-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L6EVoTAHmu55cj4buieHjz5Z9fs5Mq0EB/FPi/1FMZc3XyBouhh6NPI7F0mbSOLb FvzYRDo/TsA4wYHQ5n13yw== 0001144204-09-001704.txt : 20090113 0001144204-09-001704.hdr.sgml : 20090113 20090113124719 ACCESSION NUMBER: 0001144204-09-001704 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20090107 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Change in Shell Company Status ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090113 DATE AS OF CHANGE: 20090113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Sports Supplement Acquisition Group Inc. CENTRAL INDEX KEY: 0001404597 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 000000000 STATE OF INCORPORATION: NV FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-150820 FILM NUMBER: 09523400 BUSINESS ADDRESS: STREET 1: 34 HAMPTON ROAD STREET 2: TOWN MOOR CITY: DONCASTER STATE: X0 ZIP: DN2 5DG BUSINESS PHONE: 011448452806186 MAIL ADDRESS: STREET 1: 34 HAMPTON ROAD STREET 2: TOWN MOOR CITY: DONCASTER STATE: X0 ZIP: DN2 5DG FORMER COMPANY: FORMER CONFORMED NAME: Cynergi Holdings, Inc. DATE OF NAME CHANGE: 20070626 8-K 1 v136667_8k.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported)
January 12, 2009 (January 7, 2009)
 
SPORTS SUPPLEMENT ACQUISITION GROUP INC.
(Exact name of registrant as specified in its charter)
 
NEVADA 
 
333-150820 
(State or other jurisdiction of incorporation) 
 
(Commission File No.) 

3500 de Maisonneuve West, Suite 1650
Montreal, QC H3Z 3C1 Canada
(Address of principal executive offices and Zip Code)

(514) 658-6164
(Registrant's telephone number, including area code)
 
34 Hampton Road, Town Moor
Doncaster, South Yorkshire
England DN2 5DG
(Former Address of principal executive offices and Zip Code)
 
011 44 845 280 6186
(Registrant's former telephone number, including area code)
 
     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) 
   
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 
   
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17  CFR 240.14d-2(b))
   
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 
 



 
CURRENT REPORT ON FORM 8-K

TABLE OF CONTENTS

Item 1.01
 
Entry Into a Material Definitive Agreement
 
2
         
Item 2.01
 
Completion of Acquisition or Disposition of Assets
 
2
         
   
Part I
   
         
   
    Item 1.    Description of Business
 
2
   
    Item 2.    Management’s Discussion and Analysis
 
12
   
    Item 3.    Description of Property
 
16
   
    Item 4.    Security Ownership of Certain Beneficial Owners and Management
 
16
   
    Item 5.    Directors, Executive Officers, Promoters and Control Persons
 
17
   
    Item 6.    Executive Compensation
 
17
   
    Item 7.    Certain Relationships and Related Transactions and Director Independence
 
19
   
    Item 8.    Description of Securities
 
19
       
 
   
Part II
   
         
   
    Item 1.    Market Price of and Dividends on the Registrant’s Common Equity and Other Shareholder Matters
 
20
   
    Item 2.    Legal Proceedings
 
21
   
    Item 3.    Changes in and Disagreements with Accountants
 
21
   
    Item 4.    Recent Sales of Unregistered Securities
 
21
   
    Item 5.    Indemnification of Directors and Officers
 
21
         
   
Part F/S
 
22
         
   
Part III
   
         
   
    Item 1.    Index to Exhibits
 
22
   
    Item 2.    Description of Exhibits
 
22
         
Item 3.02
 
Unregistered Sales of Equity Securities
 
22
         
Item 5.06
 
Change in Shell Company Status
 
23
         
Item 9.01
 
Financial Statements and Exhibits
 
23
         
   
Financial Statements
 
F-1
         
   
Exhibits
 
 
         
Signatures
     
24
 
i


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The information contained in this current report on Form 8-K and in other public statements by the Company and Company officers or directors includes or may contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included or incorporated by reference in this report, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected revenues, projected costs and plans and objectives of management for future operations, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “project,” “estimate,” “anticipate,” or “believe” or the negative thereof or any variation thereon or similar terminology.

Such forward-looking statements are made based on management's beliefs, as well as assumptions made by, and information currently available to, management pursuant to the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. Such statements are not guarantees of future performance or events and are subject to known and unknown risks and uncertainties that could cause the Company's actual results, events or financial positions to differ materially from those included within the forward-looking statements. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to:

 
future financial and operating results, including projections of net sales, revenue, income, net income per share, profit margins, expenditures, liquidity, goodwill valuation and other financial items
 
our ability to develop relationships with new customers and maintain or improve existing customer relationships;
 
development of new products, brands and marketing strategies;
 
Performance of our contract manufacturer, and significant shareholder, Proviant Technologies;
 
distribution channels, product sales and performance and timing of product shipments;
 
inventories and the adequacy and intended use of our facilities;
 
current or future customer orders;
 
the impact on our business and results of operations and variations in quarterly net sales from seasonal and other factors;
 
management’s goals and plans for future operations;
 
our ability to improve operational efficiencies, manage costs and business risks and improve or maintain profitability;
 
growth, expansion, diversification and acquisition strategies, the success of such strategies, and the benefits we believe can be derived from such strategies;
 
personnel;
 
the outcome of regulatory, tax and litigation matters;
 
sources and availability of raw materials;
 
operations outside the United States;
 
1

 
 
the adequacy of reserves and allowances;
 
overall industry and market performance;
 
competition;
 
current and future economic and political conditions;
 
the impact of accounting pronouncements; and
 
other assumptions described in this report or underlying or relating to any forward looking statements.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements. Except as required by law, we undertake no obligation to disclose any revision to these forward-looking statements to reflect events or circumstances after the date made, changes in internal estimates or expectations, or the occurrence of unanticipated events.

Section 1 - Registrant’s Business and Operations

Item 1.01
 Entry into a Material Definitive Agreement.

The information provided in Item 2.01 regarding the agreements with Proviant Technologies, Inc. (“Proviant”) and with Sports Supplement Acquisition Group, Inc., a Delaware corporation, a previously-unrelated company (“SSAG”), is incorporated herein by this reference.

Section 2 - Financial Information

Item 2.01
 Completion of Acquisition or Disposition of Assets.

Information Required Pursuant To Form 10
 
Prior to the acquisition of SSAG, we were a “shell company” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Pursuant to Item 2.01(f) of Form 8-K, we are required to include in this report the information that we would be required to provide if we were filing a general form for registration of securities on Form 10. This information is set forth below in this Item 2.01 and is organized in accordance with the Items set forth in Form 10.

As used in this Report, Cynergi Holdings, Inc.  prior to the acquisition of SSAG is referred to as “Cynergi” and as the “Company” for periods after the acquisition.

PART I

ITEM 1. DESCRIPTION OF BUSINESS.

Background.  We were incorporated in the State of Nevada on February 27, 2007 as Cynergi Holdings, Inc., for the purposes of pursuing certain gold mining claims in the west central area of the state of Nevada.  After acquiring certain mineral claims, management made the decision to write off the expenses associated with pursuit of the mineral interests in order to pursue alternative business models. SSAG was formed under the laws of Delaware on November 5, 2007. SSAG remained inactive until November 2008 when it entered into a Letter of Intent with Proviant Technologies, Inc. (“Proviant”) under the terms of which it acquired the ErgoPharm brand of Sports Supplements from Proviant. That transaction was completed on December 10, 2008.

SSAG’s Acquisition of ErgoPharm.  The terms of the ErgoPharm acquisition by SSAG call for a payment of $500,000 at closing, $1.5 million by February 23, 2009 and payments of $666,666 on December 10, 2009 and 2010, and $666,668 on December 10, 2011, as well as the issuance of 400 SSAG common shares which converted into 5,142,900 of our common shares and the issuance of 2,000,000 5-year $0.75 warrants vesting ratably on the first, second and third anniversaries of the ErgoPharm acquisition.

