Document:

f8k090809ex10i_celsius.htm

Exhibit 10.1

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE, AND IS BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS.  THIS SECURITY MAY NOT BE
SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR SUCH OTHER LAWS.

CONVERTIBLE NOTE

(Non-Revolving Line of Credit)

Borrower: Celsius Holdings, Inc., a Nevada corporation, authorized to do business in Florida as Celsius Products Holdings, Inc.

Borrower Address: 140 NE 4th Avenue, Suite C, Delray Beach, Florida 33483

Closing Date: September 8, 2009

Maturity Date: September 8, 2012

Principal Amount: $6,500,000

 

FOR VALUE RECEIVED, CELSIUS HOLDINGS, INC., a Nevada corporation, authorized to do business in Florida as Celsius Products Holdings, Inc. (hereinafter the “Borrower”), promises to pay to the order of CDS VENTURES OF SOUTH FLORIDA, LLC, a Florida limited liability company, its successors or assigns (hereinafter the “Lender”)
at  3299 N. W. 2nd Avenue, Boca Raton, FL 33431 or such other place as Lender may from time to time designate in writing, the principal sum of SIX MILLION FIVE HUNDRED THOUSAND AND NO/100THS DOLLARS ($6,500,000.00) or the aggregate unpaid principal amount of all advances made by Lender to Borrower pursuant to the terms of the Loan and Security Agreement of even date herewith between the Borrower, CELSIUS, INC., a Nevada corporation, authorized to do business in Florida, as CELSIUS PRODUCTS, INC., and
Lender (the "Loan Agreement") plus interest on the unpaid principal balance the variable rate equal to three hundred (300) basis points over the one (1) month LIBOR (the “Note Rate”).  Interest shall be calculated on the principal balance, which from time to time is outstanding, on the basis of a three hundred sixty (360) day year, based on the actual number of days elapsed in each month.

 

Commencing on September 8, 2010 and continuing each three (3)-month period hereafter, Borrower shall make payments of all accrued but unpaid interest only on the unpaid principal amount at the Note Rate. On September 8, 2012 (the “Maturity Date”), all outstanding and unpaid principal, all accrued and unpaid interest thereon
and other charges or fees which are then due and owing from Borrower to Lender shall be immediately due and payable.

 

Subject to the terms and conditions of this Note, Lender shall advance funds to Borrower pursuant to the terms of such Loan Agreement up to a maximum principal sum equal to the face amount of this Note.

 

 

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ARTICLE 1

 

DEFINITIONS

 

SECTION 1.1 Definitions.  The terms defined in this Article whenever used in this Note have the following respective meanings:

 

(i) “Affiliate” has the meaning ascribed to such term in Rule 12b-2 under the Securities Exchange Act of 1934, as amended.

 

(ii) “Bankruptcy Code” means the United States Bankruptcy Code of 1986, as amended (11 U.S.C. §§ 101 et. seq.).

 

(iii) “Business Day” means a day other than Saturday, Sunday or any day on which banks located in the State of California are authorized or obligated
to close.

 

(iv) “Capital Shares” means the Common Stock and any other shares of any other class or series of capital stock, whether now or hereafter authorized
and however designated, which have the right to participate in the distribution of earnings and assets (upon dissolution, liquidation or winding-up) of the Borrower.

 

(v) “Closing Date” means the closing date set forth in the first paragraph of this Note.

 

(vi) “Common Shares” or “Common Stock” means shares of the Borrower’s
Common Stock.

 

(vii) “Common Stock Issued at Conversion”, when used with reference to the securities deliverable upon conversion of this Note, means all Common
Shares now or hereafter Outstanding and securities of any other class or series into which this Note hereafter shall have been changed or substituted, whether now or hereafter created and however designated.

 

(viii) “Conversion” or “conversion” means the repayment by the Borrower of the
Principal Amount of this Note (and, to the extent the Lender elects as permitted by Section 3.1, accrued and unpaid interest thereon) by the delivery of Common Stock on the terms provided in Section 3.2, and “convert,” “converted,” “convertible” and like words shall have a corresponding meaning.

 

(ix) “Conversion Date” means any day on which all or any portion of the Principal Amount of this Note is converted in accordance with the provisions
hereof.

 

(x) “Conversion Notice” means a written notice of conversion substantially in the form annexed hereto as Exhibit
A.

 

(xi) “Conversion Price” on any date of determination means the applicable price for the conversion of this Note into Common Shares on such day as
set forth in Section 3.1.

 

 

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(xii) “Current Market Price” on any date of determination means the closing price of a Common Share on such day as reported in the “pink sheets”
through the Interdealer Trading Quotation System; provided, if such security is not traded on the over the counter market via the pink sheets, then the closing price on the NASDAQ OTCBB Exchange; provided further, that, if such security is not listed or admitted to trading on the NASDAQ OTCBB, as reported on the principal national security exchange or quotation system on which such security is quoted or listed or admitted to trading, or, if not
quoted or listed or admitted to trading on any national securities exchange or quotation system, the closing bid price of such security on the over-the-counter market on the day in question as reported by Bloomberg LP or a similar generally accepted reporting service, as the case may be.

 

(xiii) “Note” or “Notes” means this Convertible Note of the Borrower or such
other convertible Note(s) exchanged therefor as provided in Section 2.1.

 

(xiv) Reserved.

 

(xv) “Event of Default” has the meaning set forth in Section 6.1.

 

(xvi) “LIBOR” means the London Interbank Offered Rate published as of the first business day of each month in the “Money Rates” section
of The Wall Street Journal, or if no such rate is published in The Wall Street Journal, then the nearest comparable published rate, as determined by the Lender.

 

(xvii) “Market Price” means the average of the ten daily VWAPs for the 10 Trading Days immediately preceding the date on which a Conversion Notice
is received.

 

(xviii) “Maturity Date” means the maturity date set forth in the first paragraph of this Note.

 

(xix) “Maximum Rate” has the meaning set forth in Section 6.4

 

(xx) “Note Rate” means hundred (300) basis points over the one (1) month LIBOR.

 

(xxi) “Outstanding” when used with reference to Common Shares or Capital Shares (collectively, “Shares”)
means, on any date of determination, all issued and outstanding Shares, and includes all such Shares issuable in respect of outstanding scrip or any certificates representing fractional interests in such Shares; provided, however, that any such Shares directly or indirectly owned or held by or for the account of the Borrower or any Subsidiary of the Borrower shall not be deemed “Outstanding” for
purposes hereof.

 

(xxii) “Person” means an individual, a corporation, a partnership, an association, a limited liability company, an unincorporated business organization,
a trust or other entity or organization, and any government or political subdivision or any agency or instrumentality thereof.

 

(xxiii) “Principal Amount” means, for any date of calculation, the principal sum set forth in the first paragraph of this Note (but only such principal
amount as to which the Lender has (a) actually advanced to Borrower pursuant to the Loan Agreement, and (b) not theretofore furnished a Conversion Notice in compliance with Section 3.2).

 

 

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(xxiv) Reserved.

 

(xxv) “SEC” means the United States Securities and Exchange Commission.

 

(xxvi) “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC thereunder, all as in effect at the
time.

 

(xxvii) Reserved.

 

(xxviii) “Subsidiary” means any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are owned directly or indirectly by the Borrower.

 

(xxix) “Trading Day” means any day on which (i) purchases and sales of securities on the principal national security exchange or quotation system
on which the Common Shares are traded are reported thereon, or, if not quoted or listed or admitted to trading on any national securities exchange or quotation system, as reported by Bloomberg LP or a similar generally accepted reporting service, as the case may be, (ii) at least one bid for the trading of Common Shares is reported and (iii) no material suspension or limitation of trading of the Common Shares.

