THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO CENTURION GOLD HOLDINGS, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.
SECURED CONVERTIBLE TERM NOTE
FOR VALUE RECEIVED, CENTURION GOLD HOLDINGS, INC., a Florida
corporation (the "BORROWER"), hereby promises to pay to LAURUS MASTER FUND,
LTD., c/o M&C Corporate Services Limited, P.O. Box 309 GT, Xxxxxx House, South
Church Street, Xxxxxx Town, Grand Cayman, Cayman Islands, Fax: 000-000-0000 (the
"HOLDER") or its registered assigns or successors in interest, on order, the sum
of Three Million Dollars ($3,000,000), together with any accrued and unpaid
interest hereon, on September 23, 2007 (the "MATURITY DATE") if not sooner paid.
The original principal amount of this Note subject to amortizing payments
pursuant to Section 1.2 hereof is hereinafter referred to as the "AMORTIZING
PRINCIPAL AMOUNT" and the remaining original principal amount of this Note is
hereinafter referred to as the "NON-AMORTIZING PRINCIPAL AMOUNT."
Capitalized terms used herein without definition shall have the
meanings ascribed to such terms in that certain Securities Purchase Agreement
dated as of the date hereof between the Borrower and the Holder (the "PURCHASE
AGREEMENT").
The following terms shall apply to this Note:
ARTICLE I
INTEREST & AMORTIZATION
1.1 (a) Interest Rate. Subject to Sections 1.1(b), 4.12 and 5.6
hereof, interest payable on this Note shall accrue at a rate per annum (the
"Interest Rate") equal to the "prime rate" published in The Wall Street Journal
from time to time, plus one percent (1%). The prime rate shall be increased or
decreased as the case may be for each increase or decrease in the prime rate in
an amount equal to such increase or decrease in the prime rate; each change to
be effective as of the day of the change in such rate. Subject to Section 1.1(b)
hereof, the Interest Rate shall not be less than five percent (5%). Interest
shall be calculated on the basis of a 360 day year. Interest shall accrue but
not be payable during the period commencing on the date hereof and ending on
September 30, 2004. Interest on the Amortizing Principal Xxxxxx shall be payable
monthly, in arrears, commencing on November 1, 2004 and on the first day of each
consecutive calendar month thereafter (each, a "REPAYMENT DATE") and on the
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Maturity Date, whether by acceleration or otherwise. Accrued interest on the
Non-Amortizing Principal Amount shall be payable only on the Maturity Date or,
in the event of the redemption or conversion of all or any portion of the
Non-Amortizing Principal Amount, accrued interest on the amount so redeemed or
converted shall be paid on the date of redemption or conversion, as the case may
be.
1.1 (b) Interest Rate Adjustment. The Interest Rate shall be subject
to adjustment on the last business day of each month hereafter until the
Maturity Date (each a "Determination Date"). If on any Determination Date (i)
the Borrower shall have registered under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), the shares of Common Stock underlying each of the
conversion of this Note and the exercise of the Warrant issued on a registration
statement declared effective by the Securities and Exchange Commission (the
"SEC"), and (ii) the market price (the "Market Price") of the Common Stock as
reported by Bloomberg, L.P. on the Principal Market (as defined below) for the
five (5) consecutive trading days immediately preceding such Determination Date
exceeds the then applicable Fixed Conversion Price by at least twenty five
percent (25%), the Interest Rate for the succeeding calendar month shall
automatically be reduced by 200 basis points (200 b.p.) (2.0.%) for each
incremental twenty five percent (25%) increase in the Market Price of the Common
Stock above the then applicable Fixed Conversion Price. If on any Determination
Date (i) the Borrower shall not have registered under the Securities Act the
shares of Common Stock underlying the conversion of this Note and the exercise
of the Warrant on a registration statement declared effective by the SEC or the
Borrower shall have registered such shares under the Securities Act but on such
Determination Date the related registration statement is not effective, and (ii)
the Market Price of the Common Stock as reported by Bloomberg, L.P. on the
Principal Market for the five (5) consecutive trading days immediately preceding
such Determination Date exceeds the then applicable Fixed Conversion Price by at
least twenty five percent (25%), the Interest Rate for the succeeding calendar
month shall automatically be decreased by 100 basis points (100 b.p.) (1.0.%)
for each incremental twenty five percent (25%) increase in the Market Price of
the Common Stock above the then applicable Fixed Conversion Price.
