Exhibit 2.3
EXHIBIT B TO
REVISED AND RESTATED GAMING EQUIPMENT SALE AGREEMENT
CONVERTIBLE PROMISSORY NOTE
$US 500,000 Executed at: Las Vegas, Nevada
July __, 2001
VIVA GAMING & RESORTS INC., a Florida corporation, the principal office of
which is located at 0000 Xxxxx Xxxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000
(the "COMPANY" or "MAKER"), for value received hereby promises to pay to PHOENIX
LEISURE, INC., a Nevada corporation (the "HOLDER"), the principal office of
which is located at 0000 X. Xxxxxxx Xx., Xxxxx 000, Xxx Xxxxx, XX 00000, the sum
of FIVE HUNDRED THOUSAND DOLLARS AND 00/100 CENTS ($US500,000) or such lesser
amount (the "NOTE") as shall be due at the Maturity Date (as hereinafter
defined) equal the outstanding principal amount hereof, together with interest
thereon at the rate specified below, on the terms and conditions set forth
hereinafter.
The following is a statement of the rights of the Holder and the
conditions to which this Note is subject, and to which the Holder, by the
acceptance of this Note, agrees:
1. PAYMENTS OF PRINCIPAL AND INTEREST. Except as provided herein and in
Section 4 hereof, all payments (principal and interest) under this Note
shall be by check, cashier's check, wire transfer or other immediately
available funds payable in United States Dollars and shall be due and
payable in one lump sum payment twelve (12) months from the date hereof
(the "MATURITY DATE"). Interest shall accrue upon all outstanding sums
evidenced hereby at the rate per annum of ten percent (10%). Interest
shall be calculated on a 365-day year end, actual days elapsed.
2. EVENT OF DEFAULT. An "event of default" shall mean: (i) failure by the
Company to pay the Note at the Maturity Date, or (ii) any breach of any
other obligation, undertaking or covenant under this Note. Upon the
occurrence of an Event of Default, the Holder of the Note may declare the
entire principal immediately due and payable, without notice or demand to
the Company. At any time or times during which an Event of Default shall
then exist or upon the Maturity Date, the interest rate under this Note
shall be equal to the lesser of: (i) eighteen percent (18%) per annum; or
(ii) the maximum rate of interest permitted by applicable law, and shall
be due and payable on the Maturity Date.
3. PREPAYMENT. The Company may prepay this Note in whole or in part by giving
Holder notice in writing. In recognition of Holder's conversion rights
pursuant to Section 4 hereof, Holder has the right to exercise such
conversion rights prior to the Company prepaying the Note.
4. CONVERSION.
4.1. VOLUNTARY CONVERSION. The Holder of this Note has the right, at the
Holder's option, at any time prior to payment in full of the principal
balance of this Note, to convert the outstanding principal under this
Note, in accordance with the provisions of Section 4.2 hereof, in whole or
in part, but in denominations of not less than Ten Thousand Dollars
($10,000) (unless the entire principal balance of this Note is being
converted), into fully paid and non-assessable shares of common stock,
$.001 par value per share, of the Company (the "Common Stock"). The number
of shares of Common Stock into which the outstanding principal of this
Note may be converted ("Conversion Shares") shall be determined by
dividing the principal amount for which conversion is requested by the
Conversion Price (as defined below) in effect at the time of such
conversion. The Conversion Price shall be equal to ONE DOLLAR ($US1.00)
per share. If applicable, the Conversion Price shall be adjusted pursuant
the provisions of Section 5 hereof.
4.2. CONVERSION PROCEDURE. Before the Holder shall be entitled to convert this
Note into shares of Common Stock, it shall give written notice by mail,
postage prepaid, to the Company at its principal corporate office, of the
election to convert the same, and shall state therein the name or names in
which the certificate for shares of Common Stock are to be issued. The
Company shall, as soon as practicable thereafter, issue and deliver at
such office to the Holder of this Note a certificate or certificates
(bearing such legends as are required by applicable state and federal
securities laws in the opinion of counsel to the Company) for the number
of shares of Common Stock to which the Holder of this Note shall be
entitled as aforesaid. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender
of this Note, and the person or persons entitled to receive the shares of
Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock as
of such date.