2


Upon signature of the letter of intent with Proviant, SSAG secured convertible debt financing of $525,000, and entered into a letter of intent to be acquired by Cynergi on December 1, 2008.  Under the definitive Share Exchange agreement with Cynergi dated December 31, 2008 (the “Share Exchange Agreement”), existing Cynergi shareholders retain 6,325,000 common shares and the former SSAG shareholders (including Proviant) received an aggregate of 18,000,000 restricted common shares. Additionally, Cynergi is required to secure a minimum of $1.5 million in financing on terms acceptable to SSAG.  As a result, Cynergi entered into an agreement with Knights Bridge Capital Corp. (“Knights Bridge”) pursuant to which Knights Bridge or its designee will invest $1.0 million in exchange for 1.8 million shares and unrelated parties will enter into subscription agreements with the Company for the purchase of 1.5 million common shares in exchange for cash proceeds of $500,000.

The ErgoPharm brand has been in existence since 1999, and we believe it has gained a reputation for innovative, high quality products. The brand’s annual revenues have fluctuated over time, but have stabilized in the $3.5-4 million range. In an industry that is marketing intensive, the ErgoPharm brand has achieved a certain level of success with minimal investment in advertising and promotional activities. We are confident that with new packaging, advertising and promotion to grow customer awareness of the ErgoPharm brand, an increase in revenue is likely.

General Description of the Market.   SSAG is a sales and marketing company formed to acquire brands and companies currently operating in the sports performance and weight management markets. Since our formation, we have been actively engaged in seeking out companies that management believes would integrate efficiently into our portfolio.

According to the Nutrition Business Journal, nutritional supplements are taken regularly by an estimated 59% of U.S. adults over 18 years of age. With average life spans in North America increasing, more people, particularly educated baby boomers, are pursuing lifelong fitness goals. This trend is exemplified by the increasing number of health and sports clubs that have been established in the U.S. Despite this awareness, the number of overweight adults and children has reached serious proportions triggering health risks for individuals and medical costs to society.

Nutritional supplements are taken for a wide variety of reasons, including enhancing fitness or sports programs, building muscle and strength, increase energy, feel better, lose weight, and maintain health.  Sports nutrition and weight-loss supplements in the U.S. alone experienced an estimated 12.4% growth rate in 2000, according to the Nutrition Business Journal. Despite its growth, the supplements market has been dealing with a number of issues that we believe we are ideally suited to address due to our unique products, the extensiveness of our clinical testing, and our approach to marketing. Presently, a large part of the supplements market consists of products which contain a single active ingredient, products which are difficult to use, and products which are sold with little or no reliable information. Customers are confused due to an absence of consumer education, the large selection of product choices and brands, scant scientific confirmation to back up product claims, mismatched expectations, and lack of tangible results. We believe with many products they have no confidence in product dosages, material quality or label claims. Due to these factors, we believe there is a solid and growing base of consumers who are frustrated and would welcome new products that have been carefully tested and developed and that are designed to meet their specific needs. We plan on conducting independent clinical trials on our new products to show their efficacy, but no assurance can be given however, that these new products will be perceived as meeting these needs or that our products will achieve our anticipated level of market acceptance.

The initial target audience for our products is North American health and fitness consumers who are looking for higher performance and high quality energy, weight-loss and sports supplement products.  This is a broad category with users ranging from athletes and bodybuilders to consumers with general fitness goals. The market is a rapidly shifting one as new and unique products are regularly introduced to the marketplace.  Ranging from tablets, capsules, bars, nutrition, meal replacements and energy drinks, total U.S. sales in this category reached $18.2 billion in 2006, according to the Nutrition Business Journal. A cross-cutting supplement category, weight-loss supplements include many products, generally formulas, specifically designed to facilitate the burning of fat and calories.
 
3

 
Sales and Marketing.  We have achieved minimal operating revenues since the inception of our business, having completed the acquisition of the ErgoPharm brand on December 10, 2008. We intend to continue selling most of the products that currently form the ErgoPharm brand. We have discontinued certain underperforming products, and will be introducing new and innovative products as they become available.

In the Sports Supplement market, products are generally sold via the following channels:

Specialty retailers — the major retailers are General Nutrition Centers, Vitamin World and Vitamin Shoppe. There are several regional and local chains.

Distributors — there are several national and international distributors, as well as scores of regional and local operations.

On-line retailers — there are many e-tailers specializing in Sports Supplements, with a wide range in revenues and product offerings

Direct sales — many companies offer their products via their own web sites.

The ErgoPharm brand of products is currently sold through all of these channels. There are currently more than 20 customers who order on a regular basis. It is our intent to grow revenues by targeting new customers in international markets as well as expanding upon existing relationships.

Supplies and Suppliers.  Proviant will be our primary manufacturer. As the former owner of the ErgoPharm brand, the developer of the current product line and a significant shareholder in SSAG, we believe Proviant is uniquely positioned to continue as ErgoPharm’s source of products.

The various agreements executed on December 10, 2008 assures a continual supply of product, the use of Proviant’s facility for warehousing, distribution and fulfillment, first access to new and novel ingredients developed by Proviant and preferential pricing below that of arm’s length manufacturers.

Although we intend to initially rely upon a single source for manufacture, several alternative sources are available to us. Alternative manufacturers will be chosen based on quality, service and price. The raw materials necessary to make our products are also available from several sources. We expect all required raw materials to be readily available in sufficient quantities and to be of required quality.

Seasonality.  We do not expect to experience seasonal variation in our operating results.

Customers.  We do not expect any single customer to account for a significant portion of our revenues.

Competition.  There are many companies that sell Sports Supplements, via similar channels. Our competitors will include companies that provide delivery systems such as gel caps, tablets, capsules, liquids and the like and companies which will compete with our final products. We will compete with companies engaged in the health, nutrition, and fitness products field, most of which will be considerably larger than we are in total assets and resources. This could enable them to bring their own products to advanced stages of development and marketing with more speed and efficiency than we can. There can be no assurance that our products will be able to successfully compete with theirs.

Costs and Effects of Compliance with Environmental Laws.  There are no special or unusual environmental laws or regulations that will require us to make material expenditures or that can be expected to materially impact on the operation of our business.

Employees. As of January 8, 2009 we have 2 employees including one executive officer. We have contracted with Proviant for the services of 2 full-time and 1 part-time personnel. We presently estimate hiring 1-2 employees within the next 3-6 months and an additional 3 to 5 employees during the following 12 month period. None of these employees are represented by labor unions. We believe that our employee relations are good.

4

 
Government Regulation.  Our business is subject to varying degrees of regulation by a number of government authorities in the United States, including the United States Food and Drug Administration (FDA), the Federal Trade Commission (FTC), the Consumer Product Safety Commission, the United States Department of Agriculture, and the Environmental Protection Agency. Various agencies of the states and localities in which we operate and in which our products are sold also regulate our business, such as the California Department of Health Services, Food and Drug Branch. The areas of our business that these and other authorities regulate include, among others:  
 
 
product claims and advertising;
 
product labels;
 
product ingredients; and
 
how we manufacture, package, distribute, import, export, sell and store our products.
 
The FDA, in particular, regulates the formulation, manufacturing, packaging, storage, labeling, promotion, distribution and sale of vitamin and other nutritional supplements in the United States, while the FTC regulates marketing and advertising claims. In August 2007, a new rule issued by the FDA went into effect requiring companies that manufacture, package, label, distribute or hold nutritional supplements to meet certain Good Manufacturing Practices (GMPs) to ensure such products are of the quality specified and are properly packaged and labeled. Companies have up to three years to comply with the new requirements depending on the size of the company. In our case, given the current number of our employees, we would be required to comply with the new requirements by June 25, 2009. We are committed to meeting or exceeding the standards set by the FDA on a timely basis and believe that we are well positioned to operate within the new GMPs mandated by the FDA.
 
