Document:

f8k091009ex10iv_pashmina.htm

Exhibit 10.4

 

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXCHANGEABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY
BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

SECURED PROMISSORY NOTE

 

	
$500,000.00
	
September 10, 2009

FOR VALUE RECEIVED, SwissINSO SA, a Swiss corporation (the “Maker”), promises to pay to the order of Pashminadepot.com, Inc., a Florida corporation, or its successors or assigns (the “Holder”),
upon the terms set forth below, the principal sum of Five Hundred Thousand Dollars ($500,000) (this “Note”). The execution and delivery of this Note is a condition to the execution and delivery of the Stock Purchase Agreement dated the date hereof (the “Purchase Agreement”) among Maker, Holder and the other parties signatories thereto. Defined terms not otherwise
defined herein shall have the meanings ascribed to such terms in that Purchase Agreement.

 

1.            Payments.

 

(a) Unless an Event of Default shall have previously occurred and be continuing, the full amount of principal under this Note shall be due and payable on a date (the “Maturity
Date”) that shall be the earlier to occur of: (i) 120 days from the date hereof or (ii) the date the Holder or Maker (or any successor in interest to or parent thereof or any subsidiary thereof or such successor-in-interest or parent) consummates the sale of securities in a single transaction or series of related transactions resulting in gross proceeds of at least $5,000,000 or more (a “Financing”).

 

(b) There shall be no interest payable on the outstanding principal amount of this Note. Except as otherwise set forth in this Note, the Maker may not prepay any portion of the principal amount of this Note without
10 day advance written notice to the Holder.

 

 

 

 

 

 

2.    Events of Default.

 

(a) “Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary
or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

 

(i) Any default in the payment of the principal of, or the interest on, this Note, as and when the same shall become due and payable;

 

(ii) The Maker shall fail to observe or perform any obligation or shall breach any term or provision of this Note and such failure or breach shall not have been remedied within ten business days after the date on
which notice of such failure or breach shall have been delivered;

 

(iii) The Maker shall fail to observe or perform any of its obligations owed to the Holder or any other covenant, agreement, representation or warranty contained in, or otherwise commit any material breach hereunder
or in any other agreement executed in connection herewith;

 

(iv) The Maker shall commence, or there shall be commenced against the Maker a case under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Maker commences
any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Maker, or there is commenced against the Maker any such bankruptcy, insolvency or other proceeding; or the Maker is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or the Maker suffers any appointment of any custodian
or the like for it or any substantial part of its property; or the Maker makes a general assignment for the benefit of creditors; or the Maker shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; or the Maker shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or the Maker shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence
in any of the foregoing; or any corporate or other action is taken by the Maker for the purpose of effecting any of the foregoing;

 

(v) The Maker shall default in any of its respective obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued,
or by which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement of the Maker or any subsidiary, whether such indebtedness now exists or shall hereafter be created;

 

(vi) A breach or threatened breach by the Maker of any representations, warranties, covenants or agreements by Maker or a Seller in the Purchase Agreement which is not cured within five business days after notice
thereof by the Holder; or

 

 

 

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(vii) The Maker shall (a) be a party to any Change of Control Transaction (as defined below), (b) agree to sell or dispose all or in excess of 50% of its assets in one or more transactions (whether or not such sale
would constitute a Change of Control Transaction), (c) redeem or repurchase more than a de minimis number of shares of Common Stock or other equity securities of the Maker, or (d) make any distribution or declare or pay any dividends (in cash or other property, other than common stock) on, or purchase, acquire, redeem, or retire any of the Maker’s capital stock, of any class, whether now or hereafter outstanding. “Change of Control Transaction”
means the occurrence of any of: (i) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Securities Exchange Act of 1934, as amended) of effective control (whether through legal or beneficial ownership of capital stock of the Maker, by contract or otherwise) of in excess of 20% of the voting securities of the Maker, (ii) a replacement at one time or over time of more than one-half of the members of the Maker’s
board of directors which is not approved by a majority of those individuals who are members of the board of directors on the date hereof (or by those individuals who are serving as members of the board of directors on any date whose nomination to the board of directors was approved by a majority of the members of the board of directors who are members on the date hereof), (iii) the merger of the Maker with or into another entity that is not wholly owned by the Maker, consolidation or sale of 33% or more of the
assets of  the Maker in one or a series of related transactions, or (iv) the execution by the Maker of an agreement to which the Maker is a party or by which it is bound, providing for any of the events set forth above in (i), (ii) or (iii).

