FORM OF AMENDED AND RESTATED KANEB NOTE] SECOND AMENDED AND RESTATED PROMISSORY NOTE CONVERTIBLE INTO COMMON STOCK OF WT HOLDINGS CORPORATION May __, 2006
EXHIBIT
10.5
[FORM
OF AMENDED AND RESTATED KANEB NOTE]
SECOND
AMENDED AND RESTATED PROMISSORY NOTE
CONVERTIBLE
INTO COMMON STOCK
OF
WT
HOLDINGS CORPORATION
May
__,
2006
| Due July 20, 2006 |
$__________
|
For
value
received, WT HOLDINGS CORPORATION (formerly Fortune Entertainment Corporation),
a Delaware corporation (the “Maker”),
hereby promises to pay ______________
(collectively, with its successors, representatives, and permitted assigns,
the
“Holder”),
in
accordance with the terms hereinafter provided, the principal amount of
$________
together
with interest thereon.
This
Note
hereby amends and restates that certain 5% promissory note in the principal
amount of $____ dated November 21, 2005 (“Assumed
Note”)
issued
to ___________ (“Assignor”).
This
Note is issued in connection with the assignment of $________ in principal
and
$_______ in accrued interest under the Assumed Note from Assignor to Holder.
The
Maker has delivered this Note to Holder following the Maker’s receipt of the
Assumed Note. This is one of a series of ____ (__) promissory notes issued
to
the Holder which collectively represent 100% the principal and interest amounts
owed under the Assumed Note as of this date; this note represents ___% of such
principal and interest amount.
All
payments under or pursuant to this Note shall be made in United States Dollars
in immediately available funds to the Holder at
the
address of the Holder set forth in Section 4.1 herein. The
outstanding principal balance of this Note shall be due and payable on July
20,
2006 (the “Maturity
Date”)
or at
such earlier time as provided herein.
ARTICLE
I
Section
1.1 Debt
Assignment.
This
Note has been executed and delivered in connection with the assumption of the
Assumed Note by ▇▇▇▇▇▇ from the
Assignor.
Maker
acknowledges that the amendment and restatement of this Note is a condition
to
all such assumptions.
Section
1.2 Interest.
Beginning on the date of this Note (“Interest Commencement Date”), the
outstanding principal balance of this Note shall bear interest, in arrears,
at a
rate per annum equal to five percent (5%), payable in cash. Interest shall
be
computed on the basis of a 360-day year of twelve (12) 30-day months and shall
accrue commencing on the Interest Commencement Date. Furthermore,
upon the occurrence of an Event of Default (as defined in Section 2.1 hereof),
then to the extent permitted by law, the Maker will pay interest to the Holder,
payable on demand, on the outstanding principal balance of the Note from the
date of the Event of Default of the lesser of twenty-five percent (25%) and
the
maximum applicable legal rate per annum.
ARTICLE
II
EVENTS
OF
DEFAULT; REMEDIES
Section
2.1 Events
of Default.