The FDA also regulates the labeling and marketing of dietary supplements and nutritional products, including:
 
 
the identification of dietary supplements or nutritional products and their nutrition and ingredient labeling;
 
 
requirements related to the wording used for claims about nutrients, health claims, and statements of nutritional support;
 
 
labeling requirements for dietary supplements or nutritional products for which “high potency” and “antioxidant” claims are made;
 
 
notification procedures for statements on dietary supplements or nutritional products; and
 
 
premarket notification procedures for new dietary ingredients in nutritional supplements.
 
The Dietary Supplement Health and Education Act of 1994 (DSHEA) revised the provisions of the Federal Food, Drug and Cosmetic Act concerning the composition and labeling of dietary supplements and defined dietary supplements to include vitamins, minerals, herbs, amino acids and other dietary substances used to supplement diets. DSHEA generally provides a regulatory framework to help ensure safe, quality dietary supplements and the dissemination of accurate information about such products. The FDA is generally prohibited from regulating active ingredients in dietary supplements as drugs unless product claims, such as claims that a product may heal, mitigate, cure or prevent an illness, disease or malady, trigger drug status.
 
In December 2006, the Dietary Supplement and Nonprescription Drug Consumer Protection Act was passed, which further revised the provisions of the Federal Food, Drug and Cosmetic Act. Under the new act, manufacturers, packers or distributors whose name appears on the product label of a dietary supplement or nonprescription drug are required to include contact information on the product label for consumers to use in reporting adverse events associated with the product’s use and to notify the FDA of any serious adverse event report within 15 business days of receiving such report. Events reported to the FDA would not be considered an admission from a company that its product caused or contributed to the reported event. The new act became effective in December 2007. The FDA is in the process of developing industry guidance on how to comply with this new law. We are committed to meeting or exceeding the provisions of this act on a timely basis.
 
5

 
We are also subject to a variety of other regulations in the United States, including those relating to bioterrorism, taxes, labor and employment, import and export, the environment and intellectual property.

Our operations outside the United States are similarly regulated by various agencies and entities in the countries in which we operate and in which our products are sold. The regulations of these countries may conflict with those in the United States and may vary from country to country. The sale of our products in certain European countries is subject to the rules and regulations of the European Union, which may be interpreted differently among the countries within the European Union. In markets outside the United States, we may be required to obtain approvals, licenses or certifications from a country’s ministry of health or comparable agency before we begin operations or the marketing of products in that country. Approvals or licenses may be conditioned on reformulation of our products for a particular market or may be unavailable for certain products or product ingredients. These regulations may limit our ability to enter certain markets outside the United States.

RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors in addition to other information in this Current Report on Form 8-K and our other filings with the SEC before purchasing our common stock. The risks and uncertainties described below are those that we currently deem to be material and that we believe are specific to our company and our industry. In addition to these risks, our business may be subject to risks currently unknown to us. If any of these or other risks actually occurs, our business may be adversely affected, the trading price of our common stock may decline and you may lose all or part of your investment.
 
Risks Associated With Our Business

We recently entered into a new business and may not be successful in executing our business plan.

We have recently discontinued our former business model involving the exploration of resource properties and adopted a new model involving the marketing of Sports Supplements and nutritional products. We have only recently completed our platform acquisition under our new business model. As a result, we have a very limited operating history under our current business model. Even though we are being managed by a senior executive with significant experience in the industry, our limited operating history makes it difficult to predict the long-term success of our business model.

Based on our recurring losses during our development stage and inability to implement our business plan, our auditors have included an explanatory paragraph in their opinion as to the substantial doubt about our ability to continue as a going concern.

We are a development stage company and since inception, have incurred losses from development stage activities to date, and are in need of additional capital. As a result of these factors, our independent auditors have included an explanatory paragraph in their opinion on our financial statements for the year ended January 31, 2008 as to the substantial doubt about our ability to continue as a going concern. As such, we may be required to cease operations and you could lose your entire investment. Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which contemplate that we will continue to operate as a going concern. Our financial statements do not contain any adjustments that might result if we are unable to continue as a going concern.
 
Our industry is highly competitive and we may be unable to compete effectively. Increased competition could adversely affect our financial condition.
 
The market for our products is highly competitive. Many of our competitors are substantially larger and have greater financial resources and broader name recognition than we do. Our larger competitors may be able to devote greater resources to research and development, marketing and other activities that could provide them with a competitive advantage. Our market has relatively low entry barriers and is highly sensitive to the introduction of new products that may rapidly capture a significant market share. Increased competition could result in price reductions, reduced gross profit margins or loss of market share, any of which could have a material adverse effect on our financial condition and results of operations. There can be no assurance that we will be able to compete in this intensely competitive environment.
 
6

 
We may not be able to raise additional capital or obtain additional financing if needed.
 
Our cash from operations may not be sufficient to meet our working capital needs and/or to implement our business strategies. As a result, we may need to raise additional capital or obtain additional financing.
 
At any given time it may be difficult for companies to raise capital due to a variety of factors, some of which may be outside a company’s control, including a tightening of credit markets, overall poor performance of stock markets, and/or an economic slowdown in the United States or other countries. Thus, there is no assurance we would be able to raise additional capital if needed. To the extent we do raise additional capital, the ownership position of existing stockholders could be diluted. Similarly, there can be no assurance that additional financing will be available if needed or that it will be available on favorable terms. Under the terms of our credit facility, there are limits on our ability to create, incur or assume additional indebtedness without the approval of our lender.
 
Our inability to raise additional capital or to obtain additional financing if needed would negatively affect our ability to implement our business strategies and meet our goals. This, in turn, would adversely affect our financial condition and results of operations.
 
The failure of our suppliers to supply quality materials in sufficient quantities, at a favorable price, and in a timely fashion could adversely affect the results of our operations.
 
We buy our finished product from one supplier. The loss of our major supplier or of a supplier that provides any hard to obtain materials could adversely affect our business operations. Although we believe that we could establish alternate sources for most of our raw materials, any delay in locating and establishing relationships with other sources could result in product shortages, with a resulting loss of sales and customers. In certain situations we may be required to alter our products or to substitute different materials from alternative sources.
 
A shortage of raw materials or an unexpected interruption of supply could also result in higher prices for those materials. Although we may be able to raise our prices in response to significant increases in the cost of raw materials, we may not be able to raise prices sufficiently or quickly enough to offset the negative effects of the cost increases on our results of operations.
 
There can be no assurance that suppliers will provide the quality raw materials needed by us in the quantities requested or at a price we are willing to pay. Because we do not control the actual production of these raw materials, we are also subject to delays caused by interruption in production of materials based on conditions outside of our control, including weather, transportation interruptions, strikes and natural disasters or other catastrophic events.
 
Our business is subject to the effects of adverse publicity, which could negatively affect our sales and revenues.
 
Our business can be affected by adverse publicity or negative public perception about our industry, our competitors, or our business generally. This adverse publicity may include publicity about the nutritional supplements industry generally, the efficacy, safety and quality of nutritional supplements and other health care products or ingredients in general or our products or ingredients specifically, and regulatory investigations, regardless of whether these investigations involve us or the business practices or products of our competitors. There can be no assurance that we will be able to avoid any adverse publicity or negative public perception in the future. Any adverse publicity or negative public perception will likely have a material adverse effect on our business, financial condition and results of operations. Our business, financial condition and results of operations also could be adversely affected if any of our products or any similar products distributed by other companies are alleged to be or are proved to be harmful to consumers or to have unanticipated health consequences.
 
7

 
We could be exposed to product liability claims or other litigation, which may be costly and could materially adversely affect our operations.
 
We could face financial liability due to product liability claims if the use of our products results in significant loss or injury. Additionally, the manufacture and sale of our products involves the risk of injury to consumers from tampering by unauthorized third parties or product contamination. We could be exposed to future product liability claims that, among others: our products contain contaminants; we provide consumers with inadequate instructions about product use; or we provide inadequate warning about side effects or interactions of our products with other substances.
 
We maintain product liability insurance coverage, including primary product liability and excess liability coverage. While we currently expect to be able to continue our product liability insurance, there can be no assurance that we will in fact be able to continue such insurance coverage, that our insurance will be adequate to cover any liability we may incur, or that our insurance will continue to be available at an economically reasonable cost.
 