Notwithstanding the foregoing (and anything to the contrary contained in
herein), in no event shall the Interest Rate be less than zero percent (0%).
1.2 Minimum Monthly Principal Payments. Amortizing payments of the
outstanding principal amount of this Note not contained in the Restricted
Account (as defined in the Restricted Account Agreement) shall begin on January
1, 2005 and shall recur on each succeeding Repayment Date thereafter until the
Amortizing Principal Amount has been repaid in full, whether by the payment of
cash or by the conversion of such principal into Common Stock pursuant to the
terms hereof. Subject to Section 2.1 and Article 3 below, on each Repayment
Date, the Borrower shall make payments to the Holder in the amount $7,953.13
(the "MONTHLY PRINCIPAL AMOUNT"), together with any accrued and unpaid interest
then due on such portion of the Amortizing Principal Amount plus any and all
other amounts which are then owing under this Note that have not been paid (the
Monthly Principal Amount, together with such accrued and unpaid interest and
such other amounts, collectively, the "MONTHLY AMOUNT") ; provided that,
following a release of an amount of funds from the Restricted Account (as
defined in the Restricted Account Agreement) for the purposes set forth in the
Restricted Account Side Letter (other than with respect to a release that occurs
as a result of a conversion of any Principal Amount) (each, a "RELEASE AMOUNT")
each Monthly Principal Amount due on any Repayment Date following any such
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release shall be increased by an amount equal to (x) such Release Amount divided
by (y) the sum of (I) the number of Repayment Dates remaining until the Maturity
Date plus (II) one (1). Any Principal Amount that remains outstanding on the
Maturity Date shall be due and payable on the Maturity Date.
ARTICLE II
CONVERSION REPAYMENT
2.1 (a) Payment of Monthly Amount in Cash or Common Stock. If the
Monthly Amount (or a portion thereof of such Monthly Amount if such portion of
the Monthly Amount would have been converted into shares of Common Stock but for
Section 3.2) is required to be paid in cash pursuant to Section 2.1(b), then the
Borrower shall pay the Holder an amount equal to 102% of the Monthly Amount due
and owing to the Holder on the Repayment Date in cash. If the Monthly Amount (or
a portion of such Monthly Amount if not all of the Monthly Amount may be
converted into shares of Common Stock pursuant to Section 3.2) is required to be
paid in shares of Common Stock pursuant to Section 2.1(b), the number of such
shares to be issued by the Borrower to the Holder on such Repayment Date (in
respect of such portion of the Monthly Amount converted into shares of Common
Stock pursuant to Section 2.1(b)), shall be the number determined by dividing
(x) the portion of the Monthly Amount converted into shares of Common Stock, by
(y) the then applicable Fixed Conversion Price. For purposes hereof, the initial
"FIXED CONVERSION PRICE" means $0.77.
(b) Monthly Amount Conversion Guidelines. Subject to
Sections 2.1(a), 2.2 and 3.2 hereof, the Holder shall convert into shares of
Common Stock all or a portion of the Monthly Amount due on each Repayment
according to the following guidelines (collectively, the "CONVERSION CRITERIA"):
(i) the average closing price of the Common Stock as reported by Bloomberg, L.P.
on the Principal Market for the five (5) consecutive trading days immediately
preceding such Notice Date shall be greater than or equal to 110% of the Fixed
Conversion Price and (ii) the amount of such conversion does not exceed twenty
five percent (25%) of the aggregate dollar trading volume of the Common Stock
for the twenty two (22) day trading period immediately preceding the applicable
Repayment Date. If the Conversion Criteria are not met, the Holder shall convert
only such part of the Monthly Amount that meets the Conversion Criteria. Any
part of the Monthly Amount due on a Repayment Date that the Holder has not been
able to convert into shares of Common Stock due to failure to meet the
Conversion Criteria, shall be paid by the Borrower in cash at the rate of 102%
of the Monthly Amount otherwise due on such Repayment Date, within three (3)
business days of the applicable Repayment Date.