The
occurrence of any of the following events shall be an “Event of Default” under
this Note:
(a) the
Maker
shall fail to make the payment of any amount of principal or interest
outstanding on the date such payment is due hereunder; or
(b) the
Maker
shall fail to (i) timely deliver the shares of common stock upon conversion
of
the Note as provided for herein, or (ii) make the payment of any fees and/or
liquidated damages under this Note; or
(c) the
Maker
shall be in default in the performance or observance of (i) any material
covenant, condition or agreement contained in this Note and such default is
not
fully cured within five (5) business days after the occurrence thereof;
or
(d) the
Maker
shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of
all
or a substantial part of its property or assets, (ii) make a general assignment
for the benefit of its creditors, (iii) commence a voluntary case under the
United States Bankruptcy Code (as amended, the “Bankruptcy
Code”)
or
under the comparable laws of any jurisdiction, (iv) file a petition seeking
to
take advantage of any bankruptcy, insolvency, moratorium, reorganization or
other similar law affecting the enforcement of creditors' rights generally,
(v)
acquiesce in writing to any petition filed against it in an involuntary case
under the Bankruptcy Code or under the comparable laws of any jurisdiction,
or
(vi) take any action under the laws of any jurisdiction analogous to any of
the
foregoing; or
(e) the
Maker
shall be in breach of or default under the terms, provisions, conditions or
provisions of any other agreement to which the Maker and Holder are parties
including such agreements in existence as of the date hereof and those
agreements executed by the parties hereafter; or
(f) the
Maker
shall be in default under any other promissory note or any other payment
obligation in whatever form made by the Maker in excess of $2,500; or
(g) a
proceeding or case shall be commenced in respect of the Maker, without its
application or consent, in any court of competent jurisdiction, seeking (i)
the
liquidation, reorganization, moratorium, dissolution, winding up, or composition
or readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of it or of all or any substantial part of
its
assets in connection with the liquidation or dissolution of the Maker or (iii)
similar relief in respect of it under any law providing for the relief of
debtors, and such proceeding or case described in clause (i), (ii) or (iii)
shall continue undismissed, or unstayed and in effect, for a period of sixty
(60) days or any order for relief shall be entered in an involuntary case under
the Bankruptcy Code or under the comparable laws of any jurisdiction against
the
Maker or action under the laws of any jurisdiction analogous to any of the
foregoing shall be taken with respect to the Maker and shall continue
undismissed, or unstayed and in effect for a period of sixty (60)
days.
2
Section
2.2 Remedies
Upon An Event of Default.
If an
Event of Default shall have occurred and shall be continuing, the Holder of
this
Note may at any time at its option, (a) declare the entire unpaid principal
balance of this Note, together with all interest accrued hereon, due and
payable, and thereupon, the same shall be accelerated and so due and payable,
without presentment, demand, protest, or notice, all of which are hereby
expressly unconditionally and irrevocably waived by the Maker; (b) demand that
the principal amount of this Note then outstanding and all accrued and unpaid
interest thereon shall be converted into shares of Common Stock at a Conversion
Price per share calculated pursuant to Section 3.1 hereof, or (c) exercise
or
otherwise enforce any one or more of the Holder's rights, powers, privileges,
remedies and interests under this Note or applicable law. In addition, the
applicable rate of interest shall be adjusted pursuant to Section
1.2.
ARTICLE
III
CONVERSION;
ANTIDILUTION
Section
3.1 Conversion
Option.
At any
time on or after the Issuance Date, this Note shall be convertible (in whole
or
in part), at the option of the Holder (the “Conversion Option”), into such
number of fully paid and non-assessable shares of common stock of the Maker
(the
“Common Stock”) as is determined by dividing (x) that portion of the outstanding
principal balance and any interest due under this Note as of the conversion
date
(the “Conversion Date”) that the Holder designates as its conversion date in a
duly executed written notice of conversion delivered to the Maker in a form
substantially the same as that attached hereto (the “Conversion Notice”) by (y)
the Conversion Price (as hereinafter defined) then in effect on the Conversion
Date, provided, however, that the Conversion Price shall be subject to
adjustment as described in Section 3.5 below. The Holder shall deliver this
Note
to the Maker at the address set forth in Section 4.1, at such time that this
Note is fully converted. With respect to partial conversions of this Note,
the
Maker shall keep written records of the amount of this Note converted as of
each
Conversion Date.
Section
3.2 Conversion
Price. The conversion price (the “Conversion Price”) shall equal
$_________
per share,
subject
to adjustment as described under Section 3.5 hereof. Notwithstanding any
adjustment hereunder, at no time shall the Conversion Price be greater than
$___________ per share except if it is adjusted pursuant to Section 3.5
hereof.
Section
3.3 Mechanics
of Conversion. Not later than three (3) Trading Days after any Conversion
Date, the Maker shall deliver to the Holder by express courier a certificate
or
certificates which shall be free of restrictive legends and trading restrictions
representing the number of shares of [Common/Preferred] Stock being acquired
upon the conversion of this Note (the “Delivery Date”).
