Document:

exh10-17_16773.htm

    EXHIBIT 10.17

      

      

      

      

      

      THIRD
MODIFICATION TO

      

      LOAN AND
SECURITY AGREEMENT

      

      

      among

      

      

      THE
PRIVATEBANK AND TRUST COMPANY

      Bank

      

      

      LIFEWAY
FOODS, INC., FRESH MADE, INC.,

      HELIOS
NUTRITION LIMITED, PRIDE OF MAIN STREET DAIRY, LLC,

      AND
STARFRUIT, LLC

      Borrowers

      

      

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      THIRD
MODIFICATION TO

      LOAN AND SECURITY
AGREEMENT

      

      

      THIS
THIRD MODIFICATION TO LOAN AND SECURITY AGREEMENT (“Third Modification”) is made
as of the 6th day of February, 2010 (the “Effective Date”) is executed
by and among THE PRIVATEBANK AND TRUST COMPANY (“Bank”), LIFEWAY FOODS, INC.,
an Illinois corporation, FRESH MADE, INC., a Pennsylvania corporation, HELIOS
NUTRITION LIMITED, a Minnesota corporation, PRIDE OF MAIN STREET DAIRY, LLC, a
Minnesota limited liability company, and STARFRUIT, LLC, an Illinois limited
liability company (“Borrowers”).

       

      

      W I T N E S S E T
H:

      

      WHEREAS,
Bank and Borrowers previously entered into a Loan and Security Agreement dated
February 6, 2009, as amended by that certain First Modification to Loan and
Security Agreement dated as of August 13, 2009, and by that certain Second
Modification Agreement dated November 12, 2009 (as modified, the “Loan Agreement”), pursuant to
which Bank made available to Borrowers a credit facility.

      

      WHEREAS,
Bank and Borrowers desire to amend the Loan Agreement to, among other things,
extend the maturity of the Revolving Loan to February 6, 2011 and decrease the
Borrowers’ Revolving Loan Commitment to $4,000,000.

       

      NOW,
THEREFORE, in consideration of the terms and conditions contained herein, and of
any extension of credit heretofore, now or hereafter made by Bank to Borrowers,
the parties hereto hereby agree as follows:

      

      1.        
    GENERAL
DEFINITIONS

      

      1.1           Undefined
Terms.  Unless the context otherwise provides or requires,
capitalized terms used herein which are not defined herein shall have the
meanings ascribed to them in the Loan Agreement; provided, however, that all
references in the Loan Agreement to (a) “Obligations” shall, in addition to the
definition set forth in the Loan Agreement include, but not be limited to, the
duties and obligations of Borrowers under this Third Modification and (b) “Loan
Documents” shall, in addition to the definition set forth in the Loan Agreement
include, but not be limited to, this Third Modification and the documents and
instruments to be delivered pursuant to this Third Modification.

      

      1.2           Amended and Restated Defined
Terms.  When used herein and in the Loan Agreement, the
following terms shall have the following amended and restated
meanings:

      

      ““Revolving Loan
Commitment” shall mean Four Million and 00/100 Dollars ($4,000,000.00).”

      

      ““Revolving Loan Maturity
Date” shall mean February 6, 2011, unless extended by the Bank pursuant
to any modification, extension or renewal note executed by the Borrowers and
accepted by the Bank in its sole and absolute discretion in substitution for the
Revolving Note.”

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      1.3           Other
Terms.  All other terms contained in this Third Modification
shall, unless the context indicates otherwise, have the meanings provided for by
the Uniform Commercial Code (the “Code”) of the State of
Illinois, as now or hereafter in effect, to the extent the same are used or
defined therein.

