Document:

Exhibit 10.22

 

NOTE PURCHASE AGREEMENT

 

This Note Purchase
Agreement (this “Agreement”) is made and entered into as of the 20th
day of September, 2006, by and among DeMarseCo Holdings, Inc., a Delaware
corporation (the “Company”),  and the investor set forth on Exhibit A
attached to this Agreement (the “Investor”).

 

RECITALS

 

The Company is a
wholly-owned subsidiary of DeMarseCo, Inc., a Delaware corporation (“DeMarseCo”),  and DeMarseCo desires to transfer certain assets of DeMarseCo
to the Company and distribute all of the capital stock of the Company to
DeMarseCo’s stockholders as a dividend (“Spin-Out”);

 

In connection with
the Spin-Out, the Company, DeMarseCo and the Investor have agreed (a) that the
Company will assume $250,000 principal amount plus accrued and unpaid interest
due to the Investor under that certain Convertible Promissory Note dated
December 28, 2005 issued by DeMarseCo in an original principal amount of
$500,000 (“Old Note I”) (to be
evidenced by a note to be issued under this Agreement), and (b) that the
Company will assume $250,000 principal amount plus accrued and unpaid interest
due to the Investor under that certain Convertible Promissory Note dated
September 15, 2006 issued by DeMarseCo in an original principal amount of
$500,000 (“Old Note II”  together with Old Note I,  the “Old
Notes”)  (to be
evidenced by a note to be issued under this Agreement); and

 

In connection with
the Company’s assumption of a portion of the principal amount plus accrued and
unpaid interest on such amount of each of the Old Notes, the Company desires to
sell to the Investor, and Investor desires to purchase from the Company,
Convertible Promissory Notes (the “Notes,”  and each individually, a “Note”),  in
the aggregate principal amount of up to $750,000 on the terms and conditions
set forth in this Agreement.

 

In consideration
of the foregoing recitals and the mutual promises set forth in this Agreement,
the parties to this Agreement agree as follows:

 

Section
1.                AUTHORIZATION
AND SALE.

 

1.1                   Authorization.
Upon the terms and subject to the conditions set forth in this Agreement,
the Company has duly authorized the issuance and sale, pursuant to the terms of
this Agreement, of the Notes, in the form attached as Exhibit B, against
payment of the purchase price therefor. The securities into which the Notes are
convertible are referred to in this Agreement as the “Note Shares.”

 

1.2                   Subscription.
Upon the terms and subject to the conditions set forth in this Agreement,
the Investor hereby irrevocably subscribes for and agrees to accept as evidence
of the assignment of the aggregate $500,000 principal amount due to the
Investor under the Old Notes at the Initial Closing (as defined below) two
Notes with the original principal amounts indicated opposite such Investor’s
name on Exhibit A. Notwithstanding anything in this Agreement to the
contrary, the Company shall have no obligation to issue any Notes or Note
Shares (collectively, the “Securities”)  to any person who is a resident of a
jurisdiction in which

 

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the issuance of the
Securities would constitute a violation of the securities, “blue sky” or other
similar laws of such jurisdiction (collectively referred to as the “State Securities Laws”).

 

1.3                   Initial
Closing. The issuance of the initial Notes (the “Initial Closing”) shall take place at the
offices of DLA Piper Rudnick Gray Cary, 1221 South Mopac Expressway, Suite 400,
Austin, Texas 78746, on the date hereof, at such time as mutually agreed upon
by the Company and the Investor, or at such other time and place as the Company
and the Investor mutually agree upon (the “Initial
Closing Date”).  At the
Initial Closing, the Company shall deliver to the Investor the Notes with the
original principal amounts as indicated on Exhibit A registered in the
name of such Investor.

 

1.4                   Subsequent
Closings. At any time from and after the date hereof until June 28,
2007, the Company may request that the Investor purchase additional Notes in an
aggregate principal amount of up to $250,000 (a “Subsequent Closing”),  which
the Investor may purchase at its sole discretion. If the Company does not
request that the Investor purchase additional Notes during the time period
specified for a Subsequent Closing, the Investor will have no further obligation
to purchase such additional Notes as contemplated for a Subsequent Closing. At
each sale of additional Notes, Exhibit A shall be automatically amended
without further action on the part of any party to reflect the sale of such
Notes.

 

Section
2.                REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to the Investor that:

 

2.1                   Organization,
Good Standing and Qualification. The Company has been duly incorporated
and organized, and is validly existing and in good standing, under the laws of
the State of Delaware. The Company has all requisite corporate power and
authority to execute,  deliver, and
perform its obligations under this Agreement and the Notes  (this Agreement and the Notes are referred to
collectively in this Agreement as the “Transaction
Agreements”),  and any
other agreements contemplated by Transaction Agreements, to own and operate its
properties and assets, and to carry on its business as currently conducted and
as presently proposed to be conducted. The Company is presently qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the failure to be so qualified would have a material adverse effect on
the Company’s business, properties, prospects, or financial condition.

 

2.2                   Capitalization.
The capitalization of the Company immediately prior to the Initial Closing
consists of the following:

 

(a)                      Common
Stock. A total of 2,000,000 authorized shares of common stock, par value
$0.001 per share (the “Common Stock”),  of which 1,000,000 shares are issued and
outstanding. The outstanding shares of Common Stock have been duly authorized
and validly issued, are fully paid and nonassessable, and were issued in
accordance with the registration and qualification provisions of the Securities
Act of 1933 (the “Securities Act”),
and any relevant state securities laws or pursuant to valid exemptions from the
Securities Act and any relevant state securities laws.

 

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(b)                     Options,
Warrants, Reserved Shares. There is no outstanding option, warrant, right
(including conversion or preemptive rights), or agreement for the purchase or
acquisition from the Company of any shares of its capital stock or any
securities convertible into or ultimately exchangeable or exercisable for any
shares of the Company’s capital stock. Other than pursuant to the Founder Stock
Purchase Agreements, each dated as of the date hereof, between the Company and
each of Elisabeth DeMarse, Philip Siegel, David Lack and Brett Shobe, no shares
of the Company’s outstanding capital stock, or stock issuable upon exercise or
exchange of any outstanding options, warrants, or rights, or other stock
issuable by the Company, are subject to any preemptive rights, rights of first
refusal, or other rights to purchase such stock (whether in favor of the
Company or any other person) pursuant to any agreement or commitment of the
Company.

 

(c)                      The Company
is not a party or subject to any agreement or understanding, and, to the best
of the Company’s knowledge, there is no agreement or understanding between any
persons and/or entities, which affects or relates to the voting or giving of
written consents with respect to any security or by a director of the Company.

 

2.3                   Subsidiaries.
The Company has no subsidiaries and does not own or control, directly or
indirectly, any interest in any other corporation, partnership, limited
liability company, trust, joint venture, association, or other entity. The
Company is not a participant in any joint venture, partnership, or similar
arrangement.

 

2.4                   Due
Authorization. All corporate action on the part of the Company, its
officers, directors, and stockholders necessary for the authorization,
execution, delivery, and performance of all obligations of the Company under
the Transaction Agreements has been taken or shall be taken prior to the
Initial Closing, and this Agreement constitutes, and the Transaction Agreements
when executed and delivered, shall constitute, valid and legally binding
obligations of the Company, enforceable in accordance with their respective
terms, except as may be limited by (a) applicable bankruptcy, insolvency,
reorganization, or other laws of general application relating to or affecting
the enforcement of creditors’ rights generally and (b) the effect of rules of
law governing the availability of equitable remedies and shall be free of any
liens, encumbrances, or restrictions on transfer (other than those created by
the Transaction Agreements and applicable state and/or federal securities
laws).