(c) Application of Conversion Amounts. Any amounts converted
by the Holder pursuant to Section 2.1(b) shall be deemed to constitute payments
of, or applied against, (i) first, outstanding fees, (ii) second, accrued
interest on the Amortizing Principal Xxxxxx, (iii) third, accrued interest on
the Non-Amortizing Principal Xxxxxx and (iv) fourth, the Amortizing Principal
Xxxxxx.
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2.2 No Effective Registration. Notwithstanding anything to the
contrary herein, no amount payable hereunder may be converted into Common Stock
unless (a) either (i) an effective current Registration Statement (as defined in
the Registration Rights Agreement) covering the shares of Common Stock to be
issued in satisfaction of such obligations exists, or (ii) an exemption from
registration of the Common Stock is available pursuant to Rule 144 of the
Securities Act, and (b) no Event of Default hereunder exists and is continuing,
unless such Event of Default is cured within any applicable cure period or is
otherwise waived in writing by the Holder in whole or in part at the Holder's
option.
2.3 Optional Redemption of Amortizing Principal Amount. The
Borrower will have the option of prepaying the outstanding Amortizing Principal
Amount ("OPTIONAL AMORTIZING REDEMPTION"), in whole or in part, by paying to the
Holder a sum of money equal to one hundred thirty percent (130%) of the
Amortizing Principal Amount to be redeemed, together with accrued but unpaid
interest thereon and any and all other sums due, accrued or payable to the
Holder arising under this Note, the Purchase Agreement or any Related Agreement
(the "AMORTIZING REDEMPTION AMOUNT") on the day written notice of redemption
(the "NOTICE OF AMORTIZING REDEMPTION") is given to the Holder. The Notice of
Amortizing Redemption shall specify the date for such Optional Amortizing
Redemption (the "AMORTIZING REDEMPTION PAYMENT DATE"), which date shall be not
less than seven (7) business days after the date of the Notice of Amortizing
Redemption (the "REDEMPTION PERIOD"). A Notice of Amortizing Redemption shall
not be effective with respect to any portion of the Amortizing Principal Amount
for which the Holder has a pending election to convert pursuant to Section 3.1,
or for conversions initiated or made by the Holder pursuant to Section 3.1
during the Redemption Period. The Amortizing Redemption Amount shall be
determined as if such Xxxxxx's conversion elections had been completed
immediately prior to the date of the Notice of Amortizing Redemption. On the
Amortizing Redemption Payment Date, the Amortizing Redemption Amount shall be
paid in good funds to the Holder. In the event the Borrower fails to pay the
Amortizing Redemption Amount on the Amortizing Redemption Payment Date as set
forth herein, then such Notice of Amortizing Redemption will be null and void.