      

      2.          
 AMENDMENT TO
REVOLVING NOTE.  The Revolving Note is hereby amended by
deleting all references to “$5,000,000” and replacing such references with
“$4,000,000”.  Except as specifically set forth herein, the Revolving
Note, the Term Note and the Loan Documents previously delivered by the Borrowers
shall remain in full force and effect and are hereby ratified and confirmed in
all respects.  The indebtedness evidenced by the Revolving Note (as
hereby amended by this Third Modification) is continuing indebtedness of
Borrowers and nothing herein shall be deemed to constitute a payment, settlement
or novation of the Revolving Note, or to release or otherwise adversely affect
any lien or security interest securing such indebtedness or any rights of Bank
against any party primarily or secondarily liable for such
indebtedness.

       

      3.        
    WARRANTIES AND
REPRESENTATIONS.

      

      3.1           General Representations and
Warranties.  Each of the Borrowers jointly and severally
warrants and represents that, except as provided in Exhibit A hereto, the
representations and warranties of Borrowers as set forth in the Loan Agreement
were true and correct when made and remain true and correct as of the Effective
Date.

      

      3.2           Warranty and Reaffirmation
of Warranties and Representations; Survival of Warranties and
Representations.  Each request for an advance made by Borrowers
pursuant to this Third Modification, the Loan Agreement or the Loan Documents
shall constitute a reaffirmation as of the date of said request of the
representations and warranties of Borrowers contained in Section 7 of the Loan
Agreement and Section 3.1 of this Third Modification.  All
representations and warranties of Borrowers contained in this Third Modification
and the Loan Documents shall survive the execution, delivery and acceptance
thereof by the parties thereto and the closing of the transactions described
therein or related thereto and the termination of this Third Modification for
any reason.

      

      4.        
    CONDITIONS
PRECEDENT.

      

      This
Third Modification shall become effective upon the satisfaction of the following
conditions precedent:

      

      4.1           Execution and Delivery of
Amendment.  This Third Modification or counterparts thereof
shall have been duly executed by Borrowers and Bank, and delivered to, Borrowers
and Bank.

      

      4.2           Documents and Loan
Documents.  Bank shall have received such other documents,
affidavits, certificates, lien searches and statements executed and delivered by
Borrowers as may be required or deemed advisable by Bank or its counsel, to duly
authorize, create and perfect the security interests in the Collateral in favor
of Bank as contemplated by this Third Modification.

      

      4.3           No Default
Exists.  No Event of Default or Unmatured Event of Default
exists.

      

      4.4         
 Material Adverse
Effect.  No event shall have occurred since November 1, 2009
which has had or could have a Material Adverse Effect.

      
        
          
          

        

        
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      5.         
   MISCELLANEOUS.

      

      5.1           Expenses (Including
Attorneys’ Fees).  In addition to amounts payable pursuant to
the Loan Agreement, Borrowers shall reimburse Bank on demand for all its
reasonable expenses (including, but not limited to, reasonable attorneys’ fees
and expenses) of, or incidental to:

      

      (a)           The
preparation of this Third Modification, all Loan Documents, any amendment of or
modification of this Third Modification or the Loan Documents including, without
limitation, any lien search costs and expenses;

      

      (b)           Any
litigation, contest, dispute, suit, proceeding or action (whether instituted by
Bank, Borrowers or any other Person) in any way relating to the Collateral, this
Third Modification, the Loan Documents or Borrowers’ affairs;

      

      (c)           Any
attempt to enforce any rights of Bank against Borrowers or any other Person
which may be obligated to Bank by virtue of this Third Modification or the Loan
Documents, including, without limitation, the Account Debtors;
and/or

      

      (d)           Any
attempt to inspect, verify, protect, collect, sell, liquidate or otherwise
dispose of the Collateral.

      

      Such
expenses shall be additional Obligations hereunder secured by the
Collateral.  Without limiting the generality of the foregoing, such
expenses, costs, charges and fees may include paralegal fees, costs and
expenses; accountants’ fees, costs and expenses; court costs and expenses;
photocopying and duplicating expenses; court reporter fees, costs and expenses;
long distance telephone charges; air express charges; telegram charges;
secretarial over-time charges; and expenses for travel, lodging and
food.