Additionally, it is possible that one or more of our insurers could exclude from our coverage certain ingredients used in our products. In such event, we may have to stop using those ingredients or rely on indemnification or similar arrangements with our customers who wish to continue to include those ingredients in their products. A substantial increase in our product liability risk or the loss of customers or product lines could have a material adverse effect on our results of operations and financial condition.
 
Our products and manufacturing activities are subject to extensive government regulation, which could limit or prevent the sale of our products in some markets and could increase our costs.
 
The manufacturing, packaging, labeling, advertising, promotion, distribution, and sale of our products are subject to regulation by numerous national and local governmental agencies in the United States and in other countries. Failure to comply with governmental regulations may result in, among other things, injunctions, product withdrawals, recalls, product seizures, fines, and criminal prosecutions. Any action of this type by a governmental agency could materially adversely affect our ability to successfully market our products. In addition, if the governmental agency has reason to believe the law is being violated (for example, if it believes we do not possess adequate substantiation for product claims), it can initiate an enforcement action. Governmental agency enforcement could result in orders requiring, among other things, limits on advertising, consumer redress, divestiture of assets, rescission of contracts, and such other relief as may be deemed necessary. Violation of these orders could result in substantial financial or other penalties. Any action by the governmental agency could materially adversely affect our ability and our customers’ ability to successfully market those products.
 
In markets outside the United States, before commencing operations or marketing our products, we may be required to obtain approvals, licenses, or certifications from a country’s ministry of health or comparable agency. Approvals or licensing may be conditioned on reformulation of products or may be unavailable with respect to certain products or product ingredients. We must also comply with product labeling and packaging regulations that vary from country to country. Furthermore, the regulations of these countries may conflict with those in the United States and with each other. The sale of our products in certain European countries is subject to the rules and regulations of the European Union, which may be interpreted differently among the countries within the European Union. The cost of complying with these various and potentially conflicting regulations can be substantial and can adversely affect our results of operations.
 
We cannot predict the nature of any future laws, regulations, interpretations, or applications, nor can we determine what effect additional governmental regulations, when and if adopted, would have on our business. They could include requirements for the reformulation of certain products to meet new standards, the recall or discontinuance of certain products, additional record keeping, expanded or different labeling, and additional scientific substantiation. Any or all of these requirements could have a material adverse effect on our operations.
 
Our manufacturing and fulfillment activities are subject to certain risks.
 
Our products are manufactured for us in Champaign, Il. As a result, we are dependent on the uninterrupted and efficient operation of this facility. Proviant’s manufacturing and fulfillment operations are subject to power failures, blackouts, the breakdown, failure or substandard performance of equipment, the improper installation or operation of equipment, natural or other disasters, and the need to comply with the requirements or directives of governmental agencies, including the FDA. While we have implemented and are evaluating various emergency, contingency and disaster recovery plans, there can be no assurance that the occurrence of these or any other operational problems at Proviant’s facility in Illinois would not have a material adverse effect on our business, financial condition and results of operations. Furthermore, there can be no assurance that our contingency plans will prove to be adequate or successful if needed or that our insurance will continue to be available at a reasonable cost or, if available, will be adequate to cover any losses that we may incur from an interruption in Proviant’s manufacturing and distribution operations.
 
8

 
We may be unable to protect our intellectual property rights or may inadvertently infringe on the intellectual property rights of others.
 
We possess and may possess in the future certain proprietary technology, trade secrets, trademarks, tradenames, licenses and similar intellectual property. There can be no assurance that we will be able to protect our intellectual property adequately. In addition, the laws of certain foreign countries may not protect our intellectual property rights to the same extent as the laws of the United States. Litigation in the United States or abroad may be necessary to enforce our intellectual property rights, to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement. This litigation, even if successful, could result in substantial costs and diversion of resources and could have a material adverse effect on our business, results of operation and financial condition. If any such claims are asserted against us, we may seek to obtain a license under the third party’s intellectual property rights. There can be no assurance, however, that a license would be available on terms acceptable or favorable to us, if at all.

We are dependent on our chief executive officer and the loss of his services or our inability to attract and retain an experienced executive management team may prevent us from successfully executing our business plan.

For the foreseeable future our success will depend largely on the services of our chief executive officer James Klein because of his industry knowledge, marketing skills and relationships with major customers. We are dependent on Mr. Klein to both manage our current operations and attract and retain an executive management team with substantial industry experience. We do not maintain key person life insurance policies on Mr. Klein. The loss of Mr. Klein or our inability to build an effective executive management team could seriously harm our business, financial condition or results of operations and our ability to execute our business plan

Our marketing costs could materially increase which could have a material adverse effect on our earnings.

We incur marketing costs relating to the advertising and promotion of our products. For instance, our marketing costs may materially increase. Any increase in our marketing costs without an offsetting increase in our revenues could have a material adverse impact on our earnings.

Failures in our information technology system could disrupt our business.

Our operating processes are highly dependent upon our information technology system infrastructure, and we face the risk of business disruption if failures in our information systems occur. Such a disruption could have an impact upon our business and operations. A major physical disaster or other calamity that causes significant damage to our offices or our systems would adversely affect our business.

We may need to raise additional funds in the future to fund our acquisition strategy. If such funds are not available we may have to delay or forego potential acquisitions.

We expect we will have to raise additional capital in the future to help fund our operations and acquisition strategy or to fund unforeseen capital requirements or other events and uncertainties. If we cannot raise funds on acceptable terms, we may not be able to acquire additional Sports Supplement companies, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements. This may cause us to delay or forego potential acquisition even if they may be profitable to our future operations.
 
9

 
We are not obligated to follow any particular criteria for evaluating new acquisition targets.

Even though we expect to develop general guidelines for determining whether a potential target’s products are attractive for a combination, we are not obligated to follow any particular operating, financial, geographic, or other criteria in evaluating candidates for potential relationships. We will target companies which we believe will provide the best potential long-term financial return for our stockholders and we will determine the terms of the relationship accordingly. Our stockholders will not have the opportunity to evaluate the relevant economic, financial, and other information that our management team will use and consider in deciding whether to pursue an opportunity or not.

Our acquisition and strategic alliance strategies include numerous risks, including identifying acquisition candidates, execution risks, significant acquisition costs, the management of a larger enterprise, and the diversion of management’s attention that could cause our overall business operations to suffer.

We may seek to acquire companies that complement our business. Our inability to complete acquisitions and successfully integrate acquired companies may render us less competitive. We may evaluate acquisitions at any time. We cannot assure you that we will be able to identify acquisition candidates and complete acquisitions on commercially reasonable terms or at all. If we make acquisitions, we also cannot be sure that any benefits anticipated from the acquisitions will actually be realized. Additionally, we cannot be sure that we will be able to obtain financing for acquisitions.

The process of integrating acquired operations into our existing operations may result in unforeseen operating difficulties and may require significant financial, operational and managerial resources that would otherwise be available for the ongoing development or expansion of our existing business. The integration of acquired businesses may also lead to the loss of key employees of the acquired companies and diversion of management’s attention from ongoing business concerns. To the extent that we have miscalculated our ability to integrate and operate the business to be acquired, we may have difficulty in achieving our operating and strategic objectives. The diversion of management attention may affect our results of operations. Future acquisitions could result in the incurrence of debt and related interest expense, contingent liabilities and accelerated amortization expenses related to acquisition premiums paid, which could have a materially adverse effect on our financial condition, operating results and cash flow.

Risks Related to Our Stock
  
There is no active trading market for our common stock.
 
There is no active trading market for our common stock. Our common stock is not eligible for trading on any national or regional securities exchange or the Nasdaq Stock Market. Our common stock is eligible for trading on the OTC Bulletin Board. This market tends to be substantially less liquid than national and regional securities exchanges or the Nasdaq Stock Market. To date, there has been very limited trading of our common stock. We cannot provide you with any assurance that an active trading market for our common stock will develop, or if such a market develops, that it will be sustained.

