EXHIBIT 4.1
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "1933 ACT"), OR UNDER THE PROVISIONS OF ANY APPLICABLE STATE SECURITIES
LAWS, BUT HAS BEEN ACQUIRED BY THE REGISTERED HOLDER HEREOF FOR PURPOSES OF
INVESTMENT AND IN RELIANCE ON STATUTORY EXEMPTIONS UNDER THE 1933 ACT, AND UNDER
ANY APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, PLEDGED,
TRANSFERRED OR ASSIGNED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER PROVISIONS
OF THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT; AND IN THE CASE OF AN EXEMPTION, ONLY IF THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
TRANSACTION DOES NOT REQUIRE REGISTRATION OF THIS NOTE.
ACCUPOLL HOLDING CORP.
August 25, 2005 Tustin, California
$62,473.00
8% CONVERTIBLE PROMISSORY NOTE
AccuPoll Holding Corp., a Nevada corporation (the "Company"), for
value received, hereby promises to pay to Xxxxx X. Xxxxx, or his registered
assign (the "Holder") on August 25, 2006 (the "Maturity Date"), at the principal
offices of the Company, the principal sum owed Holder on such date in such coin
or currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, and to pay interest on
the outstanding principal sum hereof at the rate of eight percent (8%) per annum
(the "Note") and payable monthly in arrears commencing October 2005, by the
fifth day of the successive calendar month. Principal shall be payable on the
Maturity Date in like coin or currency to the Holder hereof at the office of the
Company as hereinafter set forth, provided that any payment otherwise due on a
Saturday, Sunday or legal Bank holiday may be paid on the following business
day. In the event that for any reason whatsoever any interest or other
consideration payable with respect to this Note shall be deemed to be usurious
by a court of competent jurisdiction under the laws of the State of California
or the laws of any other state governing the repayment hereof, then so much of
such interest or other consideration as shall be deemed to be usurious shall be
held by the holder as security for the repayment of the principal amount hereof
and shall otherwise be waived. As of the date first above, Xxxxxx has advanced
to the Company $62,473 and in his sole discretion may make additional advances
available from time to time up to $200,000.
1. TRANSFERS OF NOTE TO COMPLY WITH THE 1933 ACT
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The Holder agrees that this Note may not be sold, transferred,
pledged, hypothecated or otherwise disposed of except as follows: (1) to a
person whom the Note may legally be transferred without registration and without
delivery of a current prospectus under the 1933 Act with respect thereto and
then only against receipt of an agreement of such person to comply with the
provisions of this Section 1 with respect to any resale or other disposition of
the Note; or (2) to any person upon delivery of a prospectus then meeting the
requirements of the 1933 Act relating to such securities and the offering
thereof for such sale or disposition, and thereafter to all successive
assignees.
2. PREPAYMENT; CONVERSION
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The principal amount of this Note may be prepaid by the Company, in
whole or in part without premium or penalty, at any time. Upon any prepayment of
the entire principal amount of this Note, all accrued, but unpaid, interest
shall be paid to the Holder on the date of prepayment.
At any time prior to or at the time of repayment of this Note by
the Company, the Holder may elect to convert some or all of the principal and
interest owing on this Note into shares of the Company's common stock at the
rate of $0.118 per share. Such election to convert shall be evidenced by
completion of the conversion notice attached hereto and delivery of such notice
to the Company. The Holder's right to convert the obligations due under this
Note to common stock shall supercede the Company's right to repay such
obligations in cash.
3. COVENANTS OF COMPANY
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The Company covenants and agrees that, so long as any principal of,
or interest on, this Note shall remain unpaid, unless the Holder shall otherwise
consent in writing, it will comply with the following terms:
(a) REPORTING REQUIREMENTS. The Company will furnish to the Holder:
(i) as soon as possible, and in any event within ten (10) days
after obtaining knowledge of the occurrence of (A) an "Event of Default," as
hereinafter defined, (B) an event which, with the giving of notice or the lapse
of time or both, would constitute an Event of Default, or (C) a material adverse
change in the condition or operations, financial or otherwise, of the Company,
taken as whole, the written statement of the Chief Executive Officer or the
Chief Financial Officer of the Company, setting forth the details of such Event
of Default, event or material adverse change and the action which the Company
proposes to take with respect thereto;
(ii) promptly after the sending or filing thereof, copies of
all financial statements, reports, certificates of its Chief Executive Officer,
Chief Financial Officer or accountants and other information which the Company
or any subsidiary sends to any holders (other than the Notes) of its securities;
(iii) promptly after the commencement thereof, notice of each
action, suit or proceeding before any court or other governmental authority or
other regulatory body or any arbitrator as to which there is a reasonable
possibility of a determination that would (A) materially impact the ability of
the Company or any subsidiary to conduct its business, (B) materially and
adversely affect the business, operations or financial condition of the Company
taken as a whole, or (C) impair the validity or enforceability of the Notes or
the ability of the Company to perform its obligations under the Notes.