      

      5.2           Limited Waiver of Field
Audit.  The Bank hereby waives it right to conduct any
inspections and audits under Section 8.14 of the Loan Agreement prior to the
Revolving Loan Maturity Date provided that (a) no Event of Default or Unmatured
Event of Default shall have occurred and (b) between the Effective Date and the
Revolving Loan Maturity Date, the outstanding balance of the Revolving Loan will
be $0.00 for not less than thirty (30) consecutive days (it being understood and
agreed that Bank may conduct such inspections and audits at any time (i) after
the Revolving Loan Maturity Date, (ii) prior to the Borrowers’ compliance with
the preceding clause (b) and/or (c) following the occurrence of an Event of
Default or Unmatured Event of Default).

      

      5.3           Severability.  Wherever
possible, each provision of this Third Modification shall be interpreted in such
manner as to be effective and valid under applicable law.  If,
however, any provision of this Third Modification shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Third Modification, unless the
ineffectiveness of such provision materially and adversely alters the benefits
accruing to either party hereunder.

      

      5.4           Parties.  This
Third Modification and the Loan Documents shall be binding upon and inure to the
benefit of the successors and assigns of Borrowers and Bank.

      

      5.5           Conflict of
Terms.  The Loan Agreement, Loan Documents and all Schedules
and Exhibits hereto are incorporated in this Third Modification by this
reference thereto.  Except as otherwise provided in this Third
Modification and except as otherwise provided in the Loan Agreement by specific
reference to the applicable provision of this Third 

      
        
          
          

        

        
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      Modification,
if any provision contained in this Third Modification is in conflict with, or
inconsistent with, any provision in the Loan Agreement or Loan Documents, the
provision contained in this Third Modification shall govern and control; provided, however, that
whenever possible the provisions of this Third Modification, the Loan Agreement
and Loan Documents shall be construed and interpreted to avoid any such
conflicts or inconsistencies.

      

      5.6           Waivers by
Borrowers.  Except as otherwise provided for in this Third
Modification and the Loan Agreement, each of the Borrowers waives
(a) presentment, demand and protest and notice of presentment, protest,
default, non-payment, maturity, release, compromise, settlement, extension or
renewal of any or all commercial paper, accounts, contract rights, documents,
instruments, chattel paper and guaranties at any time held by Bank on which any
of the Borrowers may in any way be liable and hereby ratifies and confirms
whatever Bank may do in this regard; (b) all rights to notice of a hearing
prior to Bank’s taking possession or control of, or to Bank’s replevy,
attachment or levy upon, the Collateral or any bond or security which might be
required by any court prior to allowing Bank to exercise any of Bank’s remedies;
and (c) the benefit of all valuation, appraisement and exemption
laws.  Each of the Borrowers acknowledge that they have been advised
by counsel with respect to this Third Modification and the transactions
evidenced by this Third Modification.

      

      5.7           Authorized
Signatures.  The signature upon this Third Modification or any
of the Loan Documents of a person previously designated by Borrowers shall bind
Borrowers and be deemed to be the act of Borrowers.

      

      5.8           Forum Selection and Consent
to Jurisdiction.  ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH THIS THIRD MODIFICATION OR ANY OTHER LOAN
DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE
OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS; PROVIDED THAT NOTHING IN THIS THIRD MODIFICATION SHALL BE DEEMED OR
OPERATE TO PRECLUDE THE BANK FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN
ANY OTHER JURISDICTION.  EACH OF THE BORROWERS HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS
AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE.  EACH OF
THE BORROWERS FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF ILLINOIS.  EACH OF THE BORROWERS HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

      

      5.9           Waiver of Jury
Trial.  THE BANK AND EACH OF THE BORROWERS, AFTER CONSULTING OR
HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE IRREVOCABLY, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS THIRD MODIFICATION, ANY
NOTE, ANY OTHER LOAN DOCUMENT, ANY OF THE OTHER OBLIGATIONS, THE COLLATERAL, OR
ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, OR ANY
COURSE OF CONDUCT OR COURSE OF DEALING IN WHICH THE BANK AND ANY OF THE

      
        
          
          

        

        
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      BORROWERS
ARE ADVERSE PARTIES, AND EACH AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.  THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE BANK GRANTING ANY FINANCIAL ACCOMMODATION TO THE
BORROWERS.

