EXHIBIT 4.1
CONVERTIBLE LOAN AGREEMENT
OCTOBER 2003
This Convertible Loan Agreement ("Agreement") is made and entered into
to be effective upon execution by and between Utix Group, Inc. (fka Chantal Skin
Care Corporation), a Delaware corporation with an address at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Borrower"), Corporate Sports Incentives,
Inc., a New Hampshire corporation with an address at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ("CSI" or the "Guarantor"), and the lenders who are
signatories hereto, each with an address as set forth opposite their names on
SCHEDULE A attached hereto (each a "Lender" and collectively, the "Lenders"), as
follows:
WHEREAS, CSI entered in a business loan agreement ("CSI Loan
Agreement") with the Lenders pursuant to which CSI borrowed an aggregate amount
of $225,000 ("CSI Loan") from the Lenders, which CSI Loan matures in March 2004;
WHEREAS, the Borrower shall enter into a Share Exchange Agreement with
CSI, ▇▇▇▇ ▇▇▇▇▇▇▇, an individual ("Utix Principal Stockholder"), and the
stockholders of CSI (the "CSI Stockholders"), dated as of October 31, 2003 (the
"Share Exchange Agreement"), whereby the stockholders of CSI will exchange their
shares of CSI common stock for shares of common stock of the Borrower (the
"Share Exchange") and CSI will become a wholly-owned subsidiary of Borrower; and
WHEREAS, pursuant to Section 1.01(e) of the Share Exchange Agreement,
the Lenders have agreed to cancel the indebtedness in the CSI Loan Agreement in
consideration for Borrower entering into this Agreement with the Lenders,
whereby Lenders will lend to Borrower an aggregate amount of $225,000 (the
"Loan") pursuant to the terms of this Agreement and the Notes (as defined
hereinafter).
NOW THEREFORE, for good and valuable consideration, the parties
hereto, intending to be legally bound, agree as follows
1. LOAN AGREEMENT. Borrower agrees to borrow from each Lender, and each
Lender agrees to lend to Borrower on the date hereof, the amounts set
forth opposite each Lender's name in SCHEDULE A attached hereto,
subject to the terms and conditions set forth hereunder and in the
notes that are substantially in the form attached hereto as EXHIBIT A
(the "Notes"), in an aggregate amount of Two Hundred Twenty Five
Thousand Dollars ($225,000).
a. CANCELLATION OF CSI LOAN. As additional consideration for
canceling the indebtedness evidenced by the CSI Loan
Agreement, each Lender shall have the right, but not the
obligation, for every one dollar ($1) of principal that such
Lender loans to the Borrower, to purchase one share of
common stock of the Borrower for $0.001 per share, on the
Closing Date (as defined in the Share Exchange Agreement).
2. TERMS.
a. INTEREST. The Loan shall bear interest at a rate of seven
percent (7%) per annum. Interest will be paid quarterly,
commencing on March 31, 2004 and on each June 30, September
30 and December 31 thereafter until the principal amount and
all accrued but unpaid interest has been paid.
b. MATURITY. The Loan will mature on the earlier of (i) the
one-year anniversary of the Effective Date (as defined in
the Share Exchange Agreement), (ii) the occurrence of an
Event of Default (as defined in the Notes) in accordance
with the procedures set forth in the Notes, and (iii) the
Borrower's completion of an equity financing of at least
$1.5 million, which such financing shall be exclusive of the
Rule 504 Offering (as defined in Section 4.03(i) of the
Share Exchange Agreement).
c. GUARANTEE. The Loan shall be unconditionally guaranteed by
CSI in substantially the form of EXHIBIT B attached hereto.
d. VOLUNTARY CONVERSION. Each Lender has the right, at the
Lender's option, at any time prior to payment in full of the
principal balance of their Note, to convert their Note, in
whole or in part, into fully paid and nonassessable shares
of Common Stock of the Borrower (the "Common Stock"). The
number of shares of Common Stock into which the Note may be
converted ("Conversion Shares") shall be determined by
multiplying the aggregate principal amount of the Note by
the Conversion Price (as defined below) in effect at the
time of such conversion. The Conversion Price shall be equal
to (A) the quotient of (x) 1.2 divided by (y) 50,000
multiplied by (B) 96,794.609.