Applicable SEC Rules governing the trading of “penny stocks” limits the trading and liquidity of our common stock which may affect the trading price of our common stock.
 
Our common stock is currently eligible for trading on the OTC Bulletin Board. To the extent our common stock trades below $5.00 per share, our common stock will be considered a “penny stock” and will be subject to SEC rules and regulations that impose limitations upon the manner in which our shares can be publicly traded. These regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure document explaining the penny stock market and the associated risks. Under these regulations, brokers who recommend penny stocks to persons other than established customers or certain accredited investors must make a special written suitability determination for the purchaser and receive the purchaser's written agreement to a transaction prior to sale. These regulations may have the effect of limiting the trading activity of our common stock and reducing the liquidity of an investment in our common stock.
 
10


We intend to raise additional capital in the future, and such additional capital may be dilutive to stockholders or impose operational restrictions.

We intend to raise additional capital in the future to help fund our operations and acquisition strategy through sales of shares of our common stock, securities convertible into shares of our common stock, or issuances of debt. Additional convertible debt or equity financing may be dilutive to our stockholders and debt financing, if available, may involve restrictive covenants that may limit our operating flexibility. If additional capital is raised through the issuance of shares of our common stock or securities convertible into shares of our common stock, the percentage ownership of our stockholders will be reduced. These stockholders may experience additional dilution in net book value per share and any additional equity securities may have rights, preferences and privileges senior to those of the holders of our common stock.

If our executive officers, directors and principal stockholders choose to act together, they may be able to control our management and operations, which may prevent us from taking actions that may be favorable to you.
 
Our executive officer, directors and principal stockholders, beneficially own approximately 60% of our outstanding common stock. These stockholders, acting together, have the ability to exert substantial influence over any matters requiring approval by our stockholders, including the election and removal of directors and any proposed merger, consolidation or sale of all or substantially all of our assets. In addition, they could dictate the management of our business and affairs. This concentration of ownership could have the effect of delaying, deferring or preventing a change in control of us or impeding a merger or consolidation, takeover or other business combination that could be favorable to you.
 
The trading price of our common stock is likely to be highly volatile.

The trading price of our shares may from time to time fluctuate widely. The trading price may be affected by a number of factors including events described in the risk factors set forth in this report as well as our operating results, financial condition, announcements regarding our business, general economic conditions and other events or factors. In addition, the stock market has experienced significant price and volume fluctuations that have particularly affected the price of many small capitalization companies and that often have been unrelated or disproportionate to the operating performance of these companies. Market fluctuations such as these may seriously harm the market price of our common stock. Further, securities class action suits have been filed against companies following periods of market volatility in the price of their securities. If such an action is instituted against us, we may incur substantial costs and a diversion of management attention and resources, which would seriously harm our business, financial condition and results of operations.

We do not intend to pay dividends in the foreseeable future.

We have never declared or paid a cash dividend on our common stock. Accordingly, we do not anticipate paying any dividends in the foreseeable future and investors seeking dividend income should not purchase our common stock.

We are not subject to certain of the corporate governance provisions of the Sarbanes-Oxley Act of 2002.

Since our common stock is not listed for trading on a national securities exchange, we are not subject to certain of the corporate governance requirements established by the national securities exchanges pursuant to the Sarbanes-Oxley Act of 2002. These include rules relating to independent directors, director nomination, audit and compensation committees, retention of audit committee financial expert and the adoption of a code of ethics. Unless we voluntarily elect to comply with those obligations, which we have not to date, the protections that these corporate governance provisions were enacted to provide, will not exist with respect to the Company. While we may make an application to have our securities listed for trading on a national securities exchange, which would require us to comply with those obligations, we cannot assure you that we will make such application, that we would be able to satisfy applicable listing standards, or if we did satisfy such standards, that we would be successful in such application.

11


Compliance with changing regulation of corporate governance and public disclosure will result in additional expenses.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty for public companies and significantly increased the cost and risks associated with accessing the public markets and public reporting. In addition to managing the operations of Reliant, our management team will need to continue to invest significant management time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities. Prior to the closing of the Purchase Agreement, Reliant was not subject to these laws and regulations and, therefore, did not incur any such costs. As Reliant is now our sole operating subsidiary, it will have to absorb the additional expenses of compliance with such laws and regulations which may have a material adverse effect on its results of operations. Accordingly, the Company’s financial performance as a private company may not be indicative of its future financial performance as a subsidiary of a public company.

Standards for compliance with Section 404 of the Sarbanes-Oxley Act of 2002 are uncertain, and if we fail to comply in a timely manner, our business could be harmed and our stock price could decline.

Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require annual assessment of our internal control over financial reporting, and attestation of this assessment by our independent registered public accountants. The SEC has extended the compliance dates for smaller public companies, including the Company. Accordingly, we believe that the annual assessment of our internal controls requirement will first apply to our annual report for our first fiscal year ended on or after July 15, 2008. Compliance with these rules will require us to incur increased general and administrative expenses and management attention. The standards that must be met for management to assess the internal control over financial reporting as effective are new and complex, and require significant documentation, testing and possible remediation to meet the detailed standards. We may encounter problems or delays in completing activities necessary to make an assessment of our internal control over financial reporting. In addition, the attestation process by our independent registered public accountants is new and we may encounter problems or delays in completing the implementation of any requested improvements and receiving an attestation of our assessment by our independent registered public accountants. If we cannot assess our internal control over financial reporting as effective, or our independent registered public accountants are unable to provide an unqualified attestation report on such assessment, investor confidence and share value may be negatively impacted.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS.

We were formed in February 2007 for the purpose of engaging in the acquisition, exploration and development of resource properties. Immediately prior to the closing of the Share Exchange Agreement, we were considered a shell company under applicable rules of the Securities Exchange Commission and our business plan consisted solely of identifying and acquiring a suitable operating company to acquire and complying with our reporting obligations under federal securities laws. Since inception, we have not generated any revenue.
 
On December 31, 2008, we acquired SSAG, a marketer of Sports Supplements. Upon completion of the acquisition, SSAG became a wholly owned subsidiary of the Company which currently serves as our sole operating subsidiary. The following Management’s Discussion and Analysis is intended to help the reader understand the results of operations of SSAG and the ErgoPharm division of Proviant  prior to the closing of the Share Exchange Agreement and the financial condition of the Company after the closing of the Share Exchange Agreement.
 
Overview

We market and sell our ErgoPharm brand of nutritional supplements destined for use by athletes and active adults. We market our products via print advertising in publications directed at weightlifters and bodybuilders, as well an promoting our products on various internet sites.. We sell our products to retail chains, distributors and internet sellers. Our operations consist of an office in Montreal, Canada from which all administrative, marketing and sales activities occur, as well as outsourced manufacturing, warehousing and distribution through Proviant.

12


Key Performance Indicators
 
Our key performance indicators are the number of units sold of each product, as well as our total revenues. We recognize revenue when an order is received and shipped. In order to increase our revenues, we need to expose our ErgoPharm brand to new consumers in existing markets, as well as introducing the brand to previously untapped international markets. This is ultimately dependent upon the success of our advertising campaigns, as well as the efforts of our Director of International Sales.  

Outlook
 
Our business plan is to become a leading force in the Sports Supplement market. Through strategic acquisition and organic development, we intend to build a marketing and sales company focused on providing efficacious supplements to active adults. We accomplished the first step in executing this strategy by acquiring SSAG’s sales and marketing infrastructure. In the near term, we will seek to increase our revenues via a new and aggressive advertising campaign, taking advantage of ErgoPharm’s history of delivering innovative nutritional supplements since 1999. Thereafter, we intend to grow our business both organically through new product initiatives as well as through additional synergistic acquisitions in the Sports Supplement industry to expand into new marketing channels and increase customer penetration.

In order to successfully execute our plan, we will need to attract and retain an executive management team with substantial industry experience. Our chief executive officer James Klein has substantial experience in the Sports Supplement market and intends to build an effective management team as resources permit, including adding a dedicated chief financial officer .

