PREMIUM SECURED CONVERTIBLE NOTE AGREEMENT
Exhibit
10.5
PREMIUM
SECURED CONVERTIBLE NOTE AGREEMENT
This
Convertible Note Agreement ("Agreement") is made and effective on June 30, 2009,
|
BETWEEN:
|
GENMED HOLDING CORP.
(the "Company"), a corporation organized and existing under the laws of
the State of Nevada, with its head office located
at:
|
|
|
Xxxxxxxxxxx
00
|
|
|
0000
XX Xxxxxxxxxx
|
|
|
Xxxxxxxxxxx
|
|
AND:
|
G.M.W. XXXXX ("Note
Holder 1"), an individual residing
at:
|
|
|
Xxxxxxxxxxxxxxxx
00
|
|
|
0000
XX Xxxxxxxxx
|
|
|
Xxxxxxxxxxx
|
|
AND:
|
TOTAL LOOK B.V. ("Note
Holder 2"), a corporation organized and existing under the laws of the
Netherlands, with its head office located
at:
|
|
|
Xxxxxxxxxxxxxxxx
00
|
|
|
0000
XX Xxxxxxxxx
|
|
|
Xxxxxxxxxxx
|
WHEREAS,
as per June 30, 2009, the Company owes Note Holder 1, a total amount of $712,610.97 of which
$601,808.82 was lent by Note Holder 1 to the Company, during the period till
March 31, 2008, to fund the Company’s operations and $110,802.15 is for unpaid
interest for these loans. These loans are unsecured and bears an annual interest
of 8%.
WHEREAS,
as per June 30, 2009, the Company owes Note Holder 2, a total amount of
€151,134.75 of which €143,636.47 was lent by Note Holder 2 to the Company to
fund the Company’s operations and €7,498.28 is for unpaid interest for this
loan. At June 30, 2009 these amounts were converted into US Dollars, according
Oanda’s EUR/USD exchange rate of 1,40484, which resulted in a total amount in US
Dollars owed to Note Holder 2 of $212,320.15 of which
$201,786.26 is for the loan and $10,533.89 for unpaid interest.
WHEREAS,
as per June 30, 2009, both loans and interest payable are in default and due to
be repaid to the Note Holders
WHEREAS,
both Note Holder 1 and Note Holder 2 are willing to combine and to consolidate
their loans and interest receivable, as per June 30, 2009, from the Company and
to enter into one Convertible Debenture for the sum of the total amounts
receivable by Note Holder 1 and Note Holder 2, together being $924,931.12.
WHEREAS,
the Company is prepared to grant the request of the Note Holders to convert, to
combine and to consolidate their amounts receivable from the Company into one
new 100% Premium Secured Convertible Promissory Note and issue this to TOTAL
LOOK BV.
In
consideration of the mutual covenants and conditions herein contained, the
parties hereby agree, represent and warrant as follows:
|
Page
1 of 6
|
|
1.
|
ISSUE
OF NOTES
|
|
|
a.
|
The
Company will authorize the issuance of a 100% Premium Secured Convertible
Note (hereinafter called "Note") in the aggregate principal amount of
$925,000
(nine-hundred and twenty-five thousand US Dollars) to be dated
JUNE 30, 2009 and to mature on JUNE 30, 2010, bearing interest on the
unpaid principal thereof at the rate of 8% per annum until maturity,
payable on JUNE 30, 2010.
|
|
|
b.
|
For
the purposes of calculating interest for any period for which the interest
shall be payable, such interest shall be calculated on the basis of a 30
day month and a 365 day year. The Company will promptly and punctually pay
to Note Holder or its nominee the interest on the Note held by Note Holder
without presentment of the Note. In the event the Company defaults on any
installment of interest or principal, then the Holder of the Note may, at
his option, without notice, declare the entire principal and the interest
accrued thereon immediately due and payable and may proceed to enforce the
collection thereof.
|
|
|
c.
|
The
Company will also authorize the issuance of 23,125,000 shares of its
common stock (hereinafter called "The Stock") and will authorize the
issuance of and reserve for such purchase such a number of additional
shares of common stock (hereinafter called the "Conversion Stock") as may
from time to time be the maximum number required for issuance upon
conversion of the Notes pursuant to the conversion privileges hereinafter
stated.
|
|
2.
|
SALE
AND PURCHASE OF NOTES AND STOCK
|
The
Company will sell the Note to the Note Holder, who agrees to have purchased the
principal amount of the Note, subject to the terms and conditions hereof and in
reliance upon the representations and warranties of the Company contained
herein.
|
3.
|
REPRESENTATIONS
AND WARRANTIES BY THE COMPANY
|
|
|
a.
|
Company
is a corporation duly organized and existing in good standing under the
laws of the State of NEVADA has the corporate power to own its own
property and to carry on in the business as it is now being
conducted.
|
|
|
b.
|
There
is no action or proceeding pending or, to the knowledge of the Company,
threatened against the Company before any court or administrative agency,
the determination of which might result in any material adverse change in
the business of the Company.
|
|
|
c.