 

(xxx) “VWAP” means the volume weighted average price of the Common Stock for a Trading Day on the Principal Market as reported by Bloomberg Financial
Markets or, if Bloomberg Financial Markets is not then reporting such prices, by a comparable reporting service of national reputation selected by the Holders and reasonably satisfactory to the Company.  If the VWAP cannot be calculated for the Common Stock on such Trading Day on any of the foregoing bases, then the Company shall submit such calculation to an independent investment banking firm of national reputation (reasonably acceptable to the Holders of not less than two-thirds of the Shares then
outstanding), and shall cause such investment banking firm to perform such determination and notify the Company and the Holders of the results of determination no later than two (2) Business Days from the time such calculation was submitted to it by the Company.  All such determinations shall be appropriately adjusted for any stock dividend, stock split, reverse stock split or other similar transaction during such period.

 

All references to “cash” or “$” herein means currency of the United States of America.

 

ARTICLE 2

 

EXCHANGES, TRANSFER AND REPAYMENT

 

SECTION 2.1 Registration of Transfer of the Note. This Note, when presented for registration of transfer, shall (if so required by the Borrower) be duly endorsed, or be
accompanied by a written instrument of transfer in form reasonably satisfactory to the Borrower duly executed, by the Lender duly authorized in writing.

 

 

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SECTION 2.2 Loss, Theft, Destruction of Note.  Upon receipt of evidence satisfactory to the Borrower of the loss, theft, destruction or mutilation
of this Note and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security reasonably satisfactory to the Borrower, or, in the case of any such mutilation, upon surrender and cancellation of this Note, the Borrower shall make, issue and deliver, in lieu of such lost, stolen, destroyed or mutilated Note, a new Note of like tenor and unpaid Principal Amount dated as of the date hereof (which shall accrue interest from the most recent Interest Payment Due Date on which an interest
payment was made in full).  This Note shall be held and owned upon the express condition that the provisions of this Section 2.2 are exclusive with respect to the replacement of a mutilated, destroyed, lost or stolen Note and shall preclude any and all other rights and remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement of negotiable instruments or other securities without the surrender thereof.

 

SECTION 2.3 Who Deemed Absolute Owner.  The Borrower may deem the Person in whose name this Note shall be registered upon the registry books
of the Borrower to be, and may treat it as, the absolute owner of this Note (whether or not this Note shall be overdue) for the purpose of receiving payment of or on account of the Principal Amount of this Note, for the conversion of this Note and for all other purposes, and the Borrower shall not be affected by any notice to the contrary.  All such payments and such conversions shall be valid and effectual to satisfy and discharge the liability upon this Note to the extent of the sum or sums so paid
or the conversion or conversions so made.

 

SECTION 2.4 Repayment.  Prior to September 1, 2011, Borrower may not repay in cash any principal amount due under this Note. Thereafter, Borrower
is permitted to repay in cash any principal amount due with a 10 days prior notice. On September 8, 2012 (the “Maturity Date”), all outstanding and unpaid principal, all accrued and unpaid interest thereon and other charges or fees which are then due and owing from Borrower to Lender shall be immediately due and payable.

 

SECTION 2.5 Extension.  Thereafter, annual extensions to the Maturity Date shall be available to the Borrower upon Lender’s sole discretion,  provided:
(i) no Event of Default (as such term is defined herein and in the Loan Agreement) exists under the Loan and there exists no fact or circumstance that with notice, the lapse of time or both would constitute an Event of Default under the Loan, (ii) Borrower requests same in writing at least thirty (30) days prior to the then-existing Maturity Date, and (iii) in Lender’s sole determination, no material adverse change has occurred in the Borrower or the collateral for the Loan.

 

ARTICLE 3

 

CONVERSION OF NOTE

 

SECTION 3.1 Conversion; Conversion Price; Valuation Event.

 

At the option of the Lender, this Note may be converted, either in whole or in part, up to the full Principal Amount hereof into Common Shares (calculated as to each such conversion to the nearest 1/100th of a share), at any time and from time to time on any Business Day, subject to compliance with Section 3.2. The number of Common Shares
into which this Note may be converted is equal to the dollar amount of the Note being converted divided by the Conversion Price. The “Conversion Price” shall be: (A) from the Closing Date through and including December 31, 2011, equal to the lesser of (i) $.40 per share, or (ii) the Market Price; or (B) after December 31, 2011 the greater of  (i) $.40 per share, or (ii) the Market Price, as appropriately adjusted for in either case
stock splits, stock dividends and similar events; provided that, the conversion price shall never be less than $0.10 (ten cents) regardless of the Market Price on the conversion date.

 

 

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SECTION 3.2 Exercise of Conversion Privilege.

 

       (a)           Conversion of this Note may be exercised on any Business Day by the Lender by telecopying an executed and completed Conversion Notice to the Borrower.  Each date on which
a Conversion Notice is telecopied to the Borrower in accordance with the provisions of this Section 3.2 shall constitute a Conversion Date.  The Borrower shall convert this Note and issue the Common Stock Issued at Conversion in the manner provided below in this Section 3.2, and all voting and other rights associated with the beneficial ownership of the Common Stock Issued at Conversion shall vest with the Lender, effective as of the Conversion Date at the time specified in the Conversion Notice.  The
Conversion Notice also shall state the name or names (with addresses) of the persons who are to become the holders of the Common Stock Issued at Conversion in connection with such conversion. As promptly as practicable after the receipt of the Conversion Notice as aforesaid, but in any event not more than five (5) Business Days after the Borrower’s receipt of such Conversion Notice, the Borrower shall (i) issue the Common Stock Issued at Conversion in accordance with the provisions of this Article 3 and
(ii) cause to be mailed for delivery by overnight courier (x) a certificate or certificate(s) representing the number of Common Shares to which the Lender is entitled by virtue of such conversion and (y) cash, as provided in Section 3.3, in respect of any fraction of a Common Share deliverable upon such conversion.  Such conversion shall be deemed to have been effected at the time at which the Conversion Notice indicates, and at such time the rights of the Lender of this Note, as such (except if and
to the extent that any Principal Amount thereof remains unconverted), shall cease and the Person and Persons in whose name or names the Common Stock Issued at Conversion shall be issuable shall be deemed to have become the holder or holders of record of the Common Shares represented thereby, and all voting and other rights associated with the beneficial ownership of such Common Shares shall at such time vest with such Person or Persons.  The Conversion Notice shall constitute a contract between the
Lender and the Borrower, whereby the Lender shall be deemed to subscribe for the number of Common Shares which it will be entitled to receive upon such conversion and, in payment and satisfaction of such subscription (and for any cash adjustment to which it is entitled pursuant to Section 3.4), to surrender this Note and to release the Borrower from all liability thereon (except if and to the extent that any Principal Amount thereof remains unconverted).  No cash payment aggregating less than $1.00
shall be required to be given unless specifically requested by the Lender.

 

      (b)   The Lender shall be entitled to exercise its conversion privilege notwithstanding the commencement of
any case under the Bankruptcy Code.  In the event the Borrower is a debtor under the Bankruptcy Code, the Borrower hereby waives to the fullest extent permitted any rights to relief it may have under 11 U.S.C. § 362 in respect of the Lender’s conversion privilege.  The Borrower hereby waives to the fullest extent permitted any rights to relief it may have under 11 U.S.C. § 362 in respect of the conversion of this Note.  The Borrower agrees, without cost or expense
to the Lender, to take or consent to any and all action necessary to effectuate relief under 11 U.S.C. § 362.

 

 

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SECTION 3.3 Fractional Shares.  No fractional Common Shares or scrip representing fractional Common Shares shall be delivered upon a conversion
of this Note.  Instead of any fractional Common Shares which otherwise would be delivered upon conversion of this Note, the Borrower shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction multiplied by the Current Market Price on the Conversion Date.  No cash payment of less than $1.00 shall be required to be given unless specifically requested by the Lender.