3. REPRESENTATIONS.
a. The Borrower hereby represents and warrants to the Lenders
as follows:
(i) GOOD STANDING. Borrower is a corporation duly
organized, validly existing, and in good standing
under the laws of the State of Delaware, dully
authorized to conduct business and in good standing
under the laws of each jurisdiction where such
qualification is material to the conduct of business.
(ii) CORPORATE AUTHORITY. The Borrower has full power and
authority to enter into this Agreement, to borrow the
funds, to execute and deliver the Loan, and to incur
the obligations provided for herein, all of which have
been duly authorized by all proper and necessary
corporate action. No consent or approval of
shareholders or of any public authority is required as
a condition to the validity of this Agreement.
(iii) BINDING AGREEMENT. This Agreement and the Loan, when
issued and delivered pursuant hereto for value
received, shall constitute the legal, valid, and
binding obligation of the Borrower in accordance with
its terms, subject to bankruptcy and insolvency laws
and any other laws of general application affecting
the rights and remedies of creditors.
b. The Guarantor hereby represents and warrants to the Lenders
as follows:
(i) GOOD STANDING. Guarantor is a corporation duly
organized, validly existing, and in good standing
under the laws of the State of New Hampshire, dully
authorized to conduct business and in good standing
under the laws of each jurisdiction where such
qualification is material to the conduct of business.
(ii) CORPORATE AUTHORITY. Guarantor has full power and
authority to enter into this Agreement, to guarantee
the Loan, to execute and deliver the Guarantee, and to
incur the obligations provided for herein, all of
which have been duly authorized by all proper and
necessary corporate action. No consent or approval of
shareholders or of any public authority is required as
a condition to the validity of this Agreement.
(iii) BINDING AGREEMENT. This Agreement and the Guarantee,
when issued and delivered pursuant hereto for value
received, shall constitute the legal, valid, and
binding obligation of the Guarantor in accordance with
its terms, subject to bankruptcy and insolvency laws
and any other laws of general application affecting
the rights and remedies of creditors.
4. AFFIRMATIVE COVENANTS. Until the payment in full of the Loan and
performance of all obligations of the Borrower and Guarantor
hereunder, unless otherwise indicated, the Borrower and Guarantor
shall:
a. TAXES. Pay and discharge all taxes, assessments, and
governmental charges upon it, its incomes, and its
properties prior to the date on which penalties are attached
thereto, unless and to the extent only that such taxes shall
be contested in good faith and by appropriate proceedings by
the Borrower or Guarantor, as applicable.
b. INSURANCE. Maintain insurance with insurance companies
reasonably acceptable to the Lenders on such properties, in
such amounts and against such risks as is customarily
maintained by similar businesses operating within the same
industry.
c. NOTICE OF CLAIMS. Notify Lenders of any claims made or legal
processes instituted against the properties or other assets
of Borrower or Guarantor,
as applicable, within fifteen (15) days of Borrower or
Guarantor, as applicable, becoming aware of the existence of
such claim or legal process. Agree to diligently work to
resolve, in an efficient and cost effective manner, such
claims.
5. NEGATIVE COVENANTS. Until payment in full of the Loan and the
performance of all other obligations of the Borrower and Guarantor
hereunder, the Borrower and Guarantor shall not, except with the prior
written consent of a majority (51%) of the Lenders:
a. Make loans or advances to a person, firm or corporation,
except loans or advances made in the ordinary course of
business.
b. Other than pursuant to the terms of the Share Exchange
Agreement, issue, incur or assume any indebtedness, nor
become liable, whether as an endorser, guarantor, surety, or
otherwise for any debt or obligation of any other person,
firm, or corporation.
