EXHIBIT 10-13
CONVERTIBLE PROMISSORY NOTE
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Executed at: Las Vegas, Nevada
April 5, 2001
For Value Received, VIVA GAMING & RESORT INC., a Florida corporation,
the principal office of which is located at Commerce Place, 400 Burrard Street,
Vancouver, BC V6C 3G2 Canada (the "Company" or "Maker"), hereby promises to pay
to PHOENIX LEISURE, INC., a Nevada corporation (the "Holder"), the principal
office of which is located at 3611 S. Lindell Rd., Suite 108, Las Vegas, NV
89103, the sum as provided for from time to time in Exhibit "A," (including
"Future Advances" as may be reflected on same) attached hereto (the "Loan")
(said initial amount being $100,000 as of April 5, 2001), or such sum as has
been advanced and is outstanding at the time when payment is due hereunder, in
lawful money of the United States of America, together with interest thereon at
the rate specified below, on the terms and conditions set forth hereinafter.
The following is a statement of the rights of the Holder and the
conditions to which this Note is subject, and to which the Holder, by the
acceptance of this Note, agrees:
1. Principal and Interest. Except as provided herein and in Section 5 hereof,
Maker promises to pay interest, in arrears, calculated on the basis of a
365-day year, for the actual number of days elapsed on the daily principal
balances from time to time outstanding from the date of the applicable
advance at an interest rate of ten percent (10%) per annum and shall be due
and payable ON DEMAND upon 90 days written notice to Maker. This Note may
be prepaid, in whole or in part, at any time without penalty. If no demand
for payment is made pursuant to this Section 1, all accrued interest,
together with the entire principal amount outstanding hereunder (or such
lesser amount as specified by Lender) shall be due and payable in full in
one lump sum payment on or before April 5, 2002.
2. Grid Schedule. Upon due execution by both the Lender and the Maker
authorizing each and every Future Advance/Loan hereunder, Lender is hereby
authorized to record on the grid schedule (the "Grid Schedule") attached
hereto as Exhibit "A" and incorporated herein appropriate notations
evidencing the date and amount of each Future Advance/Loan. Each payment in
connection therewith shall be placed on the Grid Schedule as well,
provided, however, that the failure of the Lender to make any such entry
shall not limit or otherwise affect the obligations of the Maker under this
Note, including without limitation, to repay any unpaid principal or
interest, or the right of the Lender to enforce the terms of the Loan or
this Note against the Maker. The aggregate unpaid amount under the Loan set
forth from time to time in the Grid Schedule (provided the Lender and the
Maker have properly executed all advances evidencing same), or any
continuation thereof, shall be rebuttable presumptive evidence of the
unpaid principal amount of the Loan and this Note.
3. Event of Default. An "Event of Default" shall mean: (i) failure by the
Company to pay the Note at the Maturity Date, or (ii) any breach of any
other obligation, undertaking or covenant under this Note. Upon the
occurrence of an Event of Default, the Holder of the Note may declare the
entire principal immediately due and payable, without notice or demand to
the Company. At any time or times during which an Event of Default shall
then exist or upon the Maturity Date, the interest rate under this Note
shall be equal to the lesser of: (i) eighteen percent (18%) per annum; or
(ii) the maximum rate of interest permitted by applicable law, and shall be
due and payable ON DEMAND.
4. Prepayment. The Company may prepay this Note in whole or in part by giving
Holder notice in writing. In recognition of Holder's conversion rights
pursuant to Section 5 hereof, Holder has the right to exercise such
conversion rights prior to the Company prepaying the Note.
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 the outstanding principal
under this Note, in accordance with the provisions of Section 5.2
hereof, in whole or in part, but in denominations of not less than
Ten Thousand Dollars ($10,000) (unless the entire principal balance
of this Note is being converted), into fully paid and non-assessable
shares of common stock, $.001 par value per share, of the Company
(the "Common Stock"). The number of shares of Common Stock into which
the outstanding principal of this Note may be converted ("Conversion
Shares") shall be determined by dividing the principal amount for
which conversion is requested by the Conversion Price (as defined
below) in effect at the time of such conversion. The Conversion Price
shall be equal to TWENTY CENTS ($US0.20) per share or the market
price per share, whichever is lower. If applicable, the Conversion
Price shall be adjusted pursuant the provisions of Section 6 hereof.
4.2. Conversion Procedure. Before the Holder shall be entitled to convert
this Note into shares of Common Stock, it shall give written notice
by mail, postage prepaid, to the Company at its principal corporate
office, of the election to convert the same, and shall state therein
the name or names in which the certificate 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 (bearing such legends as are
required by applicable state and federal securities laws in the
opinion of counsel to the Company) 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.
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4.3. 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.
4.4. Mechanics and the 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. If the
conversion is for less than the entire outstanding principal balance
of this Note, then the Holder and Maker shall execute an estoppel
certificate or other type of document which will confirm the current
outstanding principal balance of the Note after such partial
conversion for the remaining balance of the Note along with the
revised payment terms. Upon conversion of the full amount of this
Note, the Company shall be forever released from all obligations and
liabilities under this Note.
5. Conversion Price Adjustments.
5.1 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 the
determination of holders of Common Stock entitled to receive a
dividend or other distribution payable in additional shares of Common
Stock or other securities or rights convertible into, 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 Equivalents (including the
additional shares of Common Stock issuable upon conversion or
exercise thereof), 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.
