Attached files
| file | filename |
|---|---|
| 10-Q - HK BATTERY TECHNOLOGY INC | v193833_10q.htm |
| EX-10.3 - HK BATTERY TECHNOLOGY INC | v193833_ex10-3.htm |
| EX-32.1 - HK BATTERY TECHNOLOGY INC | v193833_ex32-1.htm |
| EX-31.1 - HK BATTERY TECHNOLOGY INC | v193833_ex31-1.htm |
| EX-10.1 - HK BATTERY TECHNOLOGY INC | v193833_ex10-1.htm |
EXHIBIT
10.2
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE
SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO
THE COMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (C) IN COMPLIANCE WITH RULE 144 OR 144A
THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS, (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (E) IN A
TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE,
FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION,
IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY. HEDGING
TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE U.S. SECURITIES ACT.
10%
SECURED CONVERTIBLE PROMISSORY NOTE
NEVADA
GOLD HOLDINGS, INC.
DUE
May14, 2011
|
Original
Issue Date: May 14, 2010
|
US$50,000
|
This
Secured Convertible Promissory Note is one of a series of duly authorized and
issued secured convertible promissory notes of NEVADA GOLD HOLDINGS, INC., a
Nevada corporation (the “Company”), designated
its 10% Secured Convertible Promissory Notes due May 14, 2011 (the “Note”), issued to
MLF GROUP LLC (together
with its permitted successors and assigns, the “Holder”) in
accordance with exemptions from registration under the Securities Act of 1933,
as amended (the “Securities Act”),
pursuant to a Securities Purchase Agreement, dated May 14, 2010 (the “Securities Purchase
Agreement”) between the Company and the Holder. Capitalized
terms not otherwise defined herein shall have the meanings ascribed to them in
the Securities Purchase Agreement.
Article
I.
Section
1.01 Principal and
Interest. (a) For value received, the Company hereby promises
to pay to the order of the Holder, in lawful money of the United States of
America and in immediately available funds the principal sum of FIFTY THOUSAND DOLLARS
($50,000) on May 14, 2011 (the “Maturity
Date”).
(b) Except
as otherwise provided for in Section 3.02 of this Note, this Note shall bear
interest from the date hereof at the rate of ten percent (10%) per annum until
paid in full, payable on the Maturity Date.
(c) On
the Maturity Date, the entire unpaid principal amount and accrued but unpaid
interest thereon shall be paid to the Holder, unless this Note is repaid earlier
in accordance with Section 1.02 herein or converted in accordance with Section
1.03 herein.
Section
1.02 Prepayment. The
Company shall have the right to prepay the Note at any time and from time to
time, in whole or in part, at 100% of the principal amount to be prepaid plus
accrued but unpaid interest thereon to the date of prepayment.
Section
1.03 Mandatory
Conversion. Upon the closing of any securities offering or
other financing resulting in gross cash proceeds to the Company in excess of
five hundred thousand dollars ($500,000) (the “Financing”), the entire unpaid
principal amount of this Note and accrued but unpaid interest thereon shall be
automatically, and without any action or notice by the Company or the Holder,
converted into the securities or instruments issued by the Company in the
Financing (the “Conversion Securities”) at a price (the “Conversion Price”)
equal to either (a) the price per share of stock (or unit of stock and other
securities) paid by investors in the Financing, if the Financing is an issuance
of stock (or units of stock and other securities) , or (b) the price paid by
investors in the Financing, expressed as a percentage of the face amount of debt
securities, if the Financing is an issuance of debt securities (or units of debt
securities and other securities) (including debt securities convertible into
stock). No fraction of shares or scrip representing
fractions of shares will be issued on conversion, but if shares are issuable,
the number of shares issuable shall be rounded to the nearest whole
share. The number or amount of Conversion Securities issuable upon a
conversion hereunder shall be determined by the quotient obtained by dividing
(x) the outstanding principal amount of this Note and accrued but unpaid
interest to be converted by (y) the Conversion Price. The Company’s
calculation of the applicable Conversion Price shall be conclusive, absent
manifest error. The Company shall afford the Holder the opportunity
to become a party to all agreements and instruments for the benefit of the
investors in the Financing, including, but not limited to, if applicable, any
registration rights agreement.