      

      5.10           Governing
Law.  This Third Modification shall be delivered and accepted
in and shall be deemed to be contracts made under and governed by the internal
laws of the State of Illinois (but giving effect to federal laws applicable to
national banks) applicable to contracts made and to be performed entirely within
such state, without regard to conflict of laws principles.

      

      

      5.11           Release of
Claims. In
consideration of the execution and delivery of this Third Modification by Bank,
the sufficiency of which is acknowledged, and excepting only the contractual
obligations respecting future performance by Bank arising under the Loan
Agreement and the Loan Documents, each of the Borrowers hereby irrevocably
releases and forever discharges Bank and each of its affiliates, subsidiaries,
successors, assigns, directors, officers, employees, agents, representatives and
attorneys (each, a “Released
Person”) of and from all damages, losses, claims, demands, liabilities,
obligations, actions and causes of action whatsoever which such Borrowers may
now have or claim to have on and as of the date hereof against any Released
Person, whether presently known or unknown, liquidated or unliquidated,
suspected or unsuspected, contingent or non-contingent, and of every nature and
extent whatsoever (collectively, “Claims”).  Each
Borrower jointly and severally  represents and warrants to Bank that
it has not granted or purported to grant to any other Person any interest
whatsoever in any Claim, as security or otherwise.  Borrowers shall
jointly and severally indemnify, defend and hold harmless each Released Person
from and against any and all Claims and any loss, cost, liability, damage or
expense (including reasonable attorneys’ fees and expenses) incurred by any
Released Person in investigating, preparing for, defending against, providing
evidence or producing documents in connection with or taking other action in
respect of any commenced or threatened Claim.

      

      5.12         Section
Titles.  The section titles contained in this Third
Modification are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties
hereto.

      

      5.13         Remainder of Loan Agreement
Unaffected.  Except as specifically amended by this Third
Modification, all of the terms and provisions of the Loan Agreement shall remain
in full force and effect.

      

      5.14         Counterparts; Integration;
Effectiveness.  This Third Modification may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Delivery of an executed counterpart of a
signature page of this Third Modification by telecopy or electronically (such as
PDF) shall be effective as delivery of a manually executed counterpart of this
Third Modification.  Execution of any Exhibit to this Third
Modification shall have the same legal effect as if such document were
separately executed without the Exhibit reference thereon.

      

      

      *     *     *     *     *

      
        
          
          

        

        
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      IN
WITNESS WHEREOF, this Third Modification has been duly executed as of the day
and year specified at the beginning hereof.

      

      

       

      
        	 	
                BANK:

                

                THE
      PRIVATEBANK AND TRUST COMPANY

                

                

                By:
      /s/ Thomas G. Estey

                

                  
      

                Name:
      Thomas G. Estey

                Title:
      Managing Director

              

      

       

      

      

      BORROWERS:

      

      LIFEWAY
FOODS, INC.

      

      

      By: 
/s/ Julie Smolyansky

      
        

      

      Title: 
President

      

      FRESH
MADE, INC.

