EXHIBIT 4.1
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "1933 ACT") AND APPLICABLE STATE SECURITIES LAWS AND MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN APPLICABLE EXEMPTION THEREFROM.
CHINA IVY SCHOOL, INC.
6.0% Convertible Note
Due: June 30, 2010
US$1,560,000
China Ivy School, Inc. (the "Issuer"), for value received, hereby promises
to pay to _______ , or registered assigns (the "Registered Holder" or "Holder"),
the principal sum of One Million Five Hundred Sixty Thousand Dollars
(US$1,560,000.00) due June 30, 2010 (the "Maturity Date"), and to pay interest
thereon on the Maturity Date (or, if earlier on the date of payment of this
Note) from the date hereof at the rate of six (6.0%) percent per annum until the
principal hereof is paid. Interest shall be computed on the basis of the actual
number of days elapsed.
Payments of principal and of any interest on this Note shall be made in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. Payments of principal
of this Note shall be made against surrender hereof. If the principal of this
Note is accelerated, interest shall accrue and be payable until the date of
payment. The Issuer shall have the right to pay any principal portion of this
Note before the scheduled due date thereof.
The Issuer shall accept at its principal executive offices any Note (i)
which may be presented or surrendered for payment, (ii) which may be surrendered
for registration of transfer or exchange, or (iii) which may be surrendered for
conversion pursuant to the provisions set forth below. The Issuer will act as
its own security registrar and paying and transfer agent for such purposes and
agrees to cause to be kept at such office a register (the "Security Register")
in which, subject to such reasonable regulations as it may prescribe, the Issuer
will provide for the registration of Notes and registration of transfers of
Notes. As of the date this Note was originally issued, such principal executive
offices of the Issuer were located at 0 Xxxxx Xxxx, Xxxxx Xxxxxxx Xxxxxxxx,
Xxxxx 000, Xxxxxx Xxxxxxxxxx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxx, 000000. If the
Issuer shall change the location of its principal executive offices it will
provide all holders with no less than thirty (30) days prior written notice.
The transfer of a this Note (or any Note issued upon transfer of all or a
portion of this Note) is registrable at the offices of the Issuer upon surrender
of such Note at the principal executive offices of Issuer duly endorsed by, or
accompanied by a written instrument of transfer in form reasonably satisfactory
to the Issuer duly executed by the Holder thereof, together with any
certifications and representations which Issuer may reasonably require to
reflect compliance with all applicable securities laws, rules and regulations
and the due authorization of the transaction. Upon such surrender of this Note
for registration of transfer, the Issuer shall execute and deliver, in the name
of the designated transferee or transferees, one or more new Notes, dated the
date of the execution thereof, of any authorized denominations and of a like
tenor, form and aggregate principal amount.
Prior to due presentment of this Note for registration of transfer, the
Issuer may treat the person in whose name this Note is registered as the owner
hereof for all purposes, whether or not this Note be overdue, and the Issuer
shall not be affected by notice to the contrary.
The Holder of this Note may at any time convert all or any amount of the
principal amount of the Note into shares of Common Stock of Issuer at a
conversion price equal to eight cents ($0.08) per share of Common Stock, subject
to adjustment as provided herein. No interest shall be paid on such portion of
this principal amount of this Note as shall be converted into Common Stock.
The conversion right granted in this Note may be exercised only by a
Registered Holder, in whole or in part, by the surrender of the Note to be
converted at the principal executive offices of the Issuer against delivery of
that number of shares of whole Common Stock as shall be computed by dividing the
principal amount of the Note being converted by the Conversion Price on the
Conversion Date. Each Note surrendered for conversion shall be endorsed by the
Registered Holder. Issuer will transmit the Common Stock certificates issuable
upon conversion of any Note and a new Note representing the balance of the Note
to the Registered Holder via express courier within three (3) business days
after the Conversion Date. The term "Conversion Date" shall mean the date the
original Notice of Conversion and Note being converted are received by the
Issuer. The term "Notice of Conversion" shall mean the written notice from the
Registered Holder to the Issuer.
All Common Stock which may be issued upon conversion of the Note will,
upon issuance, be duly issued, fully paid and non-assessable and free from all
taxes, liens, and charges with respect to the issue thereof. At all times that
any Notes are outstanding, Issuer shall have authorized and shall have reserved
for the purpose of issuance upon such conversion into Common Stock of all Notes,
a sufficient number of shares of Common Stock to provide for the conversion of
all outstanding Notes at the then effective Conversion Price. Without limiting
the generality of the foregoing, if, at any time, the Conversion Price is
decreased or increased, the number of shares of Common Stock authorized and
reserved for issuance by Issuer upon the conversion of the Securities shall be
proportionately increased or decreased, as the case may be.
