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EXHIBIT 10.3
THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT IN ACCORDANCE
WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE
SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING
TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT.
THIS NOTE MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT
AS A CONDITION PRECEDENT TO THE SALE, PLEDGE, HYPOTHECATION OR ANY
OTHER TRANSFER OF ANY INTEREST IN ANY OF THE SECURITIES REPRESENTED
BY THIS NOTE.
ORGANIC TO GO FOOD CORPORATION
CONVERTIBLE PROMISSORY NOTE
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$[_______________]
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[____________,
200_]
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Seattle,
Washington
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FOR
VALUE RECEIVED, Organic To Go Food Corporation, a Delaware
corporation (the “
Company ”)
promises to pay to W.Health L.P., a limited partnership organized
under the laws of the Bahamas (“
Investor ”),
or its registered assigns, in lawful money of the United States of
America the principal sum of [__________] Dollars ($[_________]),
payable in shares of common stock, par value $0.001 (“
Common Stock ”),
of the Company on [to insert a date that is 21 months after the
Initial Closing Date] (the “
Maturity Date ”)
in accordance with the terms hereof. This Note is one of the
“Notes” issued pursuant to the Note and Warrant
Purchase Agreement, dated as of June 1, 2008 (as amended, modified
or supplemented, the “
Note and Warrant Purchase Agreement ”)
between the Company and the Investor (as defined in the Note and
Warrant Purchase Agreement).
Capitalized
terms not otherwise defined herein shall have the meaning set
forth in the Note and Warrant Purchase Agreement.
The
following is a statement of the rights of Investor and the
conditions to which this Note is subject, and to which
Investor, by the acceptance of this Note, agrees:
1.
Definitions .
As used in this Note, the following capitalized terms have the
following meanings:
(a)
“Adjusted Closing Price” has
the meaning given in
Section 2(c)(ii).
(b)
“Base Amount” has
the meaning given in
Section 2(c)(i).
(c)
“Change in Control” shall
mean: (1) the consummation of the sale, transfer,
conveyance or other disposition (including any merger,
reorganization or consolidation) in one or a series of related
transactions of the voting equity securities of the Company or a
similar transaction (or transactions) such that immediately
following such transaction (or transactions) any
“person” or related “group” of
“persons” (as such terms are used in Sections
13(d) and 14(d)(2) of the Exchange Act) (other than the
Company or an Affiliate of the Company) beneficially owns more than
fifty percent (50%) of the total voting equity securities of the
Company outstanding immediately after such transaction;
(2) the sale or transfer of all or substantially all of the
assets of the Company to another entity which is not an Affiliate
of the Company; or (3) the consummation of a merger or
consolidation of the Company with any other entity that is not an
Affiliate of the Company, other than a merger or consolidation
which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power of the voting securities of
the Company or such surviving entity or its parent outstanding
immediately after such merger or consolidation.
(d)
“Pre-Sale Trading Price” has
the meaning given in
Section
2(f)(iii)
(e)
“Trading Day” means
(i) a day on which the Common Stock is traded on a Trading Market
(other than the OTC Bulletin Board), or (ii) if the Common Stock is
not listed on a Trading Market (other than the OTC Bulletin Board),
a day on which the Common Stock is traded in the over-the-counter
market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on any Trading Market, a day on which
the Common Stock is quoted in the over-the-counter market as
reported by the Pink Sheets LLC (or any similar organization or
agency succeeding to its functions of reporting prices); provided,
that in the event that the Common Stock is not listed or quoted as
set forth in (i), (ii) and (iii) hereof, then Trading Day shall
mean a Business Day.
2.
Conversion
.
(a)
Automatic Conversion. The
outstanding principal amount of this Note shall automatically
convert into shares of Common Stock upon the earliest to occur of
the following:
(i)
the
Maturity Date; or
(ii)
subject
to
Section 2(f) below,
the date upon which the closing price of the Common Stock on the
Trading Market it is listed or quoted on is and has been $3.00 per
share (subject to adjustments in accordance with
Section 3 )
or more on each Trading Day during a period of 60 consecutive
calendar days preceding such date.
Upon
such conversion of this Note, the Investor hereby agrees to
deliver the original of this Note (or a notice to the effect
that the original Note has been lost, stolen or destroyed and
an agreement acceptable to the Company whereby the holder
agrees to indemnify the Company from any loss incurred by it
in connection with this Note) for cancellation;
provided, however ,
that upon satisfaction of the conditions set forth in this
Section 2(a) ,
this Note shall be deemed converted and
of
no further force and effect, whether or not it is delivered
for cancellation as set forth in this sentence.
(b)
Optional Conversion. Subject
to
Sections 2(d) and 2(e) below,
if this Note has not been converted pursuant to
Section 2(a) ,
then all, but not less than all, of the outstanding principal
amount of this Note shall be convertible into shares of Common
Stock at the option of the Investor any time before the Maturity
Date. Before the Investor shall be entitled to convert this Note
into shares of Common Stock under this
Section 2(b) ,
the Investor shall surrender this Note, duly endorsed, at the
office of the Company and shall give written notice to the Company
at its principal corporate office, of the election to convert the
same pursuant to this
Section 2(b) ,
and shall state the name in which the certificate for shares of
Common Stock are to be issued. The Company shall, as soon as
practicable thereafter, issue and deliver at such office to
Investor a certificate for the number of shares of Common Stock to
which Investor shall be entitled upon conversion (bearing such
legends as are required by the Note and Warrant Purchase Agreement
and applicable
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