|
The
Company has title to the respective assets including the assets reflected
on the financial statements for the period ending MARCH 31, 2009 and which
assets are subject to no liens, mortgages, encumbrances or
charges.
|
|
|
d.
|
The
Company is not a party to any contract or agreement or subject to any
restriction which materially and adversely affects its business, property
or assets, or financial condition, and neither the execution nor delivery
of this Agreement, nor the confirmation of the transactions contemplated
herein, nor the fulfillment of the terms hereof, nor the compliance with
the terms and provisions hereof and of the Note, will conflict with or
result in the breach of the terms, conditions or provisions or constitute
a default, under the Articles of Incorporation or Code of Regulations of
the Company or of any Agreement or instrument to which the Company is now
a party.
|
|
|
e.
|
The
Company has not declared, set aside, paid or made any dividend or other
distributions with respect to its capital stock and has not made or caused
to be made directly or indirectly, any payment or other distribution of
any nature whatsoever to any of the holders of its capital stock except
for regular salary payments for services rendered and the reimbursement of
business expenses.
|
|
Page 2
of 6
|
|
|
f.
|
The
Company owns or possesses adequate licenses or other rights to use, all
patents, trademarks, trade names, trade secrets, and copyrights used in
its business. No one has asserted to the Company that its operations
infringe on the patents, trademarks, trade secrets or other rights
utilized in the operation of its
business.
|
|
4.
|
REPRESENTATIONS
AND WARRANTIES BY THE NOTE HOLDERS
|
The Note
Holder represent and warrant that:
|
|
a.
|
The
Note Holder is subscribing for the Note and Stock for investment purposes
and not with the view to or for sale in connection with any distribution
thereof and that they have no present intent to sell, give or otherwise
transfer the Notes or Stock.
|
|
|
b.
|
The
Note Holder state he is a resident of the
NETHERLANDS.
|
|
|
c.
|
The
Note Holder understand that this is a highly speculative investment in a
Company which is insolvent both from a legal and an equity
standpoint.
|
|
|
d.
|
Note
Holder state that he will be active in the affairs of the business of the
Company.
|
|
5.
|
PREPAYMENT
OF THE NOTES
|
The
Company shall have the right to make prepayments on principal of the Notes at
any time. Such prepayment shall be accompanied by a payment of all accrued
interest to date. There shall be no premium for the amount so
prepaid.
|
6.
|
CONVERSION
|
|
|
a.
|
The
Holder of the Note at any time up to and including the maturity date (or,
as to the Note to which notice of prepayment shall have been given, at any
time up to the close of business on the third business day prior to the
day fixed for prepayment) but not thereafter may convert the Note in whole
or in part into as many fully paid and non-assessable shares of Common
Stock of the Company as the principal amount of the Note so converted at a
multiple of $0.04 per share (“the Fixed Conversion Price”) upon surrender
of the certificate representing the Note to the Company at its principal
office in the City of ZOETERMEER. If the Note shall be converted in part,
the Company shall, at its option and without charge to the Holder, either
(I) execute and deliver to the Holder a Note for the balance of the
principal amount so converted, or (ii) make note thereon of the principal
of the amount converted.
|
|
|
b.
|
Upon
conversion of the Note, all accrued and unpaid interest on the principal
amount converted shall be paid to the Holder by the
Company.
|
|
|
c.
|
The
Company shall take all necessary steps to maintain the registration for
the shares held subject to the conversion privilege as described in this
section.
|
|
|
d.
|
In
the case the Company shall issue or sell any share of its Common Stock
(other than the Stock Shares issued upon conversion of the Note) without
consideration or for consideration per share less than the conversion
price of $0,04 per share, then forthwith upon such issuance or sale, the
conversion price of the Note shall be adjusted to the price equal to the
price for which the Company shall issue or sell any share of its Common
Stock.
|
|
|
e.
|
In
case the Company shall at any time divide its outstanding shares of Common
Stock into a greater number of shares, the conversion price in effect
immediately prior to such subdivision should be proportionately reduced,
and, conversely, in the case of outstanding shares of Common Stock of the
Company shall be combined into a smaller number of shares, the actual
conversion price in effect immediately prior to such combination shall be
proportionately increased.
|
|
Page 3
of 6
|
|
|
f.
|
No
fractional share of Common Stock shall be issued upon conversion of the
Note. If any the Holder of the Note shall have converted the Note held by
him other than a principal amount so small that less than a whole share of
Common Stock would be issuable upon conversion thereof, the Company may
elect to prepay such balance, with interest accrued thereon to the date
fixed for prepayment, or leave the same outstanding until the
maturity of the Note.
|
|
|
g.
|
In
any reclassification or change of outstanding shares of Common Stock
issuable upon conversion of the Note (other than a change in stated value
or from no par to par value) or in the case of any consolidation or merger
of the Company with any other corporation, or in the case of the sale and
conveyance to another corporation or person of the property of the Company
in its entirety or substantially as an entirety, the Company shall, as a
condition precedent to such transaction, case effective provisions to be
made that the Holder of the Note then outstanding shall have the right
thereafter to convert the Note into the kind and amount of shares of Stock
and other securities and property receivable upon such reclassification,
change, consolidation, merger, sale or conveyance by a Holder of the
number of shares of Common Stock in the Company into which the Note might
have been converted immediately prior to such reclassification, change,
consolidation, merger, sale or
conveyance.