Section
1.04 [Reserved]
Section
1.05 Absolute
Obligation/Ranking. Except as expressly provided herein, no
provision of this Note shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, and liquidated
damages (if any) on, this Note at the time, place, and rate, and in the coin or
currency, herein prescribed. This Note is a direct debt obligation of
the Company. This Note ranks pari passu with all other
Notes now or hereinafter issued pursuant to the Securities Purchase
Agreement.
Section
1.06 Paying Agent and
Registrar. Initially, the Company will act as paying agent and
registrar. The Company may change any paying agent, registrar, or
Company-registrar by giving the Holder not less than ten (10) business
days’ written notice of its election to do so, specifying the name, address,
telephone number and facsimile number of the paying agent or
registrar. The Company may act in any such capacity.
Section
1.07 Different
Denominations. This Note is exchangeable for an equal
aggregate principal amount of Notes of different authorized denominations, as
requested by the Holder surrendering the same. No service charge will
be made for such registration of transfer or exchange.
2
Section
1.08 Investment
Representations. This Note has been issued subject to certain investment
representations of the original Holder set forth in the Securities Purchase
Agreement and may be transferred or exchanged only in compliance with the
Securities Purchase Agreement and applicable federal and state securities laws
and regulations.
Section
1.09 Reliance on Note
Register. Prior to due presentment to the Company for transfer
or conversion of this Note, the Company and any agent of the Company may treat
the person in whose name this Note is duly registered on the Note Register as
the owner hereof for the purpose of receiving payment as herein provided and for
all other purposes, whether or not this Note is overdue, and neither the Company
nor any such agent shall be affected by notice to the contrary.
Section
1.10 Rights and
Remedies. In addition to the rights and remedies given it by
this Note, the Holder shall have all those rights and remedies allowed by
applicable laws. The rights and remedies of the Holder are cumulative
and recourse to one or more right or remedy shall not constitute a waiver of the
others.
Article
II.
Section
2.01 Amendments and Waiver of
Default. The Note may not be amended without the consent of
the Holder. Notwithstanding the above, without the consent of the
Holder, the Note may be amended to cure any ambiguity, defect or inconsistency
or to make any change that does not adversely affect the rights of the
Holder.
Article
III.
Section
3.01 Events of
Default. Each of the following events shall constitute a
default under this Note (each an “Event of
Default”):
(a) failure
by the Company to pay principal or interest amount due hereunder within five (5)
days of the date such payment is due;
(b) failure
by the Company or the Company’s transfer agent to issue Conversion Securities to
the Holder within five (5) days of the closing of the
Financing;
(c) failure
by the Company for five (5) days after notice to it to comply with any of its
other agreements in the Note;
(d)
the Company shall: (1) make a general assignment for the
benefit of its creditors; (2) apply for or consent to the appointment of a
receiver, trustee, assignee, custodian, sequestrator, liquidator or similar
official for itself or any of its assets and properties; (3) commence a
voluntary case for relief as a debtor under the United States Bankruptcy Code;
(4) file with or otherwise submit to any governmental authority any
petition, answer or other document seeking: (A) reorganization,
(B) an arrangement with creditors or (C) to take advantage of any
other present or future applicable law respecting bankruptcy, reorganization,
insolvency, readjustment of debts, relief of debtors, dissolution or
liquidation; (5) file or otherwise submit any answer or other document
admitting or failing to contest the material allegations of a petition or other
document filed or otherwise submitted against it in any proceeding under any
such applicable law, or (6) be adjudicated a bankrupt or insolvent by a
court of competent jurisdiction;
3
(e) any
case, proceeding or other action shall be commenced against the Company for the
purpose of effecting, or an order, judgment or decree shall be entered by any
court of competent jurisdiction approving (in whole or in part) anything
specified in Section 3.01(d) hereof, or any receiver, trustee, assignee,
custodian, sequestrator, liquidator or other official shall be appointed with
