EXHIBIT 4.1
PROMISSORY NOTE
December __, 2003 $_______
FOR VALUE RECEIVED, the undersigned, NEWPORT INTERNATIONAL GROUP, INC.
("Maker"), having a business address at ▇▇▇▇▇ ▇▇ ▇▇▇▇▇, #▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, hereby promises to pay to the order of __________________
("Payee" or "Holder"), at the date of maturity set forth below, the principal
amount of ____________ dollars ($_________), together with interest on the
unpaid principal amount at the rate of 8% per annum, and on any overdue payment
of principal at the rate of 1 1/2% per month (18% per annum), and with the
principal balance and all accrued interest being due and payable 24 months from
the final closing date of the Offering ("Offering") pursuant to which this Note
is issued.
1. PAYMENTS OF INTEREST AND PRINCIPAL.
a. Interest. Maker shall pay interest to ▇▇▇▇▇ on the unpaid
outstanding principal balance owed to Payee hereunder at the
rate of eight percent (8%) per annum to be paid quarterly
commencing the quarter ending March 31, 2004. Interest may be
paid in cash or common stock at the option of the Company.
Common stock will be calculated at $0.75 in the event there is
no public market for the common stock, or the ten-day average
closing bid price of the stock prior to the end of the quarter
if and when it trades publicly. Interest payment in common
stock will not be subject to reset provisions contained in
this Offering. Interest not paid within thirty (30) days
following the end of each quarter shall cause the conversion
price of both the Notes and the warrants to be issued in
connection herewith to be reduced by 10% from the current
conversion price per each such occurrence.
b. Maturity. Maker shall have no duty or obligation to pay any
portion of the outstanding principal amount owed hereunder,
except as hereinafter provided, 24 months from the final
closing date of the Offering pursuant to which this Note is
issued ("Maturity"). At Maturity, all accrued interest and
outstanding principal shall be due and payable, and shall be
paid to Payee;
c. Payments. All payments made hereunder shall be applied as made
first to the payment of interest then due, and the balance of
said payment shall be applied to the payment of the principal
sum.
2. PLACEMENT OF PAYMENT. So long as Payee shall hold this Note, all
payments of principal and interest shall be made at the address of Maker as
specified herein upon presentment of this Note.
3. PREPAYMENT. From and after the date hereof, Maker shall have the
option to prepay all, but not in part, the principal balance, together with
accrued interest on the principal amount, of this Note. There is no prepayment
penalty.
4. CONVERSION. The Payee may convert all or any amount of the principal
amount and any accrued and unpaid interest on the Note into the common stock of
the Maker at a conversion price of Seventy-Five Cents ($0.75) per share of
common stock, subject to adjustment as hereinafter provided. In the event the
outstanding common stock of the Maker is hereafter changed into or exchanged for
a different number or kind of shares, or other securities of the Maker, or of
another corporation, by reason of merger, consolidation, other reorganization,
recapitalization, reclassification, combination of shares,
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stock split-up, reverse stock split, forward stock split, stock dividend, or
otherwise, the aggregate number, price and kind of securities subject to the
conversion rights of this Note shall be adjusted appropriately.
5. SPECIAL RESET TERMS. In the event the Maker issues any shares of its
common stock or issues any options, warrants, convertible preferred stock or
convertible debt issuable or convertible into common stock of the Maker at an
exercise or conversion price per share less than $0.75 per share (or lesser
price resulting from any subsequent reset price below $0.75) within two years
following the final closing date of the Offering, then the exercise price or
conversion price, as the case may be, of this Note shall be reset to such lower
price. This reset provision shall not apply with regard to options and warrants
covered by a Form S-8 Registration Statement for employees, directors, and
consultants that are unanimously approved by the Board of Directors, provided
that such Board includes a Board member nominated by vFinance Investments, Inc.
or successor firm. In addition, the reset provision shall not apply with respect
to any securities approved by a majority in interest of the principle amount of
promissory notes issued in this Offering.
6. DEFAULT. The occurrence of any of the following shall constitute an
event of default ("Event of Default") provided such default is declared by the
holders of at least 40% of the principal amount of the promissory notes issued
in this Offering then outstanding:
a. Failure to Pay. Maker fails to pay, when due, any of the
obligations provided for in this Note at their due date or
under any other note or obligations of Maker to the Payee;
b. Denominated Events. The occurrence of any event expressly
denominated as an Event of Default in this Note;
c. Failure to Perform. Maker fails to perform or observe any
material covenant, term or condition of this Note, or any
other note or obligation issued or owing in respect to Payee
and to be performed or observed by Maker, and such failure
continues unremedied for a period of two (2) days after
written or facsimile notice from Payee to Maker of such
failure;
d. Petition By or Against Maker. There is filed by or against
Maker any petition or complaint with respect to its own
financial condition under any state or federal bankruptcy law
or any amendment thereto (including, without limitation, a
petition or reorganization, arrangement or extension of debts)
or under any other similar or insolvency laws providing for
the relief of debtors;
e. Appointment of Receiver. A receiver, trustee, conservator or
liquidator is appointed for Maker, or for all or a substantial
part of its assets, or Maker shall be adjudicated bankrupt or
in need of any relief provided to debtors by any court; or
f. Material Misstatements. The written materials furnished with
respect to the Maker contain a material misstatement of a
material fact or omits to state a material fact relevant to
the Maker, its management, or the operations of the Maker.