 

2.5                   Valid
Issuance of Securities.

 

(a)                      The Notes,
when issued as provided in this Agreement, shall be duly authorized and validly
issued, fully paid, and nonassessable.

 

(b)                     Based in part
on the representations made by the Investor in Section 3, the Securities
(assuming no change in applicable law and no unlawful distribution of the Note
Shares by the Investor or any other parties) are exempt from the registration
and prospectus delivery requirements of the Securities Act (provided,
that with respect to the Note Shares, no commission or other remuneration is
paid or given, directly or indirectly, for soliciting the issuance of the Note
Shares upon the conversion of the Note and no additional consideration is paid
for the Note Shares other than surrender of the applicable Notes upon
conversion of such Notes).

 

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(c)                      The Company
has not offered any Notes, or substantially similar securities of the Company,
for sale to, or solicited any offers to buy from, or otherwise approached or
negotiated in respect of any Notes or substantially similar securities of the
Company with, any persons other than the Investor and the existing holders of
capital stock of the Company. The Company has not taken any action that shall
cause the issuance, sale, and delivery of the Notes to constitute a violation
of the Securities Act or any applicable state securities laws.

 

2.6                   Governmental
Consents. No consent, approval, order, or authorization of or
registration, qualification, designation, declaration, or filing with, any
federal, state, or local governmental authority is required on the part of the
Company in order to enable the Company to execute, deliver, and perform its
obligations under the Transaction Agreements except for such qualifications or
filings under applicable securities laws as may be required in connection with
the transactions contemplated by this Agreement. All such qualifications and
filings shall, in the case of qualifications, be effective on the Initial
Closing and shall, in the case of filings, be made within the time prescribed
by law.

 

2.7                   Noncontravention.
The execution, delivery, and performance of the Transaction Agreements and
the consummation of the transactions contemplated by this Agreement and by the
Transaction Agreements shall not result in any such violation or default or be
in conflict with or result in a violation or breach of, with or without the
passage of time or the giving of notice or both, the Company’s Certificate of
Incorporation or Bylaws, any judgment, order, or decree of any court or
arbitrator to which the Company is a party or is subject, any agreement or
contract of the Company, or, to the best of the Company’s knowledge, a
violation of any statute, law, regulation, or order, or an event which results
in the creation of any lien, charge, or encumbrance upon any asset of the
Company.

 

Section
3.                REPRESENTATIONS,
WARRANTIES, AND CERTAIN AGREEMENTS OF THE INVESTOR. The Investor represents
and warrants to, and agrees with, the Company, severally and not jointly and
only with respect to itself, that:

 

3.1                   Authorization.
The Investor has full power and authority to enter into the Transaction
Agreements and each such Transaction Agreement constitutes the Investor’s valid
and legally binding obligation, enforceable in accordance with its terms except
(a) as may be limited by applicable bankruptcy, insolvency, reorganization, or
other laws of general application relating to or affecting the enforcement of
creditors’ rights generally, and (b) as may be limited by the effect of rules
of law governing the availability of equitable remedies.

 

3.2                   Acquired for
Own Account. The Securities shall be acquired for investment for the
Investor’s own account, not as a nominee or agent, and not with a view to the
public resale or distribution of the Securities within the meaning of the
Securities Act, and the Investor has no present intention of selling, granting
any participation in, or otherwise distributing the same. If other than an
individual, the Investor also represents that it has not been formed for the
specific purpose of acquiring the Securities.

 

3.3                   Exempt
Offering. The Investor acknowledges that the Securities have not been
registered under the Securities Act and are being offered and sold pursuant to
an

 

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exemption from
registration contained in the Securities Act based in part upon the
representations of the Investor contained in this Agreement.

 

3.4                   Disclosure
of Information. The Investor believes that it has received all the
information it considers necessary or appropriate for deciding whether to
purchase its Note. The Investor has had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of the
offering of the Securities and the business, properties, prospects, and
financial condition of the Company and to obtain additional information (to the
extent the Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information furnished
to the Investor or to which the Investor had access. The foregoing, however,
does not in any way limit or modify the representations and warranties made by
the Company in Section 2.

 

3.5                   Investment Experience.
The Investor has experience as an investor in securities of companies in
the development stage and acknowledges that it is able to fend for itself, can
bear the economic risk of its investment in the Securities, and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of this investment in the Securities. The
Investor has a preexisting personal or business relationship with the Company
and certain of its officers, directors, or controlling persons of a nature and
duration that enables the Investor to be aware of the character, business
acumen, and financial circumstances of such persons.

 

3.6                   Accredited
Investor Status. The Investor is an “accredited investor” within the
meaning of Securities and Exchange Commission (“SEC”) Rule 501 of Regulation D, as presently in effect.

 

3.7                   Restricted
Securities. The Investor understands that the Securities are
characterized as “restricted securities” under the Securities Act inasmuch as
they are being (or shall be) acquired from the Company in a transaction not
involving a public offering and that under the Securities Act and applicable
regulations under the Securities Act such Securities may be resold without
registration under the Securities Act only in certain limited circumstances. In
this connection, the Investor represents that it is familiar with SEC Rule 144,
as presently in effect, and understands the resale limitations imposed by SEC
Rule 144 and by the Securities Act. The Investor understands that the Company
is under no obligation to register any of the securities sold under this
Agreement. The Investor understands that no market now exists for any of the
Securities, and that it is uncertain whether a market, public or otherwise, shall
ever exist for the Securities.

 

3.8                   Further
Limitations on Disposition. Without in any way limiting the
representations set forth above, the Investor further agrees not to make any
disposition of all or any portion of the Securities unless and until:

 

(a)                      there is
then in effect a registration statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance with such
registration statement; or

 

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(b)                     the Investor
shall have notified the Company of the proposed disposition and shall have
furnished the Company with a statement of the circumstances surrounding the
proposed disposition, and, if reasonably requested by the Company, the Investor
shall, at the expense of the Investor or its transferee, furnish the Company
with an opinion of counsel, reasonably satisfactory to the Company, that such
disposition shall not require registration of such Securities under the
Securities Act.

 

Notwithstanding the
provisions of Subsections (a) and (b) above, no such registration
statement or opinion of counsel shall be required for: (i) any transfer of any
Securities in compliance with SEC Rule 144 or Rule 144A (it being agreed that
the Company shall have the right to receive evidence satisfactory to it
regarding compliance with such Rule or any successor or analogous rule prior to
the registration of any such transfer) or (ii) any transfer of any Securities
by an Investor that is a partnership to another partnership that is affiliated
with the Investor, to a partner or retired partner in the Investor, to the
estate of any such partner or retired partner, or to a trust for the benefit of
such partner or retired partner or the spouse or lineal descendants of such
partner or retired partner or the transfer by gift, shall, or intestate
succession of any such partner or retired partner to his or her spouse; provided,
that in each of the foregoing cases the transferee shall, prior to giving
effect to such transfer, agree in writing to be subject to the terms of this
Section to the same extent as if the transferee were an original Investor under
this Agreement.

