Attached files
| file | filename |
|---|---|
| 10-K - 22nd Century Group, Inc. | v204133_10k.htm |
| EX-21 - 22nd Century Group, Inc. | v204133_ex21.htm |
| EX-4.2 - 22nd Century Group, Inc. | v204133_ex4-2.htm |
| EX-3.2 - 22nd Century Group, Inc. | v204133_ex3-2.htm |
| EX-31.1 - 22nd Century Group, Inc. | v204133_ex31-1.htm |
| EX-32.1 - 22nd Century Group, Inc. | v204133_ex32-1.htm |
EXHIBIT
4.4
NEITHER
THE ISSUANCE AND SALE OF THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS
CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (I) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (II) AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE
COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THIS NOTE MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THIS NOTE. ANY
TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE.
THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE
SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET
FORTH ON THE FACE HEREOF PURSUANT TO THIS NOTE.
TOUCHSTONE
MINING LIMITED
10%
CONVERTIBLE PROMISSORY NOTE
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Issuance
Date: October 14, 2010
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Principal
Amount: U.S. $50,000.00
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FOR VALUE
RECEIVED, Touchstone
Mining Limited a Nevada corporation (the "Company"), hereby promises to
pay to BERKELEY INVESTMENTS
LIMITED or registered assigns ("Holder") the amount set out
above as the Original Principal Amount (as reduced pursuant to the terms hereof
pursuant to redemption, conversion or otherwise, the "Principal") when due, whether
upon the Maturity Date (as defined below), acceleration, redemption or otherwise
(in each case in accordance with the terms hereof) and to pay interest at the
rate of 10.00% per annum ("Interest") from the date set
out above as the Issuance Date (the "Issuance Date") until the same
becomes due and payable on the Maturity Date.
2. PREPAYMENT. The
Company and the Holder understand and agree that the principal amount of the
Note and any interest accrued thereon be prepaid by the Company at any time
without penalty.
3. CONVERSION OF NOTE.
The
Holder shall have the right to convert the principal and any interest due under
this Note into Shares of the Company's Common Stock, $.00001 par value per share
(“Common Stock”) as set
forth below.
3.1. Conversion into the
Company's Common Stock.
(a) The
Holder shall have the right from and after the Issuance Date and then at any
time until this Note is fully paid, to convert any outstanding and unpaid
principal portion of this Note, and accrued interest, at the election of the
Holder (the date of giving of such notice of conversion being a "Conversion Date") into fully
paid and non-assessable shares of Common Stock as such stock exists on the date
of issuance of this Note, or any shares of capital stock of Company into which
such Common Stock shall hereafter be changed or reclassified, at the conversion
price as defined in Section 3.1(b) hereof
(the "Fixed Conversion
Price"), determined as provided herein. Upon delivery to the
Company of a completed Notice of Conversion, a form of which is annexed hereto
as Exhibit A,
Company shall issue and deliver to the Holder within five (5) business days
after the Conversion Date (such fifth day being the “Delivery Date”) that number of
shares of Common Stock for the portion of the Note converted in accordance with
the foregoing. 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 of the Note and interest, if any, to be converted, by the Conversion
Price.
(b) Subject
to adjustment as provided in Section 3.1(c)
hereof, the fixed conversion price per share shall be equal to $0.10 (“Fixed Conversion
Price”).