The Initial Conversion Price is eight cents ($0.08) per share of Common
Stock ("Initial Conversion Price"). The Initial Conversion Price shall be
adjusted as provided for below (the Initial Conversion Price and the Initial
Conversion Price, as thereafter then adjusted, shall be referred to as the
"Conversion Price") and the Conversion Price from time to time shall be further
adjusted as provided for below. Upon each adjustment of the Conversion Price,
the Registered Holders of Notes shall thereafter be entitled to receive upon
conversion, at the Conversion Price resulting from such adjustment, the number
of shares of Common Stock obtained by dividing the principal amount of the Note
being converted by the Conversion Price, as then adjusted. The Conversion Price
shall be adjusted as follows:
(i) In the case of any amendment to the Certificate of Incorporation of
Issuer to change the designation of the Common Stock or the rights, privileges,
restrictions or conditions in respect to the Common Stock or division of the
Common Stock, the Conversion Price shall be adjusted so as to provide that upon
conversion of the Note the Registered Holder shall receive, in lieu of each
share of Common Stock theretofore issuable upon such conversion, the kind and
amount of shares, other securities, money and property receivable upon such
designation, change or division by such holder issuable upon such conversion had
the conversion occurred immediately prior to such designation, change or
division. The Note shall be deemed thereafter to provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for herein. The provisions of this clause (i) shall apply in the same manner to
successive reclassifications, changes, consolidations and mergers.
(ii) If Issuer shall at any time subdivide its outstanding shares of
Common Stock into a greater number of shares of Common Stock, or declare a
dividend or make any other distribution upon the Common Stock payable in shares
of Common Stock, the Conversion Price in effect immediately prior to such
subdivision or dividend or other distribution shall be proportionately reduced,
and conversely, in case the outstanding shares of Common Stock shall be combined
into a smaller number of shares of Common Stock, the Conversion Price in effect
immediately prior to such combination shall be proportionately increased.
(iii) If any capital reorganization or reclassification of the capital
stock of the Issuer, or any consolidation or merger of the Issuer with another
corporation or entity, or the sale of all or substantially all of the Issuer's
assets to another corporation or other entity shall be effected in such a way
that holders of shares of Common Stock shall be entitled to receive stocks,
securities, other evidence of equity ownership or assets with respect to or in
exchange for shares of Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale (except as
otherwise provided below), lawful and adequate provisions shall be made whereby
the Registered Holder shall thereafter have the right to receive upon the basis
and upon the terms and conditions specified herein, such shares of stock,
securities, other evidence of equity ownership or assets as may be issued or
payable with respect to or in exchange for a number of outstanding shares of
such Common Stock equal to the number of shares of Common Stock immediately
theretofore purchasable and receivable upon the conversion of this Note had such
reorganization, reclassification, consolidation, merger or sale not taken place,
and in any such case appropriate provisions shall be made with respect to the
rights and interests of such Registered Holder to the end that the provisions
hereof (including, without limitation, provisions for adjustments of the
Conversion Price and of the number of shares of Common Stock receivable upon the
conversion of this Note) shall thereafter be applicable, as nearly as may be, in
relation to any shares of stock, securities, other evidence of equity ownership
or assets thereafter deliverable upon the conversion hereof. The Issuer shall
not effect any such consolidation, merger or sale, unless, prior to the
consummation thereof, the successor corporation (if other than the Issuer)
resulting from such consolidation or merger or the corporation purchasing such
assets shall assume by written instrument executed and mailed or delivered to
the Registered Holder, the obligation to deliver to the Registered Holder such
shares of stock, securities, other evidence of equity ownership or assets as, in
accordance with the foregoing provisions, the Registered Holder may be entitled
to receive or otherwise acquire.
Where the terms of this Note provide for notice to the holders of any
event, such notice shall be sufficiently given if given in writing and mailed,
first class postage prepaid, to each Registered Holder affected by such event,
at his address as it appears in the register for the Securities. Any notice may
be waived in writing by the person entitled thereto, either before or after the
event, and such waiver shall be equivalent of such notice.
In the event of:
(a) default in the payment of the principal or accrued interest at
Maturity; or
(b) default in the performance or breach of any other material covenant or
agreement contained herein for a period of thirty (30) days after the date on
which written notice of such default requiring the Issuer to remedy the same and
stating that such notice is a "Notice of Default", shall first have been given
to the Issuer by a Registered Holder; or
(c) the entry by a court having jurisdiction of (i) a decree or order for
relief in respect of the Issuer in an involuntary case or proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law or (ii) a
decree or order adjudging the Issuer a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Issuer under any applicable law, or
appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Issuer or of any substantial part of the property
of the Issuer, or ordering the winding up or liquidation of the affairs of the
Issuer, and any such decree or order for relief or any such other decree or
order shall continue unstayed and in effect for a period of sixty (60)
consecutive days; or
(d) commencement by Issuer of a voluntary case or proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by the Issuer to the entry of a decree or order for relief in respect of
the Issuer in an involuntary case or proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against the Issuer, or the filing by
the Issuer of a petition or answer or consent seeking reorganization or relief
under any such applicable law, or the consent by the Issuer to the filing of
such petition or to the appointment of or the taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Issuer or of any substantial part of its property, or the making by the
Issuer of an assignment for the benefit of creditors, or the taking of action by
the Issuer in furtherance of any such action;
then a Registered Holder may, at its option, declare the principal of this Note
and the interest accrued hereon to be due and payable immediately by written
notice to the Issuer at its principal executive offices, and unless all such
defaults shall have been cured by the Issuer prior to receipt of such written
notice, the principal of this Note and the interest accrued thereon shall become
and be immediately due and payable.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed as
of the date set forth below.
CHINA IVY SCHOOL INC.
By:
-----------------------------
Name:
Title:
Dated: June __, 2009
