|
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 CONVERTIBLE PROMISSORY
NOTE
|
$2,000,000.00
|
September 5, 2008
|
Seattle, Washington FOR VALUE RECEIVED,
Organic To Go Food Corporation, a Delaware corporation (the “
Company ”) promises to pay to W.Health 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 Two Million Dollars ($2,000,000.00), payable in
shares of common stock, par value $0.001 (“ Common
Stock ”), of the Company on March 17, 2010 (the
“ Maturity Date ”) in accordance with
the terms hereof. This Note is one of the “Notes”
issued pursuant to the Note and Warrant Purchase Agreement, dated
as of June 1, 2008 (as amended, modified or supplemented, the
“ Note and Warrant Purchase Agreement
”) between the Company and the Investor (as defined in the
Note and Warrant Purchase Agreement). Capitalized terms not
otherwise defined herein shall have the meaning set forth in the
Note and Warrant 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. Definitions . As
used in this Note, the following capitalized terms have the
following meanings: (a) “Adjusted
Closing Price” has the meaning given in
Section 2(c)(ii). (b)
“Base Amount” has the meaning given in
Section 2(c)(i).
(c) “Change in
Control” shall mean: (1) the consummation
of the sale, transfer, conveyance or other disposition (including
any merger, reorganization or consolidation) in one or a series of
related transactions of the voting equity securities of the Company
or a similar transaction (or transactions) such that immediately
following such transaction (or transactions) any
“person” or related “group” of
“persons” (as such terms are used in Sections
13(d) and 14(d)(2) of the Exchange Act) (other than the
Company or an Affiliate of the Company) beneficially owns more than
fifty percent (50%) of the total voting equity securities of the
Company outstanding immediately after such transaction;
(2) the sale or transfer of all or substantially all of the
assets of the Company to another entity which is not an Affiliate
of the Company; or (3) the consummation of a merger or
consolidation of the Company with any other entity that is not an
Affiliate of the Company, other than a merger or consolidation
which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power of the voting securities of
the Company or such surviving entity or its parent outstanding
immediately after such merger or consolidation. (d)
“Pre-Sale Trading Price” has the
meaning given in Section
2(f)(iii) (e) “Trading
Day” means (i) a day on which the Common Stock is
traded on a Trading Market (other than the OTC Bulletin Board), or
(ii) if the Common Stock is not listed on a Trading Market (other
than the OTC Bulletin Board), a day on which the Common Stock is
traded in the over-the-counter market, as reported by the OTC
Bulletin Board, or (iii) if the Common Stock is not quoted on any
Trading Market, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the Pink Sheets LLC (or any
similar organization or agency succeeding to its functions of
reporting prices); provided, that in the event that the Common
Stock is not listed or quoted as set forth in (i), (ii) and (iii)
hereof, then Trading Day shall mean a Business Day. 2.
Conversion . (a)
Automatic Conversion. The outstanding principal amount of
this Note shall automatically convert into shares of Common Stock
upon the earliest to occur of the following: (i) the
Maturity Date; or (ii) subject to Section
2(f) below, the date upon which the closing price of the
Common Stock on the Trading Market it is listed or quoted on is and
has been $3.00 per share (subject to adjustments in accordance with
Section 3 ) or more on each Trading Day during a
period of 60 consecutive calendar days preceding such date.
Upon such conversion of this Note, the Investor hereby agrees to
deliver the original of this Note (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) for cancellation; provided, however , that
upon satisfaction of the conditions set forth in this
Section 2(a) , this Note shall be deemed
converted and of no further force and effect, whether or not it is
delivered for cancellation as set forth in this sentence.
-2-
(b) Optional Conversion. Subject to
Sections 2(d) and 2(e) below, if this Note has not
been converted pursuant to Section 2(a) , then
all, but not less than all, of the outstanding principal amount of
this Note shall be convertible into shares of Common Stock at the
option of the Investor any time before the Maturity Date. Before
the Investor shall be entitled to convert this Note into shares of
Common Stock under this Section 2(b) , the
Investor shall surrender this Note, duly endorsed, at the office of
the Company and shall give written notice to the Company at its
principal corporate office, of the election to convert the same
pursuant to this Section 2(b) , and shall state
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 Investor a certificate for the
number of shares of Common Stock to which Investor shall be
entitled upo
|
