SECURED DEMAND CONVERTIBLE PROMISSORY NOTEConvertible Promissory Note |
|
|
You are currently viewing: This Convertible Promissory Note involves
Dancing Bear Investments, Inc. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
Search Convertible Promissory Note by:
EXHIBIT
4.1
SECURED
DEMAND CONVERTIBLE PROMISSORY NOTE
$500,000Executed
at: Fort Lauderdale, Florida
Dated:
July 19, 2007
theglobe.com,
inc. a Delaware corporation (the "Company"), the principal office of which
is
located at 110 East Broward Boulevard, Suite 1400, Fort Lauderdale, Florida
33301, for value received, hereby promises to pay to Dancing Bear Investments,
Inc., a Florida corporation, or its permitted assigns (the "Holder"), the sum
of
Five Hundred Thousand Dollars ($500,000.00), or such lesser amount as shall
then
equal the outstanding principal amount hereof, together with interest thereon
at
the rate of ten percent (10%) per annum, on the terms and conditions set forth
hereinafter. This Note is one of several Notes issued in accordance with, and
is
subject to the provisions of, that certain Note Purchase Agreement between
the
Company and the Holder, dated on or about May 29, 2007 (the "Note Purchase
Agreement"). For purposes of this Note, the holders of the Notes representing
at
least a majority of the outstanding principal of all the Notes in the aggregate
issued pursuant to the Note Purchase Agreement are referred to herein as the
“Majority Holders”). Other defined terms used herein and not otherwise
specifically defined herein shall have the same meanings as set forth in the
Note Purchase Agreement.
The
following is a statement of the rights of the Holder and the conditions to
which
this Note is subject, and to which the Holder, by the acceptance of this Note,
agrees:
1. Principal
and Interest.
Except
as provided herein and in Section 5 hereof, all payments under this Note shall
be by cashier's check, wire transfer or other immediately available funds
payable in United States currency. The principal hereof shall be due and payable
five business days following any DEMAND for payment (the "Maturity Date"),
which
DEMAND may be made by the Holder at anytime. Accrued interest, at the rate
mentioned above, shall be due and payable on the Maturity Date.
2. Events
of Default.
Each of
the following events shall be deemed an Event of Default hereunder: (i) the
Company fails to timely pay all then outstanding principal and accrued interest
when due; (ii) the Company files a petition or action for relief under any
bankruptcy, insolvency or moratorium law or any other law for the relief of,
or
relating to, debtors, now or hereafter in effect, or makes any assignment for
the benefit of creditors or takes any action in furtherance of any of the
foregoing; (iii) an involuntary petition is filed against the Company (unless
such petition is dismissed or discharged within sixty (60) days) under any
bankruptcy statute now or hereafter in effect, or a custodian, receiver,
trustee, assignee for the benefit of creditors (or other similar official)
is
appointed to take possession, custody or control of any property of the Company;
or (iv) the Company defaults on any of its obligations or breaches any of its
representations, warranties or covenants in the Note Purchase Agreement or
the
Security Agreement and such breach remains uncured to the reasonable
satisfaction of the Majority Holders for a period of five (5) business days
after notice thereof from the Majority Holders (whom may elect to waive any
such
default or breach).
Upon
the
occurrence of an Event of Default hereunder, all unpaid principal, accrued
interest and other amounts owing hereunder shall: at the option of the Holder
in
the case of an Event of Default of the nature specified in clause (i) above;
automatically in the case of an Event of Default pursuant to clauses (ii) or
(iii) above; and at the option of the Majority Holders in the case of an Event
of Default pursuant to clause (iv) above, be immediately due, payable and
collectible by Holder pursuant to applicable law. Subject to the foregoing,
Holder shall have all rights and may exercise any remedies available to it
under
law, successively or concurrently. In addition, at any time or times during
which an Event of Default shall then exist or upon the maturity of this Note,
the interest rate under this Note shall be equal to the lesser of: (i) eighteen
percent (18%) per annum; or (ii) the maximum rate of interest permitted by
applicable law, and shall be due and payable ON DEMAND.