 

(b) If any Event of Default occurs and shall be continuing, the full principal amount of this Note, shall become, at the Holder’s election, immediately due and payable in cash.

 

(c) The Holder need not provide and the Maker hereby waives any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all
of its rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by the Holder at any time prior to payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

3.     Negative Covenants. So long as any portion of this Note is outstanding, the
Maker will not directly or indirectly:

 

(a) Except for Permitted Indebtedness (as defined below), enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including but not limited to, a guarantee,
on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

(b) Except for Permitted Liens (as defined below), enter into, create, incur, assume or suffer to exist any liens or encumbrances of any kind, on or with respect to any of its property or assets now owned or hereafter
acquired or any interest therein or any income or profits therefrom;

 

(c) amend its charter, bylaws or other organizational documents so as to adversely affect any rights of the Holder;

 

 

 

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(d) repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of securities other then the Notes subject to the prepayment provisions herein;

 

(e) enter into any agreement with respect to any of the foregoing; or

 

(f) take any of the actions prescribed in Section 7.3 or 7.5 of the Purchase Agreement;

 

(g) pay cash dividends or distributions on any equity securities of the Maker.

 

“Permitted Indebtedness” shall mean either (a) the indebtedness of the Maker existing on the date of issuance and disclosed to Holder, and (b) any indebtedness incurred by the Maker, any subsidiary of the Maker or any parent or successor-in-interest to the
Maker in connection with a Financing, (c) any indebtedness the proceeds of which are used to repay the Notes in full after giving of appropriate notice and (d) any indebtedness consented to by the Holder.

 

“Permitted Lien” shall mean the individual and collective reference to the following: (a) liens for taxes, assessments and other governmental charges or levies not yet due or liens for taxes, assessments and other governmental charges or levies being contested
in good faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Maker) have been established in accordance with generally accepted accounting procedures and (b) liens imposed by law which were incurred in the ordinary course of business, such as carriers’, warehousemen’s and mechanics’ liens, statutory landlords’ liens, and other similar liens arising in the ordinary course of business, and (x) which do not individually or in
the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Maker and its subsidiaries or (y) which are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or asset subject to such lien.

 

4.    Security  As security for the prompt and complete payment and
performance when due of all of the obligations under this Note, Maker hereby grants to the Holder a first priority lien on and continuing security interest in, all of the Maker’s right, title and interest in, to and under all property and assets of the Maker, whether now owned or hereafter acquired or arising and wheresoever located, of every kind and description, tangible or intangible, including, but not limited to, the assets described on Schedule 6.8 to the Purchase Agreement, attached hereto and incorporated
by specific reference herein (collectively, the “Collateral”). The Maker covenants and agrees that, to the extent it is necessary or desirable to obtain any waiver or consents, make any filings with any governmental agency or body, or enter into any additional agreements in connection with the preceding, upon the request of the Holder, Maker shall use its best efforts to take such actions as promptly as practicable.  In the event of an uncured default under this Note, Holder shall be entitled
to exercise any or all of the rights and remedies of a secured creditor with respect to the Collateral under applicable law.