3
Section
3.4 Ownership
Cap and Certain Conversion Restrictions. Notwithstanding anything to the
contrary set forth in Section 3 of this Note, at no time may the Holder convert
all or a portion of this Note if the number of shares of Common Stock to be
issued pursuant to such conversion would exceed, when aggregated with all other
shares of Common Stock owned by the Holder at such time, would result in the
Holder beneficially owning (as determined in accordance with Section 13(d)
of
the Exchange Act and the rules thereunder) in excess of 4.99% of the then issued
and outstanding shares of Common Stock of the Maker outstanding at such time;
provided, however, that upon the Holder providing the Maker with a written
notice that the Holder wishes to waive Section 3.4 of this Note with regard
to
any or all shares of Common Stock issuable upon conversion of this Note, this
Section 3.4 shall be of no force or effect within 61 days of such
notice.
Section
3.5 Adjustment
of Conversion Price.
(a) The
Conversion Price shall be subject to adjustment from time to time as
follows:
(i) Adjustments
for Stock Splits and Combinations.
If the
Maker shall at any time or from time to time after the Issuance Date effect
a
stock split or combination of the outstanding Common Stock, the applicable
Conversion Price in effect immediately prior to the stock split or combination
shall be proportionately decreased or increased, as appropriate.
(ii)
Adjustments
for Certain Dividends and Distributions.
If the
Maker shall at any time or from time to time after the Issuance Date, make
or
issue or set a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in shares of Common
Stock, then, and in each event, the applicable Conversion Price in effect
immediately prior to such event shall be decreased as of the time of such
issuance or, in the event such record date shall have been fixed, as of the
close of business on such record date, by multiplying, the applicable Conversion
Price then in effect by a fraction:
(1)
the
numerator of which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close
of
business on such record date; and
(2)
the
denominator of which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close
of
business on such record date plus the number of shares of Common Stock issuable
in payment of such dividend or distribution.
(iii) Adjustment
for Other Dividends and Distributions.
If the
Maker shall at any time or from time to time after the Issuance Date, make
or
issue or set a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in other than
shares of Common Stock, then, and in each event, an appropriate revision to
the
applicable Conversion Price shall be made and provision shall be made (by
adjustments of the Conversion Price or otherwise) so that the holders of this
Note shall receive upon conversions thereof, in addition to the number of shares
of Common Stock receivable thereon, the number of securities of the Maker which
they would have received had this Note been converted into Common Stock on
the
date of such event and had thereafter, during the period from the date of such
event to and including the Conversion Date, retained such securities (together
with any distributions payable thereon during such period), giving application
to all adjustments called for during such period under this Section 3.5(a)(iii)
with respect to the rights of the holders of this Note and the Other Notes;
provided,
however,
that if
such record date shall have been fixed and such dividend is not fully paid
or if
such distribution is not fully made on the date fixed therefor, the Conversion
Price shall be adjusted pursuant to this paragraph as of the time of actual
payment of such dividends or distributions.
4
(iv)
Adjustments
for Reclassification, Exchange or Substitution.
If the
Common Stock issuable upon conversion of this Note at any time or from time
to
time after the Issuance Date shall be changed to the same or different number
of
shares of any class or classes of stock, whether by reclassification, exchange,
substitution or otherwise (other than by way of a stock split or combination
of
shares or stock dividends provided for in Sections 3.5(a)(i), (ii) and (iii),
or
a reorganization, merger, consolidation, or sale of assets provided for in
Section 3.5(a)(v)), then, and in each event, an appropriate revision to the
Conversion Price shall be made and provisions shall be made (by adjustments
of
the Conversion Price or otherwise) so that the Holder shall have the right
thereafter to convert this Note into the kind and amount of shares of stock
and
other securities receivable upon reclassification, exchange, substitution or
other change, by holders of the number of shares of Common Stock into which
such
Note might have been converted immediately prior to such reclassification,
exchange, substitution or other change, all subject to further adjustment as
provided herein.
(v)
Adjustments
for Reorganization, Merger, Consolidation or Sales of Assets.