respect to the Company, or shall be appointed to take or shall otherwise acquire
possession or control of all or a substantial part of the assets and properties
of the Company, and any of the foregoing shall continue unstayed and in effect
for any period of sixty (60) days;
(f) default
shall occur with respect to any indebtedness for borrowed money of the Company
or under any agreement under which such indebtedness may be issued by the
Company and such default shall continue for more than the period of grace, if
any, therein specified, if the aggregate amount of such indebtedness for which
such default shall have occurred exceeds $25,000;
(g) default
shall occur with respect to any contractual obligation of the Company under or
pursuant to any contract, lease, or other agreement to which the Company is a
party and such default shall continue for more than the period of grace, if any,
therein specified, if the aggregate amount of the Company’s contractual
liability arising out of such default exceeds or is reasonably estimated to
exceed $25,000;
(h) final
judgment for the payment of money in excess of $25,000 shall be rendered against
the Company and the same shall remain undischarged for a period of 20 days
during which execution shall not be effectively stayed;
(i) any
event of default of the Company under any agreement, note, mortgage, security
agreement or other instrument evidencing or securing indebtedness that ranks
senior in priority to, or pari passu with, the obligations under this Note and
the Securities Purchase Agreement;
(j) the
Common Stock shall not be eligible for quotation on or quoted for trading on the
OTC Bulletin Board and shall not again be eligible for and quoted for trading
thereon within five (5) trading days;
(k) any
breach by the Company of any of its representations or warranties under the
Securities Purchase Agreement; or
(l) any
default shall occur in the due observance or performance of any obligations or
other covenants, terms or provisions to be performed under this Note or the
Securities Purchase Agreement which is not cured by the Company within five (5)
days after receipt of written notice thereof.
4
Section
3.02 If any Event of Default occurs, the full
principal amount of this Note, together with any other amounts owing in respect
thereof, to the date of acceleration shall become, at the Holder’s election,
immediately due and payable in cash. Commencing five (5) days after
the occurrence of any Event of Default that results in the eventual acceleration
of this Note, interest on this Note shall begin to accrue at the rate of 15% per
annum, or such lower maximum amount of interest permitted to be charged under
applicable law. All Notes for which the full amount hereunder shall
have been paid in accordance herewith shall promptly be surrendered to or as
directed by the Company. The Holder need not provide and the Company
hereby waives any presentment, demand, protest or other notice of any kind, and
the Holder may immediately and without expiration of any grace period enforce
any and all of its rights and remedies hereunder and all other remedies
available to it under applicable law. Such declaration may be
rescinded and annulled by the Holder at any time prior to payment hereunder and
the Holder shall have all rights as a Note holder until such time, if any, as
the full payment under this Section shall have been received by
it. No such rescission or annulment shall affect any subsequent Event
of Default or impair any right consequent thereon.
Article
IV.
Section
4.01 Negative
Covenants. So long as this Note shall remain in effect and
until any outstanding principal and all fees and all other expenses or amounts
payable under this Note and the Securities Purchase Agreement have been paid in
full, unless all Holders shall otherwise consent in writing, the Company shall
not:
(a) Senior or Pari Passu
Indebtedness. Incur, create, assume, guaranty or permit to
exist any indebtedness that ranks senior in priority to, or pari passu with, the
obligations under this Note and the Securities Purchase Agreement, except for
(i) indebtedness existing on the date hereof and set forth in Schedule A
attached hereto and only to the extent that such indebtedness ranks senior in
priority to or pari passu with the obligations under this Note and the
Securities Purchase Agreement on the Original Issue Date and (ii) indebtedness
created as a result of a subsequent financing if the gross proceeds to the
Company of such financing are equal to or greater than the aggregate principal
amount of the Notes and the Notes are repaid in full upon the closing of such
financing.
