This Note has
not been registered under the Securities Act of 1933, as amended
(the "1933 Act"), or under the provisions of any applicable state
securities laws, but has been acquired by the registered holder
hereof for purposes of investment and in reliance on statutory
exemptions under the 1933 Act, and under any applicable state
securities laws. This Note may not be sold, pledged, transferred or
assigned except in a transaction which is exempt under provisions
of the 1933 Act and any applicable state securities laws or
pursuant to an effective registration statement; and in the case of
an exemption, only if the Company has received an opinion of
counsel satisfactory to the Company that such transaction does not
require registration of this Note.
IFSA STRONGMAN,
INC.
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September __,
2006
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$[_______].00
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16% CONVERTIBLE PROMISSORY
NOTE
IFSA Strongman,
Inc. (the "Company"), for value received, hereby promises to pay to
[__________], or his registered assign (the "Holder") on September
__, 2007 (the "Maturity Date"), at the principal offices of the
Company, the principal sum of [_____________] (the “Initial
Principal Amount”) owed Holder on such date in such coin or
currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts,
and to pay interest on the outstanding principal sum hereof at the
rate of sixteen percent (16%) per annum (the "Note") and payable
monthly in arrears commencing October __, 2006. Principal shall be
payable on the Maturity Date in like coin or currency to the Holder
hereof at the office of the Company as hereinafter set forth,
provided that any payment otherwise due on a Saturday, Sunday or
legal Bank holiday may be paid on the following business day. In
the event that for any reason whatsoever any interest or other
consideration payable with respect to this Note shall be deemed to
be usurious by a court of competent jurisdiction under the laws of
any state governing the repayment hereof, then so much of such
interest or other consideration as shall be deemed to be usurious
shall be held by the holder as security for the repayment of the
principal amount hereof and shall otherwise be waived.
1.
Transfers of Note to
Comply with the 1933 Act
The Holder
agrees that this Note may not be sold, transferred, pledged,
hypothecated or otherwise disposed of except as follows: (1) to a
person whom the Note may legally be transferred without
registration and without delivery of a current prospectus under the
1933 Act with respect thereto and then only against receipt of an
agreement of such person to comply with the provisions of this
Section 1 with respect to any resale or other disposition of the
Note; or (2) to any person upon delivery of a prospectus then
meeting the requirements of the 1933 Act relating to such
securities and the offering thereof for such sale or disposition,
and thereafter to all successive assignees.
(a)
Optional
Prepayment. The
principal amount of this Note may be prepaid by the Company, in
whole or in part, but not withstanding the prepayment of any
principal prior to March __, 2007 the Company shall continue to
make interest payments to the Holder through March __, 2007 based
upon the Initial Principal Amount and thereafter shall only make
interest payments to the Holder based upon the amount of principal
then outstanding hereunder.
(b)
Optional
Prepayment. The Company hereby agrees that if at any time
from the date hereof the Company closes on a private placement
offering of its securities, obtains debt financing or earns
revenues prior to the Maturity Date, with gross proceeds to the
Company of at least $750,000, the principal of, and accrued
interest on, the Note shall become immediately due and payable in
cash in accordance with the terms hereof.
The Company
covenants and agrees that, so long as any principal of, or interest
on, this Note shall remain unpaid, unless the Holder shall
otherwise consent in writing, it will comply with the following
terms:
(a)
Reporting Requirements. The Company will furnish
to the Holder:
(i) as soon as
possible, and in any event within ten (10) days after obtaining
knowledge of the occurrence of (A) an "Event of Default," as
hereinafter defined, (B) an event which, with the giving of notice
or the lapse of time or both, would constitute an Event of Default,
or (C) a material adverse change in the condition or operations,
financial or otherwise, of the Company, taken as whole, the written
statement of the Chief Executive Officer or the Chief Financial
Officer of the Company, setting forth the details of such Event of
Default, event or material adverse change and the action which the
Company proposes to take with respect thereto;
(ii) promptly
after the sending or filing thereof, copies of all financial
statements, reports, certificates of its Chief Executive Officer,
Chief Financial Officer or accountants and other information which
the Company or any subsidiary sends to any holders (other than the
Notes) of its securities;
(iii) promptly
after the commencement thereof, notice of each action, suit or
proceeding before any court or other governmental authority or
other regulatory body or any arbitrator as to which there is a
reasonable possibility of a determination that would (A) materially
impact the ability of the Company or any subsidiary to conduct its
business, (B) materially and adversely affect the business,
operations or financial condition of the Company taken as a whole,
or (C) impair the validity or enforceability of the Notes or the
ability of the Company to perform its obligations under the
Notes.
(b)
Compliance with
Laws. The Company
will comply, in all material respects with all applicable laws,
rules, regulations and orders, except to the extent that
noncompliance would not have a material adverse effect upon the
business, operations or financial condition of the Company taken as
a whole.
(c)
Preservation of
Existence. The
Company will maintain and preserve, and cause each subsidiary, if
any, to maintain and preserve, its existence, and become or remain
duly qualified and in good standing in each jurisdiction in which
the failure to be so qualified would have a material adverse effect
on the business, operations or financial condition of the Company,
taken as a whole.
(d)
Maintenance of
Properties. The
Company will maintain and preserve, all of its properties which are
necessary in the proper conduct of its business in good working
order and condition, ordinary wear and tear excepted, and comply,
at all times with the provisions of all leases to which it is a
party as lessee or under which it occupies property, so as to
prevent any forfeiture or material los
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