Contract
Exhibit
4.1
THIS
NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
LAWS. IT MAY NOT BE TRANSFERRED, ASSIGNED, SOLD OR OFFERED FOR SALE EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE
REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED BECAUSE
OF AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
| $_____________ |
__________,
2007
|
FOR
VALUE
RECEIVED, Pure Vanilla eXchange, Inc., a Nevada corporation with an address
at
000 Xxxxx Xxxxxx, Xxx Xxxx XX 00000 (the “Company”),
promises to pay to the order of [HOLDER]
(“Holder”),
the
principal sum of ______________________ ($_________) plus interest on the
outstanding principal from the date hereof to and including the day when
principal is paid in full. Interest shall accrue monthly at the annual rate
of
nine and nine tenths percent (9.9%) per annum; provided that so long as an
Event
of Default (as hereinafter defined), or any event which with notice or passage
of time or both would constitute an Event of Default, shall exist and be
continuing, interest shall accrue daily at the rate of five percent (15%) per
annum.
1.
Payments.
The
Company shall pay principal and accrued interest on the earlier of (i) two
business days after the date on which the Company has raised and reported,
in
the aggregate from February 12, 2007 to the date of such report, $20 million
of
“Net
Financing”
(defined below) provided, all “Indebtedness”
defined
in the Senior Secured Convertible Note issued on December 26, 2006 in the
original principal amount of $1,500,000 to Gottbetter Master, Ltd. has been
paid
in full and (ii) April 5, 2008. For the purposes of this Note, “Net
Financing”
means,
the gross proceeds received by the Company from the sale of any of its
securities, less any loans that have been outstanding for a term of less than
six months on the date such financing is closed (regardless of the maturity
at
the date of issue) that are repaid from the proceeds of the Financing. Payments
shall be made at the offices of the Company or at such other place as Holder
or
any subsequent holder may designate to the Company in writing.
2. Prepayment.
The
indebtedness evidenced by this Note may be prepaid at any time and from time
to
time, without advance notice to Holder, in whole or in part without premium
or
penalty, but with accrued and unpaid interest to the date of prepayment on
the
amount of principal being prepaid.
3. Events
of Default.
If any
of the following events shall occur and be continuing, Holder may, by notice
to
the Company, declare this Note, all accrued and unpaid interest hereon, and
all
other amounts payable hereunder to be due and payable, whereupon the same shall
become due and payable,10 days after notice to the Company if during such 10
day
period, the Company shall fail to cure the event (an “Event
of Default”):
a. There
is
a failure to make any payment of principal of, interest on, or any other amount
payable under this Note, or the Company breaches any other obligation to Holder
hereunder, or the Holder uses the proceeds of this note for any purpose other
than payroll expenses or payment to consultants in the ordinary course of
business consistent with agreements in effect with such consultants entered
into
prior to February 14, 2007.
b. Any
proceedings shall be instituted by or against the Company seeking either (i)
an
order for relief with respect to, or reorganization, arrangement, adjustment
or
composition of, its debts under the United States Bankruptcy Code or under
any
other law relating to bankruptcy, insolvency, reorganization or relief of
debtors, or (ii) appointment of a trustee, receiver or similar official for
the
Company or for any substantial part of its property; and, with respect only
to a
proceeding instituted against the Company, such proceeding is not dismissed
within sixty (60) days thereafter;
c. The
Company’s failure to conduct business in the ordinary course, dissolution or
termination of existence;
d. Any
sale,
transfer, pledge, lien, grant of a security interest or other disposition,
outside the ordinary course of business, in or of any material assets or a
material portion of the assets or business of the Company, except a disposition
of assets to a wholly owned subsidiary of the Company;
e. Any
declaration or payment by the Company of any dividend or distribution with
respect to its capital stock; any payment with respect to any stock appreciation
right, phantom stock or similar plan; or redemption of any shares of its capital
stock, or of options, warrants, or other rights to acquire, or securities
convertible into its capital stock;
f. A
final
judgment or order for the payment of money in excess of $100,000 shall be
rendered against the Company and such judgment or order shall continue
unsatisfied, in effect and unstayed for a period of thirty (30) consecutive
days
g. The
failure of the Company to comply in all material respects with all applicable
laws, rules, regulations or orders, including, without limitation, (i) paying
before same become due all taxes, assessments and governmental charges imposed
upon it, upon its income and profits or upon its property, except to the extent
contested in good faith and covered by adequate reserves, and (ii) compliance
with all applicable environmental and toxic substance laws, rules and
regulations; or
4. No
Waiver, etc.
No delay
or omission on the part of Holder in exercising any right hereunder shall
operate as a waiver of such right or of any other right of Holder, nor shall
any
delay, omission or waiver on any one occasion be deemed a bar to or waiver
of
the same or any other right on any future occasion. The Company and every
endorser of this Note, regardless of the time, order or place of signing, waives
presentment, demand, protest and notices of every kind with respect to this
Note
and assents (i) to any extension or postponement of the time of payment and
to
any other indulgence, (ii) to the addition or release of, or any compromise
or
settlement with, any endorser or other party or person primarily or secondarily
liable hereunder, and (iii) to the addition or release of, the failure to take
or perfect an interest in, any compromise or settlement with respect to, or
any
delay in proceeding or failure to proceed against, any collateral or other
security for this Note.
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5. Governing
Law.
This
Note shall be governed by and construed in accordance with the laws of the
State
of New York applicable to contracts made and to be performed wholly within
New
York State, without giving effect to conflict of laws principles.
