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EXHIBIT 4.13.17
THIS NOTE (THE "NOTE") AND THE COMMON
SHARES ISSUABLE UPON CONVERSION OF THIS
NOTE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS. THIS NOTE AND
THE COMMON SHARES ISSUABLE UPON
CONVERSION OF THIS NOTE MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS
NOTE UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO EPIXTAR
CORP. AND/OR VOXX CORPORATION, AS
APPLICABLE, THAT SUCH REGISTRATION IS NOT
REQUIRED.
SECURED CONVERTIBLE TERM NOTE
FOR VALUE RECEIVED, EPIXTAR CORP., a Florida corporation ("EPXR"),
and
VOXX CORPORATION, a Florida corporation
("VOXX") (EPXR and VOXX, collectively,
the "BORROWER"), jointly and severally
hereby promise to pay to Sands Brothers
Venture Capital III LLC (the "HOLDER") or
its registered assigns or successors
in interest the sum of One Million Two
Hundred Thousand Dollars ($1,200,000),
together with any accrued and unpaid
interest hereon, on April 29, 2008 (the
"MATURITY DATE") if not sooner paid.
Capitalized terms used herein without definition shall have the
meanings ascribed to such terms in that
certain Securities Purchase Agreement
dated as of the date hereof between the
Borrower and the Holder (the "PURCHASE
AGREEMENT").
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The following terms shall apply to this
Note:
ARTICLE I
INTEREST & AMORTIZATION
1.1 Interest
Rate. Subject to Sections 4.11 and 5.6 hereof,
interest payable on this Note shall accrue
at a rate per annum (the "Interest
Rate") equal to the "prime rate" published
in The Wall Street Journal from time
to time, plus two percent (2.00%). The
prime rate shall be increased or
decreased as the case may be for each
increase or decrease in the prime rate in
an amount equal to such increase or
decrease in the prime rate; each change to
be effective as of the day of the change in
such rate. Interest shall be (i)
calculated on the basis of a 360 day year
and payable monthly, in arrears,
commencing on June 1, 2005 and on the first
business day of each consecutive
calendar month thereafter until the
Maturity Date (and on the Maturity Date),
whether by acceleration or otherwise (each,
a "REPAYMENT DATE").
1.2 Minimum
Monthly Principal Payments. Amortizing payments of the
aggregate principal amount outstanding
under this Note at any time (the
"PRINCIPAL AMOUNT") shall begin on November
1, 2005 and shall recur on the first
business day of each succeeding month
thereafter until the Maturity Date (each,
an "AMORTIZATION DATE"). Subject to Article
3 below, beginning on the first
Amortization Date, the Borrower shall make
monthly payments to the Holder on
each Repayment Date, each in the amount of
$28,571.43 (the "MONTHLY PRINCIPAL
AMOUNT"), together with any accrued and
unpaid interest to date on such portion
of the Principal Amount (as defined below)
plus any and all other amounts which
are then owing under this Note, the
Purchase Agreement or any other Related
Agreement but have not been paid (the
Monthly Principal Amount, together with
such accrued and unpaid interest and such
other amounts, collectively, the
"MONTHLY AMOUNT"). Any Principal Amount
that remains outstanding on the Maturity
Date shall be due and payable on the
Maturity Date.
ARTICLE II
CONVERSION REPAYMENT
2.1 Payment of
Monthly Amount in Cash or Common Stock. (a) If the
Monthly Amount is required to be paid in
shares of Common Stock (as defined
below) pursuant to Section 2.1(b), each
month by the fifth (5th) business day
prior to each Amortization Date (the
"NOTICE DATE"), the Holder shall, subject
to Section 2.2 below and the other
provisions of this Note, deliver to Borrower
a written notice in the form of Exhibit B
attached hereto converting the Monthly
Amount payable on the next Amortization
Date or Repayment Date, as the case may
be, into freely tradable unrestricted
shares of common stock of EPXR ("EPXR
Common Stock") or, following the
satisfaction of each of the conditions set
forth in clause (i) of Section 2.2 below,
into freely tradable unrestricted
shares of common stock of VOXX ("VOXX
Common Stock") (EPXR Common Stock and VOXX
Common Stock, collectively, the "Common
Stock")(each, a "REPAYMENT NOTICE"). If
a Repayment Notice is not delivered by the
Holder on or before the applicable
Notice Date for such Amortization Date (or
is not required to be delivered in
accordance with Section 2.1(b)), then the
Borrower shall pay the Monthly Amount
due on such Amortization Date in cash. Any
portion of the Monthly Amount paid in
cash on an Amortization Date or Repayment
Date, as the case may be, shall be
paid to the Holder in an amount equal to
102% of the principal portion of the
Monthly Amount otherwise due and owing to
Holder on such Amortization Date or
Repayment Date. If the Holder converts all
or a portion of the Monthly Amount in
shares of Common Stock as provided herein,
the number of such shares to be
issued by the Borrower to the Holder on
such Amortization Date or Repayment
Date, as the case may be, shall be the
number determined by dividing (x) the
portion of the Monthly Amount to be paid in
shares of Common Stock, by (y) the
then applicable Fixed Conversion Price. For
purposes hereof, the "FIXED
CONVERSION PRICE" shall, subject to further
adjustment as provided herein, mean
(x) in the case of a conversion into EPXR
Common Stock, $1.00 and (y) in the
case of a conversion into VOXX Common Stock
on or after the date of the
consummation of an initial public offering
of the VOXX Common Stock (the "VOXX
IPO Date"), a price equal to 85% of the
offering price of the VOXX Common Stock
on the VOXX IPO Date (after giving effect
thereto).