We believe that our near-term success will depend particularly on our ability to integrate SSAG into the Company and to build an effective management team that will provide a strong foundation for future growth. We believe that key risks include changes in federal legislation pertaining to nutritional supplements, our ability to identify, acquire and integrate operating companies into our operations, our ability to attract and retain an effective executive management team, and raise the capital necessary to grow our business. Our prospects must be considered in light of the risks, expenses and difficulties encountered by companies at an early stage of development. We may not be successful in addressing such risks and difficulties.

Our independent auditors included an explanatory paragraph in their opinion on our financial statements for our fiscal year ended January 31, 2008 as to the substantial doubt about our ability to continue as a going concern. This was based on our limited cash resources, our history of recurring losses since inception, and our inability to execute our business plan. Our long-term viability and growth will ultimately depend upon operating SSAG on a profitable basis and acquiring additional operating companies in the student loan and consolidation industries.
 
Results of Operations

Introductory Note. During the fiscal year ended January 31, 2008 and the interim period ended September 30, 2008, Cynergi Holdings did not generate any revenue. Accordingly, we are not required to present a discussion of the results of operation of Cynergi Holdings. On December 31, 2008, we acquired all of the common shares in SSAG pursuant to the Share Exchange Agreement and SSAG became our wholly-owned subsidiary. The following is a discussion and analysis of the results of operations of SSAG for the years ended December 31, 2007 and 2006 and the nine-month periods ended September 30, 2008 and 2007 and relates solely to the results of operation of SSAG prior to completion of the acquisition. The results may, therefore, not necessarily be indicative of the results of operations that would have resulted had SSAG been operated as a wholly-owned subsidiary of the Company. The following should be read in conjunction with the financial statements of SSAG and the related notes and other information included elsewhere in this report.

13

 
Comparison of the Nine-Month Periods Ended September 30, 2008 and September 30, 2007

Revenues

Revenues consist of sales of nutritional supplements. Revenues were $3,151,739 for the nine-month period ended September 30, 2008 as compared to $ 3,060,417 for the nine-month period ended September 30, 2007. We expect revenues to continue to increase in future periods, particularly as we begin to execute our new marketing and advertising campaigns, as well as our acquisition strategy.
 
Operating Expenses

Operating expenses consist primarily of salaries and wages, marketing, and general and administrative expenses.

Salaries, Wages and Related Expenses. Salaries, wages and related expenses consist of salaries, consulting fees, commissions, benefits and related compensation that we paid to our employees. Salaries and wages decreased $28,225  to $85,251 for the nine-month period ended September 30, 2008 from $113,476 for the for the nine-month period ended September 30, 2007. The decrease resulted primarily from the departure of the Director of Sales in March of 2008. We expect salaries and wages to increase in future periods as a result of salaries payable to our new executive management team and increased personnel costs to support our expanding sales and marketing efforts.

General, Administrative and Related Expenses. General, administrative and related expenses consist of costs related to travel, telephone, insurance, office rent, professional fees and other general and administrative expenses. General and administrative expenses increased $ 53,676 to $ 178,521 for the nine-month period ended September 30, 2008 as compared to $ 124,845 for the nine-month period ended September 30, 2007. The increase resulted primarily from an increase in the cost of product liability insurance. We expect general and administrative expenses to increase in future periods as a result of increased costs associated with growth in our operations and increased costs associated with compliance with our reporting obligations as a public company.
 
Marketing and Related Expenses. Marketing and related expenses consist primarily of costs associated with the development, preparation and distribution of promotional materials, and advertising costs. Marketing and related expenses decreased $39,548 to $26,169 for the nine-month period ended September 30, 2008 as compared to $65,717 for the nine-month period ended September 30, 2007. The decrease resulted primarily from our decreased marketing efforts in 2008. We expect marketing and related expenses to continue to increase in future periods as we continue to grow our business.
 
Net Income

Net income increased $26,132 to $645,281 during the nine-month period ended September 30, 2008 as compared to $619,149 during the nine-month period ended September 30, 2007. The increase in net income was due to an increase in revenues.
 
Comparison of the Year Ended December 31, 2007 to the Year Ended December 31, 2006

Revenues

Revenues consist of sales of nutritional supplements. Revenues were $4,008,392 for the year ended December 31, 2007 as compared to $3,482,666 for the year ended December 31, 2006. The $525,726 or 15% increase resulted primarily from the introduction of new products.

 
14

 

Operating Expenses

Operating expenses consist primarily of salaries and wages, marketing, and general and administrative expenses.

Salaries, Wages and Related Expenses. Salaries, wages and related expenses consist of salaries, consulting fees, commissions, benefits and related compensation that we paid to our employees and salaries and wages increased $15,985 to $145,492 for the year ended December 31, 2007 from $129,507 for the for the year ended December 31, 2006. The increase resulted primarily from an increase in overall salaries and compensation to our employees due to the overall growth of our business.

General and Administrative and Related Expenses. General and administrative expenses consist of costs related to travel, telephone, insurance, office rent, professional fees, and other general and administrative expenses. General and administrative expenses increased $18,642 to $169,871 for the year ended December 31, 2007 as compared to $151,229 for the year ended December 31, 2006. The increase resulted primarily from increased costs due to the overall growth of our business.

Marketing and Related Expenses. Marketing and related expenses consist primarily of costs associated with the development, preparation and distribution of promotional material, and advertising costs. Marketing and related expenses decreased $21,582 to $71,833 for the year ended December 31, 2007 as compared to $93,415 for the year ended December 31, 2006. The decrease resulted primarily from a reduction in promotional activities.

Net Income (Loss)

We recognized net income of $747,128 during the year ended December 31, 2007 as compared to a net income of $672,760 during the year ended December 31, 2006. The net income resulted almost entirely from an increase in revenue as our total operating costs were essentially unchanged in 2006 and 2007.
 
Liquidity and Capital Resources
 
Since inception, Cynergi Holdings has funded its operations through public and private offerings of its common stock and SSAG has funded operations from its operating activities and proceeds from convertible notes.

SSAG currently has convertible note of $ 525,000. Other than the forgoing, we do not maintain any term loan or credit facility with any commercial bank or other financial institution. To date, our capital needs have been principally met through the receipt of proceeds from sales of our equity and debt securities. We intend to invest our cash in excess of current operating requirements in interest-bearing, investment-grade securities.

Over the next six months, we expect to incur approximately $1,500,000 of cash expenditures in payment of the short-term convertible notes due to Proviant. We expect to fund this amount through the proceeds of the sales of our equity securities. We expect to incur additional material capital expenditures during the next twelve months in connection with the acquisition of additional operating companies. We also expect to hire additional employees to serve as executive officers of the Company.
 
SSAG  has historically operated on a cash flow positive basis and we expect that it will continue to generate enough cash to support its operations and our corporate overhead, including costs associated with retaining additional executive management and complying with our reporting obligations under federal securities laws. We believe that our current cash resources, cash provided by operations, and expected proceeds from financing activities will be sufficient to fund operations for the next 12 months. In the event that we identify a suitable operating company or companies to acquire, we expect that we will need to raise additional capital to complete such a transaction and to satisfy the working capital or operational requirements of any company we acquire. We expect to raise such capital through sales of our debt or equity securities. The sale of additional equity securities will result in additional dilution to our shareholders. In the event we have to issue additional debt, we would incur increased interest expenses and could be subject to covenants that may have the effect of restricting our operations. We have no commitment for any of the additional financing necessary to execute our business plan and we can provide no assurance that such financing will be available in an amount or on terms acceptable to us, if at all. If we are unable to obtain additional funds when they are needed or if such funds cannot be obtained on terms favorable to us, we may not be able to execute our plan to acquire additional operating companies.