 

 

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5.    No Waiver of the Holder’s Rights. All payments of principal and
interest shall be made without setoff, deduction or counterclaim. No delay or failure on the part of the Holder in exercising any of its options, powers or rights, nor any partial or single exercise of its options, powers or rights shall constitute a waiver thereof or of any other option, power or right, and no waiver on the part of the Holder of any of its options, powers or rights shall constitute a waiver of any other option, power or right. The Maker hereby waives presentment of payment, protest, and all
notices or demands in connection with the delivery, acceptance, performance, default or endorsement of this Note. Acceptance by the Holder of less than the full amount due and payable hereunder shall in no way limit the right of the Holder to require full payment of all sums due and payable hereunder in accordance with the terms hereof.

 

6.    Modifications. No term or provision contained herein may be modified,
amended or waived except by written agreement or consent signed by the party to be bound thereby.

 

7.    Cumulative Rights and Remedies; Usury. The rights and remedies of the
Holder expressed herein are cumulative and not exclusive of any rights and remedies otherwise available under this Note, or applicable law (including at equity). The election of the Holder to avail itself of any one or more remedies shall not be a bar to any other available remedies, which the Maker agrees the Holder may take from time to time. If it shall be found that any interest due hereunder shall violate applicable laws governing usury, the applicable rate of interest due hereunder shall be reduced to the
maximum permitted rate of interest under such law.

 

8.    Use of Proceeds.  The Maker shall use the proceeds from this
Note hereunder for working capital purposes and not for the satisfaction of any portion of the Maker’s or any affiliate or subsidiary’s debt (other than payment of trade payables in the ordinary course of the Maker’s business and prior practices) or to redeem any of the Maker’s or subsidiary’s equity or equity-equivalent securities  or to pay back salaries or wages, other than an aggregate of $75,000 can be used for back salaries or wages.

 

9.    Collection Expenses. If the Holder shall commence an action or proceeding
to enforce this Note, then the Maker shall reimburse the Holder for its costs of collection and attorneys fees and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

10.    Severability. If any provision of this Note is declared by a court of
competent jurisdiction to be in any way invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder shall violate applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate
of interest.

 

11.    Successors and Assigns. This Note shall be binding upon the Maker and
its successors and shall inure to the benefit of the Holder and its successors and assigns. The term “Holder” as used herein, shall also include any endorsee, assignee or other holder of this Note.

 

12.    Lost or Stolen Promissory Note. If this Note is lost, stolen, mutilated
or otherwise destroyed, the Maker shall execute and deliver to the Holder a new promissory note containing the same terms, and in the same form, as this Note. In such event, the Maker may require the Holder to deliver to the Maker an affidavit of lost instrument and customary indemnity in respect thereof as a condition to the delivery of any such new promissory note.

 

 

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13.    Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of this Note shall be governed by and construed and enforced in accordance with the laws of Switzerland.

 

14.    Notice. Whenever notice is required to be given under this Note, unless
otherwise provided herein, such notice shall be given to the Company at its principal place of business and to the Holder to the address in the Purchase Agreement.

 

15.    Required Notice to the Holder. The Holder is to be immediately notified
by the Maker, in accordance with Section 14, of the existence or occurrence, of any Event of Default.

 

 

 

 

 

 

 

 

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The undersigned has executed this Note as a maker and not as a surety or guarantor or in any other capacity.

 

SWISSINSO SA

By: /s/ Michel Gruering   

     Name: Michel Gruering

     Title:   Presidentf8k091009ex10v_pashmina.htm

Exhibit 10.5

 

SECURITY AGREEMENT

 

SECURITY AGREEMENT, dated September 10, 2009, by and between SwissINSO SA, a Swiss corporation (“Debtor”), with an address at Route de Friboourg 15, CH 1723, Marly, Switzerland and Pashminadepot.com, Inc., a Florida corporation (the “Secured Party”).

W I T N E S S E T H:

WHEREAS, Debtor has issued or will be issuing to Secured Party secured promissory notes (the “Notes”), in the aggregate principal amount of $750,000; and

WHEREAS, as security for the prompt and complete payment and performance in full of the Notes and the other Secured Obligations (as herein defined), Debtor has agreed to enter into this Security Agreement assigning, pledging, conveying, hypothecating, transferring, granting and delivering to Secured Party a security interest in and to
the Collateral (as defined herein).

