EXHIBIT 10.16
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER STATE SECURITIES LAWS. THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS
SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS.
CONVERTIBLE PROMISSORY NOTE
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October 15, 2008 Amount: $100,000.00
1. PROMISSORY NOTE. Subject to the terms and conditions set forth in
this promissory note (this "NOTE"), Seamless Corporation (the "BORROWER"), for
value received, promises to pay to Omega LLC, (the "HOLDER"), on October 14,
2009 (the "MATURITY DATE"), in accordance with the provisions hereof, the
principal amount of One Hundred Thousand Dollars ($100,000.00), plus interest as
set forth in SECTION 2 below accrued on such unpaid principal amount from time
to time outstanding until paid; PROVIDED, HOWEVER, that, prior to the Maturity
Date, the Holder may convert this Note at any time or upon the occurrence of a
Conversion Event (as defined below), the principal amount of this Note, plus any
unpaid interest accrued thereon, will convert automatically in accordance with
SECTION 4 hereof. All payments of principal and/or interest under this Note will
be made at the office of the Holder.
2. INTEREST. Interest under this Note shall accrue at the rate of seven
percent (7.0%) per annum from the date hereof until paid in full. Such interest
shall only be payable upon the repayment or conversion of all principal due
hereunder. It is the intent of the parties that the rate of interest and the
other charges to the Borrower under this Note shall be lawful; therefore, if for
any reason the interest or other charges payable under this Note are found by a
court of competent jurisdiction, in a final determination, to exceed the limit
which the Holder may lawfully charge the Borrower, then the obligation to pay
interest and other charges shall automatically be reduced to such limit and, if
any amount in excess of such limit shall have been paid, then such amount shall
be refunded to the Borrower.
3. ACCELERATION. Notwithstanding the provisions contained in this Note,
the entire amount of principal advanced to the Borrower under this Note and
remaining unpaid or unconverted, plus all unpaid interest on unpaid principal
under this Note, shall immediately be due and payable upon an Event of Default
(as hereinafter defined) or at the sole discretion of the Holder.
4. CONVERSION.
(a) CONVERSION. Upon a request for conversion by the Holder or
the happening of a Conversion Event (as defined below), all then unpaid
principal and accrued but unpaid interest underlying this Note will convert
immediately in accordance with the provisions of SECTION 4(c) hereof, into a
number of fully paid and nonassessable shares of Series A preferred stock, par
value $.001 per share (the "SHARES") of Seamless Corporation, a Nevada
corporation. Each Share converts into 10,000 shares of common stock, par value
$.001 per share (the "COMMON STOCK") of the Issuer ("CONVERSION SHARES"). This
Note shall be converted into such number of shares equal to (x) the unpaid
principal and accrued but unpaid interest under this Note divided by (y) the
Conversion Price. The "CONVERSION PRICE" is equal to the product of 50% discount
to market times 10,000 or $5.00 per share, whichever is lower.
(b) FRACTIONAL SHARES. No fractional shares of stock shall be
issued upon conversion of this Note. In lieu of any fractional shares to which
the Holder would otherwise be entitled, the Borrower shall pay the cash value of
that fractional share, calculated on the basis of the then-effective Conversion
Price.
(c) MECHANICS OF CONVERSION. At least ten (10) days prior to a
Conversion Event, the Borrower shall give to the Holder of this Note notice of
such Conversion Event. Such notice shall be given by the Borrower by mail,
facsimile or otherwise to the Holder of this Note at the address or facsimile
number shown in the Note Purchase Agreement. Within five (5) days prior to the
date of the Conversion Event as specified in such notice, the Holder of this
Note shall surrender this Note, duly endorsed, at the principal offices of the
Borrower. At its expense, the Borrower shall, as soon as practicable after the
Conversion Event, issue and deliver to such Holder at its principal office, a
certificate or certificates representing the Conversion Shares (bearing such
legends as may be required by any agreements governing the Conversion Shares and
applicable state and federal securities laws in the opinion of legal counsel of
the Borrower), together with a check payable to the Holder for any cash amounts
payable as described above as a result of a conversion into fractional shares of
stock. Upon conversion of this Note, the Borrower shall be forever released from
its obligation to pay the principal or interest amount of this Note so
converted.
(d) ADJUSTMENT OF CONVERSION PRICE AND NUMBER OF SHARES. The
Conversion Price of this Note and the number of Conversion Shares shall each be
proportionally adjusted to reflect any stock dividend, stock split, reverse
stock split, combination of shares, reclassification, recapitalization or other
similar event affecting the number of outstanding shares of capital stock to be
received upon conversion hereof. For example, if there should be a 2-for-1 stock
split of the class or series of stock to be acquired upon a Conversion Event
hereunder, the Conversion Price of this Note would be divided by two (2), and
the number of Conversion Shares receivable upon conversion of this Note would be
doubled.