 
15

 

Off-Balance Sheet Arrangements

As of December 31, 2008, we did not have any relationships with unconsolidated entities or financial partners, such as entities often referred to as structured finance or special purpose entities, which had been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

ITEM 3. DESCRIPTION OF PROPERTY

Our headquarters are currently located in a leased facility located at 1650 de Maisonneuve Boulevard West, Suite 1650, Montreal, Quebec, Canada, consisting of a total of approximately 400 square feet of office space. The current monthly rent due under the lease, which expires on October 31, 2010, is approximately CDN$1,000 per month. We have also leased one office and two cubicles at Proviant’s facility in Champaign, Il for US $1,500 per month. We believe this space is sufficient to handle our present and immediate future needs. In the event our lease is terminated for any reason or not renewed upon expiration of the present lease term, space sufficient to handle our then present and expected future needs is available from several alternative sources at slightly higher rental rates.

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth, as of January 8, 2009, information with respect to the securities holdings of all persons that we, pursuant to filings with the Securities and Exchange Commission and our stock transfer records, have reason to believe may be deemed the beneficial owner of more than five percent (5%) of our common stock. The following table also sets forth, as of such date, the beneficial ownership of our common stock by all of our current officers and directors, both individually and as a group.
 
The beneficial owners and amount of securities beneficially owned have been determined in accordance with Rule 13d-3 under the Exchange Act, and, in accordance therewith, includes all shares of our common stock that may be acquired by such beneficial owners within 60 days of January 8, 2009 upon the exercise or conversion of any options, warrants or other convertible securities. This table has been prepared based on 24,325,000 shares of common stock outstanding on January 8, 2009. Unless otherwise indicated, each person or entity named below has sole voting and investment power with respect to all shares beneficially owned by that person or entity, subject to the matters set forth in the footnotes to the table below.

Name and Address of Beneficial Owner
 
Amount and Nature
of Beneficial
Ownership
   
Percentage
of Class
 
James Klein (1)
4929 Ponsard Avenue
Montreal, QC H3W 2A6
    9,277,100       38.1 %
Proviant Technologies Inc
306 West Hensley Drive
Champaign, IL 61822
    5,142,900       21.1 %
Ian Spowart
34 Hampton Road, Town Moor,
Doncaster, South Yorkshire  England DN2 5DG
    0       0  
                 
TOTAL DIRECTORS AND OFFICERS AS A GROUP (2 persons)
    9,277,100       38.1 %


 
16

 

(1)
Held of record by The James Klein Family Trust, over which Klein is one of three trustees

ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.

The following chart sets forth certain information about each director and executive officer of the Company. Each of the executive officers will serve until his or her successor is appointed by our Board of Directors or such executive officer’s earlier resignation or removal. Each of the directors will serve until the next annual meeting of stockholders or such director’s earlier resignation or removal.

 
Name
 
Age
 
Position
 
 
James Klein
 
46
 
Chief Executive Officer, Chief Financial
Officer, Treasurer, Secretary, Director
 
 
Ian Spowart
 
42
 
Director
 

Background of directors and sole officer

Ian Spowart served as our president, chief executive officer, treasurer, chief financial officer and sole member of our board of directors from our inception on February 27, 2007 through December 31, 2008. Since August 2007, Mr. Spowart has been the sole officer and director of our wholly owned subsidiary corporation, Cynergi Ltd., a corporation organized under the laws of England. Since September 2007, Mr. Spowart has been managing partner of Local Interest Consultants. Local Interest Consultants provides consulting services for local and national government projects. From August 2005 to September 2007, Mr. Spowart was chairman and interim chief executive for The Stadium Management Board where he coordinated activities related to stadium operations. From July 2004 to August 2005, Mr. Spowart served as Development Trust Manager for Rossington Development Trust. From May 2000 to June 2004, Mr. Spowart served as Cabinet member for Special Projects for Doncaster Metropolitan Borough Council.

James Klein was appointed our Chief Executive Officer, Chief Financial Officer, secretary, treasurer and a director on December 31, 2008. Mr. Klein was the founder of Sports Supplement Acquisition Group, Inc., a company he founded in 2007. He was also a founder of Epic Nutrition, LLC, with whom he served as Chief Operating Officer from 2005-2007. He was a founder, and served as a director and Chief Financial Officer of Vitalstate Inc. from 2002 through 2004. Mr. Klein has more than 25 years of management experience in the areas of nutritional supplements, finance, sales, marketing and technology development. From 1996 to 2002, Mr. Klein worked as the chief executive officer for Avocation Legal Systems, a software company founded by Mr. Klein that specializes in software applications for law firms.

ITEM 6. EXECUTIVE COMPENSATION.
 
     The following table sets forth the compensation paid by us for the last three fiscal years ending January 31, 2007 for each or our officers. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid or named executive officers.
 
 
17

 
 
EXECUTIVE OFFICER COMPENSATION TABLE
 
                                
Non-
   
Nonqualified
             
                                 
Equity
   
Deferred
   
All
       
Name 
                              
Incentive
   
Compensa-
   
Other
       
and 
                  
Stock
   
Option
   
Plan
   
tion
   
Compen-
       
Principal
      
Salary
   
Bonus
   
Awards
   
Awards
   
Compensation
   
Earnings
   
sation
   
Total
 
Position
 
Year
 
(US$)
   
(US$)
   
(US$)
   
(US$)
   
(US$)
   
(US$)
   
(US$)
   
(US$)
 
(a) 
 
(b) 
 
(c)
   
(d)
   
(e)
   
(f)
   
(g)
   
(h)
   
(i)
   
(j)
 
   
Ian Spowart 
 
2008 
    0       0       0       0       0       0       0       0  
President 
 
2007 
    0       0       0       0       0       0       0       0  
   
2006 
    0       0       0       0       0       0       0       0  
   
Michael Stott 
 
2008 
    0       0       0       0       0       0       0       0  
Secretary 
 
2007 
    0       0       0       0       0       0       0       0  
   
2006 
    0       0       0       0       0       0       0       0  

     We have no employment agreements with any of our officers. We anticipate entering into such agreements with our key personnel.
 
     The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our named executive officers.
 
     There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and directors other than as described herein.
 
Directors' Compensation
 
The sole member of our board of directors is not compensated for his services as a director. The board has not implemented a plan to award options to any directors. There are no contractual arrangements with any member of the board of directors. We have no director's service contracts.
 
DIRECTOR’S COMPENSATION TABLE
 
   
Fees
                                   
    
Earned
                   
Nonqualified
             
    
or
             
Non-Equity
   
Deferred
             
    
Paid in
 
Stock
   
Option
   
Incentive Plan
   
Compensation
   
All Other
       
    
Cash
 
Awards
   
Awards
   
Compensation
   
Earnings
   
Compensation
   
Total
 
Name 
 
(US$)
 
(US$)
   
(US$)
   
(US$)
   
(US$)
   
(US$)
   
(US$)
 
(a) 
 
(b)
 
(c)
   
(d)
   
(e)
   
(f)
   
(g)
   
(h)
 
                                         
Ian Spowart 
 
2008
    0       0       0       0       0       0  
 
We do not intend to pay any cash compensation to our employee directors, other than to reimburse them for their cost of travel and other out-of-pocket costs incurred to attend Board meetings or other activities on behalf of the Company. We currently have no policy with respect to the granting of fees to non-employee directors in connection with their services to the Company.

 
18

 

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
 
Loans From Directors and Executive Officers

As of December 31, 2008, Mr. Klein was owed $ 17,500 for expenses incurred on behalf of the company.

Transactions between SSAG and its Affiliates prior to the Closing of The Purchase Agreement  

During the fiscal year ended December 31, 2008, SSAG paid $12,500 for services to an entity that is controlled by Mr. Klein.

Acquisition of Control of the Company
 
See Item 1 above, which is incorporated herein by reference.

Director Independence

Our Board of Directors currently consists of Ian Spowart and James Klein. In accordance with Item 407(a) of Regulation S-K of the Securities Act of 1933 and the Securities Exchange Act of 1934, the Board has adopted the definition of “independent director” and “independence standards” for audit, compensation and nominating committees set forth in the American Stock Exchange, or AMEX, Company Guide. In applying this definition, the Board has determined that neither Mr. Spowart nor Mr. Klein qualifies as an "independent director" pursuant to AMEX Company Guide Section 121. The forgoing standard will be included as an appendix to the next proxy statement or information statement we deliver to our security holders.

