PROMISSORY NOTE
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO REGISTRATION UNDER THE ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND APPLICABLE STATE SECURITIES LAWS.
No. ____________ US $750,000.00
FLORIDINO'S INTERNATIONAL HOLDINGS, INC.
9.0% SERIES A CONVERTIBLE PREFERRED
PROMISSORY NOTE DUE OCTOBER 31, 2001
THIS PROMISSORY NOTE is one of a duly authorized issue of Promissory
Notes of Floridino's International Holdings, Inc., a corporation duly organized
and existing under the laws of Florida (the "Company") designated as its Series
A Convertible Preferred Promissory Note Due October 31, 2001, in an aggregate
principal face amount not exceeding Seven Hundred Fifty Thousand Dollars (U.S.
$750,000.00).
FOR VALUE RECEIVED, the Company promises to pay to the registered
holder of this note and its successors and assigns (the "Holder"), the principal
face sum of Seven Hundred Fifty Thousand ($750,000.00) on October 31, 2001 (the
"Maturity Date"), and to pay interest on the principal sum outstanding, at the
rate of 9.0% per annum due and payable semi-annually pursuant to paragraph 4(b)
herein. Accrual of interest shall commence on the date hereof and shall continue
until payment in full of the outstanding principal sum has been made or duly
provided for. The interest so payable will be paid to the person in whose name
this Promissory Note (or one or more predecessor Promissory Notes) is registered
on the records of the Company regarding registration and transfers of the
Promissory Notes (the "Promissory Note Register"); provided, however, that the
Company's obligation to a transferee of this Promissory Note arises only if such
transfer, sale or other disposition is made in accordance with the terms and
conditions of the Securities Subscription Agreement dated as of October 1, 1999
between the Company and the Holder (the "Subscription Agreement"). The principal
of, and interest (with the exception of the prepaid interest set forth in
Section 4(b) herein) on, this Promissory Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, at the address last appearing on
the Promissory Note Register of the Company as designated in writing by the
Holder hereof from time to time. The Company will pay the outstanding principal
due upon this Promissory Note before or on the Maturity Date, less any amounts
required by law to be deducted or withheld, to the Holder of this Promissory
Note no later than the tenth (10th) day prior to the Maturity Date by check or
on the Maturity Date by wire transfer and addressed to such Holder at the last
address appearing on the Promissory Note Register. The forwarding of such check
or wire transfer shall constitute a payment of outstanding principal hereunder
and shall satisfy and discharge the liability for principal on this Promissory
Note to the extent of the sum represented by such check
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or wire transfer plus any amounts so deducted. Interest shall be payable in cash
pursuant to paragraph 4(b) herein.
This Promissory Note is subject to the following additional provisions:
1. The Promissory Notes are issuable in denominations of Fifty Thousand
($50,000.00) Dollars. Each issuance shall be made in separate and equal parcels
to the respective individual holders. No service charge will be made for the
registration or transfer or exchange, except that transferee shall pay any tax
or other governmental charges payable in connection therewith.
2. The Company shall be entitled to withhold from all payments of
principal of, and interest on, this Promissory Note any amounts required to be
withheld under the applicable provisions of the United States income tax or
other applicable laws at the time of such payments.
3. This Promissory Note has been issued subject to investment
representations of the original purchaser hereof and may be transferred or
exchanged only in compliance with the Securities Act of 1933, as amended (the
"Act") and applicable state securities laws. Prior to due presentment for
transfer of this Promissory Note, the Company and any agent of the Company may
treat the person in whose name this Promissory Note is duly registered on the
Company's Promissory Note Register as the owner hereof for the purpose of
receiving payments as herein provided and for all other purposes, whether or not
this Promissory Note be overdue, and neither the Company nor any such agent
shall be affected or bound by notice to the contrary.
