Contract
EXHIBIT
4.1
THIS
NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE
SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR RECEIPT BY THE MAKER OF AN OPINION OF
COUNSEL IN THE FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO THE MAKER
THAT THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE SOLD,
TRANSFERRED, OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION FROM REGISTRATION
UNDER THE ACT AND SUCH STATE SECURITIES LAWS.
UNSECURED
CONVERTIBLE NOTE
DUE
JANUARY 30, 2009
| $100,000 |
Issue Date:
January 13, 2009
|
For value
received, CelLynx Group, Inc., a Nevada corporation (the "Maker"), located at 00000
Xxxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx, 00000 hereby promises to pay to the
order of Xxx Xxxxxx (together with his successors, representatives, and
permitted assigns, the "Holder"), in accordance with
the terms hereinafter provided, the principal amount of One Hundred Thousand
Dollars ($100,000) or such lesser amount as is actually advanced by Holder to
the Maker
All
payments under or pursuant to this Note shall be made in United States Dollars
in immediately available funds to the Holder at the address of the Holder first
set forth above or at such other place as the Holder may designate from time to
time in writing to the Maker or by wire transfer of funds to the Holder's
account, instructions for which are attached hereto as “Exhibit A”. The
outstanding principal balance of this Note shall be due and payable on January
30, 2009 (the "Maturity
Date") or at such earlier time as provided herein. Principal hereunder
may be converted into shares of the Maker’s common stock (the “Common Stock”) on the terms
and conditions set forth herein.
ARTICLE
I
Section
1.1 Interest. The
principal amount of this Note shall not accrue interest.
Section
1.2 Payment of Principal.
Principal shall be payable in full on the Maturity Date. Notwithstanding the
foregoing, Maker may prepay principal from time to time without
premium or penalty.
Section
1.3 Payment on
Non-Business Days.
Whenever any payment to be made shall be due on a Saturday, Sunday or a public
holiday under the laws of the State of California, such payment may be due on
the next succeeding business day.
Section
1.4 Replacement. Upon receipt of a duly executed,
notarized and unsecured written statement from the Holder with respect to the
loss, theft or destruction of this Note (or any replacement hereof) and a
standard indemnity, or, in the case of a mutilation of this Note, upon surrender
and cancellation of such Note, the Maker shall issue a new Note, of like tenor
and amount, in lieu of such lost, stolen, destroyed or mutilated
Note.
-1-
ARTICLE
II
EVENTS OF DEFAULT;
REMEDIES
Section
2.1 Events of
Default. The occurrence of
any of the following events shall be an “Event of
Default” under this
Note:
(a) the Maker shall fail to make the
principal and interest payments when due and such default is not fully cured
within ten (10) business days after the occurrence thereof;
or
(b) the suspension from listing, without
subsequent listing on any one of, or the failure of the Common Stock of Maker to
be listed on at least one of the OTC Bulletin Board, the American Stock Exchange
(now NYSE Alternext U.S., LLC), the Nasdaq Global Market, the Nasdaq Capital
Market or The New York Stock Exchange, Inc. for a period of five (5) consecutive
trading days; or
(c) the
Maker’s notice to the Holder, including by way of public announcement, at any
time, of its inability to comply or its intention not to comply with proper
requests for conversion of this Note into shares of Common Stock of the Maker;
or
(d) the
Maker shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property or assets, (ii) make a general assignment
for the benefit of its creditors, (iii) commence a voluntary case under the
United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic), (iv) file a petition
seeking to take advantage of any bankruptcy, insolvency, moratorium,
reorganization or other similar law affecting the enforcement of creditors'
rights generally which is not dismissed within 30 days, (v) acquiesce in writing
to any petition filed against it in an involuntary case under United States
Bankruptcy Code (as now or hereafter in effect) or under the comparable laws of
any jurisdiction (foreign or domestic) which is not dismissed within 60 days,
(vi) issue a notice of bankruptcy or winding down of its operations or issue a
press release regarding same, or (vii) take any action under the laws of any
jurisdiction (foreign or domestic) analogous to any of the foregoing;
or
(e) a proceeding or case shall be commenced
in respect of the Maker, without its application or consent, in any court of
competent jurisdiction, seeking (i) the liquidation, reorganization, moratorium,
dissolution, winding up, or composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of it or
of all or any substantial part of its assets in connection with the liquidation
or dissolution of the Maker or (iii) similar relief in respect of it under any
law providing for the relief of debtors, and such proceeding or case described
in clause (i), (ii) or (iii) shall continue undismissed, or unstayed and in
effect, for a period of thirty (30) days or any order for relief shall be
entered in an involuntary case under United States Bankruptcy Code (as now or
hereafter in effect) or under the comparable laws of any jurisdiction (foreign
or domestic) against the Maker or action under the laws of any jurisdiction
(foreign or domestic) analogous to any of the foregoing shall be taken with
respect to the Maker and shall continue undismissed, or unstayed and in effect
for a period of thirty (30) days.