      

      

      By: 
/s/ Edward Smolyansky

      
        

      

      Title: 
President, CEO 

      

      HELIOS
NUTRITION LIMITED

      

      

      
        By: 
/s/ Julie Smolyansky

        
          

        

        Title: 
President

        

      

      

      PRIDE
OF MAIN STREET DAIRY, LLC

      

      
         

        By: 
/s/ Julie Smolyansky

        
          

        

        Title: 
President

      

      

      

      STARFRUIT,
LLC

       

       

      
        By: 
/s/ Julie Smolyansky

        
          

        

        Title: 
President

        
 

      

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT
A

      

      

      EXCEPTIONS
TO REPRESENTATIONS AND WARRANTIES

      

      

      No
exceptions.Exhibit 10.7

PROMISSORY NOTE

		
	 $66,221.57 USD

	December 31st, 2009

 

FOR VALUE RECEIVED, GoldCorp Holdings, Co. (hereinafter referred to as the “Maker”), promises to pay to the order of Pierre Quilliam.(“Holder”), or assigns, at 2373 Landings Circle, Bradenton, Florida 34209, or at such other place as the Holder may from time to time designate in writing to the Maker, in lawful money of the United States of America, the principal sum of Sixty Six Thousands, Two Hundred and Twenty One US dollars ($66,221.57) and Fifty Seven Cents, at a rate of interest thereon from the date of this Note at Seven percent (7 %) per annum.

Payments of interest shall be made on a yearly basis from the date of this Note until maturity. Should first yearly payment not be made on time, the amount of due interest will be added to the principal and shall bear interest from then on to maturity.  This Note shall mature Twenty Four (24) months from the date of this Note, and shall be paid as follows: there shall be a payment of Four Thousands Six Hundred and Thirty Five ($4,635.51) US Dollars and Fifty One Cents, on December 31st, 2010 and there shall be a final Principal balloon payment made to the Holder of Seventy Five Thousands, Eight Hundred and Seventeen ($75,817.08) US Dollars and Eight Cents on or before December 31st, 2011 at which time all principal and accrued interest shall be payable in full.

Any payment of principal or interest on this Note that is not made when due, as herein provided, shall bear interest at the same rate specified above.  In the event any payment is not made within five (5) days of its due date, the Maker shall pay a late charge of five (5%) percent of the amount of the payment, provided that only one (1) such late charge may be collected on any particular payment however long that payment shall remain past due.

The indebtedness evidenced by this Note may be prepaid in whole or in part at any time without penalty or premium after thirty (30) days prior notice to the Holder, during which time the Holder shall be entitled to convert this Note into shares of Common Stock of the Maker as hereinafter provided.

If from any circumstances whatsoever fulfillment of any provision of this Note at the time performance of such provision shall be due shall involve transcending the limit prescribed by any applicable usury statute or any other applicable law, with regard to obligations of like character and amount, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity, so that in no event shall any exaction be possible under this Note or under any other instrument evidencing or securing the indebtedness evidenced hereby, that is in excess of the current limit of such validity, but such obligation shall be fulfilled to the limit of such validity.

Presentment for payment, demand, protest and notice of demand, notice of dishonor and notice of nonpayment and all other notices are hereby waived by Maker.  No failure to accelerate the debt evidenced hereby by reason of default hereunder, acceptance of a past due installment, or indulgences granted from time to time shall be construed (1) as a novation of this Note or as a restatement of the indebtedness evidenced hereby or as a waiver of such right of acceleration or of the right of the Holder thereafter to insist upon strict compliance with the terms of this Note, or (2) to prevent the exercise of such right of acceleration or any other right granted hereunder or by applicable law; and Maker hereby expressly waives the benefit of any statute or rule of law or equity now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the foregoing.  No extension of the time for the payment of this Note or any installment due hereunder, made by agreement with any person now or hereafter liable for the payment of this Note shall operate to release, discharge, modify, change or affect the original liability of the Maker under this Note, either in whole or in part, unless the Holder agrees otherwise in writing.  This Note may not be changed orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought.

1

Maker hereby waives and renounces for itself, its heirs, successors and assigns, all rights to the benefits of any statute of limitations, any moratorium, reinstatement, marshaling, forbearance, valuation, stay, extension, redemption, appraisement and exemption now provided, or which may hereafter by provided, by the Constitution and laws of the United States of America and of the State of Florida, against the enforcement and collection of the obligations evidenced by this Note except as described above.