6. EVENTS OF DEFAULT. The amounts due hereunder shall become immediately
due and payable in full upon the occurrence of any one or more of the
following events of default (the "Events of Default"). In all
instances below, Borrower or Guarantor, as applicable, has sixty (60)
days to cure.
a. Default in the payment of the principal and unpaid accrued
interest of the Loan when due and payable, whether at
maturity or otherwise; or
b. Failure of a representation of Borrower or Guarantor to be
true; or
c. Failure of Borrower or Guarantor to observe or perform any
material term, covenant, or agreement contained in this
Agreement, or the dissolution, termination of existence, or
business failure of the Borrower or Guarantor; or
d. The institution by the Borrower or Guarantor of proceedings
to be adjudicated as bankrupt or insolvent, or the consent
by it to institution of bankruptcy or insolvency proceedings
against it or the filing by it of a petition or answer or
consent seeking reorganization or release under the federal
Bankruptcy Act, or any other applicable federal or state
law, or the consent by it to the filing of any such petition
or the appointment of a receiver, liquidator, assignee,
trustee or other similar official of the Borrower or
Guarantor, as applicable, or of any substantial part of its
property, or the making by it of an assignment for the
benefit of creditors, or the taking of corporate action by
the Borrower or Guarantor in furtherance of any such action;
or
e. If, within sixty (60) days after the commencement of an
action against the Borrower or Guarantor (and service of
process in connection therewith on the Borrower or
Guarantor) seeking any bankruptcy, insolvency,
reorganization, liquidation, dissolution or similar relief
under any present or future statute, law or regulation, such
action shall not have been resolved in favor of the Borrower
or Guarantor, as applicable, or all orders or proceedings
thereunder affecting the operations or the business of the
Borrower or Guarantor, as applicable, stayed, or if the stay
of any such order or proceeding shall thereafter be set
aside, or if, within sixty (60) days after the appointment
without the consent or acquiescence of the Borrower or
Guarantor, as applicable, of any trustee, receiver or
liquidator of the Borrower or Guarantor, as applicable, or
of all or any substantial part of the properties of the
Borrower, or Guarantor, as applicable, such appointment
shall not have been vacated; or
f. The cessation of Borrower's or Guarantor's business for more
than thirty (30) days.
7. ASSIGNMENT. No portion of the Loan shall be assignable to a third
party without the express written consent of the Borrower.
8. MISCELLANEOUS
a. This Agreement and all of the covenants, warranties, and
representations of the Borrower and Guarantor and all powers
and rights of Lenders hereunder shall be in addition to and
cumulative of all other covenants, representations, and
warranties of Borrower and Guarantor and all other rights
and powers of Lenders contained in, or provided for in, any
other instrument or document now or hereafter executed and
delivered by Borrower or Guarantor to or in favor of
Lenders. No delay or failure on the part of any Lender in
the exercise of any power or right shall operate as a waiver
thereof nor shall any single or partial exercise of the same
preclude any other or further exercise thereof or the
exercise of any other power or right, and the rights and
remedies of Lenders are cumulative to and not exclusive of
remedies which they would otherwise have. No waiver, consent
or modification, or amendment shall be effective as against
the Lenders unless the same is in writing and signed by the
holders of at least a majority of the face amount of all
then outstanding Notes issued pursuant to this Agreement. No
such amendment, modification, wavier or consent shall extend
to or affect any obligation or right except to the extent
expressly provided for therein. All computations and
determinations of the assets and liabilities of Borrower or
Guarantor for the purpose of this Agreement shall be made in
accordance with generally accepted accounting principles
consistently applied, except as may be otherwise
specifically provided herein. Any notice, request or other
communication required or permitted hereunder shall be in
writing and
shall be deemed to have been duly given on the date of
service if personally served on the party to whom such
notice is to be given, on the date of transmittal of service
via telecopy to the party to whom notice is to be given
(with a confirming copy delivered within 24 hours
thereafter), or on the third day after mailing if mailed to
the party to whom notice is to be given, by first class
mail, registered or certified mail, postage prepaid, or via
a recognized overnight courier providing a receipt for
delivery and properly addressed to the parties at the
respective addresses of the parties as set forth herein .
Any party hereto may by notice so given change its address
for future notice hereunder.
b. This Agreement shall be binding upon Borrower and Guarantor
and its successors and assigns, and shall inure to the
benefit of the Lenders and the benefit of their respective
successors and assigns, including any subsequent holder or
holders of the Notes or any interest therein.
c. Borrower herby expressly waives any presentment, demand,
protest or other notice of any kind.
d. GOVERNING LAW. The laws of the State of New York shall
govern this Agreement.
e. SURVIVABILITY. Should any portion of this Agreement be
voided by a court of competent jurisdiction, all remaining
clauses in the Agreement shall remain in full force and
effect.