2.4 Optional Redemption of Non-Amortizing Principal Amount. The
Borrower will have the option of repaying the outstanding Non-Amortizing
Principal Amount ("OPTIONAL NON-AMORTIZING REDEMPTION"), in whole or in part, by
paying the Holder a sum of money equal to one hundred twenty percent (120%) of
the Non-Amortizing Principal Amount to be redeemed, together with accrued but
unpaid interest thereon (the "NON-AMORTIZING REDEMPTION AMOUNT") on the day
written notice of redemption (the "NOTICE OF NON-AMORTIZING REDEMPTION") is
giving to the Holder. The Notice of Non-Amortizing Redemption shall specify the
date for such Optional Non-Amortizing Redemption (the "NON-AMORTIZING REDEMPTION
DATE"), which date shall be not less than seven (7) business days after the date
of the Notice of Non-Amortizing Redemption (the "NON-AMORTIZING REDEMPTION
PERIOD"). A Notice of Non-Amortizing Redemption shall not be effective with
respect to any portion of the Non-Amortizing Principal Amount for which the
Holder has a pending election to convert pursuant to Section 3.1, or for
conversions initiated or made by the Holder pursuant to Section 3.1 during the
Non-Amortizing Redemption Period. The Non-Amortizing Redemption Amount shall be
determined as if the Holder's conversion elections had been completed
immediately prior to the date of the Notice of Non-Amortizing Redemption. On the
Non-Amortizing Redemption Date, the Non-Amortizing Redemption Amount shall be
paid (i) in good funds to the Holder, (ii) by furnishing the Holder written
direction to notify the bank holding the Restricted Account to release from the
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Restricted Account and deliver to the Holder a sum of money equal to the
Non-Amortizing Redemption Amount, or (iii) if the amount on deposit in the
Restricted Account is less than the Non-Amortizing Redemption Amount, by
furnishing the Holder written direction to notify the bank holding the
Restricted Account to release all amounts on deposit in the Restricted Account
to the Holder and delivering to the Holder good funds in an amount equal to the
balance of the Non-Amortizing Redemption Amount.
ARTICLE III
CONVERSION RIGHTS
3.1. Holder's Conversion Rights. Subject to Section 2.2, the Holder
shall have the right, but not the obligation, to convert all or any portion of
the then aggregate outstanding Principal Amount of this Note, together with
interest and fees due hereon, into shares of Common Stock, subject to the terms
and conditions set forth in this Article III. The Holder may exercise such right
by delivery to the Borrower of a written Notice of Conversion pursuant to
Section 3.3.
3.2 Conversion Limitation. Notwithstanding anything contained
herein to the contrary, the Holder shall not be entitled to convert pursuant to
the terms of this Note an amount that would be convertible into that number of
Conversion Shares which would exceed the difference between 4.99% of the
outstanding shares of Common Stock and the number of shares of Common Stock
beneficially owned by such Holder or issuable upon exercise of Warrants held by
such Holder at such time. For the purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act and Regulation 13d-3 thereunder. The Holder may void
the Conversion Share limitation described in this Section 3.2 upon 75 days prior
notice to the Borrower or without any notice requirement upon an Event of
Default.
3.3 Mechanics of Xxxxxx's Conversion. (a) In the event that the
Holder elects to convert any amounts outstanding under this Note into Common
Stock, the Holder shall give notice of such election by delivering an executed
and completed notice of conversion (a "NOTICE OF CONVERSION") to the Borrower,
which Notice of Conversion shall provide a breakdown in reasonable detail of the
Principal Amount, accrued interest and fees being converted. On each Conversion
Date (as hereinafter defined) and in accordance with its Notice of Conversion,
the Holder shall make the appropriate reduction to the Principal Amount, accrued
interest and fees as entered in its records and shall provide written notice
thereof to the Borrower within two (2) business days after the Conversion Date.
Each date on which a Notice of Conversion is delivered or telecopied to the
Borrower in accordance with the provisions hereof shall be deemed a "CONVERSION
DATE". A form of Notice of Conversion to be employed by the Holder is annexed
hereto as Exhibit A.
(b) Pursuant to the terms of a Notice of Conversion, the
Borrower will issue instructions to the transfer agent accompanied by an opinion
of counsel, if so required by the Borrower's transfer agent, within one (1)
business day of the date of the delivery to Borrower of the Notice of Conversion
and shall cause the transfer agent to transmit the certificates representing the
Conversion Shares to the Holder by crediting the account of the Holder's
designated broker with the Depository Trust Corporation ("DTC") through its
Deposit Withdrawal Agent Commission ("DWAC") system within three (3) business
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days after receipt by the Borrower of the Notice of Conversion (the "DELIVERY
DATE"). In the case of the exercise of the conversion rights set forth herein
the conversion privilege shall be deemed to have been exercised and the
Conversion Shares issuable upon such conversion shall be deemed to have been
issued upon the date of receipt by the Borrower of the Notice of Conversion. The
Holder shall be treated for all purposes as the record holder of such shares of
Common Stock, unless the Holder provides the Borrower written instructions to
the contrary.