(b) Liens. Create,
incur, assume or permit to exist any lien on any property or assets (including
stock or other securities of the Company) now owned or hereafter acquired by it
or on any income or revenues or rights in respect of any thereof,
except:
(i) liens
on property or assets of the Company existing on the date hereof and set forth
in Schedule B attached hereto, provided that such liens shall secure only those
obligations which they secure on the date hereof;
(ii) any
lien created under this Note or the Securities Purchase Agreement;
(iii)
any lien existing on any property or asset prior to the acquisition
thereof by the Company, provided that
5
1) such
lien is not created in contemplation of or in connection with such acquisition
and
2) such
lien does not apply to any other property or assets of the Company;
(iv) liens
for taxes, assessments and governmental charges;
(v) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlord’s or other like
liens arising in the ordinary course of business and securing obligations that
are not due and payable;
(vi) pledges
and deposits made in the ordinary course of business in compliance, with
workmen’s compensation, unemployment insurance and other social security laws or
regulations;
(vii) deposits
to secure the performance of bids, trade contracts (other than for
indebtedness), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(viii) zoning
restrictions, easements, licenses, covenants, conditions, rights-of-way,
restrictions on use of real property and other similar encumbrances incurred in
the ordinary course of business and minor irregularities of title that, in the
aggregate, are not substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of
the business of the Company;
(ix) purchase
money security interests in real property, improvements thereto or equipment
hereafter acquired (or, in the case of improvements, constructed) by the
Company, provided that
1) such
security interests secure indebtedness permitted by this Note,
2) such
security interests are incurred, and the indebtedness secured thereby is
created, within 90 days after such acquisition (or construction),
3) the
indebtedness secured thereby does not exceed 85% of the lesser of the cost or
the fair market value of such real property, improvements or equipment at the
time of such acquisition (or construction) and
4) such
security interests do not apply to any other property or assets of the
Company;
(x) liens
arising out of judgments or awards (other than any judgment that constitutes an
Event of Default hereunder) in respect of which the Company shall in good faith
be prosecuting an appeal or proceedings for review and in respect of which it
shall have secured a subsisting stay of execution pending such appeal or
proceedings for review, provided the Company shall have set aside on its books
adequate reserves with respect to such judgment or award; and
6
(xi) deposits,
liens or pledges to secure payments of workmen’s compensation and other
payments, public liability, unemployment and other insurance, old-age pensions
or other social security obligations, or the performance of bids, tenders,
leases, contracts (other than contracts for the payment of money), public or
statutory obligations, surety, stay or appeal bonds, or other similar
obligations arising in the ordinary course of business.
(c) Dividends and
Distributions. In the case of the Company, declare or pay,
directly or indirectly, any dividend or make any other distribution (by
reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof, with respect to any shares of its capital stock or directly
or indirectly redeem, purchase, retire or otherwise acquire for value any shares
of any class of its capital stock or set aside any amount for any such
purpose.
(d) Limitation on Certain
Payments and Prepayments.
(i) Pay
in cash any amount in respect of any indebtedness or preferred stock that may at
the obligor’s option be paid in kind or in other securities;
(ii) Optionally
prepay, repurchase or redeem or otherwise defease or segregate funds with
respect to any indebtedness of the Company, other than for senior indebtedness
existing on the date hereof and set forth in Schedule A attached hereto,
indebtedness under this Note or the Securities Purchase Agreement.
Article
V.
Section
5.01 Re-issuance of
Note. If the Holder elects to convert only a part of the Note
upon the closing of the Financing, then the Company shall reissue a new Note in
the same form as this Note to reflect the new principal amount and the Holder
shall return the Note to the Company for cancellation
Article
VI.