 

SECTION 3.4 Adjustments.  The Conversion Price and the number of shares deliverable upon conversion of this Note are subject to adjustment from time to time as
follows:

 

(i) Reclassification, Etc.  In case the Borrower shall reorganize its capital, reclassify its capital stock, consolidate or merge with or
into another Person (where the Borrower is not the survivor or where there is a change in or distribution with respect to the Common Stock of the Borrower), sell, convey, transfer or otherwise dispose of all or substantially all its property, assets or business to another Person, or effectuate a transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Borrower is disposed of (each, a “Fundamental Corporate
Change”) and, pursuant to the terms of such Fundamental Corporate Change, shares of common stock of the successor or acquiring corporation, or any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor or acquiring corporation (“Other Property”) are to be received by or distributed to the
holders of Common Stock of the Borrower, then the Lender of this Note shall have the right thereafter (A) receive the number of shares of common stock of the successor or acquiring corporation or of the Borrower, if it is the surviving corporation, and Other Property as is receivable upon or as a result of such Fundamental Corporate Change by a holder of the number of shares of Common Stock into which the outstanding portion of this Note may be converted
at the Conversion Price applicable immediately prior to such Fundamental Corporate Change or (B) require the Borrower, or such successor, resulting or purchasing corporation, as the case may be, to, without benefit of any additional consideration therefor, execute and deliver to the Lender a Note with substantial identical rights, privileges, powers, restrictions and other terms as this Note in an amount equal to the amount outstanding under this Note immediately prior to such Fundamental Corporate Change.  For
purposes hereof, “common stock of the successor or acquiring corporation” shall include stock of such corporation of any class which is not preferred as to dividends or assets over any other class of stock of such corporation and which is not subject to prepayment and shall also include any evidences of indebtedness, shares of stock or other securities which are convertible into or exchangeable for any such stock, either immediately or upon the
arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock.  The foregoing provisions shall similarly apply to successive Fundamental Corporate Changes.

 

SECTION 3.5 Surrender of Notes.  Upon any redemption of this Note pursuant to Sections 3.2, or 6.2, or upon maturity pursuant to Section 2.4,
the Lender shall either deliver this Note by hand to the Borrower at its principal executive offices or surrender the same to the Borrower at such address by nationally recognized overnight courier.  Payment of the redemption price or the amount due on maturity specified in Section 2.4, shall be made by the Borrower to the Lender against receipt of this Note (as provided in this Section 3.5) by wire transfer of immediately available funds to such account(s) as the Lender shall specify by written notice
to the Borrower.  

 

 

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If payment of such redemption price is not made in full by the redemption date, or the amount due on maturity is not paid in full by the Maturity Date, the Lender shall again have the right to convert this Note as provided in Article 3 hereof or to declare an Event of Default.

 

ARTICLE 4

 

STATUS; RESTRICTIONS ON TRANSFER

 

SECTION 4.1 Status of Note.  This Note constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance with its
terms subject, as to enforceability, to general principles of equity and to principles of bankruptcy, insolvency, reorganization and other similar laws of general applicability relating to or affecting creditors’ rights and remedies generally.

 

SECTION 4.2 Restrictions on Transfer.  This Note has not been registered under the Securities Act.  The Lender by accepting this
Note agrees that this Note may not be assigned or otherwise transferred unless and until the Borrower has received the opinion of counsel for the Lender that this Note or such shares may be sold pursuant to an exemption from registration under the Securities Act. Pursuant to a registration rights agreement of even date herewith (the “Registration Rights Agreement”), the Borrower shall file and maintain an effective registration statement for the Common Shares deliverable upon the conversion of this
Note. Until such registration statement is declared effective by the SEC, the Common Shares deliverable upon the conversion of this Note may not be assigned or otherwise transferred unless and until the Borrower has received the opinion of counsel for the Lender that such Common Shares may be sold: (i) pursuant to an exemption from registration under the Securities Act; or (ii) pursuant to Rule 144 promulgated by the SEC under the Securities Act.

 

ARTICLE 5

 

COVENANTS

 

SECTION 5.1 Conversion.  The Borrower shall cause the transfer agent, not later than five (5) Business Days after the Borrower’s receipt
of a Conversion Notice, to issue and deliver to the Lender the requisite shares of Common Stock Issued at Conversion.

 

SECTION 5.2 Notice of Default.  If any one or more events occur which constitute or which, with notice, lapse of time, or both, would constitute
an Event of Default, the Borrower shall forthwith give notice to the Lender, specifying the nature and status of the Event of Default or such other event(s), as the case may be.

 

SECTION 5.3 Payment of Obligations.  So long as this Note shall be outstanding, the Borrower shall pay, extend, or discharge at or before
maturity, all its respective material obligations and liabilities, including, without limitation, tax liabilities, except where the same may be contested in good faith by appropriate proceedings.

 

SECTION 5.4 Compliance with Laws.  So long as this Note shall be outstanding, the Borrower shall comply with all applicable laws, ordinances,
rules, regulations and requirements of governmental authorities, except for such noncompliance which would not have a material adverse effect on the business, properties, prospects, condition (financial or otherwise) or results of operations of the Borrower and the Subsidiaries.

 

 

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SECTION 5.5 Inspection of Property, Books and Records.  So long as this Note shall be outstanding, the Borrower shall keep proper books of
record and account in which full, true and correct entries shall be made of all material dealings and transactions in relation to its business and activities and shall permit representatives of the Lender at the Lender’s expense to visit and inspect any of its respective properties, to examine and make abstracts from any of its respective books and records, not reasonably deemed confidential by the Borrower, and to discuss its respective affairs, finances and accounts with its respective officers and independent
public accountants, all at such reasonable times and as often as may reasonably be desired.

 

SECTION 5.6 Reservation of Stock Issuable Upon Conversion.  The Borrower shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the conversion of this Note, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of this 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 this Note, in addition to such other remedies as shall be available to the holder of this Note, the Borrower will 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, including, without limitation, engaging in best efforts to obtain the requisite shareholder approval to file an amendment to the charter of the Borrower.

 

ARTICLE 6

 

EVENTS OF DEFAULT; REMEDIES

 

SECTION 6.1 Events of Default.  “Event of Default” wherever used herein means any one of the
following events:

 

(i) the Borrower shall default in the payment of principal of or interest on this Note as and when the same shall be due and payable and, in the case of an interest payment default, such default shall continue for
five (5) Business Days after the date such interest payment was due, or the Borrower shall fail to perform or observe any other covenant, agreement, term, provision, undertaking or commitment under this Note or the Loan Agreement and such default shall continue for a period of ten (10) Business Days after the delivery to the Borrower of written notice that the Borrower is in default hereunder or thereunder;

 

(ii) any of the representations, warranties, or covenants made by the Borrower herein, in the Loan Agreement or in any certificate or financial or other written statements heretofore or hereafter furnished by or on
behalf of the Borrower in connection with the execution and delivery of this Note or the Loan Agreement shall be false or misleading in a material respect on the Closing Date;

 

SECTION 6.2 Acceleration of Maturity; Rescission and Annulment.  If an Event of Default occurs and is continuing, then and in every such case
the Lender may, in Lender’s sole and absolute discretion, by a notice in writing to the Borrower, rescind any outstanding Conversion Notice and declare that any or all amounts owing or otherwise outstanding under this Note are immediately due and payable and upon any such declaration this Note or such portion thereof, as applicable, shall become immediately due and payable in cash, together with all accrued and unpaid interest thereon to the date of payment.