7. REMEDIES.
a. Acceleration. Upon the occurrence of an Event of Default and
for so long as such default is continuing:
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(i) The total amount of (a) of this Note and all other
sums owing to Payee which are (i) then due and unpaid
or (ii) thereafter to become due and payable; and (b)
interest on the foregoing sums, at the rate of one
and one-half percent (1 1/2%) per month, but not
greater than the highest rate permitted by law, from
said occurrence until paid in full (the "Default
Amount") shall, at the option of Payee, become
immediately due and payable without notice or demand;
and
(ii) Payee may exercise any of the other remedies provided
under applicable laws.
8. CUMULATIVE REMEDIES; WAIVERS. No remedy referred to herein is
intended to be exclusive, but each shall be cumulative and in addition to any
other remedy referred to above or otherwise available to Payee at law or in
equity. No express or implied waiver by ▇▇▇▇▇ of any default or Event of Default
hereunder shall in any way be, or be construed to be, a waiver of any future or
subsequent default or Event of Default. The failure or delay of Payee in
exercising any rights granted it hereunder under any occurrence of any of the
contingencies set forth herein shall not constitute a waiver of any such right
upon the continuation or recurrence of any such contingencies or similar
contingencies, and any single or partial exercise of any particular right by
Payee shall not exhaust the same or constitute a waiver of any other right
provided herein.
9. COSTS AND EXPENSES. Maker shall be liable for all costs, charges and
expenses incurred by ▇▇▇▇▇ by reason of the occurrence of any Event of Default
or the exercise of ▇▇▇▇▇'s remedies with respect thereto.
10. NO MARSHALLING. Payee shall be under no obligation to proceed
against any or all of the collateral before proceeding directly against Maker.
Payee shall be under no obligation whatsoever to proceed first against any of
the Collateral before proceeding against any other of the Collateral. It is
expressly understood and agreed that all of the Collateral stands as equal
security for all obligations described above, and that Payee shall have the
right to proceed against any or all of the Collateral in any order, or
simultaneously, as in its sole discretion it shall determine. It is further
understood and agreed that ▇▇▇▇▇ shall have the right, as it, in its sole
discretion, shall determine to retain, sell or dispose of any or all of the
Collateral in any order or simultaneously.
11. OTHER REMEDIES. The remedies granted to Payee herein upon an Event
of Default are not restrictive of any and all other rights and remedies of Payee
provided for by this Agreement, any of the relevant documents and applicable
law.
12. MISCELLANEOUS.
a. Waivers. No waiver of any term or condition of this Note shall
be construed to be a waiver of any succeeding breach of the
same term or condition. No failure or delay of Payee to
exercise any power hereunder, or it insists upon strict
compliance by Maker of any obligations hereunder, and no
custom or other practice at variance with the terms hereof
shall constitute a waiver of the right of Payee to demand
exact compliance with such terms.
b. Invalid Terms. In the event any provision contained in this
Note shall, for any reason, be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this
Note, and this Note shall be construed as if such invalid,
illegal or unenforceable provision had never been contained
herein.
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c. Successors. This Note shall be binding upon Maker, its legal
representatives, successors and assigns, and inure to the
benefit of Payee, its legal representatives, successors and
assigns.
d. Controlling Law. This Note shall be read, construed and
governed in all respects in accordance with the laws of the
State of New York.
e. Amendments. This Note may be amended only by an instrument in
writing and executed by the party against which enforcement of
the amendment is sought.
13. NOTICES. All notices, request, demands and other communications
required or permitted to be given hereunder shall be sufficiently given if
address to:
Maker: Newport International Group, Inc.
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ #▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Payee: _________________________________
_________________________________
_________________________________
_________________________________
posted in the U.S. Mail by certified or registered mail, return receipt
requested or by overnight mail, including appropriate receipts. Any party may
change said address by giving the other party hereto notice of such change of
address. Notice given as hereinabove prescribed shall be deemed given on the
date of its deposit in the U.S. Mail or with the overnight delivery service.
14. HEADINGS. All section and subsection headings herein, wherever they
appear, are for convenience only and shall not affect the construction of any
terms herein.
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed
by its duly authorized officer and its seal affixed hereto, as of the day and
year first above written.
NEWPORT INTERNATIONAL, INC.
By:
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▇▇▇▇ ▇▇▇▇▇, President
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