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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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$666,666
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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 Six Hundred Sixty-Six
Thousand Six Hundred and Sixty-Six ($666,666) Dollars, in lawful
money of the United States of America, together with interest
(calculated on the basis of a 360-day year) on the unpaid principal
balance from day-to-day remaining, computed until maturity at the
rate per annum which shall from day-to-day be equal to the
Applicable Rate.
1. DEFINITIONS. When used in
this Note, the following terms shall have the respective meanings
specified herein or in the section referred to:
“APPLICABLE RATE” means seven percent (7%) per annum,
except as otherwise provided in SECTION 4. “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 25%, except as otherwise adjusted pursuant to SECTION
8(e).
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“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. “DEFAULT
CONVERSION PRICE” means the Current Market Price less 45%,
except as otherwise set forth in any Other Note with a maturity
date prior to the Maturity Date and/or as adjusted pursuant to
SECTION 8(e). “EVENT OF DEFAULT” is defined in
SECTION 4 hereof. “EXCHANGE ACT” means the
Securities Exchange Act of 1934, as amended.
“INTEREST PAYMENT DATE” means (a) each January 1,
April 1, July 1 and October 1 of each calendar year during the term
of this Note, and (b) the Maturity Date. “LOAN
DOCUMENTS” means this Note, the Other Notes and all other
documents evidencing Obligation. “MATURITY DATE”
means December 10, 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. “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.
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2. PAYMENT.
(a) INTEREST AND PRINCIPAL PAYMENTS. The unpaid principal of,
and interest on, this Note shall be due and payable as follows:
(i) Interest, computed in accordance with
the terms hereof, shall be due and payable quarterly as it accrues
on each Interest Payment Date, commencing on April 1, 2009; and
(ii) the unpaid principal of, and interest on,
this Note shall be finally due and payable on the Maturity Date.
(b) VOLUNTARY PREPAYMENT. The Company reserves the
right, upon fifteen (15) Business Days' prior written notice to
Lender, which notice shall set forth the Current Market Price and
all supporting calculations thereof, to prepay the outstanding
principal balance of this Note, in whole or in part, at any time
and from time to time. All prepayments shall be made together with
payment of interest accrued on the amount of principal being
prepaid through the date of such prepayment.
(c) PAYMENTS GENERALLY. Except as otherwise provided
herein, all payments of principal of and interest on this Note
shall be made by the Company to Lender by fedwire or other
immediately available funds. Should the principal of, or any
installment of the principal of or interest on, 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, and
interest shall be payable with respect to such extension. Payments
made to Lender by the Company hereunder shall be applied first to
accrued interest 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.
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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 when due any
principal of, or interest upon, this Note or the Obligation 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). Upon the
occurrence of any Event of Default hereunder, then the holder
hereof may, at its option, (i) (A) declare the entire unpaid
principal balance and accrued interest upon the Obligation to be
immediately due and payable and such unpaid principal balance and
accrued interest upon the Obligation shall accrue interest
thereafter at the rate of twelve percent (12%) per annum, and (B)
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 principal balance and interest accrued on this Note
shall become immediately due and payable and such unpaid principal
balance and accrued interest upon the Obligation shall accrue
interest thereafter at the rate of twelve percent (12%) per annum;
or (ii) exercise its conversion rights arising upon an Event of
Default set forth in SECTION 8.
In addition, upon an Event of
Default, Lender shall have the right to nominate one additional
director 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;
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(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. (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 with customary industry standards in
maintaining and operating its assets, properties, and investments;
(ii) maintain complete and a
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