Section
2.2 Remedies
Upon An Event of Default.
If an Event of Default shall have occurred and shall be continuing, the Holder
of this Note may at any time at its option, declare the entire unpaid principal
balance of this Note due and payable, and thereupon, the same shall be
accelerated and so due and payable, without presentment, demand, protest, or
notice, all of which are hereby expressly unconditionally and irrevocably waived
by the Maker; provided, however, that upon the occurrence of an Event of Default
described in (i) Sections 2.1 (d) or (e), the outstanding principal balance
hereunder shall be automatically due and payable; or demand that the principal
amount of this Note then outstanding shall be converted into shares of Common
Stock at a Conversion Price per share calculated pursuant to Sections 3.1
hereof; or exercise or otherwise enforce any one or more of the Holder's rights,
powers, privileges, remedies and interests under this Note or applicable
law.
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ARTICLE
III
CONVERSION
Section
3.1 Conversion
Option. At any time during
the term of this Note, the principal amount of this Note shall be convertible
(in whole or in part), at the option of the Holder (the “Conversion
Option”), into such number
of fully paid and non-assessable shares of Common Stock (the "Conversion
Rate") as is determined by
dividing (x) that portion of the outstanding principal balance under this Note
as of such date that the Holder elects to convert by (y) the Conversion Price
(as defined in Section 3.2(a) hereof) then in effect on the date on which the
Holder faxes a notice of conversion (the “Conversion
Notice”), duly executed,
to the Maker (the “Voluntary Conversion
Date”). The Holder shall
deliver this Note to the Maker at such time that this Note is fully converted.
With respect to partial conversions of this Note, the Maker shall keep written
records of the amount of this Note converted as of each Conversion
Date.
Section
3.2 Conversion
Price.
(a) The
term "Conversion
Price" shall mean $0.20 per share of Common Stock.
(b) Issue Taxes. The
Maker shall pay any and all issue and other taxes, excluding federal, state or
local income taxes, that may be payable in respect of any issue or delivery of
shares of Common Stock on conversion of this Note pursuant thereto; provided, however, that the
Maker shall not be obligated to pay any transfer taxes resulting from any
transfer requested by the Holder in connection with any such
conversion.
(c) Fractional Shares. No
fractional shares of Common Stock shall be issued upon conversion of this Note.
In lieu of any fractional shares to which the Holder would otherwise be
entitled, the Maker shall pay cash equal to the product of such fraction
multiplied by the average of the bid and ask prices of the Common Stock for the
five (5) consecutive trading days immediately preceding the Conversion
Date.
(d) Reservation of Common
Stock. The Maker shall at all times when this Note shall be outstanding,
reserve and keep available out of its authorized but unissued Common Stock, such
number of shares of Common Stock as shall from time to time be sufficient to
effect the conversion of this Note.
(e) Regulatory
Compliance. If any shares of Common Stock to be reserved for the purpose
of conversion of this Note require registration or listing with or approval of
any governmental authority, stock exchange or other regulatory body under any
federal or state law or regulation or otherwise before such shares may be
validly issued or delivered upon conversion, the Maker shall, at its sole cost
and expense, in good faith and as expeditiously as possible, endeavor to secure
such registration, listing or approval, as the case may be.