[signature page follows]
Executed on the day and year below written. This Agreement may be executed in
any number of counterparts, each constituting an original, but altogether one
agreement. A facsimile or other copy of this Agreement shall be considered as
having the same effect and be equivalent to an original signed document.
Borrower:
Utix Group, Inc. (fka Chantal Skin Care Corporation)
By:
-----------------------------
Name:
Title:
Date:
---------------------------
GUARANTOR:
Corporate Sports Incentives, Inc.
By:
-----------------------------
Name:
Title:
Date:
---------------------------
Lenders:
By:
-----------------------------
Name:
---------------------------
SSN:
----------------------------
Date:
---------------------------
SCHEDULE A
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LENDERS ADDRESS LOAN AMOUNT
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ $ 75,000
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇,▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 50,000
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
EXHIBIT A
---------
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), NOR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS
AND MAY NOT BE PLEDGED, SOLD, ASSIGNED OR TRANSFERRED UNLESS (I) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAW REQUIREMENTS HAVE BEEN MET OR (II) UTIX GROUP,
INC. RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO UTIX GROUP, INC.
THAT EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND
THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES
LAWS ARE AVAILABLE.
No. _____ $_________
UTIX GROUP, INC.
CONVERTIBLE PROMISSORY NOTE
November __, 2003
Utix Group, Inc., a Delaware corporation formerly known as Chantal Skin
Care Corporation (the "Company") with an address at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, for value received hereby promises to pay to
_____________________________________ (the "Holder"), or its registered assigns,
the sum of ______________ Dollars ($_______), or such lesser amount as shall
then be outstanding hereunder. The principal amount hereof and any unpaid
accrued interest hereon, as set forth below, shall be due and payable on the
earlier to occur of (i) November __, 2004, (ii) when declared due and payable by
the Holder upon the occurrence of an Event of Default (as defined below), or
(iii) the completion by the Company of an equity financing of at least $1.5
million, which such financing shall be exclusive of the Rule 504 Offering (as
defined in Section 4.03(i) of the Share Exchange Agreement) (the "Maturity
Date"). Payment for all amounts due hereunder shall be made by mail to the
registered address of the Holder. This Note is issued in connection with the
Convertible Loan Agreement between the Company, Corporate Sports Incentives,
Inc., a New Hampshire corporation ("CSI" or the "Guarantor") and the Lenders who
are signatories thereto, dated as of October __, 2003, as the same may from time
to time be amended, modified or supplemented (the "Loan Agreement"). The holder
of this Note is subject to certain restrictions set forth in the Loan Agreement
and shall be entitled to certain rights and privileges set forth in the Loan
Agreement. This Note is one of the Notes referred to as the "Notes" in the Loan
Agreement. Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Loan Agreement.
The following is a statement of the rights of the Holder of this Note
and the conditions to which this Note is subject, and to which the Holder
hereof, by the acceptance of this Note, agrees:
1. DEFINITIONS. As used in this Note, the following terms, unless
the context otherwise requires, have the following meanings:
(i) "Company" includes any corporation which shall
succeed to or assume the obligations of the Company under this Note.
(ii) "Holder," when the context refers to a holder of this
Note, shall mean any person who shall at the time be the registered
holder of this Note.
2. INTEREST. Commencing on March 31, 2004, and on each June 30,
September 30 and December 31 thereafter until all outstanding principal and
interest on this Note shall have been paid in full, the Company shall pay
interest at the rate of seven percent (7%) per annum (the "Interest Rate") on
the principal of this Note outstanding during the period beginning on the date
of issuance of this Note and ending on the date that the principal amount of
this Note becomes due and payable.
3. EVENTS OF DEFAULT. If any of the events specified in this
Section 3 shall occur (herein individually referred to as an "Event of
Default"), the Holder of the Note may, so long as such condition exists, declare
the entire principal and unpaid accrued interest hereon immediately due and
payable. In all instances below, the Company or the Guarantor, as applicable,
has sixty (60) days to cure.