4. (a) The Holder of this Promissory Note shall be entitled to convert
the outstanding principal balance of the Note into shares of the Company's
common stock ("Common Stock") as follows: after one (1) year from the issuance
date, at a conversion price for each share of Common Stock equal to the average
closing bid price for the five consecutive trading days prior to the date of
conversion, discounted by forty (40%) percent, as reported by the Over The
Counter Bulletin Board ("OTC") (the "Conversion Price"). If the number of
resultant Conversion Shares would as a matter of law or pursuant to regulatory
authority require the Company to seek shareholder approval of such issuance, the
Company shall, as soon as practicable, take the necessary steps to seek such
approval. If such approval is not received within 30 days then Company shall be
required to redeem the Promissory Note pursuant to paragraph 4(c) herein. Such
conversion shall be effectuated by surrendering the Promissory Notes to be
converted (with a copy, by facsimile or courier, to the Company) to the Company
with the form of conversion notice attached hereto as Exhibit A, executed by the
Holder of this promissory Note evidencing such Holder's intention to convert
this Promissory Note or a specified portion (as above provided) hereof, and
accompanied by proper assignment hereof in blank. Accrued but unpaid interest
shall be subject to conversion. No fractional shares or scrip representing
fractions of shares will be issued on conversion, but the number of shares
issuable shall be rounded to the nearest whole share. The transferee or issuee
shall execute such investment representations or other documents as are
respectively required by counsel in order to ascertain the available
registration exemption. The date on which notice of conversion is given shall be
deemed to be the date on which the Holder has delivered this Promissory Note,
with the assignment and
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conversion notice duly executed, to the Company or, if earlier, the date set
forth in such notice of conversion if the Promissory Note is received by the
Company within five (5) business days thereafter. The transferee or issuee shall
execute such investment representations or other documents as are reasonably
required by counsel in order to ascertain the available registration exemption.
(b) Interest at the rate of 9.0% per annum shall be payable
semi-annually. Upon maturity, in the event this Promissory Note has not been
converted in full, to the extent it is unconverted, any outstanding principal
balance and accrued interest shall automatically convert as if Notice of
Conversion had been received on the date of maturity in accordance with
paragraph 4(a) herein.
5. No provision of this Promissory Note shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of, and interest on, this Promissory Note at the time, place, and
rate, and in the coin currency, herein prescribed.
6. The Company hereby expressly waives demand and presentment for
payment, notice of nonpayment, protest, notice of protest, notice of dishonor,
notice of acceleration or intent to accelerate, and diligence in taking any
action to collect amounts called for hereunder and shall be directly and
primarily liable for the payment of all sums owing and to be owing hereon,
regardless of and without any notice, diligence, act or omission as or with
respect to the collection of any amount called for hereunder.
7. If one or more of the following describe "Events of Default" shall
occur and continue for 30 days unless a different time frame is noted below:
(a) The Company shall default in the payment of principal or
interest on this Promissory Note; or
(b) Any of the representations or warranties made by the Company
herein, in the Subscription Agreement, or in any certificate
or financial or other written statements heretofore or
hereafter furnished by the Company in connection with the
execution and delivery of this Promissory Note or the
Subscription Agreement shall be false or misleading in any
material respect at the time made; or
(c) The Company shall fail to perform or observe, in any material
respect, any other covenant, term, provision, condition,
agreement or obligation of the Company under this Promissory
Note and such failure shall continue uncured for a period of
thirty (30) days after notice from the Holder of such failure;
or
(d) The Company shall (1) become insolvent; (2) admit in writing
its inability to pay its debts generally as they mature; (3)
make an assignment for the benefit of creditors or commence
proceedings for its dissolution; or (4) apply for or consent
to the appointment of a trustee, liquidator or receiver for
its or for a substantial part of its property or business; or
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(e) A trustee, liquidator or receiver shall be appointed for the
Company or for a substantial part of its property or business
without its consent and shall not be discharged within thirty
(30) days after such appointment; or
(f) Any governmental agency or any court of competent jurisdiction
at the instance of any governmental agency shall assume
custody or control of the whole or any substantial portion of
the properties or assets of the Company and shall not be
dismissed within thirty (30) days thereafter; or
(g) Any money judgment, writ or warrant of attachment, or similar
process, in excess of the aggregate sum of the note shall be
entered or filed against the Company or any of its properties
or other assets and shall remain unpaid, unvacated, unbonded
or unstayed for a period of fifteen (15) days or in any event
later than five (5) days prior to the date of any proposed
sale thereunder; or
(h) Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any
bankruptcy law or any law for the relief of debtors shall be
instituted by or against the Company and, if instituted
against the Company, shall not be dismissed within sixth (60)
days; or
(i) The Company shall have its Common Stock delisted from the
over-the-counter market; or
(j) The Company shall not deliver the Common Stock pursuant to
paragraph 4(a) herein without restrictive legend within 3
business days of the date delivery is required hereunder; or
(k) The Company does not bring current its financial disclosure
and filings with the S.E.C. within ninety (90) days of the
date of this note; or
(l) The Company does not deliver to the Holder proof of payment of
all outstanding fees of the Company's accountants and
consultants, BDO Seldman, LLP, for the preparation of the
appropriate S.E.C. filings which shall bring the Company
current; or
(m) The Company, at any time, utilizes the funds provided by the
Holder of this Notes for any reason or purpose other than the
daily operation or the legitimate business purposes of the
Company.