NOW THEREFORE, in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is hereby agreed as follows:

1.           SECURITY INTEREST.

 

1.1 Grant of Security. As security for the prompt and complete payment and performance in full of the indebtedness, together with all interest, fees and other charges, arising under the Notes or this Security Agreement, and
including, any of its remedies under the Notes or this Security Agreement (“Secured Oligations”), Debtor hereby grants, assigns, conveys, mortgages, pledges, hypothecates and transfers to Secured Party a first priority lien on and security interest in, all of the Debtor’s right, title and interest in, to and under, all of the property and assets currently owned or owing to, or hereafter acquired or arising in favor or, Debtor, wherever located, including, but not limited to, all accounts, deposit
accounts, chattel paper, instruments, documents, securities, contract rights, receivables, equipment, goods, inventory, investment property, goodwill, general intangibles, intellectual property, patents, patent applications, trademarks, trademark applications, trade names, copyrights, copyright applications, Internet domain names, service marks, trade secrets, know-how, technology, software, hardware, commercial tort claims, warranties and guarantees, as any of the foregoing terms may be defined in the UCC, and
including any products, proceeds (including insurance proceeds) or income derived therefrom, whether by disposition or otherwise (all of the above, collectively, the “Collateral”).

 

1.2 Continuing Agreement. This Security Agreement shall create a continuing security interest in the Collateral and shall remain in full force and effect until performance in full of the Secured Obligations.

 

1.3           Termination. Upon satisfaction of the Secured Obligations this Agreement shall automatically be null and void and have no further force and effect without any action on the part of either party.

 

 

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2.           PERFECTION OF SECURITY INTEREST.

 

2.1 Authorization to File Financing Statements. Debtor agrees to execute all such financing statements pursuant to the Uniform Commercial Code or similar filings as in effect from time to time in Switzerland or other foreign
jurisdictions (the "UCC") or other notices appropriate under applicable law.

 

2.2           Collateral Covenants.  To further insure the attachment, perfection and priority of, and the ability of Secured Party to enforce Secured Party’s security interest in the Collateral, Debtor
agrees to take any and all other actions as Secured Party may determine to be necessary or useful for the attachment, perfection, and priority of, and the ability of Secured Party to enforce, Secured Party's security interest in the Collateral, including, without limitation, (a) executing, delivering and, where appropriate, filing financing statements and amendments relating thereto under the UCC, to the extent, if any, that the Debtor's signature is required therefor, (b) complying with any provision of any
statute, regulation, or treaty of the United States or any foreign country as to the Collateral if compliance with such provision is a condition to attachment, perfection or priority of, or ability of Secured Party to enforce, Secured Party's security interest in such Collateral, (c) obtaining governmental and other third party waivers, consents, and approvals in form and substance satisfactory to Secured Party, and (d) taking all actions under any other law, as reasonably determined by Secured Party to be applicable.

3.           EVENTS OF DEFAULT.

3.1           Event of Default.  An Event of Default, as defined in the Notes, shall constitute an automatic default hereunder.

 

3.2 Rights upon Event of Default. Upon an Event of Default, Secured Party shall have all the rights and remedies of a secured party under the UCC or with respect to the Collateral.

 

4.           REPRESENTATIONS AND WARRANTIES

 

4.1 Validity. The security interest in the Collateral granted to the Secured Party hereunder constitutes and shall continue to constitute a legal, valid and, upon the filing of a UCC financing statement, or similar statement
in any foreign jurisdiction applicable to the Collateral, fully perfected, security interest in the Collateral.

 

4.2 No Other Liens. Except for the liens granted hereunder and for those permitted pursuant to the Notes, the Debtor owns and, as to all Collateral whether now existing or hereafter acquired, will continue to own, the
Collateral free and clear of any and all liens, rights or claims, encumbrances, limitations or restrictions of all other persons or entities; provided however that the foregoing restriction shall not prohibit the Debtor from obtaining a revolving line of credit or equipment financing or similar arrangements pursuant to which a security interest is customarily granted in the ordinary course of business if, in connection therewith, the Secured Party and the new lender agree to an intercreditor agreement acceptable
to the Secured Party and such new lender.