 

3.9                   Legends.
It is understood that the instruments evidencing the Securities shall bear
legend substantially similar to the legends set forth below (in addition to any
legend required under applicable state securities laws):

 

(a)                      “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
UNITED STATES FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE,
SOLD, OR OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE, DIRECTLY OR INDIRECTLY,
NOR MAY THE SECURITIES BE TRANSFERRED ON THE BOOKS OF THE COMPANY, WITHOUT
REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE UNITED STATES FEDERAL OR
STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM,
SUCH COMPLIANCE, AT THE OPTION OF THE COMPANY, TO BE EVIDENCED BY AN OPINION OF
STOCKHOLDER’S COUNSEL, IN A FORM ACCEPTABLE TO THE COMPANY, THAT NO VIOLATION
OF SUCH REGISTRATION PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR
ASSIGNMENT.”

 

(b)                     Any other
legends required by state securities laws applicable to the Investor.

 

The legend set
forth in Subsection (a) above shall be removed by the Company from any
instruments evidencing the Securities upon delivery to the Company of an
opinion by counsel, reasonably satisfactory to the Company, that a registration
statement under the Securities Act is at that time in effect with respect to
the legended security or that such security can be freely transferred in a
public sale without such a registration statement being in effect and that such
transfer shall not jeopardize the exemption or exemptions from registration
pursuant to which the Company issued the Securities.

 

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Section
4.                COVENANTS.

 

4.1                   “Market
Stand-Off” Agreement. The Investor agrees that it shall not, to the
extent requested by the Company or an underwriter of securities of the Company,
sell or otherwise transfer or dispose of any Securities or other shares of
stock of the Company then owned by such Investor (other than to donees or
partners of the Investor who agree to be similarly bound) for up to 180 days
following the effective date of a registration statement of the Company filed
under the Securities Act; provided, that:

 

(a)                      such
agreement shall be applicable only to the first such registration statement of
the Company which covers securities to be sold on its behalf to the public in
an underwritten offering;

 

(b)                     all executive
officers and directors of the Company and holders of at least one percent of
the Company’s voting securities are bound by and have entered into similar
agreements; and

 

(c)                      any release
by the Company or an underwriter of any party mentioned in Subsection (b) above
from the above restrictions shall have no effect unless each such person is
released from such restrictions to the same extent.

 

The obligations
described in this Section shall not apply to a registration relating solely to
employee benefit plans on Form S-l or Form S-8 or similar forms that may be
promulgated in the future, or a registration relating solely to a transaction
on Form S-4 or similar forms that may be promulgated in the future. The Company
may impose stop-transfer instructions with respect to the Securities (or other
securities) subject to the foregoing restriction until the end of such 180 day
period.

 

In order to
enforce the foregoing covenant, the Company shall have the right to place
restrictive legends on the certificates representing the shares subject to this
Section and to impose stop-transfer instructions with respect to the Securities
and such other shares of stock of the Investor (and the shares or securities of
every other person subject to the foregoing restriction) until the end of such
period.

 

4.2                   Corporate
Existence; Good Standing. The Company shall preserve and maintain its
corporate existence in the State of Delaware and all of its licenses,
privileges and franchises and other rights necessary or desirable in the normal
course of its businesses, except to the extent that the failure to preserve and
maintain its corporate existence and such rights would not have a material
adverse effect on the financial condition, properties, business or prospects of
the Company. The Company shall qualify to do business and shall be and remain
in good standing in each jurisdiction in which the nature of its business
requires it to be so qualified, or in which failure to be so qualified and in
good standing would have a material adverse effect on the financial condition,
properties or business of the Company.

 

4.3                   Compliance
with Laws. The Company shall comply with all governmental requirements,
except where the failure to do so would not have a material adverse effect on
the financial condition, properties, business or prospects of the Company. The
Company shall pay and discharge when due any and all indebtedness, obligations,
assessments

 

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and real and personal
property taxes, including, but not limited to, federal and state income taxes,
except as may be subject to good faith contest or as to which a bona fide
dispute may arise.

 

4.4                   Indebtedness.
Until such time as all unpaid principal and accrued and unpaid interest
under each Note has been paid by the Company or converted pursuant to the terms
of the Notes, the Company shall not create, incur, assume or be liable for any
indebtedness without the prior written consent of the Investor, other than the
Company’s indebtedness to the Investor under the Notes, indebtedness
subordinated to the Company’s indebtedness to the Investor under the Notes and
trade payables incurred in the ordinary course of business.

 

4.5                   Investment
Period. For so long as the Notes are outstanding (the “Investment Period”),  the Investor shall have the exclusive
right to (a) purchase or subscribe for capital stock (or securities convertible
or exchangeable for capital stock) of the Company, other than securities,
options or warrants issued to any person or entity in exchange for services
rendered, and (b) approve any other potential investor’s ability to purchase or
subscribe for any such capital stock (or securities convertible or exchangeable
for capital stock). In addition, during the Investment Period, neither the
Company nor any representative or agent of the Company shall enter into any
discussions with or entertain proposals from any prospective investors or
acquirers or enter into any negotiations, arrangements or agreements with any
third party with respect to any purchase or subscription of capital stock (or
securities convertible or exchangeable for capital stock) of the Company for
the purpose of raising capital without the prior written consent of the
Investor.

 

4.6                   Visitation
and Inspection. The Company shall permit the Investor, at the Investor’s
expense, to visit and inspect the Company’s properties, to examine its books of
account and records and to discuss the Company’s affairs, finances and accounts
with its officers, all at such reasonable times as may be requested by the
Investor. The provisions of this Section shall not be in limitation of any
rights which the Investor may have with respect to the books and records of the
Company and its subsidiaries, or to inspect their properties or discuss their
affairs, finances and accounts, under the laws of the State of Delaware.

 

4.7                   Protective
Provisions. The Company agrees that, for the period of time beginning
with the Initial Closing and terminating upon the closing of the Company’s next
round of financing (provided, that such round of financing results in
aggregate gross proceeds to the Company in excess of $5,000,000) (a “Qualified Financing”), the Company shall
not, without the prior written consent of the Investor, (a) issue or grant any
securities, options or warrants to any person or entity in exchange for
services rendered, (b) incur any indebtedness, (c) make any capital expenditure
in excess of $150,000 or (d) hire any officers, directors or senior managers.

 

4.8                   Qualified
Financing. A Qualified Financing must be approved by a unanimous vote
of the Board of Directors of the Company, regardless of the number of directors
that serve on the Board of Directors.

 

4.9                   Mergers and
Similar Transactions. The Investor has the right to approve or
disapprove of any merger, consolidation, conversion, acquisition or other
similar transaction involving the Company (a “Business
Transaction”).

 

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4.10            Board Composition.
Until such time as all unpaid principal and accrued and unpaid interest
under each Note has been paid by the Company or converted pursuant to the terms
of the Notes, the size of the Board of Directors (the “Board”)  of
the Company shall be set at no more than five members and the members of the
Board shall consist of:

 

(a)                      Investor
Directors. Two representatives designated by the Investor, who initially
shall be Craig Milius and Philip Siegel;

 

(b)                     Common
Stockholder Director. One representative designated by the holders of a
majority of the outstanding shares of Common Stock, who initially shall be
Elisabeth DeMarse; and

 

(c)                      Outside
Directors. Up to two representatives designated by unanimous consent of all
other Directors; provided, that no current or former officer or employee
of the Company or any affiliate of the Company, or a current or former officer
or employee of the Company shall be designated as an outside director.

 

Section
5.                GENERAL
PROVISIONS.

 

5.1                   Survival of
Representations and Warranties. The representations, warranties, and
covenants of the Company and the Investor contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Initial Closing and shall in no way be affected by any investigation of the
subject matter thereof made by or on behalf of the Investor, its respective
counsel, or the Company, as the case may be.