 

 

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SECTION 6.3 Late Payment Penalty.  If any portion of the principal of or interest on this Note shall not be paid within five (5) days of when
it is due Lender may assess a late charge in the amount of five percent (5%) of the unpaid amount of the payment, or the maximum permitted by applicable law, whichever is less.

 

SECTION 6.4 Maximum Interest Rate.  Notwithstanding anything herein to the contrary, if at any time the applicable interest rate as provided
for herein shall exceed the maximum lawful rate which may be contracted for, charged, taken or received by the Lender in accordance with any applicable law (the “Maximum Rate”), the rate of interest applicable to this Note shall be limited to the Maximum Rate.  To the greatest extent permitted under applicable law, the Borrower hereby waives and agrees not to allege or claim that any provisions of this Note could give rise to or result
in any actual or potential violation of any applicable usury laws.

 

SECTION 6.5 Remedies Not Waived.  No course of dealing between the Borrower and the Lender or any delay in exercising any rights hereunder
shall operate as a waiver by the Lender.

 

ARTICLE 7

 

MISCELLANEOUS

 

SECTION 7.1 Notice of Certain Events.  In the case of the occurrence of any event described in Section 3.4 of this Note, the Borrower shall
cause to be mailed to the Lender of this Note at its last address as it appears in the Borrower’s security registry, at least twenty (20) days prior to the applicable record, effective or expiration date hereinafter specified (or, if such twenty (20) days’ notice is not possible, at the earliest possible date prior to any such record, effective or expiration date), a notice thereof, including, if applicable, a statement of (y) the date on which a record is to be taken for the purpose of such dividend,
distribution, issuance or granting of rights, options or warrants, or if a record is not to be taken, the date as of which the holders of record of Common Stock to be entitled to such dividend, distribution, issuance or granting of rights, options or warrants are to be determined or (z) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up is expected to become effective, and the date as of which it is expected that holders of record of Common Stock
will be entitled to exchange their shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale transfer, dissolution, liquidation or winding-up.

 

SECTION 7.2 Register.  The Borrower shall keep at its principal office a register in which the Borrower shall provide for the registration
of this Note.  Upon any transfer of this Note in accordance with Articles 2 and 4 hereof, the Borrower shall register such transfer on the Note register.

 

SECTION 7.3 Withholding.  To the extent required by applicable law, the Borrower may withhold amounts for or on account of any taxes imposed
or levied by or on behalf of any taxing authority in the United States having jurisdiction over the Borrower from any payments made pursuant to this Note.

 

 

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SECTION 7.4 Transmittal of Notices.  Except as may be otherwise provided herein, any notice or other communication or delivery required or
permitted hereunder shall be in writing and shall be delivered personally, or sent by telecopier machine or by a nationally recognized overnight courier service, and shall be deemed given when so delivered personally, or by telecopier machine or overnight courier service as follows:

        

	
(1)      
	
If to the Borrower, to:

Celsius Holdings, Inc.

140 NE 4th Avenue, Suite C

Delray Beach, Florida 33483

Telephone: 561-276-2239

Facsimile: 561-276-2268

	
(2)      
	
If to the Lender, to:

CDS Ventures of South Florida, LLC

3299 N.W. 2nd Avenue

Boca Raton, FL 33431

Telephone:  561-278-1169

Facsimile:   561-278-6930

 

Each of the Lender or the Borrower may change the foregoing address by notice given pursuant to this Section 7.4.

 

SECTION 7.5 Attorneys’ Fees.  Should any party hereto employ an attorney for the purpose of enforcing or construing this Note, or any
judgment based on this Note, in any legal proceeding whatsoever, including insolvency, bankruptcy, arbitration, declaratory relief or other litigation, the prevailing party shall be entitled to receive from the other party or parties thereto reimbursement for all reasonable attorneys' fees and all reasonable costs, including but not limited to service of process, filing fees, court and court reporter costs, investigative costs, expert witness fees, and the cost of any bonds, whether taxable or not, and that such
reimbursement shall be included in any judgment or final order issued in that proceeding.  The "prevailing party" means the party determined by the court to most nearly prevail and not necessarily the one in whose favor a judgment is rendered.

 

SECTION 7.6 Governing Law.  This Note shall be governed by, and construed in accordance with, the laws of the State of Florida (without giving
effect to conflicts of laws principles).  With respect to any suit, action or proceedings relating to this Note, the Borrower and Lender irrevocably submit to the exclusive jurisdiction of the courts of the State of Florida sitting in Palm Beach County and hereby waive, to the fullest extent permitted by applicable law, any claim that any such suit, action or proceeding has been brought in an inconvenient forum.  Subject to applicable law, the Borrower agrees that final judgment against it
in any legal action or proceeding arising out of or relating to this Note shall be conclusive and may be enforced in any other jurisdiction within or outside the United States by suit on the judgment, a certified copy of which judgment shall be conclusive evidence thereof and the amount of its indebtedness, or by such other means provided by law.

 

 

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SECTION 7.7  Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE
OR ANY OTHER DOCUMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS NOTE AND OTHER DOCUMENTS.  EACH PARTY HERETO (I) CERTIFIES THAT NEITHER OF THEIR RESPECTIVE REPRESENTATIVES, AGENTS OR ATTORNEYS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (II) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS NOTE BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS HEREIN.

 

SECTION 7.8  Headings.  The headings of the Articles and Sections of this Note are inserted for convenience only and do not constitute a part of this Note.

 

SECTION 7.9  Payment Dates.  Whenever any payment hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

 

SECTION 7.10  Binding Effect.  Each Lender by accepting this Note agrees to be bound by and comply with the terms and provisions of this Note.

 

SECTION 7.11 No Stockholder Rights.  Except as otherwise provided herein, this Note shall not entitle the Lender to any of the rights of a stockholder of the Borrower, including, without limitation, the right to vote, to receive dividends and other distributions,
or to receive any notice of, or to attend, meetings of stockholders or any other proceedings of the Borrower, unless and to the extent converted into shares of Common Stock in accordance with the terms hereof.

 

SECTION 7.12  Facsimile Execution.  Facsimile execution of this Note shall be deemed original.

 

[REMAINDER OF PAGE INTENTIONALLY BLANK]

 

 

 

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IN WITNESS WHEREOF, the Borrower has caused this Note to be signed by its duly authorized officer on the date of this Note.

	 	 	
Celsius Holdings, Inc., a Nevada corporation, authorized to do business in Florida as Celsius Products Holdings, Inc.

 
	 
	
 
	
By: 
	/s/Jeffrey Perlman  	 
	 	 	Name: Jeffrey Perlman	 
	 	 	Title: Vice Presidentf8k090809ex10ii_celsius.htm

Exhibit 10.2

EXECUTION COPY

LOAN AND SECURITY AGREEMENT

This Loan and Security Agreement (hereinafter called "Agreement") is between CELSIUS HOLDINGS, INC., a Nevada Corporation, authorized to do business in Florida as  CELSIUS
PRODUCTS HOLDINGS, INC. (“Borrower”), CELSIUS, INC., a Nevada corporation, authorized to do business in Florida as CELSIUS PRODUCTS, INC., (“Celsius Products”) whose address is 140 N.E. 4th Avenue, Suite C, Delray Beach, Florida 33483 (hereinafter Borrower and Celsius Products are hereinafter
individually and collectively called "Grantor”) and CDS VENTURES OF SOUTH FLORIDA, LLC, a Florida limited liability company (hereinafter called "Lender").