(i) Default in the payment of the principal and unpaid
accrued interest of this Note when due and payable, whether at maturity
or otherwise;
(ii) Failure of a representation of the Company or the
Guarantor in the Loan Agreement to be true;
(iii) Failure of the Company or the Guarantor to observe or
perform any material term, covenant, or agreement contained in the Loan
Agreement, or the dissolution, termination of existence, or business
failure of the Company or the Guarantor;
(iv) The institution by the Company or the Guarantor of
proceedings to be adjudicated as bankrupt or insolvent, or the consent
by it to institution of bankruptcy or insolvency proceedings against it
or the filing by it of a petition or answer or consent seeking
reorganization or release under the federal Bankruptcy Act, or any
other applicable federal or state law, or the consent by it to the
filing of any such petition or the appointment of a receiver,
liquidator, assignee, trustee or other similar official of the Company
or the Guarantor, as applicable, or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the taking of corporate action by the Company or the
Guarantor in furtherance of any such action; or
(v) If, within sixty (60) days after the commencement of
an action against the Company or the Guarantor (and service of process
in connection therewith on the Company or the Guarantor) seeking any
bankruptcy, insolvency, reorganization, liquidation, dissolution or
similar relief under any present or future statute, law or regulation,
such action shall not have been resolved in favor of the Company or the
Guarantor, as applicable, or all orders or proceedings thereunder
affecting the operations or the business of the Company or the
Guarantor, as applicable, stayed, or if the stay of any such order or
proceeding shall thereafter be set aside, or if, within sixty (60) days
after the appointment without the consent or acquiescence of the
Company or the Guarantor, as applicable, of any trustee, receiver or
liquidator of the Company or the Guarantor, as applicable, or of all or
any substantial part of the properties of the Company, or the
Guarantor, as applicable, such appointment shall not have been vacated;
or
(vi) The cessation of the Company's or Guarantor's
business for more than thirty (30) days.
4. GUARANTEE. The indebtedness evidenced by this Note is
unconditionally guaranteed by the Guarantor.
5. CONVERSION.
5.1 VOLUNTARY CONVERSION. The Holder of this Note has the
right, at the Holder's option, at any time prior to payment in full of the
principal balance of this Note, to convert this Note, in accordance with the
provisions of Section 5.3 hereof, in whole or in part, into fully paid and
nonassessable shares of Common Stock of the Company (the "Common Stock"). The
number of shares of Common Stock into which this Note may be converted
("Conversion Shares") shall be determined by multiplying the
principal amount of the Note by the Conversion Price (as defined below). The
Conversion Price shall be equal to (A) the quotient of (x) 1.2 divided by (y)
50,000 multiplied by (B) 96,794.609.
5.2 CONVERSION PROCEDURE.
5.2.1 NOTICE OF CONVERSION. Before the Holder
shall be entitled to convert this Note into shares of Common Stock, it shall
surrender this Note at the principal office of the Company and shall give
written notice by mail, postage prepaid, to the Company at its principal
corporate office, of the election to convert the same pursuant to Section 5.1,
and shall state therein the name or names in which the certificate or
certificates for shares of Common Stock are to be issued. The Company shall, as
soon as practicable thereafter, issue and deliver at such office to the Holder
of this Note a certificate or certificates for the number of shares of Common
Stock to which the Holder of this Note shall be entitled as aforesaid. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of this Note, and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock as of such date.
5.3 DELIVERY OF STOCK CERTIFICATES. As promptly as
practicable after the conversion of this Note, the Company at its expense will
issue and deliver to the Holder of this Note a certificate or certificates for
the number of full shares of Common Stock issuable upon such conversion.
