Exhibit 10.1
Form 8-K
Viking Systems, Inc.
File No. 000-49636
Neither this Convertible Promissory Note nor the shares of common stock which
will be issued if this Note is converted into shares of common stock, has been
registered under the Securities Act of 1933 or applicable state securities laws
and may not be sold, transferred, assigned, offered, pledged or otherwise
distributed for value without the express written consent of the Maker and
Maker's receipt of an opinion of counsel acceptable to the Maker that such sale,
transfer, assignment, offer, pledge or other distribution for value is exempt
from the registration and prospectus delivery requirements of such Act and such
laws.
$300,000 February 17, 2005
CONVERTIBLE PROMISSORY NOTE
FOR VALUE RECEIVED, Viking Systems, Inc., a Nevada corporation ("Maker"),
hereby promises to pay to the order of Brian Miller ("Payee"), the principal sum
of THREE HUNDRED THOUSAND Dollars (U.S. $300,000.00), together with interest
thereon from the date hereof accruing at the rate of ten percent (10%) per
annum. Principal and all accrued interest shall be payable in full on or before
March 31, 2005.
PAYMENT TERMS
Principal and Interest. The principal amount of this Note, together with
all accrued interest, shall be due and payable on or before March 31, 2005.
Manner of Payment. All payments of principal and interest on this Note
shall be made payable to Payee and mailed to One Market Plaza Spear Tower, Suite
700, San Francisco, CA 94105 or at such other place in the United States of
America as Payee shall designate to Maker in writing. If any payment of
principal or interest on this Note is due on a day which is not a Business Day,
such payment shall be due on the next succeeding Business Day, and such
extension of time shall be taken into account in calculating the amount of
interest payable under this Note. "Business Day" means any day other than a
Saturday, Sunday or legal holiday in the State of Nevada.
Prepayment. Maker may, without premium or penalty, at any time and from
time to time, prepay all or any portion of the outstanding principal balance due
under this Note, provided that each such prepayment is accompanied by accrued
interest on the amount of principal prepaid calculated to the date of such
prepayment.
DEFAULT
The occurrence of any one or more of the following events with respect to
Maker shall constitute an event of default hereunder ("Event of Default"):
(a) If Maker shall fail to pay when due any payment of principal or
interest on this Note and such failure continues for fifteen (15) days
after Payee notifies Maker therein writing;
(b) The Maker shall default in the observance or performance of any
other term, covenant or agreement contained herein and the same shall not
be cured within fifteen (15) days of the occurrence thereof;
(c) If, pursuant to or within the meaning of the United States
Bankruptcy Code or any other federal or state law relating to insolvency or
relief of debtors (a "Bankruptcy Law"), Maker shall (i) commence a
voluntary case or proceeding; (ii) consent to the entry of an order for
relief against it in an involuntary case; (iii) consent to the appointment
of a trustee, receiver, assignee, liquidator or similar official; (iv) make
an assignment for the benefit of its creditors; or (v) admit in writing its
inability to pay its debts as they become due.
(d) If a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that (i) is for relief against Maker in an
involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator
or similar official for Maker or substantially all of Maker's assets, or
(iii) orders the liquidation of Maker, and in each case the order or decree
is not dismissed within 120 days.
REMEDIES
Upon the occurrence of an Event of Default hereunder (unless all Events of
Default have been cured or waived by Payee), Payee may, at its option, (i) by
written notice to Maker, declare the entire unpaid principal balance of this
Note, together with all accrued interest thereon, immediately due and payable
regardless of any prior forbearance and (ii) exercise any and all rights and
remedies available to it under applicable law, including, without limitation,
the right to collect from Maker all sums due under this Note. Maker shall pay
all reasonable costs and expenses incurred by or on behalf of Payee in
connection with Payee's exercise of any or all of its rights and remedies under
this Note, including, without limitation, reasonable attorneys' fees.
CONVERSION INTO CONVERTIBLE DEBT INSTRUMENT
The unpaid principal amount of the Note and accrued interest thereon shall
be converted in full into a subsequent Convertible Debt Instrument pursuant to
the Maker's anticipate convertible debt issuance provided that such convertible
debt issuance is presented to Payee on or before March 1, 2005.
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WAIVER
The rights and remedies of Payee under this Note shall be cumulative and
not alternative. No waiver by Payee of any right or remedy under this Note shall
be effective unless in writing signed by Payee. Neither the failure nor any
delay in exercising any right, power or privilege under this Note will operate
as a waiver of such right, power or privilege and no single or partial exercise
of any such right, power or privilege by Payee will preclude any other or
further exercise of such right, power or privilege or the exercise of any other
right, power or privilege. To the maximum extent permitted by applicable law,
(a) no claim or right of Payee arising out of this Note can be discharged by
Payee, in whole or in part, by a waiver or renunciation of the claim or right
unless in a writing, signed by Payee; (b) no waiver that may be given by Payee
will be applicable except in the specific instance for which it is given; and
(c) no notice to or demand on Maker will be deemed to be a waiver of any
obligation of Maker or of the right of Payee to take further action without
notice or demand as provided in this Note. Maker hereby waives presentment,
demand, protest and notice of dishonor and protest.
OTHER PROVISIONS
This Note shall be construed according to, and shall be governed by, the
laws of the State of California. The provisions of this Note shall be deemed
severable, so that if any provision hereof is declared invalid under the laws of
any state where it is in effect, or of the United States, all other provisions
of this Note shall continue in full force and effect. This Note may be amended
only by a writing signed on behalf of each party.
Any suit filed to enforce this Note or collect the money owed hereunder
shall be filed in any state or federal court having subject matter jurisdiction
and located in San Diego County, California. In any action or proceeding
instituted with respect to any such claim, Maker irrevocably submits to the
jurisdiction of such courts.
This Note shall be binding upon the successors and assigns of Maker, and
shall inure to the benefit of and be enforceable by the heirs, personal
representatives, successors and assigns of Payee or any other holder hereof.
IN WITNESS WHEREOF, the undersigned has duly executed, sealed and delivered
this Promissory Note the day and year first above written.
VIKING SYSTEMS, INC.,
a Nevada corporation
By: /s/ Thomas B. Marsh
Thomas B. Marsh, President
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