3.4 Conversion Mechanics.
(a) The number of shares of Common Stock to be issued upon each
conversion of this Note pursuant to this Article III shall be determined by
dividing that portion of the Principal Amount and interest and fees to be
converted, if any, by the then applicable Fixed Conversion Price. In the event
of any conversions of outstanding obligations under this Note in part pursuant
to this Article III, such conversions shall be deemed to constitute conversions
(i) first, of the Monthly Amount for the current calendar month, (ii) then of
outstanding Amortizing Principal Amount, by applying the conversion amount to
Monthly Principal Amounts for the remaining Repayment Dates in chronological
order, (iii) then of the accrued interest on the Non-Amortizing Principal
Amount, and (iv) then, of outstanding Non-Amortizing Principal Xxxxxx.
(b) The Fixed Conversion Price and number and kind of shares or
other securities to be issued upon conversion is subject to adjustment from time
to time upon the occurrence of certain events, as follows:
A. Stock Splits, Combinations and Dividends. If the shares
of Common Stock are subdivided or combined into a greater or smaller
number of shares of Common Stock, or if a dividend is paid on the
Common Stock in shares of Common Stock, the Fixed Conversion Price or
the Conversion Price, as the case may be, shall be proportionately
reduced in case of subdivision of shares or stock dividend or
proportionately increased in the case of combination of shares, in
each such case by the ratio which the total number of shares of Common
Stock outstanding immediately after such event bears to the total
number of shares of Common Stock outstanding immediately prior to such
event.
B. During the period the conversion right exists, the
Borrower will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of Common
Stock upon the full conversion of this Note. The Borrower represents
that upon issuance, such shares will be duly and validly issued, fully
paid and non-assessable. The Borrower agrees that its issuance of this
Note shall constitute full authority to its officers, agents, and
transfer agents who are charged with the duty of executing and issuing
stock certificates to execute and issue the necessary certificates for
shares of Common Stock upon the conversion of this Note.
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C. Share Issuances. Subject to the provisions of this
Section 3.4, if the Borrower shall at any time prior to the conversion
or repayment in full of the Principal Amount issue any shares of
Common Stock or securities convertible into Common Stock to a person
other than the Holder (except (i) pursuant to Subsections A or B
above; (ii) pursuant to options, warrants or other obligations to
issue shares outstanding on the date hereof as disclosed to Holder in
writing; or (iii) pursuant to options that may be issued under any
employee incentive stock option and/or any qualified stock option plan
adopted by the Borrower); for a consideration per share (the "OFFER
PRICE") less than the Fixed Conversion Price in effect at the time of
such issuance, then the Fixed Conversion Price shall be immediately
reset to such lower Offer Price at the time of issuance of such
securities. For purposes hereof, the issuance of any security of the
Borrower convertible into or exercisable or exchangeable for Common
Stock shall result in an adjustment to the Fixed Conversion Price at
the time of issuance of such securities.
D. Reclassification, etc. If the Borrower at any time
shall, by reclassification or otherwise, change the Common Stock into
the same or a different number of securities of any class or classes,
this Note, as to the unpaid Principal Amount and accrued interest
thereon, shall thereafter be deemed to evidence the right to purchase
an adjusted number of such securities and kind of securities as would
have been issuable as the result of such change with respect to the
Common Stock immediately prior to such reclassification or other
change.
3.5 Issuance of Replacement Note. Upon any partial conversion of
this Note, a replacement Note containing the same date and provisions of this
Note shall, at the written request of the Holder, be issued by the Borrower to
the Holder for the outstanding Principal Amount of this Note and accrued
interest which shall not have been converted or paid. Subject to the provisions
of Article IV, the Borrower will pay no costs, fees or any other consideration
to the Holder for the production and issuance of a replacement Note.