5.4 MECHANICS AND EFFECT OF CONVERSION. No fractional
shares of Common Stock shall be issued upon conversion of this Note. In lieu of
the Company issuing any fractional shares to the Holder upon the conversion of
this Note, the Company shall pay to the Holder the amount of outstanding
principal that is not so converted, such payment to be in the form as provided
below. Upon the conversion of this Note pursuant to Section 5.1 above, the
Holder shall surrender this Note, duly endorsed, at the principal office of the
Company. At its expense, the Company shall, as soon as practicable thereafter,
issue and deliver to such Holder at such principal office a certificate or
certificates for the number of shares of such Common Stock which the Holder
shall be entitled upon such conversion (bearing such legends as are required by
the Loan Agreement and applicable state and federal securities laws in the
opinion of counsel to the Company), together with any other securities and
property to which the Holder is entitled upon such conversion under the terms of
this Note, including a check payable to the Holder for any cash amounts payable
as described above. Upon conversion of this Note, the Company shall be forever
released from all of its obligations and liabilities under this Note.
6. CONVERSION PRICE ADJUSTMENTS.
6.2 ADJUSTMENTS FOR STOCK SPLITS AND SUBDIVISIONS. In the
event the Company should at any time or from time to time after the date of
issuance hereof fix a record date for the effectuation of a split or subdivision
of the outstanding shares of Common Stock, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as "Common Stock Equivalents") without payment of any consideration
by such holder for the additional shares of Common Stock or the Common Stock
Equivalents, then, as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is fixed), the Conversion
Price of this Note shall be appropriately decreased so that the number of shares
of Common Stock issuable upon conversion of this Note shall be increased in
proportion to such increase of outstanding shares.
6.3 ADJUSTMENTS FOR REVERSE STOCK SPLITS. If the number
of shares of Common Stock outstanding at any time after the date hereof is
decreased by a combination of the outstanding shares of Common Stock, then,
following the record date of such combination, the Conversion Price for this
Note shall be appropriately increased so that the number of shares of Common
Stock issuable on conversion hereof shall be decreased in proportion to such
decrease in outstanding shares.
6.3 NOTICES OF RECORD DATE, ETC. In the event of:
6.3.1 Any taking by the Company of a record of the
holders of any class of
securities of the Company for the purpose of determining the holders thereof who
are entitled to any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property, or to receive
any other right; or
6.3.2 Any capital reorganization of the Company,
any reclassification or recapitalization of the capital stock of the Company or
any transfer of all or substantially all of the assets of the Company to any
other person or any consolidation or merger involving the Company; or
6.3.3 Any voluntary or involuntary dissolution,
liquidation or winding up of the Company, then the Company will mail to the
holder of this Note at least ten (10) business days prior to the earliest date
specified therein, a notice specifying:
6.3.3.1 The date on which any such record
is to be taken for the purpose of such right, and the amount and character of
such right; and
6.3.3.2 The date on which any such
reorganization, reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding up is expected to become effective and the record date
for determining stockholders entitled to vote thereon.
6.4 RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The
Company shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock solely for the purpose of effecting the
conversion of the Note such number of its shares of Common Stock as shall from
time to time be sufficient to effect the conversion of the Note; and if at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of the entire outstanding principal amount
of this Note, in addition to such other remedies as shall be available to the
holder of this Note, the Company will use its best efforts to take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purposes.
7. TREATMENT OF NOTE. To the extent permitted by generally
accepted accounting principles, the Company will treat, account and report the
Note as debt and not equity for accounting purposes and with respect to any
returns filed with federal, state or local tax authorities.
8. NO STOCKHOLDER RIGHTS. Nothing contained in this Note shall be
construed as conferring upon the Holder or any other person the right to vote or
to consent or to receive notice as a stockholder in respect of meetings of
stockholders for the election of directors of the Company or any other matters
or any rights whatsoever as a stockholder of the Company; and no interest shall
be payable or accrued in respect of the Conversion Shares obtainable hereunder
until, and only to the extent that, this Note shall have been converted.
9. PREPAYMENT. Prior to the Maturity Date, this Note may be
prepaid by the Company, without prepayment penalty, upon twenty (20) days' prior
written notice to the Holder, at any time, in whole or in part.
10. ASSIGNMENT. Subject to the restrictions on transfer described
in Section 12 below, the rights and obligations of the Company and the Holder of
this Note shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties.