3. Security.
The
Company's obligations hereunder shall be secured by a security interest in
and
upon the "Collateral" (as defined in the Security Agreement) of the Company.
The
Company agrees to execute and deliver to the Holder and for the benefit of
all
Holders of the Notes, in form and substance reasonably satisfactory to Majority
Holders, a security agreement, financing statement and such other documents
as
the Majority Holders may reasonably require with regards to such security
interest.
4. Prepayment.
The
Company may not prepay this Note in whole or in part at any time prior to May
29, 2008, without the prior written consent of the Majority Holders. In
recognition of Holder's conversion rights pursuant to Section 5 hereof, such
consent may be withheld in the sole discretion of the Majority Holders. After
May 29, 2008, the Company may prepay this Note at any time upon at least fifteen
days prior written notice of the proposed date of prepayment; provided, however,
that the Holder may elect to convert all or a portion of this Note at any time
prior to such date of prepayment.
5. Conversion.
Voluntary
Conversion.
The
Holder of this Note has the right, at the Holder's option, to convert the
outstanding principal under this Note, in accordance with the provisions of
Section 5.2 hereof, in whole or in part, but in denominations of not less than
Ten Thousand Dollars ($10,000) (unless the entire principal balance of this
Note
is being converted), into fully paid and nonassessable shares of Common Stock
of
the Company. Subject to Section 6 below, the number of shares of Common Stock
into which the outstanding principal of this Note may be converted ("Conversion
Shares") shall be determined by dividing the principal amount for which
conversion is requested by the Conversion Price (as defined below) in effect
at
the time of such conversion. The initial “Conversion Price” shall be One Cent
($.01). Notwithstanding anything herein to the contrary, if, after taking into
account the number of shares of the Company’s Common Stock issuable upon
exercise or conversion of all outstanding securities of the Company (other
than
the Notes) that are, directly or indirectly, convertible or exercisable into
shares of Common Stock, the Company does not have authorized a sufficient number
of shares of Common Stock to permit conversion of this Note and each other
Note
in full, then this Note shall, subject to the terms hereof, be convertible
only
to the extent of the number of shares of Common Stock that are authorized and
available for issuance hereunder. Any portion of the principal amount of this
Note which is not convertible due to the application of the foregoing sentence
shall become subject to conversion hereunder at such time as the Company’s
shareholders authorize an amendment to the Company’s certificate of
incorporation authorizing a number of additional shares of Common Stock
sufficient to permit such conversion.
2
5.1 Conversion
Procedure.
Before
the Holder shall be entitled to convert this Note into shares of Common Stock,
it shall give written notice by mail, postage prepaid, to the Company at its
principal corporate office, of the election to convert the Note, and shall
state
therein the name or names in which the certificate for shares of Common Stock
are to be issued. A closing for such conversion shall be held at the offices
of
the Company on the fifth business day following the date of deposit of the
notice in the mail or such other date mutually acceptable to the Holder and
the
Company. At such closing the Company shall issue and deliver to the Holder
of
this Note a certificate or certificates (bearing such legends as are required
under applicable state and federal securities laws in the opinion of counsel
to
the Company) for the number of shares of Common Stock to which the Holder shall
be entitled as aforesaid, together with a check made payable to the Holder
in
the amount of any accrued interest on the principal amount converted to the
date
of such conversion, and the Holder shall surrender this Note. Such conversion
shall be deemed to have been made immediately prior to the close of business
on
the date of mailing of Holder's written notice of exercise (the "Effective
Date"), and the person or persons entitled to receive the shares of Common
Stock
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such shares of Common Stock as of such date.
5.2 Mechanics
of Conversion.
No
fractional shares of Common Stock shall be issued upon conversion of this Note.
In lieu of the Company issuing any fractional shares to the Holder upon the
conversion of this Note, the Company shall pay to the Holder the amount of
outstanding principal that is not so converted. If the conversion is for less
than the entire outstanding principal balance of this Note, then the Company
shall issue a replacement Note to the Holder representing the unconverted
principal balance.
6. Conversion
Price Adjustments.
6.1 Adjustments
for Subdivision, Dividends, Combinations