6. Subordination.
The
following provisions are for the benefit of Holder of Senior Indebtedness
(defined below).
(a) Subordination.
Holder
for itself, its successors and assigns covenants and agrees that to the extent
and in the manner hereinafter set forth, the Loans shall be subordinated and
subject in right of payment to the prior payment in full of all Senior
Indebtedness (defined below) solely in the manner set forth in this Section
6.
The provisions of this Section 6 are made for the benefit of all holders of
Senior Indebtedness and are intended to be and are an inducement and a
consideration for each holder of Senior Indebtedness, whether created on, before
or after the date hereof, to acquire and hold or continue to hold such Senior
Indebtedness. Any such holder may proceed to enforce such provisions and Holder
for itself, its successors and assigns hereby waives notice or proof of reliance
hereon by any holder of Senior Indebtedness and protest, demand for payment
and
notice of default.
(b) “Senior
Indebtedness”
means
“Indebtedness”
as
defined in the Senior Secured Convertible Note issued on December 26, 2006
in
the original principal amount of $1,500,000 to Gottbetter Master,
Ltd.
(c) Subordination
Agreements.
Holder
covenants and agrees that payment of the sums due or to be due under the Notes
are expressly subordinated to all Senior Indebtedness in the manner provided
herein, and Xxxxxx agrees to enter into any further subordination agreement
by
any holder of Senior Indebtedness, provided, however, that such agreement is
reasonable and consistent with the terms and conditions set forth in this
Section 5.
(d) Hold
Payments in Trust.
If
Holder receives any payment in respect of any sum due or to be due under the
Notes which Xxxxxx knows it is not entitled to receive, it will hold any amount
so received in trust for the benefit of the holders of the Senior Indebtedness
and will forthwith turn over such payment to such holders of the Senior
Indebtedness in the form received to be applied on the Senior Indebtedness
upon
receipt of written notice from all such holders.
(e) No
Action.
Xxxxxx
will not commence any action or proceeding against the Company or any guarantor
hereof to recover all or any part of this Note or join with any creditor under
any bankruptcy, reorganization, readjustment or arrangement of debt,
receivership, liquidation or insolvency law or statute of the federal or any
state government, unless Holder shall have given the holders of the Senior
Indebtedness 60 days notice of its intention to do so and unless the holders
of
the Senior Indebtedness shall also have the opportunity to join in bringing
any
such proceedings against the Company.
(f)
Changes
to Senior Indebtedness.
At any
time and from time to time, the holders of the Senior Indebtedness may, without
the consent of or notice to Xxxxxx, without incurring responsibility to Holder,
and without impairing or releasing any of their rights or any of the obligations
of Holder hereunder:
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(i) change
the amount, manner, place or terms of payment or change or extend the time
of
payment of or renew or alter the Senior Indebtedness in any manner;
(ii) sell,
exchange, release or otherwise deal with any property pledged or mortgaged
to
secure, or howsoever securing, the Senior Indebtedness;
(iii)
release
anyone liable in any manner for the payment or collection of the Senior
Indebtedness;
(iv)
exercise
or refrain from exercising any rights against the Company and others;
and
(v) apply
any
sums by whomsoever paid or however realized to the Senior
Indebtedness.
7. Notices.
Any
notice or other communication required or permitted under this Note shall be
in
writing and shall be deemed to have been duly given (i) upon hand delivery,
or
(ii) on the third day following delivery to the U.S. Postal Service as certified
or registered mail, return receipt requested and postage prepaid, or (iii)
on
the first day following delivery to a nationally recognized United States
overnight courier service, fee prepaid, return receipt or other confirmation
of
delivery requested, or (iv) when telecopied or sent by facsimile transmission
if
an additional notice is also delivered or mailed, as set forth under (i), (ii)
or (iii) above, within three days thereafter. Any such notice or communication
shall be delivered or directed to a party at its address set forth above or,
as
to each such party or any holder hereof, at such other address as may be
designated by such party or holder in a notice given to the other parties hereto
in accordance with the provisions of this paragraph.
8. Maximum
Interest.
Notwithstanding any other provisions of this Note, Holder does not intend to
charge, and the Company shall not be required to pay, any interest or other
fees
or charges in excess of the maximum permitted by applicable law. Any payments
in
excess of such maximum shall be refunded to the Company or credited against
unpaid principal.
9. Modifications;
Waiver.
No
modification or waiver of this Note or any part hereof shall be effective unless
in writing and signed by the Company and Holder. No waiver of any breach or
condition of this Note shall be deemed to be a waiver of any other or subsequent
breach or condition, whether of like kind or different nature. No course of
dealing between the Company and Holder, or between Holder and any other party,
will be deemed effective to modify, amend, waive or discharge any part of this
Note or of the rights or obligations of the Company hereunder.
10. Jurisdiction
and Venue.
In the
event that any legal proceedings are commenced in any court with respect to
any
matter arising under this Note, the Company specifically consents and agrees
that: (i) the courts of the State of New York and/or the United States Federal
Courts located in the State of New York shall have exclusive jurisdiction over
the Company and over the subject matter of any such proceedings; and (ii) the
venue of any such action shall be in New York County, New York and/or the United
States District Court for the Southern District of New York.
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IN
WITNESS WHEREOF, Pure Vanilla eXchange has executed this Note as of the date
first above written.
| Pure Vanilla eXchange, Inc. | ||
| |
|
|
| By: | ||
|
Xxxxxx Xxxxxx |
||
|
Its
Chief Executive Officer
|
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