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(b) Monthly
Amount Conversion Guidelines. Subject to Sections
2.1(a), 2.2, and 3.2 hereof, the Holder
shall convert all or a portion of the
Monthly Amount due on each Repayment Date
in shares of Common Stock if the
average closing price of the Common Stock
as reported by Bloomberg, L.P. on the
Principal Market for the five (5) trading
days immediately preceding such
Repayment Date was greater than or equal to
110% of the Fixed Conversion Price,
provided, however, that such conversions
shall not exceed twenty five percent
(25%) of the aggregate dollar trading
volume of the Common Stock for the five
(5) day trading period immediately
preceding delivery of a Notice of Conversion
to the Borrower. Any part of the Monthly
Amount due on a Amortization Date or
Repayment Date, as the case may be, that
the Holder has not converted into
shares of Common Stock shall be paid by the
Borrower in cash on such
Amortization Date or Repayment Date. Any
part of the Monthly Amount due on such
Amortization Date or Repayment Date which
must be paid in cash (as a result of
the closing price of the Common Stock on
one or more of the five (5) trading
days preceding the applicable Amortization
Date or Repayment Date being less
than 110% of the Fixed Conversion Price)
shall be paid in cash at the rate of
102% of the Monthly Amount otherwise due on
such Amortization Date or Repayment
Date, within three (3) business days of the
applicable Amortization Date or
Repayment Date.
2.2 No
Effective Registration. Notwithstanding anything to the
contrary herein, unless the Holder, in its
sole discretion, shall request
otherwise, none of the Borrower's
obligations to pay the Monthly Amount to the
Holder may be converted into VOXX Common
Stock or EPXR Common Stock unless and
until (i) in the case of conversion into
VOXX Common Stock, either (I) (a) VOXX
shall have consummated an initial public
offering, (b) VOXX Common Stock shall
be publicly traded on a nationally
recognized exchange; and (c) the shares
underlying the conversion of this Note into
VOXX Common Stock pursuant to the
terms hereof shall have been registered on
an effective, current Registration
Statement (as defined in the Registration
Rights Agreement) or (II) an exemption
from registration of the EPXR Common Stock
(with respect to the resale of such
common stock) is available to pursuant to
Rule 144 of the Securities Act; (ii)
in the case of conversion into EPXR Common
Stock, (a) the shares underlying the
conversion of this Note into EPXR Common
Stock pursuant to the terms hereof
shall have been registered on an effective,
current Registration Statement; or
(b) an exemption from registration of the
EPXR Common Stock (with respect to the
resale of such common stock) is available
to pursuant to Rule 144 of the
Securities Act and (III) in each of the
foregoing cases, no Event of Default
hereunder or under any Related Agreement
exists and is continuing, unless such
Event of Default is cured within any
applicable cure period or is otherwise
waived in writing by the Holder in whole or
in part at the Holder's option.
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2.3 Optional
Redemption in Cash. The Borrower will have the option
of prepaying this Note ("OPTIONAL
REDEMPTION") by paying to the Holder a sum of
money equal to one hundred thirty percent
(130%) of the outstanding principal
amount of this Note at the time of
prepayment, together with accrued but unpaid
interest thereon and any and all other sums
due, accrued or payable to the
Holder arising under this Note, the
Purchase Agreement or any Related Agreement
(the "REDEMPTION AMOUNT") outstanding on
the day written notice of redemption
(the "NOTICE OF REDEMPTION") is given to
the Holder. The Notice of Redemption
shall specify the date for such Optional
Redemption (the "REDEMPTION PAYMENT
DATE") which date shall be seven (7)
business days after the date of the Notice
of Redemption (the "REDEMPTION PERIOD"). A
Notice of Redemption shall not be
effective with respect to any portion of
this Note for which the Holder has a
pending election to convert pursuant to
Section 3.1, or for conversions
initiated or made by the Holder pursuant to
Section 3.1 during the Redemption
Period. The Redemption Amount shall be
determined as if such Holder's conversion
elections had been completed immediately
prior to the date of the Notice of
Redemption. On the Redemption Payment Date,
the Redemption Amount must be paid
in good funds to the Holder. In the event
the Borrower fails to pay the
Redemption Amount on the Redemption Payment
Date as set forth herein, then such
Redemption Notice will be null and
void.