Section
3.3 Adjustment for Stock Splits;
Dividends. The number and kind of securities purchasable upon
the conversion of this Note as well as the Conversion Price shall be subject to
adjustment from time to time as follows. In case the Company shall
(i) pay a dividend in shares of Common Stock or make a distribution in shares of
Common Stock to holders of its outstanding Common Stock, (ii) subdivide its
outstanding shares of Common Stock into a greater number of shares, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares
of Common Stock, or (iv) issue any shares of its capital stock in a
reclassification of the Common Stock, then the number of shares of Common Stock
purchasable upon conversion of this Notes immediately prior thereto shall be
adjusted so that the Holder shall be entitled to receive the kind and number of
underlying Common Stock of the Company which it would have owned or have been
entitled to receive had this Note been converted in advance thereof. Upon each
such adjustment of the kind and number of underlying Common Stock of the Company
which were purchasable hereunder, the Holder shall thereafter be entitled to
purchase the number of underlying Common Stock resulting from such adjustment at
a Conversion Price per share obtained by multiplying the Conversion Price per
share in effect immediately prior to such adjustment by the number of underlying
Common Stock purchasable pursuant thereto immediately prior to such adjustment
and dividing by the number of underlying Common Stock of the Company resulting
from such adjustment. An adjustment made pursuant to this paragraph
shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
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ARTICLE
IV
MISCELLANEOUS
Section
4.1 Notices. Any notice, demand, request, waiver or
other communication required or permitted to be given hereunder shall be in
writing and shall be effective (a) upon hand delivery, telecopy or facsimile at
the address or number designated in the Note Purchase Agreement (if delivered on
a business day during normal business hours where such notice is to be
received), or the first business day following such delivery (if delivered other
than on a business day during normal business hours where such notice is to be
received) or (b) on the third business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The Maker will give
written notice to the Holder at least ten (10) days prior to the date on which
the Maker takes a record (x) with respect to any dividend or distribution upon
the Common Stock, or (y) with respect to any pro rata subscription offer to
holders of Common Stock.
Section
4.2 Governing
Law. 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 law.
Section 4.3
Headings. Article and section headings in this
Note are included herein for purposes of convenience of reference only and shall
not constitute a part of this Note for any other purpose.
Section 4.4
Binding
Effect. The obligations of
the Maker and the Holder set forth herein shall be binding upon the successors
and assigns of each such party, whether or not such successors or assigns are
permitted by the terms hereof.
Section 4.5
Amendments. This Note may not be modified or
amended in any manner except in writing executed by the Maker and the
Holder.
Section 4.6
Compliance
with Securities Laws. The
Holder of this Note acknowledges that this Note is being acquired solely for the
Holder's own account and not as a nominee for any other party, and for
investment, and that the Holder shall not offer, sell or otherwise dispose of
this Note. This Note and any Note issued in substitution or replacement therefor
shall be stamped or imprinted with a legend in substantially the following
form:
"THIS
NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE
SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR RECEIPT BY THE MAKER OF AN OPINION OF COUNSEL IN THE FORM,
SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO THE MAKER THAT THIS NOTE AND THE
SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE MAY BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION FROM REGISTRATION
UNDER THE ACT AND SUCH STATE SECURITIES LAWS."
Section 4.7
Parties in
Interest. This Note shall
be binding upon, inure to the benefit of and be enforceable by the Maker, the
Holder and their respective successors and permitted
assigns.
Section 4.8
Failure or
Indulgence Not Waiver. No
failure or delay on the part of the Holder 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.
-4-
|
By: /s/ Xxxxxx X.
Xxx
Name: Xxxxxx
X. Xxx
Title: Chief
Executive Officer |
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EXHIBIT
A
WIRE
INSTRUCTIONS
Payee:
________________________________________________________
Bank:
________________________________________________________
Address:
_____________________________________________________
_____________________________________________________________
Bank No.:
_____________________________________________________
Account
No.: __________________________________________________
Account
Name: _________________________________________________
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FORM
OF
NOTICE OF
CONVERSION
(To be
Executed by the Holder in order to Convert the Note)
The
undersigned hereby irrevocably elects to convert $ ________________ of the
principal amount of the above Note into shares of Common Stock of CELLYNX GROUP,
INC. (the “Maker”)
according to the conditions hereof, as of the date written below.
Date of
Conversion
_________________________________________________________
Conversion
Price ___________________________________________________________
Number of
shares of Common Stock beneficially owned or deemed beneficially owned by
the
Holder on
the Date of Conversion: _________________________
Signature_________________________________________________________________
[Name]
Address:__________________________________________________________________
__________________________________________________________________
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