If at
any time or from time to time after the Issuance Date there shall be a capital
reorganization of the Maker (other than by way of a stock split or combination
of shares or stock dividends or distributions provided for in Section 3.5(a)(i),
(ii) and (iii), or a reclassification, exchange or substitution of shares
provided for in Section 3.5(a)(iv)), or a merger or consolidation of the Maker
with or into another corporation where the holders of outstanding voting
securities prior to such merger or consolidation do not own over fifty percent
(50%) of the outstanding voting securities of the merged or consolidated entity,
immediately after such merger or consolidation, or the sale of all or
substantially all of the Maker's properties or assets to any other person (a
“Corporate
Transaction”),
then
as a part of such Corporate Transaction an appropriate revision to the
Conversion Price shall be made and provision shall be made (by adjustments
of
the Conversion Price or otherwise) so that the Holder shall have the right
thereafter to convert such Note into the kind and amount of shares of stock
and
other securities or property of the Maker or any successor corporation resulting
from Corporate Transaction. In any such case, appropriate adjustment shall
be
made in the application of the provisions of this Section 3.5(a)(v) with respect
to the rights of the Holder after the Corporate Transaction to the end that
the
provisions of this Section 3.5(a)(v) (including any adjustment in the applicable
Conversion Price then in effect and the number of shares of stock or other
securities deliverable upon conversion of this Note and the Other Notes) shall
be applied after that event in as nearly an equivalent manner as may be
practicable.
(vi)
Adjustments
for Issuance of Additional Shares of Common Stock.
In the
event the Maker, shall, at any time, from time to time, issue or sell any shares
of additional shares of common stock (otherwise than as provided in the
foregoing subsections (i) through (v) of this Section 3.5(a) or pursuant to
Common Stock Equivalents (hereafter defined) granted or issued prior to the
Issuance Date) (“Additional
Shares of Common Stock”),
at a
price per share less than the Conversion Price then in effect or without
consideration, then the Conversion Price upon each such issuance shall be
adjusted to the price equal to the consideration per share paid for such
Additional Shares of Common Stock.
5
(b) No
Impairment.
The
Maker
shall
not, by amendment of its Certificate of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Maker,
but
will at all times in good faith, assist in the carrying out of all the
provisions of this Section 3.5 and in the taking of all such action as may
be
necessary or appropriate in order to protect the Conversion Rights of the Holder
against impairment.
(c) Issue
Taxes.
The
Maker shall pay any and all issue and other taxes, excluding federal, state
or
local income taxes, that may be payable in respect of any issue or delivery
of
shares of Common Stock on conversion of this Note pursuant thereto; provided,
however,
that
the Maker shall not be obligated to pay any transfer taxes resulting from any
transfer requested by the Holder in connection with any such
conversion.
(d) Fractional
Shares.
No
fractional shares of Common Stock shall be issued upon conversion of this Note.
In lieu of any fractional shares to which the Holder would otherwise be
entitled, the Maker shall pay cash equal to the product of such fraction
multiplied by the average of the closing bid prices of the Common Stock for
the
five (5) consecutive Trading Days immediately preceding the Conversion
Date.
(e) Reservation
of Common Stock.
The
Maker shall at all times when this Note shall be outstanding, reserve and keep
available out of its authorized but unissued Common Stock, such number of shares
of Common Stock as shall from time to time be sufficient to effect the
conversion of this Note and all interest accrued thereon; provided
that the
number of shares of Common Stock so reserved shall at no time be less than
the
number of shares of Common Stock for which this Note and all interest accrued
thereon are at any time convertible. The Maker shall increase the authorized
number of shares of Common Stock if at any time the unissued number of
authorized shares shall not be sufficient to satisfy the Maker’s obligations
under this Section 3.5(e).
ARTICLE
IV
MISCELLANEOUS
Section
4.1 Notices.
Any
notice, demand, request, waiver or other communication required or permitted
to
be given hereunder shall be in writing and shall be effective (a) upon hand
delivery by telex (with correct answer back received), telecopy or facsimile
at
the address or facsimile number designated below (if delivered on a business
day
during normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a business
day
during normal business hours where such notice is to be received) or (b) on
the
second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur.