(c) The
Fixed Conversion Price and number and kind of shares or other securities to be
issued upon conversion determined pursuant to Section 3.1(a), shall
be subject to adjustment from time to time upon the happening of certain events
while this conversion right remains outstanding, as follows:
A. Merger, Sale of Assets,
etc. If (A) the Company effects any merger
or consolidation of the Company with or into another entity, (B) the
Company effects any sale of all or substantially all of its assets in one or a
series of related transactions, (C) any tender offer or exchange
offer (whether by the Company or another entity) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, (D) the Company consummates a stock purchase
agreement or other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of arrangement) with one or
more persons or entities whereby such other persons or entities acquire more
than the 50% of the outstanding shares of Common Stock (not including any shares
of Common Stock held by such other persons or entities making or party to, or
associated or affiliated with the other persons or entities making or party to,
such stock purchase agreement or other business combination), (E) any "person"
or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of
the 1934 Act) is or shall become the "beneficial owner" (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate
Common Stock of the Company, or (F) the Company effects any reclassification of
the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or
property (in any such case, a "Fundamental Transaction"), this
Note, as to the unpaid principal portion thereof and accrued interest thereon,
shall thereafter be deemed to evidence the right to convert into such number and
kind of shares or other securities and property as would have been issuable or
distributable on account of such Fundamental Transaction, upon or with respect
to the securities subject to the conversion right immediately prior to such
Fundamental Transaction. The foregoing provision shall similarly
apply to successive Fundamental Transactions of a similar nature by any such
successor or purchaser. Without limiting the generality of the
foregoing, the anti-dilution provisions of this Section shall apply to such
securities of such successor or purchaser after any such Fundamental
Transaction.
B. Reclassification,
etc. If the Company at any time shall, by reclassification or
otherwise, change the Common Stock into the same or a different number of
securities of any class or classes that may be issued or outstanding, this Note,
as to the unpaid principal portion thereof and accrued interest thereon, shall
thereafter be deemed to evidence the right to purchase an adjusted number of
such securities and kind of securities as would have been issuable as the result
of such change with respect to the Common Stock immediately prior to such
reclassification or other change.
C. 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 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.
D. Share
Issuance. So long as this Note is outstanding, if the
Company shall issue any Common Stock prior to the complete conversion or payment
of this Note, for a consideration per share that is less than the Fixed
Conversion Price that would be in effect at the time of such issue, then, and
thereafter successively upon each such issuance, the Fixed Conversion Price
shall be reduced to such other lower issue price. For purposes of
this adjustment, the issuance of any security or debt instrument of the Company
carrying the right to convert such security or debt instrument into Common Stock
or of any warrant, right or option to purchase Common Stock shall result in an
adjustment to the Fixed Conversion Price upon the issuance of the
above-described security, debt instrument, warrant, right, or option and again
upon the issuance of shares of Common Stock upon exercise of such conversion or
purchase rights if such issuance is at a price lower than the then applicable
Fixed Conversion Price. Common Stock issued or issuable by the Company for no
consideration will be deemed issuable or to have been issued for $0.00001 per
share of Common Stock.
2
(d) Whenever
the Conversion Price is adjusted pursuant to Section 3.1(c) above,
the Company shall promptly mail to the Holder a notice setting forth the
Conversion Price after such adjustment and setting forth a statement of the
facts requiring such adjustment.
(e) During
the period the conversion right exists, Company will reserve from its authorized
and unissued Common Stock not less than an amount of Common Stock equal to 150%
of the amount of shares of Common Stock issuable upon the full conversion of
this Note. Company represents that upon issuance, such shares will be
duly and validly issued, fully paid and non-assessable. Company
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.
3.2 Method of
Conversion. This Note may be converted by the Holder in whole
or in part as described in Section 3.1(a)
hereof. Upon partial conversion of this Note, a new Note containing
the same date and provisions of this Note shall, at the request of the Holder,
be issued by the Company to the Holder for the principal balance of this Note
and interest which shall not have been converted or paid.
3.3. Maximum
Conversion. The Holder shall not be entitled to convert on a
Conversion Date that amount of the Note in connection with that number of shares
of Common Stock which would be in excess of the sum of (i) the number of shares
of Common Stock beneficially owned by the Holder and its affiliates on a
Conversion Date, (ii) any Common Stock issuable in connection with the
unconverted portion of the Note, and (iii) the number of shares of Common Stock
issuable upon the conversion of the Note with respect to which the determination
of this provision is being made on a Conversion Date, which would result in
beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock of the Company on such Conversion
Date. For the purposes of the provision to the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3
thereunder. Subject to the foregoing, the Holder shall not be limited
to aggregate conversions of 4.99%. The Holder shall have the
authority and obligation to determine whether the restriction contained in this
Section 3.3
will limit any conversion hereunder and to the extent that the Holder determines
that the limitation contained in this Section applies, the determination of
which portion of the Notes are convertible shall be the responsibility and
obligation of the Holder. The Holder may waive the conversion
limitation described in this Section 3.3, in whole
or in part, upon and effective after 61 days prior written notice to the Company
to increase such percentage to up to 9.99%.
