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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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$666,667
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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-Seven ($666,667) 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 35%,
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, 2011. “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 ope
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