|
|
7.
|
COVENANTS
|
|
|
a.
|
The
Company covenants that so long as the Note is in existence, it will
deliver to the Holder thereof (i) as soon as practical, after the end of
such quarterly period, in each fiscal year, consolidated income and
surplus statements of the Company; (ii) as soon as practical , after the
end of each fiscal year, a consolidated income and surplus statement of
the Company, and (iii) with reasonable promptness, such other financial
data as the Holder may request in
writing.
|
|
|
b.
|
The
Company covenants that, so long as the Note is outstanding, it will permit
the Holder of the Note to visit and inspect, at the Holder's expense, any
of the property of the Company, including its books and records, and to
discuss affairs, finances and accounts with its
officers.
|
|
|
c.
|
The
Company covenants that, without the written consent of the Holder of the
principal amount of the Note, it will
not:
|
|
|
i
|
Create
or suffer to exist any mortgage, pledge, encumbrance, lien or charge of
any kind on any of its properties or assets, whether now owned or
hereafter acquired except for (i) mortgages, encumbrances, liens or
charges which are now in existence; (ii) mortgages, liens, charges and
encumbrances (a) for taxes, assessments or governmental charges or levies
on property of the Company if the same shall not be due or delinquent or
thereafter can be paid without penalty, or being contested in good faith
and by appropriate proceedings; (b) of mechanics and material men for sums
not yet due or being contested in good faith and by appropriate
proceedings; or (c) in connection with workers' compensation, unemployment
insurance and other state employment
legislation.
|
|
|
ii
|
Assume,
guarantee, endorse or otherwise become liable in connection with the
obligations, stock or dividends of any person, firm or corporation except
in the ordinary course of business by endorsement of a negotiable
instrument in the course of
collection.
|
|
|
iii
|
Merge
or consolidate with any other corporation or sell, lease or transfer or
otherwise dispose of all or a substantial part of its assets to any
person, firm or corporation.
|
|
Page 4
of 6
|
|
8.
|
EVENT
OF DEFAULT
|
|
|
a.
|
The
breach of any of the events or conditions contained in Section 7 of this
Agreement shall constitute an event of default under this Agreement. The
Holders of the Note may give written notice of such breach and if the
Company shall within 45 days after receipt of such written notice have
failed to correct such occurrence or condition, then the Holder of the
Note may, at its option and without notice, declare the entire principal
and interest accrued thereon immediately due and payable and may proceed
with collection.
|
|
|
b.
|
If
the Company has made a material misrepresentation in connection with this
Agreement or with the transactions contemplated by this Agreement, or if
the Company makes an assignment for the benefit of creditors, or a trustee
or receiver is appointed for the Company; or if any proceeding involving
the Company is commenced under any bankruptcy, reorganization,
arrangement, insolvency, statute or law, such event shall be deemed a
default which will immediately entitled the Holder of the Note, at their
option and without notice, to declare the entire amount of interest
accrued thereon immediately due and payable and proceed to enforce the
collection thereof.
|
|
|
c.
|
In
case of default in the payment of any installment or principal, the Holder
of the Note may, at their option and without notice, declare the entire
principal and the interest accrued thereof immediately due and payable and
may proceed to enforce the collection
thereof.
|
|
9.
|
MISCELLANEOUS
|
|
|
a.
|
Any
and all notices, approvals or other communications to be sent to the
parties shall be deemed validly and properly given if made in writing and
delivered by hand or by registered or certified mail, return receipt
requested, and addressed to the Company at its principal office or to the
Holder of the Note at the addresses given to the Company by the Note
Holder.
|
|
|
b.
|
This
Agreement may not be modified, amended or terminated except by written
agreement executed by all the parties
hereto.
|
|
|
c.
|
The
waiver of any breach or default hereunder shall not be considered valid
unless in writing and signed by the party giving such notice and no waiver
shall be deemed a waiver of any subsequent breach or default of
same.
|
|
|
d.
|
The
paragraph headings contained herein are for the purpose of convenience
only and are not intended to define or limit the contents of
such.
|
|
|
e.
|
The
validity, construction, interpretation and enforceability of this
Agreement and the Notes executed pursuant to this Agreement shall be
determined and governed by the laws of the State of
NETHERLANDS.
|
|
|
f.
|
This
Agreement shall be binding upon and inure to the benefit of the company
and its successors and assigns.
|
|
|
g.
|
This
Agreement may be executed in one or more counterparts, each of which shall
be deemed an original.
|
|
Page 5
of 6
|
IN
WITNESS WHEREOF, Company and Note Holders have executed this agreement at
ZOETERMEER on JUNE 30, 2009.
|
COMPANY
|
NOTE
HOLDER 1
|
|
|
Authorized
Signature
|
Authorized
Signature
|
|
|
Print
Name and Title
|
Print
Name and Title
|
|
|
NOTE
HOLDER 2
|
||
|
Authorized
Signature
|
||
|
Print
Name and
Title
|
|
Page 6
of 6
|