Section
6.01 Anti-dilution. Adjustment of Conversion
Price. The Conversion Price shall be adjusted from time to
time as follows:
(a) Adjustment of Conversion
Price and Number of Shares upon Issuance of Common Stock. If
at any time after the Original Issue Date, the Company issues or sells, or is
deemed to have issued or sold, any shares of Common Stock (including
shares of common stock in the Financing) other than upon issuance, exercise or
conversion of the Other Securities (as defined herein) for a consideration per
share less than a price (the “Applicable Price”)
equal to the Conversion Price in effect immediately prior to such issuance or
sale, then immediately after such issue or sale the Conversion Price then in
effect shall be reduced to an amount equal to such consideration per share,
provided that in no event shall the Conversion Price be reduced below
$0.001.
(b) Effect on Conversion Price
of Certain Events. For purposes of determining the adjusted
Conversion Price under Section 6.01(a) above, the following shall be
applicable:
7
(i)
Issuance of
Options. If after the date hereof, the Company in any manner
grants any rights, warrants or options to subscribe for or purchase Common Stock
or convertible securities (“Options”), other than
Other Securities, and the lowest price per share for which one share of Common
Stock is issuable upon the exercise of any such Option or upon conversion or
exchange of any convertible securities issuable upon exercise of any such Option
is less than the Conversion Price then in effect, then such share of Common
Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the granting or sale of such Option for such price per
share. For purposes of this Section 6.01(b)(i), the lowest price per
share for which one share of Common Stock is issuable upon exercise of such
Options or upon conversion or exchange of such convertible securities shall be
equal to the sum of the lowest amounts of consideration (if any) received or
receivable by the Company with respect to any one share of Common Stock upon the
granting or sale of the Option, upon exercise of the Option or upon conversion
or exchange of any other convertible security other than this Note issuable upon
exercise of such Option. No further adjustment of the Conversion
Price shall be made upon the actual issuance of such Common Stock or of such
convertible securities upon the exercise of such Options or upon the actual
issuance of such Common Stock upon conversion or exchange of such convertible
securities.
(ii)
Issuance of Convertible
Securities. If the Company in any manner issues or sells any
convertible securities after the Original Issue Date, other than Other
Securities, and the lowest price per share for which one share of Common Stock
is issuable upon the conversion or exchange thereof is less than the Conversion
Price then in effect, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
issuance or sale of such convertible securities for such price per
share. For the purposes of this Section 6.01(b)(ii), the lowest
price per share for which one share of Common Stock is issuable upon such
conversion or exchange shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to one
share of Common Stock upon the issuance or sale of the convertible security and
upon conversion or exchange of such convertible security. No further
adjustment of the Conversion Price shall be made upon the actual issuance of
such Common Stock upon conversion or exchange of such convertible securities,
and if any such issue or sale of such convertible securities is made upon
exercise of any Options for which adjustment of the Conversion Price had been or
are to be made pursuant to other provisions of this Section 6.01(b), no further
adjustment of the Conversion Price shall be made by reason of such issue or
sale.
(iii)
Change in
Option Price or Rate of Conversion. If the purchase price
provided for in any Options, the additional consideration, if any, payable upon
the issue, conversion or exchange of any convertible securities, or the rate at
which any convertible securities are convertible into or exchangeable for Common
Stock changes at any time, the Conversion Price in effect at the time of such
change shall be adjusted to the Conversion Price which would have been in effect
at such time had such Options or convertible securities provided for such
changed purchase price, additional consideration or changed conversion rate, as
the case may be, at the time initially granted, issued or sold and the number of
shares of Common Stock issuable upon conversion of this Note shall be
correspondingly readjusted. For purposes of this Section
6.01(b)(iii), if the terms of any Option or convertible security that was
outstanding as of the Original Issue Date are changed in the manner described in
the immediately preceding sentence, then such Option or convertible security and
the Common Stock deemed issuable upon exercise, conversion or exchange thereof
shall be deemed to have been issued as of the date of such change. No
adjustment pursuant to this Section 6.01(b) shall be made if such adjustment
would result in an increase of the Conversion Price then in effect.