ARTICLE IV
EVENTS OF DEFAULT
Upon the occurrence and continuance of an Event of Default beyond any
applicable grace period, the Holder may make all sums of principal, interest and
other fees then remaining unpaid hereon and all other amounts payable hereunder
immediately due and payable. In the event of such an acceleration, the amount
due and owing to the Holder shall be one hundred thirty percent (130%) of the
outstanding principal amount of the Note (plus accrued and unpaid interest and
fees, if any) (the "DEFAULT PAYMENT"). The Default Payment shall be applied
first to any fees due and payable to Holder pursuant to this Note, the Purchase
Agreement or the Related Agreements, then to accrued and unpaid interest due on
the Note and then to outstanding principal balance of the Note.
The occurrence of any of the following events set forth in Sections 4.1
through 4.10, inclusive, is an "EVENT OF DEFAULT":
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4.1 Failure to Pay Principal, Interest or other Fees. The Borrower
fails to pay when due any installment of principal, interest or other fees
hereon in accordance herewith, or the Borrower fails to pay when due any amount
due under any other promissory note issued by Borrower, and in any such case,
such failure shall continue for a period of three (3) days following the date
upon which any such payment was due.
4.2 Breach of Covenant. The Borrower breaches any covenant or any
other term or condition of this Note or the Purchase Agreement in any material
respect, or the Borrower or any of its Subsidiaries breaches any covenant or any
other term or condition of any Related Agreement in any material respect and,
any such case, such breach, if subject to cure, continues for a period of
fifteen (15) days after the occurrence thereof.
4.3 Breach of Representations and Warranties. Any representation
or warranty made by the Borrower in this Note or the Purchase Agreement, or by
the Borrower or any of its Subsidiaries in any Related Agreement, shall, in any
such case, be false or misleading in any material respect on the date that such
representation or warranty was made or deemed made.
4.4 Receiver or Trustee. The Borrower or any of its Subsidiaries
shall make an assignment for the benefit of creditors, or apply for or consent
to the appointment of a receiver or trustee for it or for a substantial part of
its property or business; or such a receiver or trustee shall otherwise be
appointed.
4.5 Judgments. Any money judgment, writ or similar final process
shall be entered or filed against the Borrower or any of its Subsidiaries or any
of their respective property or other assets for more than $150,000 and shall
remain unvacated, unbonded or unstayed for a period of thirty (30) days.
4.6 Bankruptcy. Bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings or relief under any bankruptcy law
or any law for the relief of debtors shall be instituted by or against the
Borrower or any of its Subsidiaries.
4.7 Stop Trade. An SEC stop trade order or Principal Market
trading suspension of the Common Stock shall be in effect for five (5)
consecutive days or five (5) days during a period of ten (10) consecutive days,
excluding in all cases a suspension of all trading on a Principal Market,
provided that the Borrower shall not have been able to cure such trading
suspension within thirty (30) days of the notice thereof or list the Common
Stock on another Principal Market within sixty (60) days of such notice. The
"Principal Market" for the Common Stock shall include the NASD OTC Bulletin
Board, NASDAQ SmallCap Market, NASDAQ National Market System, American Stock
Exchange, or New York Stock Exchange (whichever of the foregoing is at the time
the principal trading exchange or market for the Common Stock, or any securities
exchange or other securities market on which the Common Stock is then being
listed or traded).
4.8 Failure to Deliver Common Stock or Replacement Note. The
Borrower shall fail (i) to timely deliver Common Stock to the Holder pursuant to
and in the form required by this Note, and Section 9 of the Purchase Agreement,
if such failure to timely deliver Common Stock shall not be cured within two (2)
business days or (ii) to deliver a replacement Note to Holder within seven (7)
business days following the required date of such issuance pursuant to this
Note, the Purchase Agreement or any Related Agreement (to the extent required
under such agreements).