4.3. DELIVERY OF STOCK CERTIFICATES. As promptly as practicable after the
conversion of this Note, the Company at its expense will issue and deliver
to the Holder of this Note a certificate or certificates for the number of
full shares of Common Stock issuable upon such conversion.
4.4. MECHANICS AND THE EFFECT OF CONVERSION. No fractional shares of Common
Stock shall be issued upon conversion of this Note. In lieu of the Company
issuing any fractional shares to the Holder upon the conversion of this
Note, the Company shall pay to the Holder the amount of outstanding
principal that is not so converted. If the conversion is for less than the
entire outstanding principal balance of this Note, then the Holder and
Maker shall execute an estoppel certificate or other type of document
which will confirm the current outstanding principal balance of the Note
after such partial conversion for the remaining balance of the Note along
with the revised payment terms. Upon conversion of the full amount of this
Note, the Company shall be forever released from all obligations and
liabilities under this Note.
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5. CONVERSION PRICE ADJUSTMENTS.
5.1 ADJUSTMENTS FOR STOCK SPLITS AND SUBDIVISIONS. In the event the
Company should at any time or from time to time after the date of
issuance hereof fix a record date for the effectuation of a split or
subdivision of the outstanding shares of Common Stock or the
determination of holders of Common Stock entitled to receive a
dividend or other distribution payable in additional shares of
Common Stock or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly,
additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration by
such holder for the additional shares of Common Stock Equivalents
(including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or
the date of such dividend distribution, split or subdivision if no
record date is fixed), the Conversion Price of this Note shall be
appropriately decreased so that the number of shares of Common Stock
issuable upon conversion of this Note shall be increased in
proportion to such increase of outstanding shares.
5.2 ADJUSTMENTS FOR REVERSE STOCK SPLITS. If the numbers of shares of
Common Stock outstanding at any time after the date hereof is
decreased by a combination of the outstanding shares of Common
Stock, then, following the record date of such combination, the
Conversion Price for this Note shall be appropriately increased so
that the number of shares of Common Stock issuable on conversion
hereof shall be decreased in proportion to such decrease in
outstanding shares.
5.3 RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Company shall at
all times reserve and keep available out of its authorized but
unissued Common Stock solely for the purpose of effecting the
conversion of the Note such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of
the Note; and if at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the
conversion of the entire outstanding principal amount of this Note,
in addition to such other remedies as shall be available to the
Holder of this Note, the Company will use its best efforts to take
such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such
purposes. The Company hereby agrees to not pledge, restrict or
otherwise encumber the shares of Common Stock which have been
reserved for the conversion of the Note by Holder.
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6. ASSIGNMENT. The rights and obligations of the Company and the Holder of
this Note shall be binding upon and benefit the successors, assigns and
transferees of the parties. Neither the Company nor the Holder may assign
its rights and/or obligations hereunder without the prior written consent
of the other.
7. NOTICES. All notices, requests, consents and other communications
hereunder to any party, shall be deemed to be sufficient if in writing and
(i) delivered in person, (ii) delivered and received by telex, telecopier,
telegram, if a confirmatory mailing in accordance herewith is also made,
(iii) duly sent by registered mail return receipt requested and postage
prepaid or (iv) duly sent by overnight delivery service, addressed to such
party at the address set forth in the Agreement.
All such notices and communications shall be deemed to have been received:
(i) at the time personally delivered (including delivery by telex,
telecopier and telegram), (ii) three days after mailed to the foregoing
persons at the addresses set forth above; (iii) the next day when sent by
overnight delivery service; provided that rejection or other refusal to
accept or inability to deliver because of changed address for which no
notice has been received shall also constitute receipt.