ARTICLE III
CONVERSION RIGHTS
3.1.
Holder's Conversion Rights. The Holder shall have the right,
but not the obligation, to convert at any
time all or any portion of the then
aggregate outstanding principal amount of
this Note, together with interest and
fees due hereon, into shares of Common
Stock subject to the terms and conditions
set forth in this Article III. The Holder
may exercise such right by delivery to
the Borrower of a written notice of
conversion not less than one (1) day prior
to the date upon which such conversion
shall occur.
73.5
3.2 This
Section left intentionally blank.
73.6
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73.7
3.3 Mechanics
of Holder's Conversion. (a) In the event
that the Holder elects to convert this Note
into Common Stock, the Holder shall
give notice of such election by delivering
an executed and completed notice of
conversion ("NOTICE OF CONVERSION") to the
Borrower and such Notice of
Conversion shall provide a breakdown in
reasonable detail of the Principal
Amount, accrued interest and fees being
converted. On each Conversion Date (as
hereinafter defined) and in accordance with
its Notice of Conversion, the Holder
shall make the appropriate reduction to the
Principal Amount, accrued interest
and fees as entered in its records and
shall provide written notice thereof to
the Borrower within two (2) business days
after the Conversion Date. Each date
on which a Notice of Conversion is
delivered or telecopied to the Borrower in
accordance with the provisions hereof shall
be deemed a Conversion Date (the
"CONVERSION DATE"). A form of Notice of
Conversion to be employed by the Holder
is annexed hereto as Exhibit A.
73.8
(b) Pursuant
to the terms of the Notice of Conversion,
the Borrower will issue instructions to the
transfer agent accompanied by an
opinion of counsel within two (2) business
day of the date of the delivery to
Borrower of the Notice of Conversion and
shall cause the transfer agent to
transmit the certificates representing the
Conversion Shares to the Holder by
crediting the account of the Holder's
designated broker with the Depository
Trust Corporation ("DTC") through its
Deposit Withdrawal Agent Commission
("DWAC") system within three (3) business
days after receipt by the Borrower of
the Notice of Conversion (the "DELIVERY
DATE"). In the case of the exercise of
the conversion rights set forth herein the
conversion privilege shall be deemed
to have been exercised and the Conversion
Shares issuable upon such conversion
shall be deemed to have been issued upon
the date of receipt by the Borrower of
the Notice of Conversion. The Holder shall
be treated for all purposes as the
record holder of such Common Stock, unless
the Holder provides the Borrower
written instructions to the contrary.
3.4 Conversion
Mechanics.
(a) The number
of shares of Common Stock to be issued upon each
conversion of this Note shall be determined
by dividing that portion of the
principal and interest and fees to be
converted, if any, by the then applicable
Fixed Conversion Price. In the event of any
conversions of outstanding principal
amount under this Note in part pursuant to
this Article III, such conversions
shall be deemed to constitute conversions
of outstanding principal amount
applying to Monthly Amounts for the
remaining Amortization Dates in
chronological order.
(b) The Fixed
Conversion Price and number and kind of shares or
other securities to be issued upon
conversion is subject to adjustment from time
to time upon the occurrence of certain
events, as follows:
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A.
Stock Splits, Combinations and Dividends. If the shares of
Common Stock are subdivided or combined
into a greater or smaller number of
shares of Common Stock, or if a dividend is
paid on the Common Stock in shares
of Common Stock, the Fixed Conversion Price
shall be proportionately reduced in
case of subdivision of shares or stock
dividend or proportionately increased in
the case of combination of shares, in each
such case by the ratio which the
total number of shares of Common Stock
outstanding immediately after such event
bears to the total number of shares of
Common Stock outstanding immediately
prior to such event.
B.
During the period the conversion right exists, the Borrower
will reserve from its authorized and
unissued Common Stock a sufficient number
of shares to provide for the issuance of
Common Stock upon the full conversion
of this Note. The Borrower represents that
upon issuance, such shares will be
duly and validly issued, fully paid and
non-assessable. The Borrower agrees that
its issuance of this Note shall constitute
full authority to its officers,
agents, and transfer agents who are charged
with the duty of executing and
issuing stock certificates to execute and
issue the necessary certificates for
shares of Common Stock upon the conversion
of this Note.
C.
Share Issuances. Subject to the provisions of this Section
3.4, if the Borrower shall (x) in the case
of EPXR Common Stock, at any time
prior to the conversion or rep