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(b) COMPLIANCE WITH LAWS. The Company will comply, in all material
respects with all applicable laws, rules, regulations and orders, except to the
extent that noncompliance would not have a material adverse effect upon the
business, operations or financial condition of the Company taken as a whole.
(c) PRESERVATION OF EXISTENCE. The Company will maintain and
preserve, and cause each subsidiary, if any, to maintain and preserve, its
existence, and become or remain duly qualified and in good standing in each
jurisdiction in which the failure to be so qualified would have a material
adverse effect on the business, operations or financial condition of the
Company, taken as a whole.
(d) MAINTENANCE OF PROPERTIES. The Company will maintain and
preserve, all of its properties which are necessary in the proper conduct of its
business in good working order and condition, ordinary wear and tear excepted,
and comply, at all times with the provisions of all leases to which it is a
party as lessee or under which it occupies property, so as to prevent any
forfeiture or material loss thereof or thereunder.
(e) MAINTENANCE OF INSURANCE. The Company will maintain, with
responsible and reputable insurers, insurance with respect to its properties and
business, in such amounts and covering such risks, as is carried generally in
accordance with sound business practice by companies in similar businesses in
the same localities in which the Company is situated.
(f) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Company will keep
adequate records and books of account, with complete entries made in accordance
with generally accepted accounting principles, reflecting all of its financial
and other business transactions.
(g) COMPLIANCE WITH THE SECURITIES EXCHANGE ACT OF 1934. The
Company shall comply in all respects with the requirements of the Securities
Exchange Act of 1934, including the filing of all reports due thereunder.
4. EVENTS OF DEFAULT AND REMEDIES
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(a) Any one or more of the following events which shall have
occurred and be continuing shall constitute an event of default ("Event of
Default"):
(i) Default in the payment of interest upon this Note, as and
when the same shall become due; or
(ii) Default in the payment of the principal of this Note, as
and when the same shall become due; or
(iii) The Company shall fail to perform or observe any
affirmative covenant contained in this Note and such Default, if capable of
being remedied, shall not have been remedied ten (10) days after written notice
thereof shall have been given by the Holder to the Company; or
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(iv) The Company or any subsidiary (A) shall institute any
proceeding or voluntary case seeking to adjudicate it bankrupt or insolvent, or
seeking dissolution, liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of any order for relief or the appointment of a receiver,
trustee, custodian or other similar official for such the Company or any
subsidiary or for any substantial part of its property, or shall consent to the
commencement against it of such a proceeding or case, or shall file an answer in
any such case or proceeding commenced against it consenting to or acquiescing in
the commencement of such case or proceeding, or shall consent to or acquiesce in
the appointment of such a receiver, trustee, custodian or similar official; (B)
shall be unable to pay its debts as such debts become due, or shall admit in
writing its inability to apply its debts generally; (C) shall make a general
assignment for the benefit of creditors; or (D) shall take any action to
authorize or effect any of the actions set forth above in this subsection 3
(iv); or
(v) Any proceeding shall be instituted against the Company
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for the
Company or for any substantial part of its property, and either such proceeding
shall not have been dismissed or shall not have been stayed for a period of
sixty (60) days or any of the actions sought in such proceeding (including,
without limitation, the entry of any order for relief against it or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its property) shall occur; or
(vi) One or more final judgments or orders for the payment of
money in excess of $250,000 in the aggregate shall be rendered against the
Company, and either (A) enforcement proceedings shall have been commenced by any
creditor upon any such judgment or order, or (B) there shall be any period of
thirty (30) days during which enforcement of any such judgment or order shall
not be discharged, stayed or fully satisfied.
(b) If an Event of Default described above has occurred, then the
Holder may, without further notice to the Company, declare the principal amount
of this Note at the time outstanding, together with accrued unpaid interest
thereon, and all other amounts payable under this Note to be forthwith due and
payable, whereupon such principal, interest and all such amounts shall become
and be forthwith due and payable.