 

5.2                   Successors
and Assigns. Except as otherwise provided in this Agreement, the
provisions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and permitted assigns of the parties to this
Agreement (including transferees of any Securities).

 

5.3                   Third
Parties. Nothing in this Agreement, express or implied, is intended to
confer upon any person, other than the parties to this Agreement and their respective
successors and assigns, any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.

 

5.4                   Governing
Law. This Agreement shall be governed by and construed exclusively in
accordance with the internal laws of the State of Delaware as applied to
agreements among Delaware residents entered into and to be performed entirely
within Delaware, excluding that body of law relating to conflict of laws.

 

5.5                   Counterparts.
This Agreement may be executed in two or more counterparts (including,
without limitation, facsimile counterparts), each of which shall be deemed an
original, but all of which together shall constitute one and the same
agreement.

 

5.6                   Headings.
The headings and captions used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement.
All references in this Agreement to sections, subsections, exhibits, and
schedules shall, unless otherwise provided, refer to sections and subsections
of this Agreement and exhibits and

 

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schedules attached to
this Agreement, all of which exhibits and schedules are incorporated in this
Agreement by this reference.

 

5.7                   Notices.
All notices, requests, consents, and other communications under this
Agreement shall be in writing and shall be delivered personally or by facsimile
transmission or by nationally recognized overnight delivery service or by first
class certified or registered mail, return receipt requested, postage prepaid:

 

If to the Company,
at 300 West 6th Street, Suite 2300, Austin, Texas 78701 or fax to (512)
476-3952, Attention: Philip Siegel, or at such other address or addresses as
may have been furnished by giving five days advance written notice to all other
parties, with a copy (which shall not constitute notice) to DLA Piper Rudnick
Gray Cary, 1221 South Mopac Expressway, Suite 400, Austin, Texas 78746,
Attention: Samer Zabaneh (Fax: (512) 457-7001).

 

If to the Investor,
at its address set forth on Exhibit A, or at such other address or
addresses as may have been furnished to the Company by giving five days advance
written notice.

 

Notices provided
in accordance with this Section shall be deemed delivered upon personal
delivery (including confirmed facsimile) or three business days after deposit
in the mail.

 

5.8                   No Finder’s
Fees. Each party represents that it neither is nor shall be obligated
for any finder’s or broker’s fee or commission in connection with the transactions
contemplated by this Agreement. The Investor agrees to indemnify and to hold
harmless the Company from any liability for any commission or compensation in
the nature of a finder’s or broker’s fee (and any asserted liability) for which
such Investor or any of its officers, partners, employees, or representatives
is responsible. The Company agrees to indemnify and hold harmless the Investor
from any liability for any commission or compensation in the nature of a finder’s
or broker’s fee (and any asserted liability) for which the Company or any of
its officers, employees or representatives is responsible.

 

5.9                   Attorneys’
Fees and Expenses. Each party to this Agreement agrees to pay its own
fees and expenses arising in connection with the negotiation and execution of
this Agreement and consummation of the transactions contemplated in this
Agreement.

 

5.10            Amendments and
Waivers. Any term of this Agreement may be amended and the observance
of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Investor. Any amendment or waiver
effected in accordance with this Section shall be binding upon the Investor and
the Company.

 

5.11            Severability. If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision(s) shall be excluded from this Agreement and the
balance of this Agreement shall be interpreted as if such provision(s) were so
excluded and shall be enforceable in accordance with its terms.

 

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5.12            Entire Agreement.
This Agreement, together with all exhibits and schedules to this Agreement,
constitutes the entire agreement and understanding of the parties with respect
to the subject matter of this Agreement and supersedes any and all prior
negotiations, correspondence, agreements, understandings, duties, or
obligations between the parties with respect to the subject matter of this
Agreement.

 

5.13            Further Assurances.
From and after the date of this Agreement, upon the request of the Investor
or the Company, the Company and the Investor shall execute and deliver such
instruments, documents, or other writings as may be reasonably necessary or desirable
to confirm and carry out and to effectuate fully the intent and purposes of
this Agreement.

 

5.14            Delays or Omissions.
No delay or omission to exercise any right, power, or remedy accruing to
the Investor, upon any breach or default of the Company under this Agreement
shall impair any such right, power, or remedy of such Investor nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor shall
any waiver of any single breach or default be deemed a waiver of any other
breach or default therefore or thereafter occurring. Any waiver, permit,
consent, or approval of any kind or character on the part of the Investor of
any breach or default under this Agreement or any waiver on the part of the
Investor of any provisions or conditions of this Agreement must be made in
writing and shall be effective only to the extent specifically set forth in
such writing. All remedies, either under this Agreement or by law or otherwise
afforded to the Investor, shall be cumulative and not alternative.

 

5.15            Rights of the
Investor. The Investor shall have the absolute right to exercise or
refrain from exercising any right or rights that such Investor may have by reason
of the Transaction Agreements, the Company’s Certificate of Incorporation and
Bylaws, or at law or in equity, including, without limitation, the right to
consent to the waiver of any obligation of the Company and to enter into an
agreement with the Company for the purpose of modifying the Transaction
Agreements, and such Investor shall not incur any liability to any other holder
of Securities with respect to exercising or refraining from exercising any such
right or rights.

 

5.16            No Commitment for
Additional Financing. The Company acknowledges and agrees that the
Investor has made no representation, undertaking, commitment or agreement to
provide or assist the Company in obtaining any financing, investment or other
assistance, other than the purchase of the Securities as set forth in Section
1. In addition, the Company acknowledges and agrees that (a) no statements,
whether written or oral, made by the Investor or its representatives on or
after the date of this Agreement shall create an obligation, commitment or
agreement to provide or assist the Company in obtaining any financing or
investment, (b) the Company shall not rely on any such statement by the
Investor or its representatives and (c) an obligation, commitment or agreement
to provide or assist the Company in obtaining any financing or investment may
only be created by a written agreement, signed by such Investor and the
Company, setting forth the terms and conditions of such financing or investment
and stating that the parties intend for such writing to be a binding obligation
or agreement. The Investor shall have the right, in its sole and absolute
discretion, to refuse or decline to participate in any other financing of or
investment in the Company, and shall have no obligation to assist or cooperate
with the Company in obtaining any financing, investment or other assistance.

 

11

 

5.17            Waiver of Conflicts.
Each party to this Agreement acknowledges that DLA Piper Rudnick Gray Cary,
counsel for the Company, has in the past and may continue to perform legal
services for the Investor in matters unrelated to the transactions described in
this Agreement, including the representation of the Investor in venture capital
financings and other matters. Accordingly, each party to this Agreement (a)
acknowledges that they have had an opportunity to ask for information relevant
to this disclosure; (b) acknowledges that DLA Piper Rudnick Gray Cary
represented the Company in the transaction contemplated by this Agreement and
has not represented the Investor or any individual shareholder or employee of
the Company in connection with such transaction; and (c) gives its informed
consent to DLA Piper Rudnick Gray Cary’s representation of the Investor in such
unrelated matters and to DLA Piper Rudnick Gray Cary’s representation of the
Company in connection with this Agreement and the transactions contemplated by
this Agreement. The Company and the Investor acknowledge that the Investor is a
professional investment fund, and as such invests in numerous portfolio
companies, some of which may be competitive with the Company’s business. The
Investor shall not be liable to the Company for any claim arising out of, or
based upon, (a) the investment by the Investor in any entity competitive with
the Company or (b) actions taken by any partner, officer, or other
representative of the Investor to assist any such competitive company, whether
or not such action was taken as a board member of such competitive company, or
otherwise, and whether or not such action has a detrimental effect on the
Company.

