Exhibit 10.1
THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, TO A NON-US PERSON IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF
REGULATION S UNDER THE SECURITIES ACT, OR PURSUANT TO AN OPINION OF
COUNSEL SATISFACTORY TO THE BORROWER THAT REGISTRATION IS NOT REQUIRED
UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
GUAR GLOBAL LTD.
CONVERTIBLE PROMISSORY NOTE
______________, 2013 $[ ]
Guar Global Ltd., a Nevada corporation (the "COMPANY"), for value received,
promises to pay to the order of [ ] (the "HOLDER"), the sum of [ ]
Dollars ($[ ]) (the "PRINCIPAL"), plus accrued interest, pursuant to the
terms and conditions set forth herein.
The Company and Holder agree as follows:
1. ISSUANCE OF PRINCIPAL AND CONVERSION.
1.1 Except as set forth in Section 3 below, the unpaid Principal of
this Note and any accrued and unpaid interest shall be due and payable by the
Company on [ , 20__] ("MATURITY DATE"). The Company agrees and authorizes the
Holder to advance $__________ of the proceeds of the loan under this Note
directly to [ ]'s bank account.
1.2 The unpaid Principal of this Note shall bear interest at the rate
of ten percent (10%) per annum, simple interest. Interest on this Note shall be
computed on the basis of a three hundred sixty-five (365) day year and actual
days elapsed.
1.3 Prior to the Maturity Date the Holder may elect, at the Holder's
discretion, to have all or part of the Principal of this Note and the accrued
and unpaid interest thereon converted into a number of shares of common stock of
the Company determined by dividing (i) the unpaid Principal of this Note and any
accrued and unpaid interest thereon being converted, by (ii) $0.25.
1.4 The Company hereby waives demand and presentment for payment,
notice of nonpayment, protest and notice of protest of this Note.
1.5 In the event of conversion the Holder will surrender the original
of this Note for conversion at the principal office of the Company at the time
of such conversion. Holder agrees to execute all necessary documents in
connection with the conversion of this Note, including a definitive stock
purchase agreement. If upon such conversion of this Note a fraction of a share
would result, then the Company will round up to the nearest whole share.
2. ISSUANCE OF CONSIDERATION ON CONVERSION. As soon as practicable after
receipt of the original Note and related documents for conversion pursuant to
Section 1, but in not event later than five (5) business days therefrom, the
Company at its expense will cause to be issued in the name of, and delivered to,
the Holder, a certificate or certificates for the number of shares of common
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stock to which the Holder will be entitled on such conversion (bearing such
legends as may be required by applicable state and federal securities laws in
the opinion of legal counsel for the Company), together with any other
securities and property, if any, to which the Holder is entitled on such
conversion under the terms of this Note.
3. CHANGE OF CONTROL. In the event (a) of any reorganization of the
Company, (b) the Company consolidates with or merges into another entity, (c)
the Company sells all or substantially all of its assets to another entity and
then distributes the proceeds to its shareholders, or (d) the Company issues or
otherwise sells securities representing more than 50% of the voting power of the
Company in a single transaction or series of related transactions immediately
after giving effect to such transaction or series of related transaction, after
the date of this Note, then, and in each such case, this Note shall become
immediately due and payable.
4. REPRESENTATIONS AND ACKNOWLEDGMENTS OF THE HOLDER. The Holder hereby
represents, warrants, acknowledges and agrees that:
4.1 INVESTMENT. The Holder is acquiring this Note and the securities
issuable upon conversion of this Note (together, the "SECURITIES") for the
Holder's own account, and not directly or indirectly for the account of any
other person. The Holder is acquiring the Securities for investment and not with
a view to distribution or resale thereof except in compliance with the
Securities Act of 1933 (the "ACT") and any applicable state law regulating
securities.
4.2 ACCESS TO INFORMATION. The Holder has had the opportunity to ask
questions of, and to receive answers from, appropriate executive officers of the
Company with respect to the terms and conditions of the transactions
contemplated hereby and with respect to the business, affairs, financial
condition and results of operations of the Company. The Holder has had access to
such financial and other information as is necessary in order for the Holder to
make a fully informed decision as to investment in the Company, and has had the
opportunity to obtain any additional information necessary to verify any of such
information to which the Holder has had access.
4.3 INVESTOR STATUS. The Holder is an "accredited investor" within the
meaning of Regulation D of the rules and regulations promulgated under the Act
and has such business or financial expertise as to be able to protect the
Holder's own interests in connection with the purchase of the Securities, or is
a non-"U.S. Person" as defined in Regulation S of the Act.
4.4 REGULATION S. For purposes of compliance with the Regulation S, if
the Holder is not a "U.S. Person," as such term is defined in Rule 902(k) of
Regulation S,(1) the Holder represents and warrants they are a person or entity
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(1) Regulation S provides in part as follows:
1. "U.S. person" means: (i) any natural person resident in the United
States; (ii) any partnership or corporation organized or incorporated under the
laws of the United States; (iii) any estate of which any executor or
administrator is a U.S. person; (iv) any trust of which any trustee is a U.S.
person; (v) any agency or branch of a foreign entity located in the United
States; (vi) any non-discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary for the benefit or account
of a U.S. person; (vii) any discretionary account or similar account (other than
an estate or trust) held by a dealer or other fiduciary organized, incorporated,
or (if an individual) resident in the United States; and (viii) any partnership
or corporation if: (A) organized or incorporated under the laws of any foreign
jurisdiction; and (B) formed by a U.S. person principally for the purpose of
investing in securities not registered under the Securities Act of 1933, as
amended, unless it is organized or incorporated, and owned, by accredited
investors (as defined in Rule 501(a)) who are not natural persons, estates or
trusts.
2. The following are not "U.S. persons": (i) any discretionary account or
similar account (other than an estate or trust) held for the benefit or account
of a non-U.S. person by a dealer or other professional fiduciary organized,
incorporated, or (if an individual) resident in the United States; (ii) any
estate of which any professional fiduciary acting as executor or administrator
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that is outside the United States, and further represents and warrants as
follows:
(a) The Holder is not acquiring the Securities for the account or
benefit of a U.S. Person.
(b) If the Holder is a legal entity, it has not been formed
specifically for the purpose of investing in the Company.
(c) The Holder hereby represents that he, she or it has satisfied
and fully observed the laws of the jurisdiction in which he, she or it is
located or domiciled, in connection with the acquisition of the Securities,
including (i) the legal requirements of the Holder's jurisdiction for the
acquisition of the Securities, (ii) any foreign exchange restrictions applicable
to such acquisition, (iii) any governmental or other consents that may need to
be obtained, and (iv) the income tax and other tax consequences, if any, which
may be relevant to the holding, redemption, sale, or transfer of the Securities;
and further, the Holder agrees to continue to comply with such laws as long as
he, she or it shall hold the Securities.
(d) To the knowledge of the Holder, without having made any
independent investigation, neither the Company nor any person acting for the
Company, has conducted any "directed selling efforts" in the United States as
the term "directed selling efforts" is defined in Rule 902 of Regulation S,
which, in general, means any activity undertaken for the purpose of, or that
could reasonably be expected to have the effect of, conditioning the marketing
in the United States for any of the Securities being offered. Such activity
includes, without limitation, the mailing of printed material to investors
residing in the United States, the holding of promotional seminars in the United
States, and the placement of advertisements with radio or television stations
broadcasting in the United States or in publications with a general circulation
in the United States, which discuss the offering of the Securities. To the
knowledge of the Holder, the Securities were not offered to the undersigned
through, and the undersigned is not aware of, any form of general solicitation
or general advertising, including without limitation, (i) any advertisement,
article, notice or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio, and (ii) any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising.
(e) The Holder will offer, sell or otherwise transfer the
Securities, only (A) pursuant to a registration statement that has been declared
effective under the Act, (B) pursuant to offers and sales that occur outside the
United States within the meaning of Regulation S in a transaction meeting the
requirements of Rule 904 (or other applicable Rule) under the Act, or (C)
pursuant to another available exemption from the registration requirements of
the Act, subject to the Company's right prior to any offer, sale or transfer
pursuant to clauses (B) or (C) to require the delivery of an opinion of counsel,
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is a U.S. person if: (A) an executor or administrator of the estate who is not a
U.S. person has sole or shared investment discretion with respect to the assets
of the estate; and (B) the estate is governed by foreign law; (iii) any trust of
which any professional fiduciary acting as trustee is a U.S. person, if a
trustee who is not a U.S. person has sole or shared investment discretion with
respect to the trust assets, and no beneficiary of the trust (and no settlor if
the trust is revocable) is a U.S. person; (iv) an employee benefit plan
established and administered in accordance with the law of a country other than
the United States and customary practices and documentation of such country; (v)
any agency or branch of a U.S. person located outside the United States if: (A)
the agency or branch operates for valid business reasons; and (B) the agency or
branch is engaged in the business of insurance or banking and is subject to
substantive insurance or banking regulation, respectively, in the jurisdiction
where located; and (vi) the International Monetary Fund, the International Bank
for Reconstruction and Development, the Inter-American Development Bank, the
Asian Development Bank, the African Development Bank, the United Nations, and
their agencies, affiliates and pension plans, and any other similar
international organizations, their agencies, affiliates and pension plans.
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certificates or other information reasonably satisfactory to the Company for the
purpose of determining the availability of an exemption.
(f) The Holder will not engage in hedging transactions involving
the Securities unless such transactions are in compliance with the Act.
(g) The Holder represents and warrants that the undersigned is
not a citizen of the United States and is not, and has no present intention of
becoming, a resident of the United States (defined as being any natural person
physically present within the United States for at least 183 days in a 12-month
consecutive period or any entity who maintained an office in the United States
at any time during a 12-month consecutive period). The Holder understands that
the Company may rely upon the representations and warranty of this paragraph as
a basis for an exemption from registration of the Securities under the Act, as
amended, and the provisions of relevant state securities laws.
4.5 SPECULATIVE INVESTMENT. The Holder's investment in the Company
represented by the Securities is highly speculative in nature and is subject to
a high degree of risk of loss in whole or in part; the amount of such investment
is within the Holder's risk capital means and is not so great in relation to the
Holder's total financial resources as would jeopardize the financial condition
of the Holder in the event such investment were lost in whole or in part.
4.6 UNREGISTERED SECURITIES.
(a) The Holder must bear the economic risk of investment for an
indefinite period of time because the Securities have not been registered under
the Act and therefore cannot and will not be sold unless they are subsequently
registered under the Act or an exemption from such registration is available.
The Company has made no representations, warranties or covenants whatsoever as
to whether any exemption from the Act, including, without limitation, any
exemption for limited sales in routine brokers' transactions pursuant to Rule
144 under the Act will become available.
(b) Transfer of the Securities has not been registered or
qualified under any applicable state law regulating securities and therefore the
Securities cannot and will not be sold unless they are subsequently registered
or qualified under any such state law or an exemption therefrom is available.
The Company has made no representations, warranties or covenants whatsoever as
to whether any exemption from any such state law is or will become available.
5. MISCELLANEOUS.
5.1 WAIVER AND AMENDMENT. Any provision of this Note may be amended,
waived or modified only upon the written consent of the Company and the Holder.
5.2 RESTRICTIONS ON TRANSFER. This Note may only be transferred in
compliance with applicable state and federal laws. All rights and obligations of
the Company and the Holder will be binding upon and benefit the successors,
assigns, heirs, and administrators of the parties.
5.3 COMPANY REPRESENTATION. The Company represents to the Holder that
the Company is a corporation duly organized, validly existing, authorized to
exercise all its corporate powers, rights and privileges, and in good standing
in the State of Nevada and has the corporate power and corporate authority to
own and operate its properties and to carry on its business as now conducted;
all corporate action on the part of the Company, its officers, directors, and
shareholders necessary for the authorization, execution, delivery, and
performance of all obligations under this Note have been taken; this Note
constitutes a legally binding and valid obligation of the Company enforceable in
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accordance with its terms, except to the extent that such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent conveyance or other laws or court decisions relating to
or affecting the rights of creditors generally, and such enforcement may be
limited by equitable principles of general applicability.
5.4 GOVERNING LAW. This Note will be governed by the laws of the State
of Nevada applicable to contracts between Nevada residents wholly to be
performed in Nevada.
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IN WITNESS WHEREOF, the Company has caused this Note to be issued as of the
date first above written.
GUAR GLOBAL LTD.,
a Nevada corporation
By:_____________________________
Michael C. Shores
Chief Executive Officer
Agreed and Accepted by the Holder:
[_____________________________]
By: __________________________
Name: ________________________
Title: _______________________
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