 

 

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4.3           Corporate Representations.  The Debtor (i) is a duly organized and validly existing corporation in good standing under the laws of Switzerland, (ii)
has the corporate power and authority to own its property and assets and to transact the business in which it is engaged or presently proposes to engage and (iii) has duly qualified and is authorized to do business and is in good standing in every jurisdiction in which it owns or leases real property or in which the nature of its business requires it to be so qualified.  The Debtor has the corporate power and authority to execute, deliver and carry out the terms and provisions of this Security Agreement
and the Notes and has taken all necessary corporate action to authorize the execution, delivery and performance and filing of this Security Agreement, the Notes and any UCC financing or continuation statements, or amendments thereto, and related agreements, instruments, endorsements, powers of attorney or notices.  The Debtor has duly executed and delivered this Security Agreement and the Notes, and this Security Agreement and the Notes constitute legal, valid and binding obligations of Debtor, enforceable
in accordance with their respective terms.

5.           MISCELLANEOUS.

 

5.1 Waiver. No course of dealing or usage of trade, and no oral or written representations or agreement, between Debtor and Secured Party, whether or not relied on or acted upon, and no act, delay or omission by Secured
in exercising any right or remedy hereunder or with respect to any Obligations shall operate as a waiver thereof or of any other right or remedy, and no single or partial exercise thereof shall preclude any other or further exercise thereof or the exercise of any other right or remedy. The giving of notice or a demand by Secured Party at any time shall not operate as a waiver in the future of Secured Party's right to exercise any right or remedy without notice or demand. Secured Party may remedy any default by
Debtor in any reasonable manner, without waiving the default remedied, and without waiving any other prior or subsequent default by Debtor.

 

5.2           Amendment.  This Agreement may be amended or modified only by a writing signed by all of the parties hereto and any provision hereof may be
waived only by a writing signed by Secured Party.

5.3           Severability.  The provisions of this Security Agreement are severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision of this Security Agreement in any jurisdiction.

5.4           Assignment.  The benefits of this Security Agreement shall inure to the benefit of the successors and assigns of Secured Party.  The
rights and obligations of Debtor under this Security Agreement shall not be assigned or delegated, by operation of law or otherwise, without the prior consent of Secured Party, and any such assignment or attempted assignment shall be void, of no force or effect, and shall constitute a material default by Debtor.

5.5           Headings.  The headings contained herein shall be for convenience of reference only and shall not have any bearing in the meaning of the provisions
contained herein.

 

 

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5.6           CHOICE OF LAW.  THIS SECURITY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SWITZERLAND.

 

5.7 DEBTOR WAIVES ANY AND ALL RIGHTS TO A TRIAL BY JURY. ALL PARTIES TO THIS AGREEMENT UNCONDITIONALLY, IRREVOCABLY, AND EXPRESSLY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, SUIT, COUNTERCLAIM, OR CROSS-CLAIMS
ARISING DIRECTLY OR INDIRECTLY IN ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT, OR OTHERWISE) IN ANY WAY ARISING OUT OF OR OTHERWISE RELATING TO THIS AGREEMENT OR TRANSACTIONS OR THE RELATIONSHIPS ESTABLISHED THEREUNDER. ALL PARTIES CONFIRM THAT THE FOREGOING WAIVER OF A TRIAL BY JURY IS INFORMED AND FREELY MADE.

 

 

 

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IN WITNESS WHEREOF, the undersigned have executed this Security Agreement on the date first set forth above.

 

SWISSISNO SA

By:           /s/ Michel Gruering   

Name:         Michel Gruering

Title:           President

PASHMINADEPOT.COM, INC.

By:           /s/ Edward Sanders   

Name:         Edward Sanders

Title:           President

 

 

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