 

5.18            Confidentiality.
Except as required by law, the Investor agrees that it shall keep confidential
and shall not disclose or divulge any confidential, proprietary, or secret
information which such Investor may obtain from the Company pursuant to
financial statements, reports, and other materials submitted by the Company to
such Investor pursuant to this Agreement or otherwise, or pursuant to
visitation or inspection rights granted under this Agreement or in the
Transaction Agreements, unless such information is known, or until such
information becomes known, to the public; provided, that the Investor
may disclose such information (a) to its attorneys, accountants, consultants,
and other professionals to the extent necessary to obtain their services in
connection with its investment in the Company, (b) to any prospective purchaser
of any Securities from such Investor as long as such prospective purchaser
agrees in writing to be bound by the provisions of this Section, or (c) to any
affiliate of such Investor or to a partner or stockholder of such Investor.

 

[Signature Page Follows]

 

12

 

IN WITNESS WHEREOF, the parties to this Agreement have executed
this Agreement as of the date first written above.

 

	
   

  	
   

  	
  DEMARSECO HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
     /s/ Elisabeth DeMarse

  	
   

  
	
   

  	
   

  	
   

  	
     Elisabeth
  DeMarse

     President

  

 

 

	
   

  	
   

  	
  INVESTOR:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AUSTIN VENTURES VIII, L.P.

  
	
   

  	
   

  	
   

  	
  By:

  	
  AV Partners VIII, L.P.,
  

  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Kenneth P. DeAngelis

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Kenneth
  P. DeAngelis

  General Partner

  
									

 

 

SIGNATURE
PAGE TO 

NOTE PURCHASE AGREEMENT

 

 

EXHIBIT A 

 

SCHEDULE OF INVESTORS

 

	
  Name and Address of Investor

  	
   

  	
  Date of Issuance

  	
   

  	
  Principal Amount 

  of Notes at

  Initial Closing

  	
   

  
	
  Austin Ventures VIII, L.P.

  300 West 6th Street, Suite 2300

  Austin, Texas 78701

  	
   

  	
  September 20, 2006

  	
   

  	
  $

  	
  250,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Austin Ventures VIII, L.P.

  300 West 6th Street, Suite 2300

  Austin, Texas 78701

  	
   

  	
  September 20, 2006

  	
   

  	
  $

  	
  250,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Total

  	
   

  	
   

  	
   

  	
  $

  	
  500,000Exhibit 10.23

 

THIS NOTE AND THE
SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER
UNITED STATES FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE,
SOLD, OR OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE, DIRECTLY OR INDIRECTLY,
NOR MAY THIS NOTE OR THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE BE
TRANSFERRED ON THE BOOKS OF THE COMPANY, WITHOUT REGISTRATION OF SUCH NOTE OR
SECURITIES, AS APPLICABLE, UNDER ALL APPLICABLE UNITED STATES FEDERAL OR STATE
SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM, SUCH
COMPLIANCE, AT THE OPTION OF THE COMPANY, TO BE EVIDENCED BY AN OPINION OF
STOCKHOLDER’S COUNSEL, IN A FORM ACCEPTABLE TO THE COMPANY, THAT NO VIOLATION
OF SUCH REGISTRATION PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR
ASSIGNMENT.

 

DEMARSECO HOLDINGS, INC.

 

CONVERTIBLE PROMISSORY NOTE

 

	
  $250,000.00

  	
   

  	
  Austin, Texas

  	
   

  	
  September 20,
  2006

  

 

FOR VALUE
RECEIVED, the undersigned, DeMarseCo Holdings, Inc., a Delaware corporation,
and its successors and assigns (the “Company”),
promises to pay to the order of Austin Ventures VIII, L.P., and its successors
and permitted assigns (“Holder”),
the principal sum of Two Hundred Fifty Thousand and no/100ths Dollars
($250,000.00), together with interest from December 28, 2005 on the balance of
this Note from time to time remaining unpaid at a rate of 4.4% per annum until
maturity, both principal and interest being payable at the address designated
in Section 12, or at such other place as Holder may from time to time
designate in writing.

 

The principal of
this Note shall mature and be due and payable at the earliest of (a) the
closing of the Qualified Financing (as defined in Section 1), (b) on
demand made at any time on or after the date that is 18 months after the date
hereof in writing to the Company by holders of a majority in outstanding
principal amount of the Notes (as defined below), or (c) on the closing of (i)
the sale or exclusive licensing of all or substantially all the assets of the
Company, (ii) the merger of the Company into or consolidation with any other
entity (other than for purposes of changing the Company’s domicile), or the
sale of outstanding stock of the Company by its stockholders, in which at least
50% of the voting power of the Company is transferred.

 

All accrued and
unpaid interest shall be due and payable immediately on maturity of the
principal of this Note.

 

All past due
principal and accrued interest on this Note shall bear interest from maturity
(whether on the closing of a Qualified Financing, on demand, upon acceleration
of maturity following an Event of Default (as defined below) or otherwise)
until paid at the lesser of (a) the rate of 12% per annum or (b) the highest
rate for which the Company may legally contract under

 

1

 

applicable law. All
payments under this Note shall be payable in lawful money of the United States
of America which shall be legal tender for public and private debts at the time
of payments.

 

This Note, the
indebtedness evidenced by this Note and all payments or rights under this Note
are expressly subordinate to all senior indebtedness of the Company, whether
such senior indebtedness is outstanding as of the date of this Note or incurred
after the date of this Note, and all such senior indebtedness shall be senior
in right of payment to this Note. As used in this Note, “senior indebtedness” means all
indebtedness or other monetary obligations of the Company that are secured by
assets of the Company or for which the instrument creating or evidencing the
same or pursuant to which the same is outstanding expressly provides that such
indebtedness or obligation shall be senior in right of payment to this Note or
the Company’s subordinated indebtedness.

 

This Note is one
of a series of convertible promissory notes of the Company in the aggregate
principal amount of $750,000 (the “Notes”)
evidencing indebtedness incurred by the Company for interim financing provided
to the Company prior to the consummation of the Qualified Financing. This Note
and the other Notes shall rank pari passu as to the payment of principal and
interest. The Holder agrees that any payments or prepayments to the holders of
this Note and the other Notes, whether principal, interest or otherwise, shall
be made pro rata among the holders of this Note and the holders of the other
Notes based upon the aggregate unpaid principal amount of this Note and the
other Notes. By accepting this Note, each holder of this Note agrees that if
any holder of this Note or of any other Note obtains any payments (whether
voluntary, involuntary, by prepayment, set-off or otherwise) of the principal
or interest on this Note or any other Note in excess of such holder’s pro rata
share of payments received by all holders of the Notes, such holder shall
purchase from the other holders of this Note and the other Notes such
participation in such notes held by them as is necessary to cause all such
holders to share the excess payment ratably among each of them as provided in
this Section.