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4.9 Default Under Related Agreements or Other Agreements. The
occurrence and continuance of any Event of Default (as defined in the Purchase
Agreement or any Related Agreement) or any event of default (or similar term)
under any other indebtedness.
4.10 Change in Control. The occurrence of a change in the
controlling ownership of the Borrower.
DEFAULT RELATED PROVISIONS
4.11 Default Interest Rate. Following the occurrence and during the
continuance of an Event of Default, the Borrower shall pay additional interest
on this Note in an amount equal to two percent (2%) per month, and all
outstanding obligations under this Note, including unpaid interest, shall
continue to accrue such additional interest from the date of such Event of
Default until the date such Event of Default is cured or waived.
4.12 Conversion Privileges. The conversion privileges set forth in
Article III shall remain in full force and effect immediately from the date
hereof and until this Note is paid in full.
4.13 Cumulative Remedies. The remedies under this Note shall be
cumulative.
ARTICLE V
MISCELLANEOUS
5.1 Failure or Indulgence Not Waiver. 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.
5.2 Notices. 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
Borrower at the address provided in the Purchase Agreement executed in
connection herewith, and to the Holder at the address provided in the Purchase
Agreement for such Holder, with a copy to Xxxx X. Xxxxxx, Esq., 000 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile number (000) 000-0000,
or at such other address as the Borrower or the Holder may designate by ten days
advance written notice to the other parties hereto. A Notice of Conversion shall
be deemed given when made to the Borrower pursuant to the Purchase Agreement.
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5.3 Amendment Provision. 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 pursuant to Section 3.5
hereof, as it may be amended or supplemented.
5.4 Assignability. This Note shall be binding upon the Borrower
and its successors and assigns, and shall inure to the benefit of the Holder and
its successors and assigns, and may be assigned by the Holder in accordance with
the requirements of the Purchase Agreement. This Note shall not be assigned by
the Borrower without the consent of the Holder.
5.5 Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in the state of
New York. Both parties and the individual signing this Note on behalf of the
Borrower 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 unenforceability 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 Borrower in any
other jurisdiction to collect on the Borrower's obligations to Holder, to
realize on any collateral or any other security for such obligations, or to
enforce a judgment or other court in favor of the Holder.
5.6 Maximum Payments. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Borrower to the Holder and thus refunded to the
Borrower.
5.7 Security Interest and Guarantee. The Holder has been granted a
security interest (i) in certain assets of the Borrower and its Subsidiaries as
more fully described in the Master Security Agreement dated as of the date
hereof and (ii) pursuant to the Stock Pledge Agreement dated as of the date
hereof. The obligations of the Borrower under this Note are guaranteed by
certain Subsidiaries of the Borrower pursuant to the Subsidiary Guaranty dated
as of the date hereof.
5.8 Construction. Each party acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.
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5.9 Cost of Collection. If default is made in the payment of this
Note, the Borrower shall pay to Holder reasonable costs of collection, including
reasonable attorney's fees.
[Balance of page intentionally left blank; signature page follows.]
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IN WITNESS WHEREOF, the Borrower has caused this Note to be signed in
its name effective as of this 23rd day of September, 2004.
CENTURION GOLD HOLDINGS, INC.
By:__________________________
Name:
Title:
WITNESS:
_______________________________
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EXHIBIT A
NOTICE OF CONVERSION
(To be executed by the Holder in order to convert all or part of the Note into
Common Stock)
[Name and Address of Holder]
The Undersigned hereby converts $_________ of the principal due on [specify
applicable Repayment Date] under the Convertible Term Note issued by Centurion
Gold Holdings, Inc. dated September __, 2004 by delivery of Shares of Common
Stock of Centurion Gold Holdings, Inc. on and subject to the conditions set
forth in Article III of such Note.
1. Date of Conversion _______________________
2. Shares To Be Delivered: _______________________
By:_______________________________
Name:_____________________________
Title:______________________________
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