8
(c) Effect on Conversion Price
of Certain Events. For purposes of determining the adjusted
Conversion Price under Sections 6.01(a) and 6.01(b), the following shall be
applicable:
(i) Calculation of Consideration
Received. If any Common Stock, Options or convertible
securities are issued or sold or deemed to have been issued or sold for cash,
the consideration received therefore will be deemed to be the net amount
received by the Company therefore. If any Common Stock, Options or
convertible securities are issued or sold for a consideration other than cash,
the amount of such consideration received by the Company will be the fair value
of such consideration, except where such consideration consists of marketable
securities, in which case the amount of consideration received by the Company
will be the market price of such securities on the date of receipt of such
securities (measured by the closing sale price of such securities on the
Over-the-Counter Bulletin Board or its principal trading market). If
any Common Stock, Options or convertible securities are issued to the owners of
the non-surviving entity in connection with any merger in which the Company is
the surviving entity, the amount of consideration therefore will be deemed to be
the fair value of such portion of the net assets and business of the
non-surviving entity as is attributable to such Common Stock, Options or
convertible securities, as the case may be. The fair value of any
consideration other than cash or securities will be determined jointly by the
Company and the holders of the principal amount of the Notes then
outstanding. If such parties are unable to reach agreement within
ten (10) days after the occurrence of an event requiring valuation (the
“Valuation
Event”), the fair value of such consideration will be determined within
five (5) Business Days after the tenth (10th) day
following the Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the holders of the principal amount of the Notes
then outstanding. The determination of such appraiser shall be final
and binding upon all parties and the fees and expenses of such appraiser shall
be borne by the Company.
(ii) Integrated
Transactions. In case any Option is issued in connection with
the issue or sale of other securities of the Company, together comprising one
integrated transaction in which no specific consideration is allocated to such
Options by the parties thereto, the Options will be deemed to have been issued
for a consideration of $0.001.
(iii) Treasury
Shares. The number of shares of Common Stock outstanding at
any given time does not include shares owned or held by or for the account of
the Company, and the disposition of any shares so owned or held will be
considered an issue or sale of Common Stock.
(iv) Record
Date. If the Company takes a record of the holders of Common
Stock for the purpose of entitling them (1) to receive a dividend or other
distribution payable in Common Stock, Options or in convertible securities or
(2) to subscribe for or purchase Common Stock, Options or convertible
securities, then such record date will be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.
9
(d) Adjustment of Conversion
Price upon Subdivision or Combination of Common Stock. If the
Company at any time after the date of issuance of this Note subdivides (by any
stock split, stock dividend, recapitalization or otherwise) one or more classes
of its outstanding shares of Common Stock into a greater number of shares, the
Conversion Price or Future Price in effect immediately prior to such subdivision
will be proportionately reduced. If the Company at any time after the
date of issuance of this Note combines (by combination, reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, the Conversion Price or Future Price in effect
immediately prior to such combination will be proportionately
increased. Any adjustment under this Section 6.01(d) shall
become effective at the close of business on the date the subdivision or
combination becomes effective.
(e) Distribution of
Assets. If the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of
Common Stock, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement or other similar transaction) (a “Distribution”), at
any time after the issuance of this Note, then, in each such case the Conversion
Price in effect immediately prior to the close of business on the record date
fixed for the determination of holders of Common Stock entitled to receive the
Distribution shall be reduced, effective as of the close of business on such
record date, to a price determined by multiplying such Conversion Price by a
fraction of which (A) the numerator shall be the closing bid price of the Common
Stock on the trading day immediately preceding such record date minus the value
of the Distribution (as determined in good faith by the Company’s Board of
Directors) applicable to one share of Common Stock, and (B) the denominator
shall be the closing bid price of the Common Stock on the trading day
immediately preceding such record date.
