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NEITHER THIS NOTE NOR ANY SECURITIES WHICH MAY BE ISSUED
UPON CONVERSION HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR REGISTERED OR OTHERWISE QUALIFIED UNDER
ANY STATE OR OTHER SECURITIES LAW. NEITHER THIS NOTE NOR
ANY SUCH SECURITIES MAY BE SOLD OR OFFERED FOR SALE IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND
REGISTRATION OR OTHER QUALIFICATION UNDER ANY APPLICABLE STATE OR
OTHER SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION OR OTHER QUALIFICATION IS NOT
REQUIRED. CONVERTIBLE PROMISSORY NOTE
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$1,500,000
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December 10, 2008
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FOR VALUE RECEIVED, Sports Supplement Acquisition Group,
Inc., a Delaware corporation (the “COMPANY”), hereby
unconditionally promises to pay to the order of PROVIANT
TECHNOLOGIES, INC., a corporation organized under the laws of the
State of Illinois (“LENDER”), at 309 W. Hensley Rd.,
Champaign, Illinois 61826 or such other address given to the
Company by Lender, the principal sum of One Million Five Hundred
Thousand ($1,500,000) Dollars, in lawful money of the United States
of America, on the Maturity Date.
1. DEFINITIONS. When used in
this Note, the following terms shall have the respective meanings
specified herein or in the section referred to:
“BUSINESS DAY” means any day other than a Saturday,
Sunday, or other day on which a bank is authorized to be closed
under the laws of Illinois. “COMMON STOCK”
means the Common Stock, par value $0.001 per share, of the Company.
“COMPANY” means Sports Supplement Acquisition
Group, Inc. “CONVERSION PRICE” means the Current
Market Price less 50%, except as otherwise adjusted pursuant to
SECTIONS 8(d). 1
“CURRENT MARKET PRICE” means, when used with
respect to any security as of any date, the volume weighted average
trading price during the ninety (90) Trading Days determined by the
last sale price, regular way, or, in case no such sale takes place
on such date, the closing bid price, regular way, of such security
in either case as reported on the Nasdaq Global Market, or, if such
security is not listed or admitted to trading on the Nasdaq Global
Market, as reported on the Nasdaq SmallCap Market, or if such
security is not listed or admitted to trading on any national or
international securities exchange or the Nasdaq Global Market or
the Nasdaq SmallCap Market, the average of the high bid and low
asked prices of such security in the over-the-counter market as
reported by the National Association of Securities Dealers, Inc.
Automated Quotations System or such other system then in use or, if
such security is not quoted by any such organization, the average
of the closing bid and asked prices of such security furnished by
an New York Stock Exchange member firm selected by the Company. If
such security is not quoted by any such organization and no such
New York Stock Exchange member firm is able to provide such prices,
then the Current Market Price of such security shall be the fair
market value thereof as determined in good faith by the Board of
Directors of the Company without any discount for lack of
marketability or minority interest; provided, however, if Lender
disagrees with the Current Market Price determined by the Board of
Directors, Lender may appoint and shall pay for an appraiser to
establish the Current Market Price. Such appraiser shall
have free and full access to all corporate records such appraiser
shall require to reach its opinion. The appraiser shall
have 60 days from the event requiring the calculation of the
Current Market Price hereunder to complete such
appraisal. If the appraiser’s Current Market Price
is within ten percent (10%) of the Current Market Price determined
by the Board of Directors above, the Current Market Price shall be
the average of the Current Market Price determined by the Board of
Directors and the Current Market Price determined by Lender’s
appraiser. If the difference between the Current Market
Price determined by the Board of Directors and the Current Market
Price determined by Lender’s appraiser is greater than ten
percent (10%), the Current Market Price shall be determined by an
appraiser from a regionally-recognized arbitration service with
expertise in valuing such security agreed to and appointed by the
parties. Such appointed arbitrator shall determine the
Current Market Price by accepting and adopting either the Current
Market Price determined by the Board of Directors or the Current
Market Price determined by Lender’s appraiser.
“EVENT OF DEFAULT” is defined in SECTION 4 hereof.
“EXCHANGE ACT” means the Securities Exchange Act
of 1934, as amended. “LOAN DOCUMENTS” means this
Note, the Other Notes and all other documents evidencing
Obligation. “MATURITY DATE” means February 23,
2009. “NOTE” refers to this Convertible
Promissory Note. “OBLIGATION” shall mean all
indebtedness, liabilities, and obligations, of the Company arising
under this Note, the Other Notes and any other Loan Documents.
“OTHER NOTES” shall mean any Convertible
Promissory Note, other than this Note, issued by the Company to
Lender. “PERSON” means any individual,
corporation, limited liability company, partnership, joint venture,
association, joint-stock company, trust, charitable foundation,
unincorporated organization, government or any agency or political
subdivision thereof, or any other entity.
“SEC” means the Securities and Exchange
Commission and any successor thereof. 2
“TRADING DAY” means each Monday, Tuesday,
Wednesday, Thursday, and Friday, other than any day on which
securities are not traded on the applicable securities exchange or
in the applicable securities market.
2. PAYMENT.
(a) PRINCIPAL PAYMENTS. The unpaid principal
balance of this Note shall payable from time to time, but no more
frequently than weekly, as such funds become available to the
Company; provided, however, that an aggregate of at least Five
Hundred Thousand Dollars ($500,000) of the principal balance of
this Note shall be due and payable on or before January 15,
2009. The remaining unpaid principal balance of this
Note shall be finally due and payable on the Maturity Date.