11. WAIVER AND AMENDMENT. Any provision of this Note may be
amended, waived or modified upon the written consent of the Company and the
holders of at least a majority of the face amount of all then outstanding Notes
issued pursuant to the Loan Agreement.
12. TRANSFER OF THIS NOTE. With respect to any offer, sale or
other disposition of this Note, the Holder will give written notice to the
Company prior thereto, describing briefly the manner thereof, together with a
written opinion of such Holder's counsel reasonably acceptable to the Company,
to the effect that such offer, sale or other distribution may be effected
without registration or qualification (under any federal
or state law then in effect). Promptly upon receiving such written notice and
reasonably satisfactory opinion, if so requested, the Company shall notify such
Holder that such Holder may sell or otherwise dispose of this Note, all in
accordance with the terms of the notice delivered to the Company. If a
determination has been made pursuant to this Section 12 that the opinion of
counsel for the Holder is not reasonably satisfactory to the Company, the
Company shall so notify the Holder promptly after such determination has been
made. Each Note thus transferred and each certificate representing the
securities thus transferred shall bear a legend as to the applicable
restrictions on transferability in order to ensure compliance with the
Securities Act, unless in the opinion of counsel for the Company such legend is
not required. The Company may issue stop transfer instructions to its transfer
agent in connection with such restrictions.
13. NOTICES. Any notice, request or other communication required
or permitted hereunder shall be in writing and shall be deemed to have been duly
given on the date of service if personally served on the party to whom such
notice is to be given, on the date of transmittal of service via telecopy to the
party to whom notice is to be given (with a confirming copy delivered within 24
hours thereafter), or on the third day after mailing if mailed to the party to
whom notice is to be given, by first class mail, registered or certified mail,
postage prepaid, or via a recognized overnight courier providing a receipt for
delivery and properly addressed at the respective addresses of the parties as
set forth herein. Any party hereto may by notice so given change its address for
future notice hereunder.
14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, excluding that
body of law relating to conflict of laws.
15. HEADING; REFERENCES. All headings used herein are used for
convenience only and shall not be used to construe or interpret this Note.
Except where otherwise indicated, all references herein to Sections refer to
Sections hereof.
IN WITNESS WHEREOF, the Company has caused this Note to be issued this
_____ day of November, 2003.
UTIX GROUP, INC. (fka Chantal Skin Care Corporation)
By:
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Name:
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Title:
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Name of Holder:
-----------------------------
Address:
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EXHIBIT A
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NOTICE OF CONVERSION
(To Be Signed Only Upon Conversion of Note)
The undersigned, the holder of the foregoing Note, hereby surrenders
such Note for conversion into shares of Common Stock of UTIX GROUP, INC., or its
successor-in-interest, to the extent of $__________ unpaid principal amount of
such Note, and requests that the certificates for such shares be issued in the
name of, and delivered to, _____________, whose address is
______________________
Dated:
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(Signature must conform in all respects
to name of holder as specified on the
face of the Note)
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(Address)
EXHIBIT B
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GUARANTEE
Corporate Sports Incentives, Inc., a New Hampshire corporation
("Guarantor"), hereby guarantees the prompt payment of the principal of and
interest on the promissory notes of Utix Group, Inc. (fka Chantal Skin Care
Corporation), a Delaware corporation (Maker"), dated November __, 2003, that are
issued pursuant to the Convertible Loan Agreement, dated October 2003, by and
among Maker, Guarantor and the lenders who are signatories thereto (the "Loan
Agreement"), in an aggregate principal amount of Two Hundred Twenty Five
Thousand Dollars ($225,000) (the "Notes").
This Guarantee is issued pursuant to the Loan Agreement, and is subject
to the terms and conditions of the Loan Agreement, including, without
limitation, the obligation of the Guarantor to satisfy this Guarantee.
Guarantor agrees that it shall not be necessary for the holder of the
Notes to proceed in any manner against Maker for the payment of the Notes as a
condition precedent to enforcing this Guarantee.
Guarantor hereby waives notice of acceptance.
IN WITNESS WHEREOF, Guarantor has executed this Guarantee on the _____
day of November, 2003.
CORPORATE SPORTS INCENTIVES, INC.
By:
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Name:
Title: