Attached files
file | filename |
---|---|
10-Q - Eco-Tek Group, Inc. | sandalwood10q123109.htm |
EX-31 - Eco-Tek Group, Inc. | ex31.htm |
EX-32 - Eco-Tek Group, Inc. | ex32.htm |
EX-10.2 - Eco-Tek Group, Inc. | ex10-2.htm |
Exhibit
10.3
THIS
NOTE, AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE (THE
“SECURITIES”)
HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL
(i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT” OR THE
“SECURITIES
ACT”) SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY
THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO
THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH
SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES
LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS
NOTE AND ANY SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE (EXCEPT AS
OTHERWISE PROVIDED BELOW).
CONVERTIBLE
PROMISSORY NOTE
$12,500
|
Effective
February ___, 2010
|
FOR VALUE
RECEIVED, Sandalwood Ventures,
Ltd., a Nevada Corporation (the “Company”),
having an address of 15 Park, Lossiemouth, Morayshire 1V30 5SE, Scotland, hereby
promises to pay to the order of Morgarlan Limited, and/or
assigns (the “Holder”),
at the offices of Holder at ___________________________, or such other place as
may be designated by Holder to the Company in writing, the aggregate principal
amount of Twelve Thousand Five Hundred Dollars ($12,500), together with
interest on the unpaid principal amount hereof, upon the terms and conditions
hereinafter set forth.
1.
|
Loan Amount. This Convertible
Promissory Note (this “Note”, “Promissory Note” or “Agreement”) evidences the loan of Twelve
Thousand Five Hundred Dollars ($12,500), from the Holder to the
Company (hereinafter referred to as the “Loan” or the “Principal”).
|
|
2.
|
Payment Terms. The Company promises to pay
to Holder the balance of Principal, together with accrued and unpaid
interest, on February __, 2011 (the “Maturity Date”), unless this Note is
earlier prepaid as herein provided or earlier converted into Common Stock
(as hereinafter defined) of the Company pursuant to Section 3
hereof. All payments hereunder shall be made in lawful money of the
United States of America. Payment shall be credited first to the
accrued interest then due and payable and the remainder to
Principal.
|
|
3.
|
Interest. Interest on the outstanding
portion of Principal of this Note shall accrue at a rate of eight percent
(8%) per annum. All computations of interest shall be made on the
basis of a 360-day year for actual days elapsed. Such interest shall
accrue and be paid upon the Maturity Date of the
Loan.
|
a.
|
Notwithstanding
any provision in this Note, the total liability for payments of interest
and payments in the nature of interest, including all charges, fees,
exactions, or other sums which may at any time be deemed to be interest,
shall not exceed the limit imposed by the usury laws of the State of
Nevada or the applicable laws of the United States of America, whichever
shall be higher (the “Maximum
Rate”).
|
b.
|
In
the event the total liability for payments of interest and payments in the
nature of interest, including, without limitation, all charges, fees,
exactions or other sums which may at any time be deemed to be interest,
which for any month or other interest payment period exceeds the Maximum
Rate, all sums in excess of those lawfully collectible as interest for the
period in question (and without further agreement or notice by, among or
to the Holder the undersigned) shall be applied to the reduction of the
principal balance, with the same force and effect as though the
undersigned had specifically designated such excess sums to be so applied
to the reduction of the principal balance and the Holder had agreed to
accept such sums as a premium-free prepayment of principal; provided,
however, that the Holder may, at any time and from time to time, elect, by
notice in writing to the undersigned, to waive, reduce or limit the
collection of any sums in excess of those lawfully collectible as interest
rather than accept such sums as a prepayment of the principal
balance. The undersigned does not intend or expect to pay nor
does the Holder intend or expect to charge, accept or collect any interest
under this Note greater than the Maximum
Rate.
|
-1-
c.
|
If
any payment of principal or interest on this Note shall become due on a
Saturday, Sunday or any other day on which national banks are not open for
business, such payment shall be made on the next succeeding business
day.
|
4.
|
Option to Convert this
Note.
|
a.
|
At
any time prior to the Maturity Date or prior to payment in full by the
Company, Holder shall have the option to convert the unpaid principal
balance of this Promissory Note, together with all accrued interest, into
shares of common stock (the “Shares” and the “Common Stock”) of the Company (the
“Conversion
Option”) at the conversion price of
$0.01 per common share (the “Conversion Price” and each a “Conversion”);
|
|
b.
|
In
order to exercise this Conversion Option, the Holder shall surrender this
Promissory Note to the Company, accompanied by written notice of its
intentions to exercise this Conversion Option, which notice shall set
forth the principal amount of this Promissory Note to be converted and
shall be in the form of Exhibit A,
attached hereto (“Notice of Conversion”). Within ten (10)
business days of the Company’s receipt of the Notice of Conversion and
this Note, the Company shall deliver or cause to be delivered to the
Holder, written confirmation that the Shares have been issued in the name
of the Holder;
|
|
c.
|
In
the event of the exercise of the Conversion Option, Holder shall cooperate
with the Company to promptly take any and all additional actions required
to make Holder a stockholder of the Company including, without limitation,
in connection with the issuance of the Shares, such representations as to
financial condition, investment intent and sophisticated investor status
as are reasonably required by counsel for the Company. Holder shall be
deemed to have automatically re-certified the Representations (defined
below) at such time or times as Holder exercises its Conversion Option as
provided herein, and the Company shall be able to rely on such
re-certification for all purposes;
|
|
d.
|
The
Company shall at all times take any and all additional actions as are
necessary to maintain the required authority to issue the Shares to the
Holder, in the event the Holder exercises its rights under the Conversion
Option;
|
|
e.
|
Payment
to Company prior to Holder’s delivery of a Notice of Conversion shall
terminate Holder’s option to
convert;
|
f.
|
Conversion
calculations pursuant to this Section 4 shall be rounded to the nearest
whole share of Common Stock, and no fractional shares shall be issuable by
the Company upon conversion of this Note. Conversion of this Note shall be
deemed payment in full of this Note and this Note shall thereupon be
cancelled;
|
|
g.
|
If
the Company at any time or from time to time on or after the effective
date of the issuance of this Note (the “Original Issuance Date”) effects a subdivision
of its outstanding Common Stock, the Conversion Price then in effect
immediately before that subdivision shall be proportionately decreased,
and conversely, if the Company at any time or from time to time on or
after the Original Issuance Date combines its outstanding shares of Common
Stock into a smaller number of shares, the Conversion Price then in effect
immediately before the combination shall be proportionately
increased;
|
h.
|
All
Shares of Common Stock which may be issued upon conversion of this Note
will, upon issuance by the Company in accordance with the terms of this
Note, be validly issued, free from all taxes and liens with respect to the
issuance thereof (other than those created by the holders), free from all
pre-emptive or similar rights and be fully paid and non
assessable;
|
-2-
i.
|
On
the date of any Conversion, all rights of any Holder with respect to the
amount of this Note converted, will terminate, except only for the rights
of any such Holder to receive certificates (if applicable) for the number
of Shares of Common Stock which this Note has been
Converted.
|
5.
|
Redemption. This
Note may be redeemed by the Company by payment of the entire Principal and
interest outstanding under this Note in cash to
Holder.
|
a.
|
This
Note may be prepaid in whole or in part at any time without
penalty.
|
|
b.
|
Any
partial prepayment shall be applied first to any accrued interest and then
to any principal Loan amount
outstanding.
|
6.
|
Representations and Warranties
of the Company. The Company represents and warrants to Holder as
follows:
|
a.
|
The
execution and delivery by the Company of this Note (i) are within the
Company’s corporate power and authority, and (ii) have been duly
authorized by all necessary corporate action. Further, the
undersigned is a duly authorized representative of the Company and has
been authorized by a resolution of the Board of Directors of the Company
to exercise any and all documents necessary to effectuate the transaction
contemplated hereby.
|
b.
|
This
Note is a legally binding obligation of the Company, enforceable against
the Company in accordance with the terms hereof, except to the extent that
(i) such enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors’ rights, and (ii) the availability
of the remedy of specific performance or in injunctive or other equitable
relief is subject to the discretion of the court before which any
proceeding therefore may be
brought.
|
7.
|
Representations, Warranties and
Covenants of Holder. Holder represents and warrants to the Company,
and agrees, as follows (collectively the “Representations”):
|
a.
|
This
Note and any Conversion Shares issuable upon conversion of this Note are
being acquired by Holder for its own account for investment and not with a
view to, or for sale in connection with, any distribution
thereof.
|
b.
|
Holder
is a non “U.S. person” as such term is defined under
Regulation S as promulgated by the Securities and Exchange Commission
(“SEC”) under
authority of the Securities Act; resides outside of the United States; was
not solicited for an investment in the Company, by the Company or any
person or entity acting on its behalf while it, was located within the
United States; has not entered into this Agreement inside the United
States; certifies under penalty of perjury that it is neither a citizen
nor a resident of the United States and the following definitions and
acknowledgements are applicable to the current purchase, and the issuance
of the Common Stock and the transactions evidenced by this Agreement are
exempt from registration pursuant to Regulation S of the Act; Holder
further represents and warrants that Holder is familiar with Regulation S;
Holder is receiving the Note for its own account and not on behalf of any
U.S. person, and the sale has not been pre-arranged with a purchaser in
the United States; and that "United States" means the United States of
America, its territories and possessions, any State of the United States,
and the District of Columbia.
|
|
c.
|
Holder
has sufficient knowledge and experience in financial and business matters
and is capable of evaluating the risks and merits of Holder’s investment
in the Company; Holder believes that Holder has received or had access to
all information Holder considers necessary or appropriate to make an
informed investment decision with respect to this Note; and Holder is able
financially to bear the risk of losing Holder’s full investment in this
Note.
|
-3-
d.
|
Holder
understands that this Note and any Shares converted pursuant hereto have
not been registered under the Securities Act or registered or qualified
under any the securities laws of any state or other jurisdiction, are
“restricted
securities,” and cannot be resold or otherwise transferred
unless they are registered under the Securities Act, and registered or
qualified under any other applicable securities laws, or an exemption from
such registration and qualification is available. Prior to any proposed
transfer of this Note or any Shares, Holder shall, among other things,
give written notice to the Company of its intention to effect such
transfer, identifying the transferee and describing the manner of the
proposed transfer and, if requested by the Company, accompanied by (i)
investment representations by the transferee similar to those made by
Holder in this Section 7 and (ii) an opinion of counsel satisfactory to
the Company to the effect that the proposed transfer may be effected
without registration under the Securities Act and without registration or
qualification under applicable state or other securities laws. Each
certificate issued to evidence any Shares shall bear a legend as
follows:
"The
securities represented by this certificate have not been registered under
the Securities Act of 1933 or any state securities act. The
securities have been acquired for investment and may not be sold,
transferred, pledged or hypothecated unless (i) they shall have been
registered under the Securities Act of 1933 and any applicable state
securities act, or (ii) the corporation shall have been furnished with an
opinion of counsel, satisfactory to counsel for the corporation, that
registration is not required under any such acts."
|
|
e.
|
The
Holder has read and reviewed the Company’s Registration Statement filing
on the Securities and Exchange Commission’s EDGAR webpage at www.sec.gov, including the risk factors,
results of operations, description of business operations and audited and
unaudited financial statements included
therein.
|
8.
|
Certain Waivers by the
Company. Except
as expressly provided otherwise in this Note, the Company and every
endorser or guarantor, if any, of this Note waive presentment, demand,
notice, protest and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Note,
and assent to any extension or postponement of the time of payment or any
other indulgence, to any substitution, exchange or release of collateral
available to Holder, if any, and to the addition or release of any other
party or person primarily or secondarily
liable.
|
9.
|
Assignment by
Holder. If
and whenever this Note shall be assigned and transferred, or negotiated,
including transfers to substitute or successor trustees, the holder hereof
shall be deemed the “Holder” for all purposes under this
Note.
|
10.
|
Amendment. This Note may not be changed
orally, but only by an agreement in writing, signed by the party against
whom enforcement of any waiver, change, modification or discharge is
sought.
|
11.
|
Costs and Fees. Anything else in this
Note to the contrary notwithstanding, in any action arising out of this
Agreement, the prevailing party shall be entitled to collect from the
non-prevailing party all of its attorneys’ fees. For the
purposes of this Note, the party who receives or is awarded a substantial
portion of the damages or claims sought in any proceeding shall be deemed
the “prevailing” party and attorneys’ fees shall
mean the reasonable fees charged by an attorney or a law firm for legal
services and the services of any legal assistants, and costs of
litigation, including, but not limited to, fees and costs at trial and
appellate levels.
|
-4-
12.
|
Governing Law. It is the intention of
the parties hereto that the terms and provisions of this Note are to be
construed in accordance with and governed by the laws of the State of
Nevada, except as such laws may be preempted by any federal law
controlling the rate of interest which may be charged on account of this
Note.
|
13.
|
No Third Party
Benefit. The
provisions and covenants set forth in this Agreement are made solely for
the benefit of the parties to this Agreement and are not for the benefit
of any other person, and no other person shall have any right to enforce
these provisions and covenants against any party to this
Agreement.
|
14.