8. NO SHAREHOLDER RIGHTS. Nothing contained in this Note shall be construed
as conferring upon the Holder or any other person the right to vote or to
consent or to receive notice as a shareholder in respect of meetings of
shareholders for the election of the Company or any other matters or any
rights whatsoever as a shareholder of the Company; and no dividends or
other distributions shall be payable or accrued in respect of this Note or
the interest represented hereby or the Conversion Shares obtainable
hereunder until, and only to the extent that, this Note shall have been
converted.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, excluding that body of
law relating to conflict of laws.
10. WAIVERS. The Company and all endorsers of this Note hereby waive demand,
presentment, notice of non-payment, dishonor and protest.
11. ATTORNEYS' FEES. In case suit shall be brought for the collection hereof,
or if it is necessary to place the same in the hands of an attorney for
collection, the Company and all endorsers of the Note agree to pay
reasonable attorneys' fees incurred in connection with such collection,
including but not limited to all fees and costs incident to any appellate,
post-judgment and bankruptcy proceedings that may result, whether the
Holder hereof is obligated therefore or not.
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12. AMENDMENT. This Notice may not be amended or modified, nor shall any
waiver of any provisions hereof be effective, except by an instrument in
writing executed by the Holder of this Note. Failure or delay by the
Holder in exercising, or a single or partial exercise of, any power or
right hereunder shall not operate as a waiver thereof or of any other
power or right or preclude any other or future exercise of that or any
other power or right. A waiver or any power or right hereunder shall be in
writing, shall be limited to the specific instance and shall not be deemed
a waiver of such power or right in the future or a wavier of any other
power or right.
13. NONASSUMABILITY. This Note is not assumable without the Holder's prior
written consent. Such assumption may be granted at the Holder's sole
discretion and may be denied without regard to a showing of an impairment
of the Holder's security of an evaluation of the creditworthiness of the
proposed assuming party. No assumption shall effect Holder's rights to
Conversion Shares of the Company pursuant to Section 5 hereof.
14. NO SET-OFF. Neither this Note nor any obligations or liabilities of the
Company hereunder shall be subject to set-off, defense or reduction
against Holder(s) for any reason whatsoever other than prior repayment in
accordance with the terms of this Note, and the Company hereby waives and
releases any right at law, or in equity, to assert any such set-off,
defense or reduction.
15. WAIVER OF JURY TRIAL. THE COMPANY, BY EXECUTION HEREOF, AND THE HOLDER, BY
ACCEPTANCE HEREOF, MUTUALLY AND WILLINGLY WAIVE THE RIGHT OF A TRIAL BY
JURY OF ANY AND ALL CLAIMS MADE BETWEEN THEM WHETHER NOW EXISTING OR
ARISING IN THE FUTURE, INCLUDING WITHOUT LIMITATION ANY AND ALL CLAIMS,
DEFENSES, COUNTERCLAIMS, CROSSCLAIMS, THIRD PARTY CLAIMS AND INTERVENOR'S
CLAIMS WHETHER ARISING FROM OR RELATED TO THE NEGOTIATION, EXECUTION AND
PERFORMANCE OF THE TRANSACTIONS TO WHICH THIS NOTE RELATES.
IN WITNESS WHEREOF, the Company has caused this Note to be issued
this ____ day of July 2001.
MAKER:
VIVA GAMING & RESORTS, INC.
By: /s/ Xxxxxx Xxx
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Its: Chairman
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"SCHEDULE 1"
NOTICE TO CONVERT
(To Be Signed Only Upon Conversion of Note)
Viva Gaming & Resorts Inc.
0000 Xxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
In accordance with Section 4 of that certain Convertible Promissory
Note dated May ________, 2001, the undersigned Holder of the foregoing Note,
hereby elects to convert the entire unpaid principal amount of such Note into
Common Stock of Viva Gaming & Resorts Inc., a Florida corporation and requests
that the certificate for such shares be issued in the name of
__________________________ and delivered to the following address:
__________________________________________.
Dated: , 20
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(Signature must conform in
all respects to name of Holder
as specified on the face of
the Note)
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(Address)
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