class of securities which the Optionee
would have been entitled to receive in such merger or consolidation
by virtue of such sale if the Optionee had been the holder of
record of a number of shares of Common Stock equal to the number of
shares covered by the unexercised portion of this option, or (ii)
the Company shall give to the Optionee written notice of its
election not to cause such provision to be made and this option
shall become exercisable in full (or, at the election of the
Optionee, in part) at any time during a period of 20 days, to be
designated by the Company, ending not more than 10 days prior to
the effective date of the merger, consolidation or sale, in which
case this option shall not be exercisable to any extent after the
expiration of such 20-day period.

 

 

2

 

 

 

6. 

Investment Representation; Legend on
Certificates.

 

The
Optionee agrees that until such time as a registration statement
under the Securities Act of 1933, as amended (the
“1933 Act”),
becomes effective with respect to the option and/or the stock, the
Optionee is taking this option and will take the stock underlying
this option, for his own account, for investment and not with a
view to the resale or distribution thereof. The Company shall have
the right to place upon the face of any stock certificate or
certificates evidencing shares issuable upon the exercise of this
option such legend as the Board may prescribe for the purpose of
preventing disposition of such shares in violation of the 1933 Act,
as now or hereafter provided.

 

7. 

Non-Transferability.

 

This
option shall not be transferable by the Optionee other than by will
or by the laws of descent or distribution and is exercisable during
the lifetime of the Optionee only by the Optionee.

 

8. 

Certain Rights Not Conferred by Option.

 

The
Optionee shall not, by virtue of holding this option, be entitled
to any rights of a stockholder in the Company.

 

9. 

Expenses.

 

The
Company shall pay all original issue and transfer taxes with
respect to the issuance and transfer of shares of Common Stock
pursuant hereto and all other direct fees and expenses necessarily
incurred by the Company in connection therewith.

 

10. 

Optionee’s Representation and Warranties.

 

Other Agreements. Optionee
represents and warrants that he has the full right and authority to
enter into this Agreement. Optionee further represents and warrants
that he is not obligated under any contract (including, but not
limited to, licenses, covenants or commitments of any nature) or
other agreement or subject to any judgment, decree or order of any
court or administrative agency which would conflict with his
obligation to use his best efforts to perform hereunder or which
would conflict with the Company’s business and operations as
presently conducted or proposed to be conducted. Neither the
execution nor delivery of this Agreement, nor the carrying on of
the Company’s business will conflict with or result in a
breach of the terms, conditions or provisions of or constitute a
default under any contract, covenant or instrument to which
Optionee is currently a party or by which Optionee is currently
bound.

 

11. 

Miscellaneous.

 

(a)           No
Implied Rights. In no event shall this option be exercisable
after the Termination Date. Nothing herein shall be deemed to
create any employment.

 

(b)           Notice.
All notices and other communications under this Agreement shall (a)
be in writing (which shall include communications by telecopy), (b)
be (i) sent by registered or certified mail, postage prepaid,
return receipt requested, by facsimile, or (ii) delivered by hand,
(c) be given at the following respective addresses and facsimile
numbers and to the attention of the following persons:

 

 

3

 

 

 

 

(i)           

if to the Company
at:

Infinite Group,
Inc.

175
Sully’s Trail, Suite 202

Pittsford, NY
14534

Telephone: (585)
385-0610

Facsimile: (585)
385-0614

  

 

 

(ii) 

if to Optionee, to
it at the address set forth below Investor’s signature on the
signature page hereof;

 

or at
such other address or facsimile number or to the attention of such
other person as the party to whom such information pertains may
hereafter specify for the purpose in a notice to the other
specifically captioned “Notice of Change of Address”,
and (d) be effective or deemed delivered or furnished (i) if given
by mail, on the fifth Business Day after such communication is
deposited in the mail, addressed as above provided, (ii) if given
by facsimile, when such communication is transmitted to the
appropriate number determined as above provided in this Section and
the appropriate answer back is received or receipt is otherwise
acknowledged, and (iii) if given by hand delivery, when left at the
address of the addressee addressed as above provided, except that
notices of a change of address, facsimile or telephone number,
shall not be deemed furnished, until received.

 

(c)           Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without
reference to conflicts of law principles. With respect to any
matters that may be heard before a court of competent jurisdiction,
the parties consent to the jurisdiction and venue of the courts of
Monroe County, New York or of any federal court located in the
Western District of New York.

 

 

IN WITNESS WHEREOF, the parties have
caused this Agreement to be executed by their respective duly
authorized representatives.

 

 

INFINITE
GROUP, INC.

 

 

By:
__/s/ James Villa___________________________

                        
James Villa, President

                        
Date: May 14, 2019

 

 

Regarding: Option
agreement dated May 14, 2019 for 2,500,000 shares of the
Company’s Common Stock, par value $.001 per share, at the
Exercise Price of $.02 per share, I accept the terms of this
agreement.

 

 

__/s/
Harry A. Hoyen, III_____________________________

Harry
A. Hoyen, Optionee

Date:
May 14, 2019

 

Optionee’s
Address:

Marblehead, OH
43440

 

4

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