Contract
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.
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__________,
2009
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$[_______]
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8%
CONVERTIBLE PROMISSORY NOTE
Global Investor Services, Inc. (the
"Company"), for value received, hereby promises to pay to [________], or
registered assigns (the "Holder") on or before ________ __, 2012 (collectively,
the "Maturity Date"), at the principal offices of the Company, the principal sum
owed Holder on such date, and to pay interest on the outstanding principal sum
hereof at the rate of eight percent (8%) per annum (the "Note"). All principal
and interest shall be payable on the Maturity Date in cash or shares of common
stock, at the discretion of the Investor; and interest shall commence accruing
on the date hereof, computed on the basis of a 365-day year and the actual
number of days elapsed, provided that any payment otherwise due on a Saturday,
Sunday or legal Bank holiday may be paid on the following business
day. All payments due hereunder, to the extent not converted into
common stock in accordance with the terms hereof, shall be made in lawful money
of the United States of America. 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 New York 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.
1.
Transfers
of Note to Comply with the 1933 Act
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.
Principal
and Interest. For value
received, the Company hereby promises to pay to the order of the Holder in
lawful money of the United States of America and in immediately available funds
the principal sum of ______________ Thousand Dollars ($___,000), together with
interest on the unpaid principal of this note at the rate of eight
percent (8%) per year (computed on the basis of a 365-day year and the
actual days elapsed) from the date of this Note until
paid.
3.
Principal
and Interest Payments. All principal and
accrued interest shall be due and payable on February __, 2012 in cash. All
payment amounts shall be first applied to interest, if any, and then to the
balance to principal. The Company, at the election of the Holder, may
pay interest in cash or shares of common stock of the Company. If the
Company pays interest in shares of common stock, then the amount of shares to be
delivered shall be equal to the dollar amount of the interest owed divided by
the average closing price for the Company’s common stock during the 30 calendar
days immediately prior to Maturity Date.
4.
Right of
Prepayment. The Company may prepay a portion or all
outstanding principal and interest of the Note at anytime.
5.
Conversion
(a) Principal. At any time prior
to or at the time of repayment of this Note by the Company on the Maturity Date,
with respect to the outstanding principal on this Note, the Holder may elect to
convert some or all of the principal owing on this Note into shares of the
Company’s common stock at a price of $0.03 per share (the “Conversion
Rate”). 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 principal due under this
Note to common stock shall supersede the Company’s right to repay such
obligations in cash.
(b) Interest. With respect to
interest payments due hereunder, the Holder may elect to convert some or all of
the interest payable into shares of the Company’s common stock at the Conversion
Rate at anytime.
(c) If, at any time when
this Note is issued and outstanding, the Company issues or sells any shares of
Common Stock for no consideration or for a consideration per share (before
deduction of reasonable expenses or commissions or underwriting discounts or
allowances in connection therewith) less than the Conversion Rate (a “Dilutive
Issuance”), then immediately upon the Dilutive Issuance, the Conversion Rate
will be reduced according to a weighted average anti-dilution
calculation.
6.
Waiver
and Consent. To the fullest extent permitted by law and except
as otherwise provided herein, the Company waives demand, presentment, protest,
notice of dishonor, suit against or joinder of any other person, and all other
requirements necessary to charge or hold the Company liable with respect to this
Note.
7.
Costs,
Indemnities and Expenses. In the event of default as described
herein, the Company agrees to pay all reasonable fees and costs incurred by the
Holder in collecting or securing or attempting to collect or secure this Note,
including reasonable attorneys’ fees and expenses, whether or not involving
litigation, collecting upon any judgments and/or appellate or bankruptcy
proceedings. The Company agrees to pay any documentary stamp taxes,
intangible taxes or other taxes which may now or hereafter apply to this Note or
any payment made in respect of this Note, and the Company agrees to indemnify
and hold the Holder harmless from and against any liability, costs, attorneys’
fees, penalties, interest or expenses relating to any such taxes, as and when
the same may be incurred.
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8.
Secured
Nature of the Note. This Note,
together with the other holders that purchased Units in the Offering, is secured
by all of the assets of the Company, including, but not limited to, the list of
the Company’s subscribers, contracts with the subscribers and all intellectual
property and source codes
9.
Event of
Default. An “Event of Default”
shall be deemed to have occurred upon the occurrence of any of the following:
(i) the Company should fail for any reason or for no reason to make any payment
of the principal, interest, costs, indemnities, or expenses pursuant to this
Note within ten (10) days of the date due as prescribed herein; (ii) any
default, whether in whole or in part, in the due observance or performance of
any obligations or other covenants, terms or provisions to be performed by the
Holder under this Note, or (iii) the Holder shall: (1) make a
general assignment for the benefit of its creditors; (2) apply for or
consent to the appointment of a receiver, trustee, assignee, custodian,
sequestrator, liquidator or similar official for itself or any of its assets and
properties; (3) commence a voluntary case for relief as a debtor under the
United States Bankruptcy Code; (4) file with or otherwise submit to any
governmental authority any petition, answer or other document
seeking: (A) reorganization, (B) an arrangement with
creditors or (C) to take advantage of any other present or future
applicable law respecting bankruptcy, reorganization, insolvency, readjustment
of debts, relief of debtors, dissolution or liquidation; (5) file or
otherwise submit any answer or other document admitting or failing to contest
the material allegations of a petition or other document filed or otherwise
submitted against it in any proceeding under any such applicable law, or
(6) be adjudicated a bankrupt or insolvent by a court of competent
jurisdiction. Upon an Event of Default (as defined above), the entire
principal balance and accrued interest outstanding under this Note, and all
other obligations of the Company under this Note, shall be immediately due and
payable without any action on the part of the Holder, interest shall accrue on
the unpaid principal balance at twenty-four percent (24%) per year or the
highest rate permitted by applicable law, if lower, and the Holder shall be
entitled to seek and institute any and all remedies available to
it.