 

Section
1.              CONVERSION.
If the Company issues or sells any preferred stock, common stock or other stock
or similar securities of the Company or any security convertible or
exchangeable into or for preferred stock, common stock or other stock or
similar securities of the Company (“Equity
Securities”) for cash in a single transaction or series of related
transactions in which the gross proceeds to the Company equal at least
$5,000,000 excluding indebtedness converted into such Equity Securities (a “Qualified Financing”), all of the unpaid
principal of this Note plus accrued interest on this Note shall automatically
and without any further action on the part of the Holder or the Company be
converted at the closing of the Qualified Financing into the same class or
series of Equity Securities as are issued and sold by the Company in such
Qualified Financing (or a class or series of Equity Securities identical in all
respects to and ranking pari passu with the class or series of Equity
Securities issued and sold in such Qualified Financing) at a price per share or
unit equal to the lowest price per share or unit at which such Equity
Securities were issued and sold in such Qualified Financing. The following
Equity Securities shall not be deemed to be issued or sold as part of a
Qualified Financing: (a) Common Stock or options to purchase Common Stock
issued, sold or granted pursuant to any stock incentive or option plan adopted
by the Company; or (b) Common Stock issued and sold by the Company in a single
transaction or series of related transactions in which no Equity Securities
other than shares of Common Stock are issued or sold.

 

2

 

Section
2.              PREPAYMENTS.
The principal and/or interest on this Note may be prepaid in whole or in
part without penalty and without the prior consent of Holder; provided that no
payments of principal or interest shall be made on this Note unless such
payment is made pro-rata according the outstanding principal and interest on
the Notes to all holders of the Notes. Any prepayment shall be applied first
against any accrued interest, and then against principal.

 

Section
3.              DEFAULT;
REMEDIES.

 

(a)           The Company shall be in
default under this Note upon the happening of any condition or event set forth
below (each, an “Event of Default”):

 

(i)            the Company’s failure
to pay any payment of principal or interest as and when due in accordance with
the terms of this Note;

 

(ii)           default by the Company
in the punctual performance of any other obligation, covenant, term or
provision contained in this Note, and such default shall continue unremedied
for a period of 10 days or more following written notice of default by Holder
to the Company;

 

(iii)          any warranty,
representation, financial statement or other information furnished to Holder by
or on behalf of the Company in connection with this Note or to induce the
Holder to make a loan to the Company proves to have been false in any material
respect when made or furnished; or

 

(iv)          the Company’s dissolution,
termination of existence, insolvency or business failure; the appointment of a
receiver of all or any part of the property of the Company; an assignment for
the benefit of creditors by the Company; or the commencement of any proceeding
under any bankruptcy or insolvency laws by or against the Company or any
guarantor, surety or endorser for the Company which results in the entry of an
order for relief or which remains undismissed, undischarged or unbonded for a
period of 60 days or more.

 

(b)           The entire unpaid
principal balance of this Note and all accrued interest on such unpaid
principal balance shall immediately be due and payable at the option of the
holder of this Note upon the occurrence of any one or more of the Events of
Default and at any time after the occurrence of any one or more of the Events
of Default.

 

Section
4.              CUMULATIVE
RIGHTS. No delay on the part of the holder of this Note in the exercise
of any power or right under this Note or under any other instrument executed
pursuant to this Agreement shall operate as a waiver of any such power or
right, nor shall a single or partial exercise of any power or right preclude
other or further exercise of such power or right or the exercise of any other
power or right.

 

Section
5.              WAIVER.
The Company and all endorsers, sureties and guarantors of this Note waive
demand, presentment, protest, notice of dishonor, notice of nonpayment, notice
of intention to accelerate or notice of acceleration other than notice of
default pursuant to Section 3(a)(ii), notice of protest and any and all
lack of diligence or delay in collection or the filing of suit on this Note
which may occur, and agree to all extensions and partial payments, before or
after maturity, without prejudice to the holder of this Note.

 

3

 

Section
6.              ATTORNEYS’
FEES AND COSTS. In the event that this Note is collected in whole or in
part through suit, arbitration, mediation, or other legal proceeding of any
nature, then and in any such case there shall be added to the unpaid principal
amount of this Note all reasonable costs and expenses of collection, including,
without limitation, reasonable attorney’s fees.

 

Section
7.              GOVERNING
LAW. This Note shall be governed by and construed in accordance with
the internal laws of the State of Delaware, without giving effect to conflicts
of law provision or rule (whether of the State of Delaware or any other
jurisdiction) that would result in the application of the laws of any
jurisdiction other than the State of Delaware.

 

Section
8.              HEADINGS.
The headings and captions used in this Note are used for convenience only and
are not to be considered in construing or interpreting this Note. All
references in this Note to sections, paragraphs, exhibits, and schedules shall,
unless otherwise provided, refer to sections and paragraphs of this Note and
exhibits and schedules attached to this Note, all of which exhibits and
schedules are incorporated in this Note by this reference.

 

Section
9.              USURY.
All agreements between the Company and the holder of this Note, whether now
existing or hereafter arising and whether written or oral, are expressly
limited so that in no contingency or event whatsoever, whether by acceleration
of the maturity of this Note or otherwise, shall the amount paid, or agreed to
be paid, to the holder of this Note for the use, forbearance or detention of
the money to be loaned under this Agreement or otherwise, exceed the maximum
amount permissible under applicable law. If from any circumstances whatsoever
fulfillment of any provision of this Note or of any other document evidencing,
securing or pertaining to the indebtedness evidenced by this Note, at the time
performance of such provision shall be due, shall involve transcending the
limit of validity prescribed by law, then ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity, and if from any such
circumstances the holder of this Note shall ever receive anything of value as
interest or deemed interest by applicable law under this Note or any other
document evidencing, securing or pertaining to the indebtedness evidenced by
this Note or otherwise an amount that would exceed the highest lawful rate,
such amount that would be excessive interest shall be applied to the reduction
of the principal amount owing under this Note or on account of any other
indebtedness of the Company to the holder of this Note relating to this Note,
and not to the payment of interest, or if such excessive interest exceeds the
unpaid balance of principal of this Note and such other indebtedness, such
excess shall be refunded to the Company. In determining whether or not the
interest paid or payable with respect to any indebtedness of the Company to the
holder of this Note, under any specific contingency, exceeds the highest lawful
rate, the Company and the holder of this Note shall, to the maximum extent
permitted by applicable law, (a) characterize any nonprincipal payment as an
expense, fee or premium rather than as interest, (b) amortize, prorate,
allocate and spread the total amount of interest throughout the full term of
such indebtedness so that the actual rate of interest on account of such
indebtedness is uniform throughout the term of such indebtedness, and/or (c)
allocate interest between portions of such indebtedness, to the end that no
such portion shall bear interest at a rate greater than that permitted by law.
The terms and provisions of this Section shall control and supersede every
other conflicting provision of all agreements between the Company and the
holder of this Note. The Holder has been advised by the Company to seek the
advice of an attorney and an accountant in connection with the issuance of this
Note. The Company has had

 

4

 

the opportunity to seek
the advice of any attorney and accountant of the Company’s choice in connection
with issuance of this Note.

 

Section
10.            SUCCESSORS
AND ASSIGNS. This Note may not be sold, transferred or otherwise
assigned by Holder without the prior written consent of the Company. All of the
stipulations, promises and agreements in this Note made by or on behalf of the
Company shall bind the successors and assigns of the Company, whether so
expressed or not, and inure to the benefit of the successors and permitted
assigns of the Holder.

 

Section
11.            SEVERABILITY.
If one or more provisions of this Note are held to be unenforceable under
applicable law, such provision(s) shall be excluded from this Note and the
balance of this Note shall be interpreted as if such provision(s) were so
excluded and shall be enforceable in accordance with its terms.