1.       Line Of Credit. Lender hereby establishes for a period extending to September 8, 2012 (the "Maturity Date ") a non-revolving line of credit (the "Credit Facility ") for Borrower in the principal amount of SIX MILLION FIVE HUNDRED
THOUSAND AND NO/100THS DOLLARS ($6,500,000.00) (the "Credit Limit"). In connection herewith, Borrower shall execute and deliver to Lender a promissory note in the original principal sum of SIX MILLION FIVE HUNDRED THOUSAND AND NO/100THS DOLLARS ($6,500,000.00) in the form attached as Exhibit A hereto (the “Note”). All sums advanced on the Credit Line or pursuant to the terms of this Agreement (each an "Advance") shall become part of the principal of said Note.

2.           Grant of Security Interest.  Subject to the terms and conditions of the Note and this Agreement, Grantor, for consideration as defined herein,
and to secure the full and prompt payment, observance and performance when due of all present and future obligations and indebtedness of Borrower to Lender, whether at the stated time, by acceleration or otherwise, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, whether or not of the same or similar class or of like kind to any indebtedness incurred contemporaneously with the execution of this Agreement, and whether now or hereafter existing, or due or to become due,
and whether such indebtedness from time to time is reduced and thereafter increased, or entirely extinguished and thereafter reincurred, including without limitation, the following:

 

      (a)           Any and all amounts owed by Borrower, under, in connection with, and/or pursuant to the indebtedness evidenced by the Note, including the outstanding principal balance with interest thereon
according to the provisions thereof, and all obligations thereunder, in connection therewith and/or pursuant to any and all agreements and other documents in connection therewith; and

 

      (b)           All sums advanced or expenses or costs paid or incurred (including without limitation reasonable attorneys' fees and other legal expenses) by Lender pursuant to or in connection with the
Note or any other agreements and documents in connection therewith plus applicable interest on such sums, expenses or costs; and

 

      (c)           Any extensions, modifications, changes, substitutions, restatements, renewals or increases or decreases of any or all of the indebtedness referenced above; and

 

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hereby grants to Lender a security interest in the collateral described in Schedule 1, including all of Borrower’s right, title and interest in and to the stock of Celsius Products, same being attached to this Agreement and made a part hereof (hereinafter collectively called the "Collateral"). Celsius Products is a wholly owned subsidiary
of the Borrower and the consideration for such granting to the Lender of the security interest described herein is the direct benefit which will be extended to Celsius Products by the Borrower.

 

       3.           Definitions. The following terms shall have the following meanings

“Accounts” means all Accounts as that term is defined in Article 9 of the UCC;

“Chattel Paper” means all Chattel Paper as that term is defined in Article 9 of the UCC;

“Commercial Tort Claims” means all Commercial Tort Claims as that term is defined in Article 9 of the UCC;

“Common Stock” means the Borrower’s common stock, par value $0.001 per share;

 

“Consignments” means all Consignments as that term is define in Article 9 of the UCC;

 

“Contracts” means all contracts, undertakings, franchise agreements or other agreements (other than rights evidenced by Chattel Paper, Documents or Instruments, as those terms are defined above and below) in or under which the Borrower may now or hereafter have any right, title or interest, including, without limitation, with
respect to an Account, and any agreement relating to the terms of payment or the terms of performance thereof;

 

“Copyrights” means (a) all copyrights of the United States or any other country; (b) all copyright registrations filed in the United States or in any other country; and (c) all proceeds thereof;

 

“Copyright License” means all agreements, whether written or oral, providing for the grant by the Borrower of any right to use any Copyright;

 

“Deposit Accounts” means all Deposit Accounts at that term is defined in Article 9 of the UCC  ;

“Documents” means all Documents as that term is defined in Article 9 of the UCC;

“Encumbrance(s)” means all Encumbrance(s) as that term is defined in Article 9 of the UCC;

“Equipment” means all Equipment as that term is defined in Article 9 of the UCC;

 “Fixtures” means all Fixtures as that term is defined in Article 9 of the UCC;

“General Intangibles” means all General Intangibles as that term is defined in Article 9 of the UCC;

“Goods” means all Goods as that term is defined in Article 9 of the UCC;

“Grantor” means collectively, CELSIUS, INC., a Nevada corporation, authorized to do business in Florida, as CELSIUS PRODUCTS, INC. and  CELSIUS HOLDINGS, INC., a Nevada corporation.

 

 

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“Health-Care-Insurance Receivables” means all Health-Care-Insurance Receivables as that term is defined in Article 9 of the UCC;

“Instruments” means all Instruments as that term is defined in Article 9 of the UCC;

“Inventory” means all Inventory as that term is defined in Article 9 of the UCC;

“Investment Property” means all Investment Property as that term is defined in Article 9 of the UCC;

“Letters of Credit” means all Letters of Credit as that term is defined in the Article 5 of the UCC;

“Letter-of-Credit Rights” means all Letter-of-Credit Rights as that term is defined in Article 9 of the UCC;

“Patents” means (a) all letters patent of the United States and all reissues and extensions thereof, (b) all applications for letters patent of the United States and all divisions, continuations and continuations-in-part thereof or any other country, including, without limitation, any thereof referred to in any schedule attached
hereto and (c) all proceeds thereof, including the goodwill of the business connected with the use of and symbolized by the Patents;

 

“Patent License” means all agreements, whether written or oral, providing for the grant by the Borrower of any right to manufacture, use or sell any invention covered by a Patent, including, without limitation, any thereof referred to in any schedule attached hereto;

 

“Payment Intangibles” means all Payment Intangibles as that term is defined in Article 9 of the UCC;

“Proceeds” means all Proceeds as that term is defined in Article 9 of the UCC;

“Promissory Note(s)” means as that term is defined in Article 9 of the UCC;

 “Software” means all Software as that term is defined in Article 9 of the UCC ;

“Stock” means all of the common stock of Celsius Products;

“Supporting Obligations” means all Supporting Obligations as that term is defined in Article 9 of the UCC;

“Tangible Chattel Paper” means all Tangible Chattel Paper as that term is defined in Article 9 of the UCC;

 

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“Trademarks” means (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers and the goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof,
and all applications in connection therewith, whether registered in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof or otherwise, including, without limitation, any thereof referred to in any schedule attached hereto; (b) all renewals thereof; and (c) all proceeds thereof, including the goodwill of the business connected with the use of and symbolized by the Trademarks;

“Trademark License” means any agreement, written or oral, providing for the grant of any right to use any Trademark.

“UCC” means the Uniform Commercial Code as in effect from time-to-time in the State of Florida and State of Nevada.

 

4.           Representations, Warranties and Covenants of Grantor.  Grantor expressly represents, warrants and covenants to Lender as follows:

 

      (a)           The address appearing with Grantor's signature below is the address of Grantor's principal office.  If any part of the Collateral is not located at Grantor's principal office, it
will be located at such other locations as Grantor, or any other entity affiliated with Grantor, may utilize in its business from time to time, and Grantor hereby covenants to notify Lender of any such additional location(s).

 

      (b)           If Grantor does not keep the records concerning the Collateral and concerning accounts, general intangibles, mobile goods and contract rights at Grantor’s principal office, same will
be located at such other locations as Grantor, or any other entity affiliated with Grantor, may utilize in its business from time to time, and Grantor hereby covenants to notify Lender of any such additional location(s).

 

      (c)           Grantor will give Lender sixty (60) days prior written notice of any change in (i) Grantor's principal office, the location of the Collateral or the location of the records described above,
or (ii) the Ownership of Grantor's business, (iii) the principals responsible for the management of Grantor's business, (iv) Grantor's company structure or identity, or (v) Grantor's name or trade name, or prior to commencing to use an assumed name not set forth in this Agreement.

 

      (d)           If any of the Collateral is to be or has been attached to real estate, the legal description of the real estate is attached to this Agreement as Schedule 2 and made a part hereof.

 

      (e)           If Grantor does not have a record interest in the real estate described above, the record Owner is indicated on the attached Schedule 2.