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(c) The Company covenants that in case the principal of, and
accrued interest on, the Note becomes due and payable by declaration or
otherwise, then the Company will pay in cash to the Holder of this Note, the
whole amount that then shall have become due and payable on this Note for
principal or interest, as the case may be, and in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including reasonable fees and disbursements of the Holder's legal counsel. In
case the Company shall fail forthwith to pay such amount, the Holder may
commence an action or proceeding at law or in equity for the collection of the
sums so due and unpaid, and may prosecute any such action or proceeding to
judgment or final decree against Company or other obligor upon this Note,
wherever situated, the monies adjudicated or decreed to be payable.
5. MISCELLANEOUS
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(a) This Note has been issued by the Company pursuant to
authorization of the Board of Directors of the Company.
(b) The Company may consider and treat the entity in whose name
this Note shall be registered as the absolute owner thereof for all purposes
whatsoever (whether or not this Note shall be overdue) and the Company shall not
be affected by any notice to the contrary. Subject to the limitations herein
stated, the registered owner of this Note shall have the right to transfer this
Note by assignment, and the transferee thereof shall, upon his registration as
owner of this Note, become vested with all the powers and rights of the
transferor. Registration of any new owners shall take place upon presentation of
this Note to the Company at its principal offices, together with a duly
authenticated assignment. In case of transfer by operation of law, the
transferee agrees to notify the Company of such transfer and of his address, and
to submit appropriate evidence regarding the transfer so that this Note may be
registered in the name of the transferee. This Note is transferable only on the
books of the Company by the holder hereof, in person or by attorney, on the
surrender hereof, duly endorsed. Communications sent to any registered owner
shall be effective as against all holders or transferees of the Note not
registered at the time of sending the communication.
(c) Payments of principal and interest shall be made as specified
above to the registered owner of this Note. No interest shall be due on this
Note for such period of time.
(d) No failure or delay on the part of the Holder hereof in the
exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege. All rights and remedies existing hereunder are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
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(e) Any notice herein required or permitted to be given shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party notified, (b) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient, if not, then on the next business day,
(c) five days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company
at 00000 Xxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxx Xxxxxxxxxx 00000, facsimile number
(000) 000-0000, and to the Holder at such address and facsimile number provided
in writing to the Company, or at such other address as the Company or the Holder
may designate by ten days advance written notice to the other parties hereto. A
conversion notice shall be deemed given when notice thereof is made in
accordance with this subsection 5(e).
(f) The term "Note" and all reference thereto, as used throughout
this instrument, shall mean this instrument as originally executed, or if later
amended or supplemented, then as so amended or supplemented, and any successor
instrument issued by the Company, as it may be amended or supplemented.
(g) This Note shall be governed by and construed in accordance with
the laws of the State of California, without regard to principles of conflicts
of laws. Any action brought by either party against the other concerning the
transactions contemplated by this Note shall be brought only in the state courts
of California or in the federal courts located in the State of California. Both
parties and the individual signing this Note on behalf of the Company agree to
submit to the jurisdiction of such courts. The prevailing party shall be
entitled to recover from the other party its reasonable attorney's fees and
costs. In the event that any provision of this Note is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision of this Note. Nothing contained herein
shall be deemed or operate to preclude the Holder from bringing suit or taking
other legal action against the Company in any other jurisdiction to collect on
the Company's obligations to Holder, or to enforce a judgment or other court
order in favor of the Holder.
[Balance of page intentionally left blank; signature page follows.]
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IN WITNESS WHEREOF, the Company has caused this Note to be signed in its
name effective as of this 26th day of August 2005.
ACCUPOLL HOLDING CORP.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
WITNESS:
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
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EXHIBIT A
CONVERSION NOTICE
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(To be executed by the Holder in order to convert all or part of the Note into
common stock of the Company)
[Name and Address of Holder]
The undersigned hereby converts $__________ of the principal due on August 25,
2006 and $__________ of interest due under the 8% Convertible Promissory Note
issued by ACCUPOLL HOLDING CORP. dated August 25, 2005 by delivery of shares of
common stock of ACCUPOLL HOLDING CORP. on and subject to the conditions set
forth in Section 2 of such Note. In connection with this conversion, the
undersigned hereby represents that he is an accredited investor as such term is
defined in Rule 501 of Regulation D, promulgated under the 1933 Act.
1. Date of Conversion:
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2. Shares To Be Delivered:
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By:
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Name:
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