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Exhibit 10.23
SECURED CONVERTIBLE NOTE AND AGREEMENT
$200,000.00
MAXMILLIAN PARTNERS LLC
April 8, 2003
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD,
TRANSFERRED,
PLEDGED, HYPOTHECATED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE
STATE
SECURITIES LAWS OR THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION UNDER
SAID ACT.
INVESTMENT IN THE NOTE HEREIN IS SPECULATIVE AND INVOLVES A HIGH
DEGREE OF
RISK. THE COMPANY IS IN ITS DEVELOPMENT STAGE, HAS NO HISTORY OF
REVENUES,
EARNINGS OR SIGNIFICANT OPERATIONS, AND IS SUBJECT TO ALL THE
RISKS INHERENT IN
A NEW BUSINESS ENTERPRISE. NO INVESTMENT IN THE NOTES SHOULD BE
MADE BY ANY
PERSON WHO IS NOT IN A POSITION TO LOSE THE ENTIRE AMOUNT OF
SUCH INVESTMENT.
RECITALS
WHEREAS, Maxmillian Partners LLC (the "Borrower"), a Delaware
limited
liability company, operating pursuant to a certain Amended and
Restated Limited
Liability Company Agreement, dated as of September 24, 2002 (the
"Operating
Agreement"); and
WHEREAS, Borrower requires short-term working capital in
connection with
current operations, and Nexcomm International Beverage, LLC, a
current unit
holder of the Company ("Holder") has agreed to lend to Borrower
$200,000, upon
the terms stated herein, including without limitation Holders'
right, but not
the obligation, prior to repayment, to convert all, or such part
as Holder
shall elect, of the principal amount due hereunder, together
with the interest
then accrued thereon, into additional units of the Company
issued in connection
with any subsequent capital financing of the Company (a
"Financing"), or such
other equity securities, as shall be sold by Borrower in
connection with the
completion of the Financing, if any, upon the same terms as are
offered to
investors generally. Holder shall be issued warrants for units
in the Borrower
("Principal Warrants"), together with certain contingent
warrants to be issued
in the event of a default hereunder ("Default Warrants", and
together with the
Financing Warrants, referred to herein and therein as the
"Warrants"), all in
accordance with the terms of the Convertible Note Warrant
Agreement ("Warrant
Agreement"), of even date herein
<PAGE>
FOR VALUE RECEIVED, MAXMILLIAN PARTNERS LLC, a Delaware
limited
liability company, having a principal place of business at 372
Danbury Road,
Suite 163, Wilton, Connecticut (the "Borrower"), promises to pay
to NEXCOMM
INTERNATIONAL BEVERAGE, LLC, (the "Holder") at the offices of
the Holder located
in Southport, Connecticut, or at such other place as Holder
shall designate, the
principal sum of Two Hundred Thousand and 00/100 Dollars
($200,000.00) or, if
then prepaid in part, the outstanding principal amount, on
September 8, 2003
("Expiration Date"), together with interest accrued upon the
outstanding
principal amount advanced hereunder from time to time,
calculated on the basis
of a 360-day year for the actual number of days elapsed, at the
rate of eight
(8%) percent (Interest"), from the date of this Secured
Convertible Note and
Agreement (the "Note"),until the Expiration Date. In no event
shall the Interest
hereunder exceed the maximum rate permitted by applicable law.
Any payment in
excess of the maximum rate shall be deemed a prepayment of
principal. Each
payment shall be applied first to the payment of Interest and
then to the
payment of principal. In addition to the other remedies
available to Holder
herein, and the Default Adjustment set forth in the Warrant
Agreement issued by
Borrower to Holder in connection herewith, in the event of
default, the Interest
applicable to this Note shall be 3% above that rate herein,
before as well as
after judgment, order or other determination. The principal
amount of this Note
shall be advanced upon the request of the Borrower, and at the
sole discretion
of the Holder in accordance with the conditions herein. The
proceeds of this
Note shall be used for normal short-term working capital needs
of the Borrower.
ARTICLE ONE
PREPAYMENT
This Note shall not without the prior written consent of the
Holder, be
subject to prepayment in whole or in part by Borrower, at any
time prior to the
earlier of (i) the date on which the Holder waives, releases or
terminates its
option to convert this Note into the equity securities of the
Company as set
forth hereinbelow, and (ii) the Expiration Date, it being the
intention of the
parties that this Note shall either be (A) paid in full with
Interest thereon
at the Expiration Date, or (B) subject to Holder's prior demand
on account of
default, converted to units of the Company upon the date of the
closing of any
Financing, , upon the terms more fully set forth in ARTICLE TWO
below
("Conversion Units").
ARTICLE TWO
CONVERSION RIGHTS
2.1 Conversion. At any time prior to the Expiration Date, in the
event
Borrower shall propose to complete a Financing, Holder shall
have the right,
exercisable upon written notice to Borrower, to convert in whole
or in part,
any outstanding principal amount hereunder together with any and
all unpaid
Interest accrued thereon (the "Obligation") into the Units
offered by Borrower
in such Financing, upon such terms as are offered to the
investors in the
Financing generally.
<PAGE>
2.2 Conversion Mechanics. In the event Borrower shall intend to
complete
a Financing prior to the Expiration Date, and shall prepare any
term sheet for
such purpose at any time prior to the Expiration Date, Borrower
shall provide
Holder with written notice of the terms and other particulars
pertaining to such
Financing, whereupon at any time on or prior to the closing date
of such
Financing (after all applicable extensions provided in the Term
Sheet), Holder
shall have the right, exercisable within by Borrower upon notice
to Borrower at
any time prior to repayment of this Note and the date of closing
of such
Financing, to convert, in whole or in part, the amount then
representing the
Obligation, into such equity securities as are sold or issued by
Borrower in
connection with the Financing, and otherwise upon the terms made
part of the
offering thereof.
ARTICLE THREE
EVENTS OF DEFAULT/SECURITY
3.1 Default. In the event Borrower shall: (a) fail to pay any
amount of
the principal or accrued Interest hereupon as same shall become
due and
payable; (b) breach any of the material covenants or any
representation or
warranty of Borrower as set forth herein or in the Warrant
Agreement issued in
connection herewith; or (c) any default by Maxmillians Mixers
LLC or Drinks
Americas, Inc. (the "Guarantors") pursuant to the terms of the
Guaranties or
the Security Agreements delivered by them as security for the
Obligations
hereunder, then at the option of the Holder hereof, and in
addition to all
other remedies at law or in equity, including without
limitation, Holder's
right to exercise its security interest in accordance with the
provisions of
the Article 9 of the Uniform Commercial Code of the State of
Connecticut, all
amounts of principal and interest the
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