 

      (f)           Without the prior written consent of Lender, Grantor will not move, sell, lease, permit any encumbrance on or otherwise dispose of the Collateral, other than its inventory in the ordinary
course of its business.  Grantor represents and warrants that Grantor and/or one or more of the Grantor’s affiliated entities are the owners of the Collateral, free and clear of all liens, charges, interests, and encumbrances, other than in favor of Lender, that no other person or other entity has any interest in the Collateral whatsoever, and that Grantor will defend same against all adverse claims and demands.

 

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      (g)           Grantor will keep the Collateral insured by such companies, in such amounts and against such risks as shall be acceptable to Lender, and the Lender hereby acknowledges that the current levels of insurance maintained by Grantor are acceptable for the first year of the Note, with loss
payable and additional insured clauses in favor of Lender as are satisfactory to Lender. Grantor will deposit such insurance policies with Lender. Grantor hereby assigns to Lender and grants to Lender a security interest in any return of unearned premium due upon cancellation of any such insurance and directs the insurer thereunder to pay to Lender all amounts so due. All amounts received by Lender in payment of insurance losses or return of unearned premium may, at Lender's option, be applied to the indebtedness
by Lender, or all or any part thereof may be used for the purpose of repairing, replacing or restoring the Collateral.  Notwithstanding the foregoing, if there is no default under the Note, at the request of the Grantor, and upon the approval of Lender in its sole discretion, amounts received by Lender in payment of insurance losses or return of unearned premium shall be used for the purpose of repairing, replacing or restoring the Collateral.   If Grantor fails to maintain satisfactory
insurance, Lender shall have the option, but not the obligation, to obtain such insurance in such amounts as Lender deems necessary, and Grantor agrees to repay, with interest at the highest rate applicable to any indebtedness which this Agreement secures, all amounts so expended by Lender.

 

      (h)            Borrower represents and warrants to Lender that all financial statements, income tax returns and credit information delivered by Borrower to Lender accurately reflect the financial condition and operations of Borrower at the times and for
the periods therein stated.  So long as this Agreement is in force and effect, Borrower agrees to deliver to Lender within one hundred twenty (120) calendar days after the end of each of Borrower’s fiscal years, a complete and accurate copy of Borrower’s consolidated audited financial statements (with notes), prepared by an independent certified public accountant acceptable to Secured party (“CPA”), including statements of cash flow, and a  balance sheet and statement
of income, together with all schedules, all prepared in accordance with generally accepted accounting principles (“GAAP”). Borrower shall provide Lender with a copy of its consolidated federal income tax return within fifteen (15) days of filing (including all schedules and extensions). Borrower shall also provide internally prepared condensed unaudited monthly statements without notes but otherwise meeting all the requirements of the annual statements no later than thirty (30) days after each month
end and internally prepared condensed quarterly financial statements with partial notes (which are included in the Form 10-Q) but otherwise meeting all the requirements of the annual statements no later than forty five (45) days after the end of each fiscal quarter end or such other date as requested by Lender for statements other than the quarterly statements, acceptable to Security Party and its accountants as well as financial statements at such other times as requested by Security Party.

 

      (i)    Lender shall not be deemed to have waived any of its rights in any Collateral unless such waiver is in writing and signed by an authorized representative
of Lender.  No delay or omission by Lender in exercising any of Lender's rights shall operate as a waiver thereof or of any other rights.  Lender shall have, in addition to all other rights and remedies provided by this Agreement or applicable law, the rights and remedies of a secured party under the Uniform Commercial Code.

 

      (j)           Grantor will maintain the Collateral in good condition and repair, reasonable wear and tear excepted, and will pay promptly all taxes, levies, and encumbrances and all repair, maintenance and preservation costs pertaining to the Collateral.  If
Grantor fails to make such payments, Lender shall have the option, but not the obligation, to pay the same and Borrower agrees to repay, with interest at the highest rate applicable to any indebtedness which this Agreement secures, all amounts so expended by Lender.  Grantor will at any time and from time to time, upon request of Lender, give any representative of Lender access during normal business hours to inspect the Collateral or the books and records thereof.

 

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      (k)           Borrower agrees to pay to Lender on demand all expenses, including reasonable attorney fees and expenses, incurred by Lender in protecting or enforcing its rights in the Collateral or otherwise under this Agreement.  After deducting all said expenses, the remainder of any
proceeds of sale or other disposition of the Collateral shall be applied to the indebtedness due Lender in such order of preference as Lender shall determine.

 

      (l)           Grantor hereby agrees to faithfully preserve and protect Lender's security interest in the Collateral at all times, and further agrees to execute and deliver, from time to time, any and all further, or other, documents, instruments, continuation
statements and perform or refrain from performing such acts, as Lender may reasonably request to effect the purposes of this Agreement and to secure to Lender the benefits of all the rights, authorities and remedies conferred upon Lender by the terms of this Agreement.  Grantor shall permit, or cause to be permitted, at Grantor's expense, representatives of Lender to inspect and make copies of the books and records of Grantor relating to the Collateral at any reasonable time or times upon prior notice.

 

      (m)            Jan Norelid (“Norelid”) and Stephen Haley (“Haley”), each a director and shareholder of the Borrower, each agrees to propose and vote for the expansion of the board of directors from five (5) to seven (7) individuals.  Lender
may nominate two (2) individuals to fill the additional two (2) board seats created by the aforementioned expansion.  Norelid and Haley agree that they shall not unreasonably withhold their affirmative vote to appoint Lender’s nominees as members of the board of directors.

 

      (n)           Pursuant to its terms, the outstanding balance of the Note is immediately convertible into shares of the Borrower’s Common Stock at the request of the Lender.

 

      (o)           The Borrower has agreed to effect the registration of the shares of Common Stock issuable upon the conversion of the Note for resale by the holders thereof under the Securities Act of 1933 (as amended, and the rules and regulations promulgated
thereunder, the “Securities Act”), pursuant to a Registration Rights Agreement in the form attached hereto as Exhibit B (the “Registration Rights Agreement”).

 

      (p)           Each Grantor has the requisite corporate power and authority to enter into and perform its obligations under the Note and loan documents, including, without limitation, this Agreement and the Registration Rights Agreement, and delivery of the
Common Stock Issued at Conversion (as such term is defined in the Note) to the Lender in accordance with the terms hereof and thereof.  All corporate action on the part of each Grantor necessary for the authorization, execution and delivery of, and the performance by such Grantor of its obligations under the Note and such loan documents to which such Grantor is a party has been taken, and no further consent or authorization of any Person [including, without limitation, any of the Grantors' respective
directors or shareholders or any governmental authority (other than such approval as may be required under the Securities Act and applicable state laws in respect of the Registration Rights Agreement)] is required under any organizational document, contract to which a Grantor is a party, any governmental requirement or otherwise.  Each board of directors of the Grantor has determined that the sale and issuance of the Common Stock Issued at Conversion and the consummation of the transaction contemplated
hereby and by the Note and other loan documents, are in the best interests of the Grantor.

 

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      (q)           The Debtor has delivered to Lender a legal opinion of its outside counsel covering such issues with respect to this transaction and the Common Stock issuable upon  conversion of such Note as such counsel has previously addressed in prior legal  opinions to the
lender (as an investor) and in such form an substance as is reasonably satisfactory to lender.

5.           Loan Disbursements. Disbursements under the Note shall be made directly by the Lender to Borrower pursuant to the written request of the Borrower together with such documentation as may be reasonably required
by Lender to document the use of each such disbursement from the Note. Disbursements are limited as follows: (i) Two Million Dollars ($2,000,000) during the month of September 2009; (ii) Two Million Dollars ($2,000,000) during October 2009; Two Million Dollars ($2,000,000) during November 2009; and (iii) Five Hundred Thousand ($500,000) in December 2009. Provided, however, that no disbursement shall be made in an amount less than Five Hundred Thousand Dollars ($500,000). Any amounts not requested for disbursement
in one calendar month can be carried over to a subsequent month and disbursed in addition to the maximum of such subsequent month.  Borrower shall provide no less than two (2) Business Days written notice to the Lender for each disbursement requested.