5. EVENTS OF DEFAULT. If any of the following events shall occur (each
herein individually referred to as an "EVENT OF DEFAULT"), the Holder of this
Note may declare the entire unpaid principal and accrued interest on this Note
immediately due and payable, by written notice to the Borrower effective upon
dispatch, without any other presentment, demand, protest or other notice of any
kind or character, all of which are hereby expressly waived, anything herein to
the contrary notwithstanding:
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(a) The institution by the Borrower of proceedings to be
adjudicated 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 Code, or any other similar 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 of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due or the taking of
corporate action by the Borrower in furtherance of any such actions; or
(b) If, within sixty (60) days after the commencement of an
action against the Borrower 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 dismissed or all orders or
proceedings thereunder affecting the operations or the business of the Borrower
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 of any trustee, receiver or liquidator of the
Borrower or of all or any substantial part of the properties of the Borrower,
such appointment shall not have been vacated.
6. FULLY PAID SHARES; RESERVATION. The Conversion Shares shall be, when
issued, validly issued, fully paid and nonassessable. The Borrower has taken all
corporate action necessary to authorize the issuance of this Note, and will
take, prior to a Conversion Event, all corporate action necessary to authorize
the Conversion Shares and covenants that it will at all times reserve and keep
available, solely for issuance upon conversion of this Note, all shares of its
stock from time to time issuable upon conversion of this Note. If at any time
the number of authorized but unissued shares of capital stock shall not be
sufficient to effect the conversion of this Note, then the Borrower will take
all corporate action as may, in the opinion of counsel, be necessary to increase
its authorized but unissued shares of capital stock to the number of shares of
capital stock as will be sufficient for this purpose.
7. SECURITY. This Note is not secured by any assets or properties of
the Borrower.
8. NO RIGHTS OR LIABILITIES AS STOCKHOLDER. Prior to conversion, this
Note does not by itself entitle the Holder to any voting rights or other rights
as a stockholder of the Company. In the absence of conversion of this Note, no
provisions of this Note, and no enumeration herein of the rights or privileges
of the Holder, shall cause such Holder to be a stockholder of the Company for
any purpose.
9. RESTRICTIONS ON TRANSFER. Holder acknowledges that this Note and the
Conversion Shares have not been registered or qualified under federal or state
securities laws. By acceptance of this Note, the registered Holder (a)
represents that the registered Holder is purchasing this Note for its own
account and not with a view to, or for sale in connection with, any distribution
of this Note or the securities issuable upon conversion of this Note and (b)
affirms that it is an "accredited investor" as such term is defined under
Regulation D promulgated under the Securities Act of 1933, as amended.
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10. AMENDMENT; WAIVER. Any term of this Note may be amended, and the
observance of any term of this Note may be waived (either generally or in a
particular instance and either retroactively or prospectively) by the written
consent of the Borrower and the Holder. Any amendment or waiver effected in
accordance with the previous sentence shall be binding upon each future holder
or transferee of this Note (or part thereof) and the Borrower.
11. ASSIGNMENT. The Borrower may not assign or otherwise transfer any
of its rights or delegate any of its obligations under this Note without the
express prior written consent of the Holder, which consent shall not be
unreasonably withheld or delayed. The Holder may assign or otherwise transfer
this Note and any or all of its rights, interests or remedies hereunder, and may
delegate any or all of its obligations hereunder, to any person or entity, upon
written notice to the Borrower.
12. TREATMENT OF NOTE. To the extent permitted by generally accepted
accounting principles, the Borrower 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.
13. HEADINGS. The headings in this Note are for purposes of convenience
of reference only, and shall not be used to interpret this Note.
14. NOTICES. Any notice, request or other communication required or
permitted hereunder must be given in writing and shall be deemed to have been
duly given when personally delivered or when deposited in the United States mail
by registered or certified mail, postage prepaid or sent via a nationally
recognized overnight courier service to the Borrower or the Holder at their
respective addresses as set forth in the Note Purchase Agreement.
15. GOVERNING LAW; JURISDICTION. This Note shall be construed and
enforced in accordance with, and governed by, the internal laws of the State of
New York, excluding that body of law applicable to conflicts of law.
16. TERMS BINDING. By execution of this Note, the Holder of this Note
(and each subsequent holder of this Note) accepts and agrees to be bound by all
the terms and conditions of this Note.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Borrower has entered into this Note as
of the date first written above.
Seamless Corporation
By:
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Name: Albert Reda
Title: President
AGREED AND ACCEPTED AS OF THE DATE FIRST WRITTEN ABOVE:
OMEGA LLC
By:___________________________________
Name:
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