(b) PAYMENTS GENERALLY. Except as otherwise
provided herein, all payments of principal of and interest, if any,
on this Note shall be made by the Company to Lender by
cashier’s check. Should this Note become due and payable on
any day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day. Payments made to
Lender by the Company hereunder shall be applied first to accrued
interest, if any, and then to principal.
3. WAIVER. The Company waives
presentment, demand, protest, notice of protest and non-payment, or
other notice of default, notice of acceleration and intention to
accelerate, or other notice of any kind, and agrees that its
liability under this Note shall not be affected by any renewal or
extension in the time of payment hereof, or in any indulgences, or
by any release or change in any security for the payment of this
Note, and hereby consents to any and all renewals, extensions,
indulgences, releases, or changes, regardless of the number of such
renewals, extensions, indulgences, releases, or changes.
4. EVENTS OF DEFAULT AND
REMEDIES. An “EVENT OF DEFAULT” shall exist hereunder
if any one or more of the following events shall occur and be
continuing: (a) the Company shall fail to pay the entire principal
balance of this Note on the Maturity Date and such failure shall
continue for five (5) Business Days after such payment became due;
or (b) the Company shall fail to perform any of the covenants or
agreements contained herein or in any other Loan Document and such
failure shall continue unremedied for thirty (30) days after
written notice thereof; or (c) any representation or warranty made
by the Company to Lender herein or in any other Loan Document shall
prove to be untrue or inaccurate in any material respect; or (d) an
event of default shall occur with respect to any Other Note
pursuant to its terms; or (e) the Company shall (1) apply for or
consent to the appointment of a receiver, trustee, intervener,
custodian, or liquidator of itself or of all or a substantial part
of its assets, (2) be adjudicated bankrupt or insolvent or file a
voluntary petition for bankruptcy or admit in writing that it is
unable to pay its debts as they become due, (3) make a general
assignment for the benefit of creditors, (4) file a petition or
answer seeking reorganization or an arrangement with creditors or
to take advantage of any bankruptcy or insolvency laws, or (5) file
an answer admitting the material allegations of, or consent to, or
default in answering, a petition filed against it in any
bankruptcy, reorganization, or insolvency proceeding, or take
corporate action for the purpose of effecting any of the foregoing;
or (f) an order, judgment, or decree shall be entered by any court
of competent jurisdiction or other competent authority approving a
petition seeking reorganization of the Company appointing a
receiver, trustee, intervener, or liquidator of the Company, or of
all or substantially all of its assets, and such order, judgment,
or decree shall continue unstayed and in effect for a period of
thirty (30) days; or (g) the dissolution or liquidation of the
Company; or (h) the Company shall default in the payment of any
indebtedness of such Company in excess of $250,000 individually or
in the aggregate or default shall occur in respect of any note or
credit agreement relating to any such indebtedness and such default
shall continue for more than the period of grace, if any, specified
therein; or (i) any final judgment(s) for the payment of money in
excess of the sum of $250,000 individually or in the aggregate
shall be rendered against the Company and such judgment(s) shall
not be satisfied or discharged at least ten (10) days prior to the
date on which any of the Company's assets could be lawfully sold to
satisfy such judgment(s). 3
Upon the occurrence of any Event of Default hereunder,
then the holder hereof may, at its option, (i) declare the entire
unpaid principal balance of the Obligation together with interest
accrued on the Obligation from the date of issuance of this Note at
the rate of twelve percent (12%) per annum to be immediately due
and payable, and (ii) pursue and enforce any of Lender's rights and
remedies available pursuant to this Note, the Other Notes, or any
applicable law or agreement; provided, however, in the case of any
Event of Default specified in PARAGRAPH (e) or (f) of this SECTION
4 with respect to the Company, without any notice to the Company or
any other act by Lender, the entire unpaid principal balance of the
Obligation together with interest accrued on the Obligation from
the date of issuance of this Note at the rate of twelve percent
(12%) per annum shall become immediately due and payable.
In addition, upon an Event of
Default, Lender shall have the right to nominate two additional
directors to the Board of Directors of the Company pursuant to that
certain Voting Agreement of even date herewith by and between the
Company and Lender.
5. REPRESENTATIONS AND
COVENANTS. (a) REPRESENTATIONS. The
Company represents and warrants to Lender that:
(i) The Company is duly
organized and in good standing under the laws of the state of its
incorporation, formation, or organization;
(ii) The Company has full power
and authority to enter into this Note and the other Loan Documents,
to execute and deliver the Loan Documents, and to incur the
obligations provided for in the Loan Documents, all of which has
been duly authorized by all necessary action.
(iii) the Loan Documents are the legal
and binding obligations of the Company, enforceable in accordance
with their respective terms; (iv)
neither the execution and delivery of this Note and the other Loan
Documents, nor consummation of any of the transactions herein or
therein contemplated, nor compliance with the terms and provisions
hereof or thereof, will contravene or conflict with any provision
of law, statute, or regulation to which the Company is subject or
any judgment, license, order, or permit applicable to the Company
or any indenture, mortgage, deed of trust, or other instrument to
which the Company may be subject; no consent, approval,
authorization, or order of any court, governmental authority, or
third party is required in connection with the execution, delivery,
and performance by the Company of this Note or any of the other
Loan Documents or to consummate the transactions contemplated
herein or therein. 4
(b) AFFIRMATIVE COVENANTS. Until
payment in full of the Obligation, the Company agrees and covenants
that the Company shall:
(i) conduct its business in an
orderly and efficient manner consistent with good business
practices and in accordance with all valid regulations, laws, and
orders of any governmental authority and will act in accordance
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