6
Any
notice to the Maker shall be sent to:
WT
Holdings Corporation
Attention:
▇▇ ▇▇▇▇▇
Room
402-404, 4/F, Allied Kajima Building
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Wanchai,
Hong Kong
With
a
copy to:
▇▇▇▇▇
▇.
▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇ LLP
▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Los
Angeles, CA 90024
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Any
notice to the Holder shall be sent to:
_________________________
_________________________
_________________________
Section
4.2 Governing
Law.
This
Note shall be governed by and construed in accordance with the internal laws
of
the State of California, without giving effect to any of the conflicts of law
principles which would result in the application of the substantive law of
another jurisdiction. This Note shall not be interpreted or construed with
any
presumption against the party causing this Note to be drafted.
Section
4.3 Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief. The
remedies provided in this Note shall be cumulative. The Maker acknowledges
that
a breach by it of its obligations hereunder will cause irreparable and material
harm to the Holder and that the remedy at law for any such breach may be
inadequate. Therefore the Maker agrees that, in the event of any such breach
or
threatened breach, the Holder shall be entitled, in addition to all other
available rights and remedies, at law or in equity, to seek and obtain such
equitable relief, including but not limited to an injunction restraining any
such breach or threatened breach, without the necessity of showing economic
loss
and without any bond or other security being required.
7
Section
4.4 Binding
Effect. The obligations of the Maker and the Holder set forth herein shall
be binding upon the successors and assigns of each such party, whether or not
such successors or assigns are permitted by the terms hereof.
Section
4.5 Amendments.
This Note may not be modified or amended in any manner except in writing
executed by the Maker and the Holder.
Section
4.6 Consent
to Jurisdiction. Each of the Maker and the Holder hereby irrevocably submits
to the exclusive jurisdiction of the United States District Court sitting in
the
Central District of California and the courts of the State of California located
in Los Angeles county for the purposes of any suit, action or proceeding arising
out of or relating to this Note Each of the Maker and the Holder hereby agree
that the prevailing party in any suit, action or proceeding arising out of
or
relating to this Note shall be entitled to reimbursement for reasonable legal
fees from the non-prevailing party. EACH PARTY HEREBY WAIVES TRIAL BY
JURY.
Section
4.7 Failure
or Indulgence Not Waiver. No failure or delay on the part of the Holder in
the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege.
Section
4.8 Waivers.
Except as otherwise specifically provided herein, the Maker and all others
that
may become liable for all or any part of the obligations evidenced by this
Note,
hereby waive presentment, demand, notice of nonpayment, protest and all other
demands' and notices in connection with the delivery, acceptance, performance
and enforcement of this Note.
Section
4.13 Certain
Definitions.
For the
purposes hereof, the following terms shall have the following
meanings:
“Person”
means
an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.
“Trading
Day”
means
a
day in which the Common Stock is traded in the over-the-counter market, as
reported by the NASD OTC Bulletin Board or such other exchange on which the
Common Stock is then traded.
[Signature
Page Follows]
8
IN
WITNESS WHEREOF, the Maker has executed this Amended and Restated Convertible
Promissory Note as of the day and year first above written.
| WT HOLDINGS CORPORATION | ||
| |
|
|
| By: | ||
|
|
||
|
▇▇
▇▇▇▇▇
Chief
Executive Officer
|
||
9
FORM
OF
NOTICE
OF CONVERSION
(To
be
completed and executed by the Holder in order to convert the Note)
Reference
is made to the Amended and Restated Convertible Promissory Note dated May __,
2006 issued to the undersigned note holder (“Note”).
The
undersigned hereby irrevocably elects to convert $ ________________ of the
principal amount and interest of the above Note into shares of Common Stock
of
WT Holdings Corporation
(the
“Maker”)
according to the terms and conditions of the Note, as of the date written below.
Date
of
Conversion _____________________
Applicable
Conversion Price $ ______________
Number
of
shares of Common Stock
beneficially
owned or deemed beneficially
owned
by
the Holder on the Date of Conversion: ______________________
_________________________________
Name
of
Holder
_________________________________
Authorized
Representative
_________________________________
Title
_________________________________
Signature
Address:
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
10