6.           Repayment; Conversion of Note.

(a)           This loan facility is a non-revolving line of credit. Prior to September 1, 2011, Borrower may not repay in cash any principal amount due under the Note. Thereafter, Borrower is permitted to repay in cash any principal amount due with a 10 days prior notice.

(b)           Lender has the right to at any time convert any part of or the entire outstanding principal amount of the Note into Borrower’s Common Stock pursuant to the terms of the Note; provided that, Lender or its affiliates shall not engage in any transaction selling Common
Stock or other derivatives of the Common Stock within 90 days of Lender executing a conversion of any outstanding principal amount of the Note to Common Stock.

7.           Defaults.  The occurrence of any of the following events shall constitute a default hereunder:

 

      (a)           the Borrower shall default in the payment of principal of or interest on the Note or any other obligation to Lender as and when the same shall be due and payable and, in the case of an interest payment default, such default shall continue
for five (5) Business Days after the date such interest payment was due, or the Borrower shall fail to perform or observe any other covenant, agreement, term, provision, undertaking or commitment under the Note, this Loan Agreement or any other agreement or document secured hereby or any other encumbrance or agreement securing the Note which remains uncured for ten (10) Business Days after the delivery to the Borrower of written notice that the Borrower is in default hereunder or thereunder;

 

      (b)           The breach of or failure to perform promptly any obligation or covenant set forth in this Agreement, the Note or any other agreement secured hereby or securing the Note unless otherwise approved in advance by Lender.

 

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      (c)           The suspension of business, insolvency, failure generally to pay debts as they became due, or the commission of any act constituting or resulting in a business failure, in each case on the part of the business of Grantor; the concealment or removal of any substantial portion of Grantor’s
property with the intent to hinder, delay or defraud any one or more creditors, or the making of any other transfer which is fraudulent or otherwise voidable under the Bankruptcy Code or other applicable federal or state law; the existence or creation of any lien, including without limitation any tax or judgment lien, upon the Collateral or any substantial part of Grantor’s property; an assignment for the benefit of creditors; the commencement of any proceedings by or against Grantor (under the Bankruptcy
Code or otherwise) seeking to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or seeking the appointment of a receiver, trustee or custodian for Grantor or for the Collateral or a substantial part of the property of  Grantor; or the institution by Grantor or any other person or entity of any liquidation, dissolution or reorganization proceedings
with respect to Grantor;

 

      (d)           The failure to effectively and promptly discharge, stay or indemnify against, to Lender's satisfaction, any lien or attachment against any of Grantor's property or the Collateral;

 

      (e)           Any representation or warranty contained herein or in any other document delivered by or on behalf of Grantor to Lender shall be false or misleading when made;

 

      (f)           If Lender, in good faith, believes the prospect of payment secured by this Agreement is impaired, or believes that any of the Collateral is in danger of loss, misuse, seizure or confiscation;

 

      (g)           The occurrence of any of the following without the Lender's written consent, which consent shall be in Lender’s sole discretion: the transfer of any of the Grantor’s assets not in the ordinary course of business; the merger or consolidation
of Grantor with another company or entity; the change of the Grantor's name; the liquidation of Grantor.

               8.           Remedies.

 

      (a)           Upon the occurrence of any default under this Agreement, Lender is authorized in its discretion to declare any or all of the indebtedness to be immediately due and payable without demand or notice to Grantor, and may exercise any one or more
of the rights and remedies granted pursuant to this Agreement or given to a secured party under applicable law, including without limitation the Uniform Commercial Code, such rights and remedies to include without limitation the right to take possession and sell, lease or otherwise dispose of the Collateral.  If reasonable notice of any disposition of Collateral or other enforcement is required, such requirement will be met if such notice is mailed, postage pre-paid, to the address of Grantor shown
below Grantor's signature on this Agreement at least fifteen (15) days prior to the time of disposition or other enforcement.  Grantor agrees that upon demand by Lender after default, Grantor will promptly assemble the Collateral and make the Collateral available to Lender at a place convenient to Lender.

 

      (b)           Grantor agrees that all of the Collateral and all of the other security which may be granted to Lender in connection with the obligations secured hereby constitute equal security for all of the obligations secured hereby, and agrees that Lender
shall be entitled to sell, retain or otherwise deal with any or all of the Collateral, in any order or simultaneously as Lender shall determine in its sole and absolute discretion, free of any requirement for the marshaling of assets or other restriction upon Lender in dealing with the Collateral or such other security.

 

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      (c)           Upon the occurrence of any default under this Agreement, Grantor hereby irrevocably constitute and appoints Lender (and any employee or agent of Lender) as Grantor's true and lawful attorney-in-fact with full power of substitution, in Lender's name or Grantor's name or otherwise,
for Lender's sole use and benefit, at Grantor's cost and expense, to exercise the following powers with respect to the Collateral:

(1)           To demand, sue for collection, receive, and give acquittance for any and all monies due or owing with respect to the Collateral;

(2)           To receive, take, endorse Grantor's name on, assign and deliver any checks, notes, drafts, documents or other instruments taken or received by Lender in connection with the Collateral;

(3)           To settle, compromise, prosecute, or defend any action or proceeding with respect to the Collateral;

(4)           To sell, transfer, assign or otherwise deal in or with the Collateral or the proceeds thereof, as fully as if Lender were the absolute Grantor thereof.

(5)           To sign Grantor's name to and file financing statements or such other documents and instruments as Lender may deem appropriate.

(6)           To take any and all action that Lender deems necessary or proper to preserve its interest in the Collateral, including without limitation, the payment of debts of Grantor that might impair the Collateral or Lender's security interest therein, the purchase of insurance
on the Collateral, the repair or safeguard of the Collateral, or the payment of taxes thereon.

(7)           To notify account debtors of Lender's security interest in Grantor's accounts and to instruct them to make payment directly to Lender.

(8)           To assume management (by Lender or by an affiliate of Lender) of the Grantor’s business.

 

      (d)           Grantor agrees that the powers of attorney granted herein are coupled with an interest and shall be irrevocable until full, final and irrevocable payment and performance of the indebtedness secured hereby; and that neither Lender nor any officer,
director, employee or agent of Lender shall be liable for any act or omission, or for any mistake or error of judgment, in connection with any such powers.

 

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      (e)           Notwithstanding the foregoing, Lender shall be under no duty to exercise any such powers, or to collect any amount due on the Collateral, to realize on the Collateral, to keep the Collateral, to make any presentment, demand or notice of protest in connection with the Collateral, or
to perform any other act relating to the enforcement, collection or protection of the Collateral.

 

      (f)           This Agreement shall not prejudice the right of Lender at its option to enforce the collection of any indebtedness secured hereby or any other instrument executed in connection with this transaction, by suit or in any other lawful manner.  No
right or remedy is intended to be exclusive of any other right or remedy, but every such right or remedy shall be cumulative to every other right or remedy herein or conferred in any other agreement or document for the benefit of Lender, or now or hereafter existing at law or in equity.

 

     9.           Miscellaneous.

 

      (a)           This Agreement and the security interest in the Collateral created hereby shall terminate when the indebtedness has been fully, finally and irrevocably paid and all other obligations of Borrower to Lender have been performed in full.  Prior
to such termination, this shall be a continuing agreement.

