EXHIBIT D
CONVERTIBLE PROMISSORY NOTE
(The “Note”)
FOR VALUE RECEIVED, the undersigned,
("Borrower") promises to pay to Catino, SA, ("Lender"), with an
address of Aquilino de la Guardia 8, P.O. Box
0823-02435, Panama, Republic of Panama, or at such place
or places as Lender may designate, the principal sum of Four
Million ($4,000,000) Dollars, without defalcation or discount, for
value received, with interest thereon at the rate set forth below,
all in lawful money of the United States (collectively, the
"Loan).
1.
Term. The term of
this Loan (the "Term") shall be for eighteen (18)
months.
2.
Interest . Interest will be charged and accrue on
that part of outstanding principal which has not been paid at the
rate of twelve percent (12 %) per annum (the
“Rate”). Interest will be charged beginning
on the date Borrower receives all of the principal and will
continue until the full amount of principal Borrower has received
has been paid.
3.
Payments
. Payments shall be payable at Aquilino de la Guardia
8PO Box 0823-02435 Panama, Republic of Panama, or at such other
place as the Lender may designate, in writing, and shall be repaid
as follows:
Subject to the provisions contained
in paragraph 4, the Loan shall be repaid at the end of eighteen
(18) months. Payment shall be due and payable on the
23rd day of November 2009 which final payment shall consist of all
unpaid principal and any interest which shall have accrued
thereon.
4.
Conversion.
(a)
Merger and Acquisition . On consummation of a
merger with a publicly held company, the Borrower will cause its
successor company to assume the Borrower’s obligations under
this Note. This Note will not be convertible prior to
such assumption and on conversion this Note will be convertible
into common stock of the public company.
(b)
Conversion . In the
event the Borrower consummates a merger with a publically held
company, the entire principal and accrued interest outstanding on
this Note shall be converted (the “Exchange
Conversion”) into the successor company’s equity
securities immediately upon consummation of such merger.
Contemporaneous with the Exchange Conversion, the entire
principal amount of this Note then outstanding, together with the
accrued and unpaid interest thereon, will be converted
automatically into shares of common stock of the merged public
company at the rate of one share for each $1.00 of principal and
interest; provided, that there are not more than 31,500,000 shares
of the merged public company then outstanding. In the event that
there are more than 31,500,000 shares of the merged public company
then outstanding, the conversion price shall be reduced by a ratio
equivalent to 31,500,000 divided by the number of shares then
actually outstanding. The issuance of
such shares upon such conversion shall be upon the terms and
subject to the conditions applicable to the merger. Upon completion
of the Exchange Conversion, all Collateral (as herein defined)
shall be released.
5.
Failure of Merger
. In the event that Borrower shall not
consummate a merger as described in paragraph 4, within
eighteen (18) months of issuance of the Note, then principal and
accrued interest with respect to the Note will immediately become
due and payable, and the Lender shall be entitled to an additional
fee in the amount of ten (10%) percent of the then outstanding
principal amount of the Note. Alternatively, Lender
shall have the option, to be exercised at Lender’s sole
discretion, of retaking the Collateral in exchange for the
Note
6.
Late Charges . Borrower shall
pay to Lender a late charge of five percent (5%) of any payment not
received by Lender within fifteen (15) calendar days after the
payment is due. The imposition or collection of this fee
shall not however constitute a waiver of any default or demand by
Lender.
7.
Events of Default
. At the option of Lender, upon the occurrence of any of
the following events of default ("Events of Default"), the Borrower
will be in default ("Default"):
(a) Nonpayment
of any amount due either under this Note.