(f)
Certain
Events. If any event occurs of the type contemplated by the
provisions of this Section 6.01 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features but excluding
the Recapitalization, as such term is defined in the Securities Purchase
Agreement), then the Company’s Board of Directors will make an appropriate
adjustment in the Conversion Price so as to protect the rights of the holders of
the Note; provided, except as set forth in Section 6.01(d), that no such
adjustment pursuant to this Section 6.01(f) will increase the Conversion Price
as otherwise determined pursuant to this Section 6.01.
(i) Notices.
1) Immediately
upon any adjustment of the Conversion Price, the Company will give written
notice thereof to the holder of this Note, setting forth in reasonable detail,
and certifying, the calculation of such adjustment.
2) The
Company will give written notice to the holder of this Note at least ten (10)
days prior to the date on which the Company closes its books or takes a record
(A) with respect to any dividend or distribution upon the Common Stock,
(B) with respect to any pro rata subscription offer to holders of Common
Stock or (C) for determining rights to vote with respect to any dissolution
or liquidation, provided that such information shall be made known to the public
prior to or in conjunction with such notice being provided to such
holder.
10
(ii) Definitions.
“Other Securities”
means (i) those options and warrants of the Company issued prior to, and
outstanding on, the Original Issue Date, (ii) the shares of Common Stock
issuable on exercise of such options and warrants, provided such options and
warrants are not amended after the Original Issue Date, and (iii) the
shares of Common Stock issuable upon conversion of this Note.
(g) Nothing
in this Section 6.01 shall be deemed to authorize the issuance of any securities
by the Company in violation of Section 6.02
Article
VII
Section
7.01 Notice. Notices
regarding this Note shall be sent to the parties at the following addresses,
unless a party notifies the other parties, in writing, of a change of
address:
|
If
to the Company, to:
|
Nevada
Gold Holdings, Inc.
|
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1640
Terrace WayWalnut Creek, California
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Attention:
David Rector, CEO
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Telephone: 925-930-0100
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Facsimile: 925-930-6338
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With
a copy to:
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Gottbetter
& Partners, LLP
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488
Madison Avenue, 12th
Floor
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New
York, New York 10022
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Attention: Adam
S. Gottbetter, Esq.
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Telephone: 212-400-6900
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Facsimile: 212-400-6901
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If
to the Holder:
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At
the address set forth in the Securities Purchase
Agreement
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Section
7.02 Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Note shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York,
without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by any of the
Transaction Documents (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be
commenced in the state and federal courts sitting in the City of New York,
Borough of Manhattan (the “New York Courts”). Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or such
New York Courts are improper or inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Note and agrees that such service shall
constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any and all right to trial by jury in any legal proceeding arising out of or
relating to this Note or the transactions contemplated hereby. If
either party shall commence an action or proceeding to enforce any provisions of
this Note, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its attorney’s fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.
11
Section
7.03 Severability. The
invalidity of any of the provisions of this Note shall not invalidate or
otherwise affect any of the other provisions of this Note, which shall remain in
full force and effect.
Section
7.04 Entire Agreement and
Amendments. This Note, together with the Securities Purchase
Agreement, represents the entire agreement between the parties hereto with
respect to the subject matter hereof and there are no representations,
warranties or commitments, except as set forth herein. This Note may
be amended only by an instrument in writing executed by the parties
hereto.
[Remainder
of Page Intentionally Left Blank]
12
IN WITNESS WHEREOF, with the
intent to be legally bound hereby, the Company as executed this Note as of the
date first written above.
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Nevada
Gold Holdings, Inc.
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By:
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Name:
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Title:
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[SIGNATURE
PAGE TO SECURED CONVERTIBLE PROMISSORY NOTE]
13
EXHIBIT
10.2
SCHEDULE
A
SENIOR AND PARI PASSU
INDEBTEDNESS
None.
SCHEDULE
B
LIENS
None.