This Note shall be convertible at the office of Maker, and at such other place or places, if any, as the Board of Directors of the Maker may designate, into fully paid and non-assessable shares (calculated as to each conversion to the nearest l/100th of a share) of Common Stock of the Maker. The number of shares of Common Stock issuable upon conversion of this Note shall be equal to the amount of principle and interest for which a notice of conversion is sent divided by the Conversion Price in effect at the time of conversion determined as hereinafter provided. The price at which shares of Common Stock shall be delivered upon conversion (the "Conversion Price") shall be initially one hundredth ($.0001) per share of Common Stock; provided, however, that such Conversion Price shall be subject to adjustment from time to time in certain instances as hereinafter provided. No payment or adjustment shall be made in respect of dividends previously declared and paid on the Common Stock upon conversion of part, or all, of  this Note into shares of Common Stock. If the Maker elects to prepay part or all of this Note, such right of conversion shall cease and terminate, as to the portion designated for prepayment, at the close of business on the prepayment date, unless the Maker defaults in the prepayment. Further, if conversion is designated, only the face amount of the Note herein shall be used to calculate the number of shares issued hereunder. No fractional shares of Common Stock will be issued, and instead the number of shares of Common Stock to be issued on conversion of this Note will, to the extent necessary, be rounded up to the nearest whole number of shares.

Before the Holder of this Note shall be entitled to convert the same into Common Stock, the Holder shall surrender this Note to the Maker, duly endorsed to the Maker or in blank, at the office of the Maker or at such other place or places, if any, as the Board of Directors of the Maker has designated, and shall give written notice to the Maker at said office or place that it elects to convert the same and shall state in writing therein the name or names (with addresses) in which it wishes the certificate or certificates for Common Stock to be issued.  The Maker will, as soon as practicable thereafter, issue and deliver at said office or place to such Holder, or to its nominee or nominees, certificates for the number of full shares of Common Stock to which it shall be entitled as aforesaid. This Note shall be deemed to have been converted, as of the close of business, on the date of the surrender of the Note for conversion as provided above, and the person or persons entitled to receive the Common Stock issuable upon conversion shall be treated for all purposes as the record holder or holders of such Common Stock as of the close of business on such date.  In the event part or all of this Note is presented for conversion, the Holder of this Note will be entitled to receive all interest on this Note which has accrued to the date of conversion on that portion of the Note which is converted, which interest will, at the Holder's election, be payable on the next regularly scheduled interest payment date on this Note or converted into shares of Common Stock.

The Conversion Price in effect at any time shall be subject to adjustment as follows: 

(i)

In case the Maker shall (A) declare a dividend on its Common Stock in shares of its capital stock, (B) subdivide its outstanding shares of Common Stock, (C) combine its outstanding shares of Common Stock into a smaller number of shares, or (D) issue by reclassification of its Common Stock (including any such reclassification in connection with a consolidation or merger in which the Maker is the continuing corporation) any shares of its capital stock, the Conversion Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification shall be proportionately adjusted so that if this Note is surrendered for conversion after such time, the Holder shall be entitled to receive the kind and amount of shares of Common Stock which it would have owned or have been entitled to receive had this Note been converted immediately prior to such time. Such adjustment shall be made successively whenever any event listed above shall occur.

(ii)

In case the Maker shall distribute to all holders of its Common Stock (including any such distribution made in connection with a consolidation or merger in which the Maker is the continuing corporation) evidences of its indebtedness or assets (excluding dividends or other distributions paid out of earned surplus), the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution by a fraction of which the numerator shall be the Current Market Price per share of the Common Stock on the date fixed for such determination less the fair market value (as determined by the Board of Directors of the Maker, whose determination shall be conclusive and described in a Board Resolution of the Maker filed with the Transfer Agent) of the portion of the assets or evidences of indebtedness so distributed applicable to one share of Common Stock and the denominator shall be such Current Market Price per share of the Common Stock on the date fixed for such determination, such adjustment to become effective immediately prior to the opening of business of the day following the date fixed for the determination of stockholders entitled to receive such distribution. 