|
Jurisdiction, Venue and Jury
Trial Waiver. The parties hereby
consent and agree that, in any actions predicated upon this Note, venue is
properly laid in Nevada and that the Circuit Court in and for Las Vegas,
Nevada, shall have full subject matter and personal jurisdiction over the
parties to determine all issues arising out of or in connection with the
execution and enforcement of this Note.
|
15.
|
Interpretation. The term “Company” as used herein in every instance
shall include the Company’s successors, legal representatives and assigns,
including all subsequent grantees, either voluntarily by act of the
Company or involuntarily by operation of law and shall denote the singular
and/or plural and the masculine and/or feminine and natural and/or
artificial persons, whenever and wherever the contexts so requires or
properly applies. The term “Holder” as used herein in every instance shall
include the Holder’s successors, legal representatives and assigns, as
well as all subsequent assignees, endorsees and holders of this Note,
either voluntarily by act of the parties or involuntarily by operation of
law. Captions and paragraph headings in this Note are for
convenience only and shall not affect its
interpretation.
|
16.
|
WAIVER OF JURY
TRIAL. THE
COMPANY AND HOLDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT EITHER MAY HAVE TO TRIAL BY JURY IN RESPECT TO ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE AND
ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS, (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF EITHER PARTY. THE COMPANY ACKNOWLEDGES
THAT THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO THE HOLDER IN
EXTENDING CREDIT TO THE COMPANY, THAT THE HOLDER WOULD NOT HAVE EXTENDED
SUCH CREDIT WITHOUT THIS JURY TRIAL WAIVER, AND THAT THE COMPANY HAS BEEN
REPRESENTED BY AN ATTORNEY OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN
ATTORNEY IN CONNECTION WITH THIS JURY TRIAL WAIVER AND UNDERSTANDS THE
LEGAL EFFECT OF THIS WAIVER.
|
17.
|
Entire
Agreement. This Agreement constitutes the sole
and only agreement of the parties hereto and supersedes any prior
understanding or written or oral agreements between the parties respecting
the subject matter hereof.
|
18.
|
Effect of Facsimile and
Photocopied Signatures. This Agreement may be executed in
several counterparts, each of which is an original. It shall
not be necessary in making proof of this Agreement or any counterpart
hereof to produce or account for any of the other
counterparts. A copy of this Agreement signed by one Party and
faxed or scanned and emailed to another Party (as a PDF or similar image
file) shall be deemed to have been executed and delivered by the signing
Party as though an original. A photocopy or PDF of this
Agreement shall be effective as an original for all
purposes.
|
[Remainder
of page left intentionally blank. Signature page
follows.]
-5-
IN WITNESS WHEREOF, the
undersigned have caused this Convertible Promissory Note to be executed and
delivered by a duly authorized officer as of the date first above written, to be
effective as of the effective date set forth above.
SANDALWOOD
VENTURES, LTD.
a
Nevada Corporation
|
|
By:
/s/ Edwin Slater
|
|
Edwin
Slater, President
|
Holder:
Morgarlan
Limited
By: ___________________
Its:
___________________
Printed
Name: ___________________
-6-
EXHIBIT
A
Conversion Election
Form
____________,
200_
Sandalwood
Ventures, Ltd.
15
Park
Lossiemouth,
Morayshire 1V30 5SE
Scotland
Re: Conversion of Promissory
Note
Gentlemen:
You are
hereby notified that, pursuant to, and upon the terms and conditions of that
certain Convertible Promissory Note of Sandalwood Ventures, Ltd. (the “Company”),
in the principal amount of $12,500 (the “Note”),
held by me (us), I (we) hereby elect to exercise my (our) Conversion Option (as
such term in defined in the Note), in connection with $__________ of the amount
currently owed under the Note (including $___________ of accrued interest),
effective as of the date of this writing, which amount will convert in
________________ shares of the Company’s Common Stock (the “Conversion”). In
connection with the Conversion, I (we) hereby re-certify, re-confirm and
re-warrant the Representations, as such Representations are defined in Section 7
of the Note.
Please
issue certificate(s) for the applicable shares of the Company’s Common Stock
issuable upon the Conversion, in the name of the person provided
below.
Very
truly yours,
|
|
___________________________
|
|
Name:
|
Please
issue certificate(s) for Common Stock as follows:
______________________________________________
Name
______________________________________________
Address
______________________________________________
Social
Security No. of Shareholder (if applicable)
Please
send the certificate(s) evidencing the Common Stock to:
Attn:___________________________________________
______________________________________________
Address
-7-