 

      (b)           THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA IN ALL RESPECTS, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, EXCEPT TO THE
EXTENT THE LAWS OF ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE.  GRANTOR CONSENTS TO THE NON-EXCLUSIVE PERSONAL JURISDICTION OF THE COURTS OF THE STATE OF FLORIDA AND THE FEDERAL COURTS LOCATED IN PALM BEACH COUNTY, FLORIDA SO THAT LENDER MAY SUE GRANTOR IN PALM BEACH COUNTY FLORIDA TO ENFORCE THIS AGREEMENT.  GRANTOR AGREES NOT TO CLAIM THAT PALM BEACH COUNTY, FLORIDA, IS AN INCONVENIENT PLACE FOR TRIAL.  AT LENDER'S OPTION,
THE VENUE (LOCATION) OF ANY SUIT TO ENFORCE THIS AGREEMENT MAY BE IN PALM BEACH COUNTY, FLORIDA.  GRANTOR HEREBY IRREVOCABLY AGREES AND CONSENTS THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO BORROWER AND/OR GRANTOR AT THE ADDRESS PROVIDED FOR NOTICES UNDER THIS AGREEMENT.

 

      (c)   GRANTOR AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY AND ALL RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION (INCLUDING BUT NOT LIMITED TO) ANY CLAIMS, CROSS-CLAIMS OR THIRD PARTY CLAIMS ARISING OUT OF, UNDER OR IN CONNECTION
WITH  THIS  AGREEMENT, THE  OTHER  LOAN  DOCUMENTS  OR  THE TRANSACTIONS CONTEMPLATED HEREIN.  GRANTOR ALSO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES, TO THE EXTENT PERMITTED BY LAW, ANY RIGHT THEY MAY HAVE TO ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES.  GRANTOR ACKNOWLEDGES THAT THE LENDER HAS BEEN INDUCED TO ENTER INTO THIS LOAN, INCLUDING THIS AGREEMENT, BY, INTER ALIA, THE PROVISIONS OF THIS PARAGRAPH.

 

10

 

 

      (d)           This Agreement shall inure to the benefit of Lender, its successors and assigns and to any other holder who derives from Lender title to or an interest in the indebtedness which this Agreement secures, and shall be binding upon Grantor, its successors and assigns.

 

      (e)           In case any one or more of the provisions of this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, but
this Agreement shall be construed as if such invalid, illegal or unenforceable provision had not been included.

 

      (f).           The Grantor agrees to cooperate promptly with the Lender and its agent in the correction or completion of the loan closing documents if deemed necessary or desirable by Lender.  Grantor understands that this may include correction
or execution of a new note and security agreement to reflect the agreed terms.

 

      (f)           Any provision to the contrary notwithstanding contained herein or in the Note or in any other instrument now or hereafter evidencing, securing or otherwise relating to any secured indebtedness, neither Lender nor any other holder of the secured
indebtedness shall be entitled to receive or collect, nor shall Borrower be obligated to pay, interest on any of the secured indebtedness in excess of the maximum rate of interest at the particular time in question, if any, which, under applicable law, may be charged to Borrower (herein the "Maximum Rate"), provided that the Maximum Rate shall be automatically increased or decreased, as the case may be, without notice to Borrower from time to time as of the effective time of each change in the Maximum Rate, and
if any provision herein or in the Note or in such other instrument shall ever be construed or held to permit the collection or to require the payment of any amount of interest in excess of that permitted by applicable law, the provisions of this paragraph shall control and shall override any contrary or inconsistent provision herein or in the Note or in such other instrument.  The intention of the parties being to conform strictly to the usury limitations under applicable law, the Note, this Agreement,
and each other instrument now or hereafter evidencing or relating to any secured indebtedness shall be held subject to reduction to the amount allowed under said applicable law as now or hereafter construed by the courts having jurisdiction.

 

      (g)           All notices pursuant to this Security Agreement shall be in writing and shall be directed to the addresses set forth below or such other address as may be specified in writing, by certified or registered mail, return receipt requested by the
party to which or whom notices are to be given.  Notices shall be deemed to be given upon sender’s obtaining a receipt (or refusal of receipt) from the U.S. Postal Service for such certified or registered mail delivery, upon personal delivery to an officer of the Borrower, or the day following prepaid delivery to a recognized overnight commercial carrier.

 

      (h)           The singular used herein shall include the plural.

 

      (i)           If more than one party shall execute this Agreement as "Borrower", the term "Borrower" shall mean all such parties executing this Agreement, and all such parties shall be jointly and severally obligated hereunder.

 

      (j)   A photocopy or other reproduction of this Agreement or of any financing statement is sufficient as a financing statement and may be filed as a financing
statement in any government office.

 

[balance of this page left intentionally blank]

 

 

 

11

 

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date written below.

Dated:  September 8, 2009.

 

Signed sealed and delivered
in the presence of:

	 	
BORROWER:

 
	 
	 /s/ Anthony Rocco	
CELSIUS HOLDINGS, INC. a Nevada corporation, authorized to do business in Florida as CELSIUS PRODUCTS HOLDINGS, INC.

140 N.E. 4th Avenue, Suite C 

Delray Beach, Florida 33483
	 
	 	 	 	 
	
 /s/ Janet Linnell
	
By: 
	/s/Jan Norelid	 
	 	 	Name: Jan Norelid	 
	 	 	As its: Vice President  	 
	 	 	
 

(Corporate Seal)
	 

 

 

Signed sealed and delivered
in the presence of:

	 	
GRANTOR:

 
	 
	 /s/ Anthony Rocco	
CELSIUS HOLDINGS, INC. a Nevada corporation, authorized to do business in Florida as CELSIUS PRODUCTS HOLDINGS, INC.

140 N.E. 4th Avenue, Suite C 

Delray Beach, Florida 33483
	 
	 	 	 	 
	
 /s/ Janet Linnell
	
By: 
	/s/Jan Norelid	 
	 	 	Name: Jan Norelid	 
	 	 	As its: Vice President  	 
	 	 	
 

(Corporate Seal)
	 

 

 

 

12

 

 

STATE OF FLORIDA             )

                                                ss:

COUNTY OF PALM BEACH )

The foregoing instrument was acknowledged before me this September 8, 2009, by Jan Norelid as Vice President of CELSIUS, INC., a Nevada corporation, authorized to do business in Florida as CELSIUS PRODUCTS, INC., on behalf of the corporation. He is personally known to me or has produced a
driver’s license as identification.

____/s/ Sandy Telsaint________

Notary Public, State of Florida

My Commission Expires: July 27, 2012

{Seal}

 

 

 

	 	
LENDER:

 
	 
	 	
CDS VENTURES OF SOUTH FLORIDA, LLC, a Florida limited liability company 
	 
	 	 	 	 
	
 
	
By: 
	/s/William H. Milmoe	 
	 	 	William H. Milmoe, Manager	 
	 	 	 	 
	 	 	

Address: 3299 N.W. 2nd Avenue

Boca Raton, FL 33431

	 

 

 

STATE OF FLORIDA             )

                                                ss:

COUNTY OF PALM BEACH )

The foregoing instrument was acknowledged before me this September _8_, 2009, by WILLIAM H. MILMOE as Manager of CDS VENTURES OF SOUTH FLORIDA, LLC, a Florida limited liability company, on behalf of the company. He is personally
known to me or has produced a Florida driver’s license as identification.

___/s/ Maritza F. Benitez___________

Notary Public, State of Florida

My Commission Expires:   November 2, 2012

{Seal}

ACKNOWLEDGMENT AND CONSENT

The undersigned parties hereby acknowledge and consent to be bound to the terms and provisions of paragraph 4(m) of this Agreement effective the date of this Agreement.

____/s/ Stephen Haley                                                                                              _____/s/
Jan Norelid             

Stephen Haley, Director and Shareholder                                                                                     Jan
Norelid, Director and Shareholder

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