4. EVENT OF
DEFAULT. Failure by the Company to make payment pursuant to
Section 1 hereof shall constitute an event of default (“Event of
Default”). In an Event of Default, the Holder shall be entitled to
all legal remedies available to it to pursue collections, and the Company shall
bear all reasonable costs of collection, including but not limited to necessary
attorneys’ fees.
5. NO
WAIVER. No failure or delay by the Holder in exercising any
right, power or privilege under this Note shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be
cumulative and not exclusively of any rights or remedies provided by applicable
law. No course of dealing between the Company and the Holder shall
operate as a waiver of any rights by the Holder.
6. NOTICES;
PAYMENTS.
(a) Notices.
Whenever notice is required to be given under this Note, unless otherwise
provided herein, such notice shall be given in accordance with the Securities
Purchase Agreement. Unless a specific notice is otherwise required
under this Note, the Company shall provide the Holder with prompt written notice
of all actions taken pursuant to this Note, including in reasonable detail a
description of such action and the reason therefore.
3
(b) Payments.
Except as otherwise provided in this Note, whenever any payment of cash is
to be made by the Company to the Holder, such payment shall be made in lawful
money of the United States of America by a check drawn on the account of the
Company and sent via overnight courier service to the Holder at such address as
previously provided to the Company in writing (which address shall be set forth
in the Securities Purchase Agreement); provided that the Holder may elect to
receive a payment of cash via wire transfer of immediately available funds by
providing the Company with prior written notice setting out such request and the
Holder's wire transfer instructions. Whenever any amount expressed to be
due by the terms of this Note is due on any day which is not a Business Day, the
same shall instead be due on the next succeeding day which is a Business
Day.
7. TRANSFER. The
Holder acknowledges and agrees that this Note may only be offered, sold,
assigned or transferred by the Holder if consented to in writing by the
Company.
8. CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the
Company and the Holder and shall not be construed against any person as the
drafter hereof.
The
headings of this Note are for convenience of reference and shall not form part
of, or affect the interpretation of, this Note.
9. SEVERABILITY. In
the event that one or more of the provisions of this Note shall for any reasons
be held invalid, illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Note, but this Note shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
10. GOVERNING
LAW. This Note and the rights and obligations of the Company
and the Holder shall be governed by and construed in accordance with the laws of
the State of New York.
[SIGNATURE
PAGE FOLLOWS]
4
IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the
Issuance Date set out above.
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TOUCHSTONE
MINING LIMITED
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By:
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/s/ Ronald Asirwatham
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Name: Ronald
Asirwatham
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Title: President
& Chief Executive
Officer
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EXHIBIT
A
NOTICE OF
CONVERSION
(To
be executed by the Holder in order to convert the Note)
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TO:
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The
undersigned hereby irrevocably elects to convert
$_____________________________________ of the principal amount of the above Note
into Shares of Common Stock of Touchstone Mining Limited, according to the
conditions stated therein, as of the Conversion Date written below.
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Conversion
Date:
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Applicable
Conversion Price:
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Signature:
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Name:
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Address:
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Amount
to be converted:
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$
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Amount
of Note unconverted:
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$
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Conversion
Price per Unit:
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$
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Number
of shares of Common Stock and Warrants to be issued including as payment
of interest, if applicable:
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Please
issue the shares of Common Stock and Warrants in the following name and to
the following address:
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Issue
to the following account of the Holder:
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Authorized
Signature:
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Name:
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Title:
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Phone
Number:
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Broker
DTC Participant Code:
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Account
Number:
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