 

Section
12.            NOTICES.
All notices, requests, consents, and other communications under this Note
shall be in writing and shall be delivered personally or by facsimile
transmission or by nationally recognized overnight delivery service or by first
class certified or registered mail, return receipt requested, postage prepaid:

 

If to the Company,
at 300 West 6th Street, Suite 2300, Austin, Texas 78701 or fax to (512)
476-3952, Attention: Philip Siegel, or at such other address or addresses as
may have been furnished by giving five days advance written notice to all other
parties, with a copy (which shall not constitute notice) to DLA Piper Rudnick
Gray Cary, 1221 S. Mopac Expressway, Suite 400, Austin, Texas 78746, Attention
Samer Zabaneh (fax: (512) 457-7001).

 

If to a Holder, at
300 West 6th Street, Suite 2300, Austin, Texas 78701 or fax to (512) 476-3952
Attention: Kenneth DeAngelis, or at such other address or addresses as may have
been furnished by giving five days advance written notice to all other parties.

 

Notices provided
in accordance with this Section shall be deemed delivered upon personal
delivery (including confirmed facsimile) or three business days after deposit
in the mail.

 

[Signature Page Follows]

 

5

 

IN
WITNESS WHEREOF, the undersigned has executed this Note on
and as of the date first above written.

 

	
   

  	
   

  	
  DEMARSECO
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Elisabeth DeMarse

  	
   

  
	
   

  	
   

  	
   

  	
  Elisabeth DeMarse 

  
	
   

  	
   

  	
   

  	
  President

  

 

 

SIGNATURE
PAGE TO

CONVERTIBLE PROMISSORY NOTE

 

 

THIS NOTE AND THE
SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER
UNITED STATES FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE,
SOLD, OR OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE, DIRECTLY OR INDIRECTLY,
NOR MAY THIS NOTE OR THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE BE
TRANSFERRED ON THE BOOKS OF THE COMPANY, WITHOUT REGISTRATION OF SUCH NOTE OR
SECURITIES, AS APPLICABLE, UNDER ALL APPLICABLE UNITED STATES FEDERAL OR STATE
SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM, SUCH
COMPLIANCE, AT THE OPTION OF THE COMPANY, TO BE EVIDENCED BY AN OPINION OF
STOCKHOLDER’S COUNSEL, IN A FORM ACCEPTABLE TO THE COMPANY, THAT NO VIOLATION
OF SUCH REGISTRATION PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR
ASSIGNMENT.

 

DEMARSECO HOLDINGS, INC.

 

CONVERTIBLE PROMISSORY NOTE

 

	
  $250,000.00

  	
   

  	
  Austin, Texas

  	
   

  	
  September 20,
  2006

  

 

FOR VALUE
RECEIVED, the undersigned, DeMarseCo Holdings, Inc., a Delaware corporation,
and its successors and assigns (the “Company”),  promises to pay to the order of Austin
Ventures VIII, L.P., and its successors and permitted assigns (“Holder”),  the principal sum of Two Hundred Fifty
Thousand and no/100ths Dollars ($250,000.00), together with interest from
September 15, 2006 on the balance of this Note from time to time remaining
unpaid at a rate of 4.4% per annum until maturity, both principal and interest
being payable at the address designated in Section 12, or at such other
place as Holder may from time to time designate in writing.

 

The principal of
this Note shall mature and be due and payable at the earliest of (a) the
closing of the Qualified Financing (as defined in Section 1), (b) on
demand made at any time on or after the date that is 18 months after the date
hereof in writing to the Company by holders of a majority in outstanding
principal amount of the Notes (as defined below), or (c) on the closing of (i)
the sale or exclusive licensing of all or substantially all the assets of the
Company, (ii) the merger of the Company into or consolidation with any other
entity (other than for purposes of changing the Company’s domicile), or the
sale of outstanding stock of the Company by its stockholders, in which at least
50% of the voting power of the Company is transferred.

 

All accrued and
unpaid interest shall be due and payable immediately on maturity of the
principal of this Note.

 

All past due
principal and accrued interest on this Note shall bear interest from maturity
(whether on the closing of a Qualified Financing, on demand, upon acceleration
of maturity following an Event of Default (as defined below) or otherwise)
until paid at the lesser of (a) the rate of 12% per annum or (b) the highest
rate for which the Company may legally contract under

 

6

 

applicable law. All
payments under this Note shall be payable in lawful money of the United States
of America which shall be legal tender for public and private debts at the time
of payments.

 

This Note, the
indebtedness evidenced by this Note and all payments or rights under this Note
are expressly subordinate to all senior indebtedness of the Company, whether
such senior indebtedness is outstanding as of the date of this Note or incurred
after the date of this Note, and all such senior indebtedness shall be senior
in right of payment to this Note. As used in this Note, “senior indebtedness” means all indebtedness
or other monetary obligations of the Company that are secured by assets of the
Company or for which the instrument creating or evidencing the same or pursuant
to which the same is outstanding expressly provides that such indebtedness or
obligation shall be senior in right of payment to this Note or the Company’s
subordinated indebtedness.

 

This Note is one
of a series of convertible promissory notes of the Company in the aggregate
principal amount of $750,000 (the “Notes”)
evidencing indebtedness incurred by the Company for interim financing provided
to the Company prior to the consummation of the Qualified Financing. This Note
and the other Notes shall rank pari passu as to the payment of principal and
interest. The Holder agrees that any payments or prepayments to the holders of
this Note and the other Notes, whether principal, interest or otherwise, shall
be made pro rata among the holders of this Note and the holders of the other
Notes based upon the aggregate unpaid principal amount of this Note and the
other Notes. By accepting this Note, each holder of this Note agrees that if
any holder of this Note or of any other Note obtains any payments (whether
voluntary, involuntary, by prepayment, set-off or otherwise) of the principal
or interest on this Note or any other Note in excess of such holder’s pro rata
share of payments received by all holders of the Notes, such holder shall
purchase from the other holders of this Note and the other Notes such
participation in such notes held by them as is necessary to cause all such
holders to share the excess payment ratably among each of them as provided in
this Section.

 

Section
1.   CONVERSION. If the Company issues
or sells any preferred stock, common stock or other stock or similar securities
of the Company or any security convertible or exchangeable into or for
preferred stock, common stock or other stock or similar securities of the
Company (“Equity Securities”) for cash in a single transaction
or series of related transactions in which the gross proceeds to the Company
equal at least $5,000,000 excluding indebtedness converted into such Equity
Securities (a “Qualified Financing”),
all of the unpaid principal of this Note plus accrued interest on this Note
shall automatically and without any further action on the part of the Holder or
the Company be converted at the closing of the Qualified Financing into the
same class or series of Equity Securities as are issued and sold by the Company
in such Qualified Financing (or a class or series of Equity Securities identical
in all respects to and ranking pari passu with the class or series of Equity
Securities issued and sold in such Qualified Financing) at a price per share or
unit equal to the lowest price per share or unit at which such Equity
Securities were issued and sold in such Qualified Financing. The following
Equity Securities shall not be deemed to be issued or sold as part of a
Qualified Financing: (a) Common Stock or options to purchase Common Stock
issued, sold or granted pursuant to any stock incentive or option plan adopted
by the Company; or (b) Common Stock issued and sold by the Company in a single
transaction or series of related transactions in which no Equity Securities
other than shares of Common Stock are issued or sold.

 

7

 

Section
2.   PREPAYMENTS. The principal and/or
interest on this Note may be prepaid in whole or in part without penalty and
without the prior consent of Holder; provided that no payments of principal or
interest shall be made on this Note unless such payment is made pro-rata
according the outstanding principal and interest on the Notes to all holders of
the Notes. Any prepayment shall be applied first against any accrued interest,
and then against principal.

 

Section
3.   DEFAULT; REMEDIES.