10. Maximum
Interest Rate. In no event shall any agreed to or actual
interest charged, reserved or taken by the Holder as consideration for this Note
exceed the limits imposed by New York law. In the event that the
interest provisions of this Note shall result at any time or for any reason in
an effective rate of interest that exceeds the maximum interest rate permitted
by applicable law, then without further agreement or notice the obligation to be
fulfilled shall be automatically reduced to such limit and all sums received by
the Holder in excess of those lawfully collectible as interest shall be applied
against the principal of this Note immediately upon the Holder’s receipt
thereof, with the same force and effect as though the Company had specifically
designated such extra sums to be so applied to principal and the Holder had
agreed to accept such extra payment(s) as a premium-free prepayment or
prepayments.
11. Cancellation
of Note. Upon the repayment by the Company of all of its obligations
hereunder to the Holder, including, without limitation, the principal amount of
this Note, plus accrued but unpaid interest, the indebtedness evidenced hereby
shall be deemed canceled and paid in full. Except as otherwise
required by law or by the provisions of this Note, payments received by the
Holder hereunder shall be applied first against expenses and indemnities, next
against interest accrued on this Note, and next in reduction of the outstanding
principal balance of this Note.
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12. Severability. If any provision
of this Note is, for any reason, invalid or unenforceable, the remaining
provisions of this Note will nevertheless be valid and enforceable and will
remain in full force and effect. Any provision of this Note that is
held invalid or unenforceable by a court of competent jurisdiction will be
deemed modified to the extent necessary to make it valid and enforceable and as
so modified will remain in full force and effect.
13. Amendment
and Waiver. This Note may be
amended, or any provision of this Note may be waived, provided that any such
amendment or waiver will be binding on a party hereto only if such amendment or
waiver is set forth in a writing executed by the parties hereto. The
waiver by any such party hereto of a breach of any provision of this Note shall
not operate or be construed as a waiver of any other breach.
14. Successors. Except as
otherwise provided herein, this Note shall bind and inure to the benefit of and
be enforceable by the parties hereto and their permitted successors and
assigns.
15. Assignment. This Note shall
not be directly or indirectly assignable or delegable by the Company or the
Holder.
16. No Strict
Construction. The language used
in this Note will be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction will be applied
against any party.
17. Further
Assurances. Each party hereto
will execute all documents and take such other actions as the other party may
reasonably request in order to consummate the transactions provided for herein
and to accomplish the purposes of this Note.
18. Notices,
Consents, etc. Any notices, consents, waivers or other
communications required or permitted to be given under the terms hereof must be
in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one (1) trading day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be:
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If
to Company:
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000
Xxxxxxx Xxxxxx, 22ND
Floor
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Attention:
Xxxxxxxx Xxxxxx, CEO
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Telephone:
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Facsimile:
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With
a Copy to:
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Law
Offices of Xxxxxxx X. Xxxxxxx PLLC
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000
Xxxxxxx Xxxxxx, 0xx
Xxxxx
Xxxx
Xxxxxx, Xxx Xxxx 00000
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Attention:
Xxxxxxx X. Xxxxxxx, Esq.
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Telephone:
000-000-0000
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Facsimile:
000-000-0000
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If
to the Holder:
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To
the address set forth in the Subscription
Agreement
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or at
such other address and/or facsimile number and/or to the attention of such other
person as the recipient party has specified by written notice given to each
other party three (3) trading days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a nationally recognized overnight delivery
service, shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
19. Governing
Law; Jurisdiction.
THIS NOTE SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICT OF LAWS. THE BORROWER HEREBY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK
WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS NOTE, THE AGREEMENTS ENTERED INTO
IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH
PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE
THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT
A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT
OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN
ANY DISPUTE ARISING UNDER THIS NOTE SHALL BE RESPONSIBLE FOR ALL FEES AND
EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN
CONNECTION WITH SUCH DISPUTE.
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20. No
Inconsistent Agreements. None of the
parties hereto will hereafter enter into any agreement, which is inconsistent
with the rights granted to the parties in this Note.
21. Third
Parties. Nothing herein
expressed or implied is intended or shall be construed to confer upon or give to
any person or entity, other than the parties to this Note and their respective
permitted successor and assigns, any rights or remedies under or by reason of
this Note.
22. Waiver of Jury
Trial. AS A MATERIAL INDUCEMENT FOR THE HOLDER TO LOAN TO THE
COMPANY THE MONIES HEREUNDER, THE COMPANY HEREBY WAIVES ANY RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS AGREEMENT AND/OR ANY AND
ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH THIS TRANSACTION.
23. Entire
Agreement. This Note (including any recitals hereto) set forth
the entire understanding of the parties with respect to the subject matter
hereof, and shall not be modified or affected by any offer, proposal, statement
or representation, oral or written, made by or for any party in connection with
the negotiation of the terms hereof, and may be modified only by instruments
signed by all of the parties hereto.
[REMAINDER
OF PAGE INTENTIONALY LEFT BLANK]
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IN WITNESS WHEREOF, this
Promissory Note is executed by the undersigned as of the date
hereof.
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By:
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Name:
Xxxxxxxx Xxxxxx
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Title: Chief
Executive Officer
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