Contract
THIS
NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE SECURITIES
ACT, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS INVOLVING
THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH
THE SECURITIES ACT. THIS NOTE MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER
AGENT AS A CONDITION PRECEDENT TO THE SALE, PLEDGE, HYPOTHECATION OR ANY OTHER
TRANSFER OF ANY INTEREST IN ANY OF THE SECURITIES REPRESENTED BY THIS
NOTE.
ORGANIC
TO GO FOOD CORPORATION
SECURED
CONVERTIBLE PROMISSORY NOTE
$5,000,000.00
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February
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Xxxxxxx, Xxxxxxxxxx
FOR VALUE
RECEIVED, Organic To Go Food Corporation, a Delaware corporation (the “Company”) promises to pay to
X.Xxxxxx L.P., a limited partnership organized under the laws of the Bahamas
(“Investor”), or its
registered assigns, in lawful money of the United States of America the
principal sum of Five Million Dollars ($5,000,000.00) (the “Principal Amount”), together
with interest from the date hereof on the Principal Amount at the rate of
fifteen percent (15%) per annum, compounded quarterly and accruing daily, on or
prior to March 17, 2010 (the “Maturity Date”) in accordance
with the terms hereof. Any payments under this Note shall be applied
first to the accrued, unpaid interest and then to the Principal
Amount. This Note is issued pursuant to the Note Purchase Agreement,
dated as of February 11, 2009 (as amended, modified or supplemented, the “Note Purchase Agreement”)
between the Company and the Investor (as defined in the Note Purchase
Agreement).
Capitalized
terms not otherwise defined herein shall have the meaning set forth in the Note
Purchase Agreement.
The
following is a statement of the rights of Investor and the conditions to which
this Note is subject, and to which Investor, by the acceptance of this Note,
agrees:
1. Optional
Conversion.
(a) The
Investor may, at its discretion any time prior to the Maturity Date, convert the
Principal Amount, in whole or in part, plus any accrued, unpaid interest due
under this Note (together, the “Converted Amount”) into Common
Stock of the Company at a conversion price of $0.14, such that upon conversion of
the Converted Amount, the Investor shall receive the number of shares of Common
Stock equal to the quotient of (i) the Converted Amount, divided by, (ii)
$0.14. Before the Investor shall be entitled to convert this Note, in
whole or in part, into shares of Common Stock hereunder, the Investor shall
surrender this Note, duly endorsed, at the office of the Company (or a notice to
the effect that the original Note has been lost, stolen or destroyed and an
agreement acceptable to the Company whereby the holder agrees to indemnify the
Company from any loss incurred by it in connection with this Note), and shall
give written notice to the Company at its principal corporate office, of the
election to convert the same pursuant to this section, and shall state the
Converted Amount and the name in which the certificate for shares of Common
Stock are to be issued. The Company shall, as soon as practicable
thereafter, issue and deliver at such office to the Investor (i) a certificate
for the number of shares of Common Stock to which the Investor shall be entitled
upon conversion of the Converted Amount (bearing such legends as are required by
the Note Purchase Agreement and applicable state and federal securities laws in
the opinion of counsel to the Company), (ii) a new note, bearing the same terms
as this Note, for the amount of the remainder of the Principal Amount not
elected to be converted (if any) (the “Remainder Amount”), and (iii)
any other securities and property to which the Investor is entitled upon such
conversion under the terms of this Note. The conversion shall be
deemed to have been made immediately prior to the close of business on the date
of the surrender of this Note, and the Person entitled to receive the shares of
Common Stock upon such conversion shall be treated for all purposes as the
record holder of such shares of Common Stock as of such date.
(b) Fractional Shares; Effect of
Conversion. No fractional shares shall be issued upon conversion of this
Note. Upon conversion of this Note in full, the Company shall be
forever released from all its obligations and liabilities under this
Note
2. Adjustments.
(a) Adjustments for distributions,
splits or subdivisions. In the event the Company at any time or from time
to time after the date of issuance hereof fixes a record date for the
effectuation of a split or subdivision of any outstanding shares of Common Stock
or the determination of holders of any shares of Common Stock entitled to
receive a distribution without payment of any consideration by such holder,
then, as of such record date (or the date of such distribution, split or
subdivision if no record date is fixed), the Conversion Price shall be adjusted
appropriately.
(b) Adjustment for Reclassification,
Exchange and Substitution. If the shares of
Common Stock issuable upon the conversion of this Note are changed into the same
or a different number of shares or units of any class or classes of capital
stock, whether by recapitalization, reclassification, or otherwise, then, and in
any such event, the Investor shall have the right thereafter to convert this
Note into the kind and amount of such capital stock and property receivable upon
such reorganization, reclassification, or other change in accordance with the
number of shares of Common Stock into which this Note would have been converted
immediately prior to such reorganization, reclassification, or
change.
3. Event of
Default. In the event of an Event of Default (as defined in
the Note Purchase Agreement), then, at the election of the Investor, upon notice
to the Company, the Principal Amount (or the Remainder Amount, if the Note has
been converted in part prior to such Event of Default) and all accrued, unpaid
interest shall become immediately due and payable in cash.
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4. Prepayment. The
Company may not pre-pay this Note, in whole or in part, without the prior
written consent of the Investor.
5. Security
Agreement. This Note is secured by a lien on all assets of the
Company, pursuant to the Security Agreement contemplated under the Note Purchase
Agreement.
6. Successors and
Assigns. Subject to the
restrictions on transfer described in the Note Purchase Agreement, the rights
and obligations of the Company and the Investor shall be binding upon and
benefit the successors, assigns, heirs, administrators and transferees of the
parties.
7. Waiver and
Amendment. Any provision of
this Note may be amended, waived or modified upon the written consent of the
Company and the Investor.
8. Notices. All notices,
requests, demands, consents, instructions or other communications required or
permitted hereunder shall in be in accordance with the notice provisions set
forth in the Note Purchase Agreement.
9. Usury. In the event any interest is
paid on this Note which is deemed to be in excess of the then legal maximum
rate, then that portion of the interest payment representing an amount in excess
of the then legal maximum rate shall be deemed a payment of principal and
applied against the principal of this Note.
10. Waivers. The Company hereby waives
notice of default, presentment or demand for payment, protest or notice of
nonpayment or dishonor and all other notices or demands relative to this
instrument.
11. Governing
Law. This Note and all
actions arising out of or in connection with this Note shall be governed by and
construed in accordance with the laws of the State of California, without regard
to the conflicts of law provisions of the State of California, or of any other
state.
12. Arbitration. Any
dispute, controversy, or claim arising in relation to this Note, including with
regard to its validity, invalidity, breach, enforcement or termination, shall be
resolved by binding arbitration in London, England, in accordance with the rules
of arbitration which are in force in the United Kingdom on the date when the
notice of arbitration is submitted. The arbitrability of such
dispute, claim or controversy shall also be determined in such arbitration. Such
arbitration proceeding shall be conducted in the English language before one (1)
arbitrator agreed to by the parties. Both the foregoing agreement of the parties
to arbitrate any and all such disputes, claims and controversies, and the
results, determinations, findings, judgments and/or awards rendered through any
such arbitration shall be final and binding on the parties hereto and may be
specifically enforced by legal proceedings.
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The
Company has caused this Note to be issued as of the date first written
above.
Organic
To Go Food Corporation
a
Delaware corporation
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By:
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Name:
Xxxxx Xxxxx
Title:
Chief Executive Officer
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[Signature
page to February 2009 Note]