(iii)

For the purpose of any computation under paragraph (ii) above, the "Current Market Price" on any date shall be deemed to be the average of the bid price per share of Common Stock on the business day of the receipt of the monies evidenced by this note. The bid price shall be the one posted on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if it is not listed or admitted to trading on any national securities exchange, the closing bid price as furnished by any member of the National Association of Securities Dealers, Inc., selected from time to time by the Maker for that purpose, or, if no member of the National Association of Securities Dealers, Inc. furnishes a bid or ask price for the Common stock, the book value of the Common Stock as determined from an unaudited balance sheet of the Maker prepared according to generally accepted accounting principles as of a date which is 90 days preceding the date of the conversion.

2

(iv)

All calculations under this paragraph (6) shall be made to the nearest cent or the nearest l/100th of a share, as the case may be.

(v)

In case of any consolidation or merger of the Maker with or into any other corporation (other than a consolidation or merger in which the Maker is the continuing corporation), or in case of any sale or transfer of all or substantially all of the assets of the Maker, the Holder of this Note shall after such consolidation, merger, sale or transfer have the right to convert this Note into the kind and amount of shares of stock and other securities and property which such holder would have been entitled to receive upon such consolidation, merger, sale or transfer if he had held the Common Stock issuable upon the conversion of this Note immediately prior to such consolidation, merger, sale or transfer.

(vi)

In the event that at any time, as a result of an adjustment made pursuant to paragraph (i) above, the holder of this Note surrendered for conversion shall become entitled to receive any securities other than shares of Common Stock, thereafter the amount of such other securities so receivable upon conversion of this Note shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock contained in paragraphs (i) to (v), inclusive, above, and the provisions of this paragraph (6) with respect to the Common Stock shall apply on like terms to any such other securities.

(vii)

No adjustment in the Conversion Price shall be required unless such adjustment would require a change of at least l% in such price; provided, however, that any adjustments which by reason of this paragraph (vii) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.

Whenever the Conversion Price is adjustable as herein provided, the Maker shall notify the Holder of this Note of the change in the Conversion Price within 30 days of any such change.

The Maker will at all times reserve, keep available and be prepared to issue, free from any preemptive rights, out of its authorized but unissued Common Stock, solely for the purpose of effecting conversion of this Note, the full number of shares of Common Stock then issuable upon the conversion of all outstanding Notes. The Maker shall from time to time, in accordance with the laws of the State of Delaware, endeavor to amend its Articles of Incorporation to increase the authorized amount of its Common Stock if at any time the authorized amount of its 

Common Stock remaining unissued shall be not sufficient to permit the conversion of this Note and all other securities of the Maker which are convertible into Common Stock. The Maker shall, if any shares of Common Stock required to be reserved for issuance upon conversion of this Note pursuant to this paragraph require registration with or approval of any governmental authority under any Federal or state law before such shares may be issued upon such conversion, endeavor to cause such shares to be so registered or approved as expeditiously as possible.

The Maker will pay any and all transfer taxes that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of this Note pursuant hereto. The Maker shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue or transfer and delivery of shares of Common Stock in a name other than that in which this Note so converted was originally issued, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Maker the amount of any such tax or has established to the satisfaction of the Maker that such tax has been paid.

In the event that this Note is collected by law or through an attorney at law, or under advice therefrom, the Maker agrees to pay all costs of collection, including reasonable attorneys' fees actually incurred.  This Note shall be governed by the laws of the State of Florida. 

Given under the hand and seal of the undersigned, the date and year indicated above.

DATED this 31st day of December, 2009.

GoldCorp Holdings, Co.

a Delaware corporation

______________________________

By: Pierre Quilliam, C.E.O

3

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