Exhibit
10.56
THIS PROMISSORY
NOTE AND THE SECURITIES PURCHASABLE UPON EXERCISE OF THE RIGHTS
CONTAINED IN THIS PROMISSORY NOTE (COLLECTIVELY, THE
“SECURITIES”) HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “SECURITIES ACT”). THE
SECURITIES MAY NOT BE SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS
IN THE OPINION OF COUNSEL SATISFACTORY TO THE HOLDER HEREOF (M2B,
INC.), AN EXEMPTION FROM SUCH REGISTRATION UNDER THE SECURITIES ACT
IS APPLICABLE TO SUCH PROPOSED EXERCISE, SALE, ASSIGNMENT, PLEDGE,
TRANSFER OR OTHER DISPOSITION.
CONVERTIBLE PROMISSORY
NOTE
|
$12,000.00
|
September 13, 2005
|
Los Angeles,
California
FOR VALUE
RECEIVED, ITREX INTERNATIONAL CORPORATION, a Delaware corporation
(“Itrex” or the “Borrower”), a wholly-owned
subsidiary of Orbit Brands Corporation (“Orbit” or the
“Company”), hereby promises to pay to M2B, Inc.
(“Holder”), the sum of Twelve Thousand Dollars
($12,000.00) on the second anniversary date following the
confirmation of the Company’s Chapter 11 Plan of
Reorganization (the “Maturity Date”), together with
accrued interest thereon. The Maturity Date is estimated to occur
by December 31, 2008. Borrower shall repay the principal and any
accrued but unpaid interest due under this Promissory Note (the
“Note”) on the Maturity Date, by check or wire transfer
to the party who is the registered holder of this Note
(“Holder’s Agent”). Whenever any payment to be
made hereunder falls due on a Saturday, Sunday or business holiday
in Los Angeles, California, such payment may be made on the next
succeeding business day, and such extension of time will, in such
case, be included in computing interest, if any, in connection with
such payment.
Interest shall
accrue on the principal amount of this Convertible Promissory Note
(the “Note”) at a fixed simple rate of five percent
(5%) per annum, calculated on the actual number of days elapsed, on
the basis of a 360-day year. Interest shall be payable in kind
(convertible into shares of the Company’s common stock) or
cash. The principal and all accrued interest may be converted into
fully paid and nonassessable shares of common stock of the Company
at the conversion price (defined hereinbelow) at the option of the
Company, in the event that the principal and all accrued interest
are not paid in full in cash on the Maturity Date.
The conversion
price shall be $0.002 per share (the “Conversion
Price”). Any fractional shares issuable upon conversion of
this Note shall be rounded down to the nearest whole share. The
Company intends that all such shares issuable upon conversion of
the Note shall be registered pursuant to Section 1145 of the
Bankruptcy Code (Title 11, United States Code, Section
1145).
The Conversion
Price and the number of shares issuable upon conversion shall be
proportionally adjusted upon the occurrence of an “Adjustment
Event,” defined as any reclassification of the
Company’s common stock, recapitalization, merger or
consolidation, or like capital adjustment affecting the number of
outstanding shares of common stock of the Company. The good faith
determination by the Company’s Board of Directors as to what
adjustments, amendments or arrangements shall be made to the
Conversion Price, and the extent thereof, shall be final and
conclusive, pro