5.2 Adjustments for Reverse Stock Splits. If the numbers 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.
5.3 Reservation of Stock Issuable Upon Conversion. The Company shall at
all times reserve and keep available out of its authorized but
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unissued 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. The Company hereby
agrees to not pledge, restrict or otherwise encumber the shares of
Common Stock which have been reserved for the conversion of the Note
by Holder.
6. Assignment. The rights and obligations of the Company and the Holder of
this Note shall be binding upon and benefit the successors, assigns and
transferees of the parties. Neither the Company nor the Holder may assign
its rights and/or obligations hereunder without the prior written consent
of the other.
7. Notices. All notices, requests, consents and other communications hereunder
to any party, shall be deemed to be sufficient if in writing and (i)
delivered in person, (ii) delivered and received by telex, telecopier,
telegram, if a confirmatory mailing in accordance herewith is also made,
(iii) duly sent by registered mail return receipt requested and postage
prepaid or (iv) duly sent by overnight delivery service, addressed to such
party at the address set forth in the Agreement.
All such notices and communications shall be deemed to have been received:
(i) at the time personally delivered (including delivery by telex,
telecopier and telegram), (ii) three days after mailed to the foregoing
persons at the addresses set forth above; (iii) the next day when sent by
overnight delivery service; provided that rejection or other refusal to
accept or inability to deliver because of changed address for which no
notice has been received shall also constitute receipt.
8. No Shareholder 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 shareholder in respect of meetings of
shareholders for the election of the Company or any other matters or any
rights whatsoever as a shareholder of the Company; and no dividends or
other distributions shall be payable or accrued in respect of this Note or
the interest represented hereby or the Conversion Shares obtainable
hereunder until, and only to the extent that, this Note shall have been
converted.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada, excluding that body of law
relating to conflict of laws.
10. Waivers. The Company and all endorsers of this Note hereby waive demand,
presentment, notice of non-payment, dishonor and protest.
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11. Attorneys' Fees. In case suit shall be brought for the collection hereof,
or if it is necessary to place the same in the hands of an attorney for
collection, the Company and all endorsers of the Note agree to pay
reasonable attorneys' fees incurred in connection with such collection,
including but not limited to all fees and costs incident to any appellate,
post-judgment and bankruptcy proceedings that may result, whether the
Holder hereof is obligated therefore or not.
12. Amendment. This Notice may not be amended or modified, nor shall any waiver
of any provisions hereof be effective, except by an instrument in writing
executed by the Holder of this Note. Failure or delay by the Holder in
exercising, or a single or partial exercise of, any power or right
hereunder shall not operate as a waiver thereof or of any other power or
right or preclude any other or future exercise of that or any other power
or right. A waiver or any power or right hereunder shall be in writing,
shall be limited to the specific instance and shall not be deemed a waiver
of such power or right in the future or a wavier of any other power or
right.
13. Nonassumability. This Note is not assumable without the Holder's prior
written consent. Such assumption may be granted at the Holder's sole
discretion and may be denied without regard to a showing of an impairment
of the Holder's security of an evaluation of the creditworthiness of the
proposed assuming party. No assumption shall effect Holder's rights to
Conversion Shares of the Company pursuant to Section 6 hereof.
14. No Set-off. Neither this Note nor any obligations or liabilities of the
Company hereunder shall be subject to set-off, defense or reduction against
Holder(s) for any reason whatsoever other than prior repayment in
accordance with the terms of this Note, and the Company hereby waives and
releases any right at law, or in equity, to assert any such set-off,
defense or reduction.
15. WAIVER OF JURY TRIAL. THE COMPANY, BY EXECUTION HEREOF, AND THE HOLDER, BY
ACCEPTANCE HEREOF, MUTUALLY AND WILLINGLY WAIVE THE RIGHT OF A TRIAL BY
JURY OF ANY AND ALL CLAIMS MADE BETWEEN THEM WHETHER NOW EXISTING OR
ARISING IN THE FUTURE, INCLUDING WITHOUT LIMITATION ANY AND ALL CLAIMS,
DEFENSES, COUNTERCLAIMS, CROSSCLAIMS, THIRD PARTY CLAIMS AND INTERVENOR'S
CLAIMS WHETHER ARISING FROM OR RELATED TO THE NEGOTIATION, EXECUTION AND
PERFORMANCE OF THE TRANSACTIONS TO WHICH THIS NOTE RELATES.
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IN WITNESS WHEREOF, the Company has caused this Note to be issued this
5th day of April 2001.
MAKER:
VIVA GAMING & RESORTS INC.
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Robert C. Sim, Chairman
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EXHIBIT "A
LOAN GRID SCHEDULE
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DATE OF BALANCE OF
ADVANCE OR PRINCIPAL SIGNATURE OF SIGNATURE OF
PAYMENT AMOUNT* OUTSTANDING* LENDER MAKER
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* -- unless otherwise note, all amounts advanced are in currency of the United
States of America.
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"Schedule 1"
NOTICE TO CONVERT
(To Be Signed Only Upon Conversion of Note)
Viva Gaming & Resorts Inc.
Commerce Place
400 Burrard Street
Vancouver, BC V6C 3G2
CANADA
In accordance with Section 5 of that certain Convertible Demand
Promissory Note dated April 5, 2001, the undersigned Holder of the foregoing
Note, hereby elects to convert the entire unpaid principal amount of such Note
into Common Stock of Viva Gaming and Resorts Inc., a Florida corporation and
requests that the certificate for such shares be issued in the name of
__________________ and delivered to the following address:_____________________.
Dated: , 20
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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)
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