 

(a)    The Company shall
be in default under this Note upon the happening of any condition or event set
forth below (each, an “Event of Default”):

 

(i)          the Company’s failure to pay any
payment of principal or interest as and when due in accordance with the terms
of this Note;

 

(ii)         default by the Company in the punctual
performance of any other obligation, covenant, term or provision contained in
this Note, and such default shall continue unremedied for a period of 10 days
or more following written notice of default by Holder to the Company;

 

(iii)        any warranty, representation, financial
statement or other information furnished to Holder by or on behalf of the
Company in connection with this Note or to induce the Holder to make a loan to
the Company proves to have been false in any material respect when made or
furnished; or

 

(iv)       the Company’s dissolution, termination of
existence, insolvency or business failure; the appointment of a receiver of all
or any part of the property of the Company; an assignment for the benefit of
creditors by the Company; or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against the Company or any guarantor,
surety or endorser for the Company which results in the entry of an order for
relief or which remains undismissed, undischarged or unbonded for a period of
60 days or more.

 

(b)    The entire unpaid principal balance of this
Note and all accrued interest on such unpaid principal balance shall
immediately be due and payable at the option of the holder of this Note upon
the occurrence of any one or more of the Events of Default and at any time
after the occurrence of any one or more of the Events of Default.

 

Section
4.   CUMULATIVE RIGHTS. No delay on the
part of the holder of this Note in the exercise of any power or right under
this Note or under any other instrument executed pursuant to this Agreement
shall operate as a waiver of any such power or right, nor shall a single or
partial exercise of any power or right preclude other or further exercise of
such power or right or the exercise of any other power or right.

 

Section
5.   WAIVER. The Company and all
endorsers, sureties and guarantors of this Note waive demand, presentment,
protest, notice of dishonor, notice of nonpayment, notice of intention to
accelerate or notice of acceleration other than notice of default pursuant to Section
3(a)(ii), notice of protest and any and all lack of diligence or delay in
collection or the filing of suit on this Note which may occur, and agree to all
extensions and partial payments, before or after maturity, without prejudice to
the holder of this Note.

 

8

 

Section
6.   ATTORNEYS’ FEES AND COSTS. In the
event that this Note is collected in whole or in part through suit,
arbitration, mediation, or other legal proceeding of any nature, then and in
any such case there shall be added to the unpaid principal amount of this Note
all reasonable costs and expenses of collection, including, without limitation,
reasonable attorney’s fees.

 

Section
7.   GOVERNING LAW. This Note shall be
governed by and construed in accordance with the internal laws of the State of
Delaware, without giving effect to conflicts of law provision or rule (whether
of the State of Delaware or any other jurisdiction) that would result in the
application of the laws of any jurisdiction other than the State of Delaware.

 

Section
8.   HEADINGS. The headings and
captions used in this Note are used for convenience only and are not to be
considered in construing or interpreting this Note. All references in this Note
to sections, paragraphs, exhibits, and schedules shall, unless otherwise
provided, refer to sections and paragraphs of this Note and exhibits and
schedules attached to this Note, all of which exhibits and schedules are
incorporated in this Note by this reference.

 

Section
9.   USURY. All agreements between the
Company and the holder of this Note, whether now existing or hereafter arising
and whether written or oral, are expressly limited so that in no contingency or
event whatsoever, whether by acceleration of the maturity of this Note or
otherwise, shall the amount paid, or agreed to be paid, to the holder of this
Note for the use, forbearance or detention of the money to be loaned under this
Agreement or otherwise, exceed the maximum amount permissible under applicable
law. If from any circumstances whatsoever fulfillment of any provision of this
Note or of any other document evidencing, securing or pertaining to the
indebtedness evidenced by this Note, at the time performance of such provision
shall be due, shall involve transcending the limit of validity prescribed by
law, then ipso facto, the obligation to be fulfilled shall be reduced to the
limit of such validity, and if from any such circumstances the holder of this
Note shall ever receive anything of value as interest or deemed interest by
applicable law under this Note or any other document evidencing, securing or
pertaining to the indebtedness evidenced by this Note or otherwise an amount
that would exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount owing under
this Note or on account of any other indebtedness of the Company to the holder
of this Note relating to this Note, and not to the payment of interest, or if
such excessive interest exceeds the unpaid balance of principal of this Note
and such other indebtedness, such excess shall be refunded to the Company. In
determining whether or not the interest paid or payable with respect to any
indebtedness of the Company to the holder of this Note, under any specific
contingency, exceeds the highest lawful rate, the Company and the holder of
this Note shall, to the maximum extent permitted by applicable law, (a)
characterize any nonprincipal payment as an expense, fee or premium rather than
as interest, (b) amortize, prorate, allocate and spread the total amount of
interest throughout the full term of such indebtedness so that the actual rate
of interest on account of such indebtedness is uniform throughout the term of
such indebtedness, and/or (c) allocate interest between portions of such
indebtedness, to the end that no such portion shall bear interest at a rate
greater than that permitted by law. The terms and provisions of this Section
shall control and supersede every other conflicting provision of all agreements
between the Company and the holder of this Note. The Holder has been advised by
the Company to seek the advice of an attorney and an accountant in connection
with the issuance of this Note. The Company has had

 

9

 

the opportunity to seek
the advice of any attorney and accountant of the Company’s choice in connection
with issuance of this Note.

 

Section
10.   SUCCESSORS AND ASSIGNS. This Note
may not be sold, transferred or otherwise assigned by Holder without the prior
written consent of the Company. All of the stipulations, promises and
agreements in this Note made by or on behalf of the Company shall bind the
successors and assigns of the Company, whether so expressed or not, and inure
to the benefit of the successors and permitted assigns of the Holder.

 

Section
11.   SEVERABILITY. If one or more
provisions of this Note are held to be unenforceable under applicable law, such
provision(s) shall be excluded from this Note and the balance of this Note
shall be interpreted as if such provision(s) were so excluded and shall be
enforceable in accordance with its terms.

 

Section
12.   NOTICES. All notices, requests,
consents, and other communications under this Note shall be in writing and
shall be delivered personally or by facsimile transmission or by nationally
recognized overnight delivery service or by first class certified or registered
mail, return receipt requested, postage prepaid:

 

If to the Company,
at 300 West 6th Street, Suite 2300, Austin, Texas 78701 or fax to (512)
476-3952, Attention: Philip Siegel, or at such other address or addresses as
may have been furnished by giving five days advance written notice to all other
parties, with a copy (which shall not constitute notice) to DLA Piper Rudnick
Gray Cary, 1221 S. Mopac Expressway, Suite 400, Austin, Texas 78746, Attention
Samer Zabaneh (fax: (512) 457-7001).

 

If to a Holder, at
300 West 6th Street, Suite 2300, Austin, Texas 78701 or fax to (512) 476-3952
Attention: Kenneth DeAngelis, or at such other address or addresses as may have
been furnished by giving five days advance written notice to all other parties.

 

Notices provided
in accordance with this Section shall be deemed delivered upon personal
delivery (including confirmed facsimile) or three business days after deposit
in the mail.

 

[Signature Page Follows]

 

10

 

IN
WITNESS WHEREOF, the undersigned has executed this Note on
and as of the date first above written.

 

	
   

  	
   

  	
  DEMARSECO
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Elisabeth DeMarse

  
	
   

  	
   

  	
   

  	
  Elisabeth DeMarse 

  
	
   

  	
   

  	
   

  	
  President

  

 

 

SIGNATURE
PAGE TO

CONVERTIBLE PROMISSORY NOTE

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