Then, or at any time thereafter, and in each and every such case,
unless such Event of Default shall have been waived in writing by the Holder
(which waiver shall not be deemed to be a waiver of any subsequent default) at
the option of the Holder and in the Holder's sole discretion, the Holder may
consider this Promissory Note immediately due and payable, without presentment,
demand,
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protest or (further) notice of any kind (other than notice of acceleration), all
of which are hereby expressly waived, anything herein or in any note or other
instruments contained to the contrary notwithstanding, and the Holder may
immediately, and without expiration of any period of grace, enforce any and all
of the Holder's rights and remedies provided herein or any other rights or
remedies afforded by law.
8. This Promissory Note represents a secured obligation of the Company
and only the Company pursuant to paragraph 9(b) herein. However, no recourse
shall be had for the payment of the principal of, or the interest on, this
Promissory Note, or for any claim based hereon, or otherwise in respect hereof,
against any incorporator, shareholder, officer or director, as such, past,
present or future, of the Company or any successor corporation, whether by
virtue of any constitution, liability being, by the acceptance hereof and as
part of the consideration for the issue hereof, expressly waived and released.
9. The Holder of this Promissory Note, by acceptance hereof, agrees
that this Promissory Note is being acquired for investment and that such Holder
will not offer, sell or otherwise dispose of this Promissory Note or the Shares
of Common Stock issuable upon exercise thereof except under circumstances which
will not result in a violation of the Act or any applicable state Blue Sky law
or similar laws relating to the sale of securities. Holder further acknowledges
that the securities issued or to be issued under this transaction are not
registered securities and are subject to restriction on transferability as set
forth by Rule 144 of the Securities Act of 1934.
10. Incase any provision of this Promissory Note is held by a court of
competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent possible, and the validity and
enforceability of the remaining provisions of this Promissory Note will not in
any way be affected or impaired thereby.
11. This Promissory Note and the agreements referred to in this
Promissory Note constitute the full and entire understanding and agreement
between the Company and the Holder with respect to the subject hereof. Neither
this Promissory Note nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the Company and the
Holder.
12. This Promissory Note shall be governed by and construed in
accordance with the laws of New York. Holder hereby waives trial by jury and
consents to exclusive jurisdiction and venue in the State of New York.
13. As set forth herein, the Company shall use all reasonable efforts
to issue and deliver, within seven business days after the Holder has fulfilled
all conditions and submitted all necessary documents duly executed and in proper
form required for conversion (the "Deadline"), to the Holder or any part
receiving a Promissory Note by transfer from the Holder (together, a "Holder"),
at the address of the Holder on the books of the Company, a certificate or
certificates for the number of Shares of Common Stock to which the Holder shall
be entitled. The Company understands that a
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delay in the issuance of the Shares of Common Stock beyond the Deadline could
result in economic loss to the Holder.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated:
-----------------------
FLORIDINO'S INTERNATIONAL HOLDINGS, INC.
By:
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EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in
Order to Convert the Debenture)
The undersigned hereby irrevocably elects to convert the above
Debenture No. _________ into Shares of Common Stock of Headstrong Group Inc.
(the "Company") according to the conditions hereof, as of the date written
below.
---------------------------------
Date of Conversion
---------------------------------
Applicable Conversion Price
---------------------------------
Signature
Address:
This original Debenture and Notice of Conversion must be received by the Company
by the third business day following the Date of Conversion.
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