As of the date of the report, we do not have a separately designated audit, compensation or nominating committee. In applying the “independence standards” established by AMEX, the Board has determined that neither Mr. Spowart nor Mr. Klein is “independent” for purposes of Section 803 of the AMEX Company Guide, applicable to audit, compensation or nominating committee members. The forgoing standards will be included as appendices to the next proxy statement or information statement we deliver to our security holders.
 
ITEM 8. DESCRIPTION OF SECURITIES.

Common Stock
 
We are authorized to issue 100,000,000 shares of common stock, $0.00001 par value per share, of which 24,325,000 are outstanding as of the date of this report.
 
Holders of common stock have equal rights to receive dividends when, as and if declared by the Board of Directors, out of funds legally available therefor. We have not declared any dividends, and we do not expect to declare or pay any dividends in the foreseeable future. Holders of common stock have one vote for each share held of record and do not have cumulative voting rights. Holders of common stock are entitled, upon liquidation of the Company, to share ratably in the net assets available for distribution, subject to the rights, if any, of holders of any preferred stock then outstanding. Shares of common stock are not redeemable and have no preemptive or similar rights.
 
Preferred Stock
 
We are authorized to issue 100,000,000 shares of preferred stock, par value $0.00001 per share of which none are outstanding. Our Board of Directors has the authority, without further action by our stockholders, to issue shares of preferred stock in one or more series, and to fix, as to any such series, any dividend rate, redemption price, preference on liquidation or dissolution, sinking fund terms, conversion rights, voting rights, and any other preference or special rights and qualifications. Any or all of the rights and preferences selected by our board of directors may be greater than the rights of our common stock. The issuance of preferred stock could adversely affect the voting power of holders of common stock and the likelihood that holders of common stock will receive dividend payments and payments upon liquidation.

 
19

 

Anti-Takeover Provisions of Our Articles of Incorporation and Bylaws

The following provisions of our articles of incorporation, our bylaws may discourage takeover attempts of us that may be considered by some stockholders to be in their best interest. The effect of such provisions could delay or frustrate a merger, tender offer or proxy contest, the removal of incumbent directors, or the assumption of control by stockholders, even if such proposed actions would be beneficial to our stockholders.

Undesignated Preferred Stock
 
Our certificate of incorporation grants our board of directors the authority to issue up to 100,000,000 shares of preferred stock and to fix the rights, preferences, qualifications and restrictions of the preferred stock. The issuance of preferred stock could, under certain circumstances, have the effect of delaying, deferring or preventing a change in control of us if, for example, our board of directors designates and issues a series of preferred stock in an amount that sufficiently increases the number of outstanding shares to overcome a vote by the holders or our common stock or with rights and preferences that includes special voting rights to veto a change in control.
 
Unanimous Written Consent
 
Unless otherwise provided in a Nevada corporation’s articles of incorporation or bylaws, any action required or permitted to be taken at a meeting of stockholders may be taken without notice and without a meeting if written consents are executed by stockholders holding at least a majority of the voting power. Our bylaws provide that stockholders may only act by written consent if all stockholders entitled to vote on the matter execute written consents. As this provision makes it more difficult to effect corporate action without calling and convening a meeting of stockholders, it could discourage, deter or delay a third party from obtaining control of the Company.
 
Director Vacancies
 
Our bylaws provide that any vacancies in our board of directors resulting from death, resignation, retirement, disqualification, removal from office or other cause will be filled solely by the vote of our remaining directors. This provision may discourage a third party from making a tender offer or otherwise attempting to obtain control of us because the provision effectively limits stockholder election of directors to annual and special meetings of the stockholders.

PART II

ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND OTHER SHAREHOLDER MATTERS.

Our common stock is currently eligible for quotation on the OTC Bulletin Board under the symbol “CYGH” As of the date of this report, there is no established public market for our common stock and there has been only minimal trading of our shares.
 
Holders

As of January 8, 2009, the number of stockholders of record of our common stock was 43. 
 
Registration Rights, Shares Eligible for Future Sale, and Shares Issuable Upon Exercise of Warrants

As of the date of this report, approximately 6,325,000 of our outstanding shares of common stock are either (i) freely tradable without restriction or further registration under the Securities Act, unless such shares are held by our affiliates, as that term is defined in Rule 144 under the Securities Act, or (ii) are eligible for public sale in accordance with Rule 144 under the Securities Act.
 
 
20

 

As of the date of this report, there are outstanding warrants to purchase 7,425,000 shares of our common stock as described below:

4122852 Canada Inc. — 600,000 5-year $ 0.75 post-Closing warrants
RCL AMRO Holdings Inc. — 375,000 5-year $ 0.75 post-Closing warrants
6894283 Canada Inc. — 225,000 5-year $ 0.75 post-Closing warrants
David Greenberg — 45,000 5-year $ 0.75 post-Closing warrants
Ron Taverner — 30,000 5-year $ 0.75 post-Closing warrants
Lorne Wilansky — 600,000 5-year $ 0.75 post-Closing warrants
Proviant Technologies Inc. — 2,000,000 5-year $ 0.75 post-Closing warrants, vesting ratably on December 10, 2009, December 10, 2010 and December 10, 2011.
3311180 Canada Inc. — 1,750,000 5-year $ 0.04 post-Closing warrants, vesting ratably on the 6 month, 12 month, 18 month and 24 month anniversaries of 3311180 Canada Inc. providing or securing working capital financing on terms acceptable to the Company.
Knights Bridge Capital Group — 1,800,000 post-Closing warrants in exchange for cash proceeds of $1 million
 
Dividends

We have not paid any cash dividends on our common stock to date, and we have no intention of paying cash dividends in the foreseeable future. Whether we declare and pay dividends will be determined by our board of directors at their discretion, subject to certain limitations imposed under Nevada law. The timing, amount and form of dividends, if any, will depend on, among other things, our results of operations, financial condition, cash requirements and other factors deemed relevant by our Board of Directors.

Transfer Agent and Registrar

Our transfer agent and registrar is Empire Stock Transfer, Inc., 7251 West Lake Mead Boulevard, Las Vegas, Nevada 89128. Its telephone number is (702) 562-4037.
 
ITEM 2. LEGAL PROCEEDINGS.

We are not currently a party to any material legal proceedings. We may from time to time become involved in litigation relating to claims arising in the ordinary course of our business.

ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.

None.

ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.

See Item 1 above, which is incorporated herein by reference.
 
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 78.138 of the General Corporation Law of Nevada (the “NGCL”) provides that, with certain exceptions, a director or officer is not individually liable to the corporation or its stockholders or its creditors for any damages as a result of any act or failure to act in his or her capacity as a director or officer unless it is proven that (a) such act or failure to act constituted a breach of his or her fiduciary duties as a director or officer; and (b) his or her breach of those duties involved intentional misconduct, fraud or a knowing violation of law. As permitted by Nevada law, our articles of incorporation include provisions that limit the liability of our directors and officers for monetary damages to the fullest extent permissible under Nevada law.
 
 
21

 

Section 78.7502 of the NGCL empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she is not liable to the corporation pursuant to Section 78.138 of the NGCL or he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceedings, had no reasonable cause to believe his or her conduct was unlawful. No indemnification may be made in respect of any claim, issue or matter as to which such person shall have been adjudged by a court of competent jurisdiction after exhaustion of all appeals therefrom to be liable to the corporation or for amounts paid in settlement to the corporation unless and only to the extent that the court in which such action or suit was brought or other court of competent jurisdiction determines that in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

Our articles of incorporation and bylaws provide that we shall indemnify our directors and officers to the fullest extent permitted Nevada law. Our bylaws permit us to obtain and maintain insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in such capacity, regardless of whether or not indemnification by us would be permitted. As of the date of this report, we have not obtained any such insurance.

PART F/S

The information provided in Item 9.01 (a) and (b) of this report is incorporated herein by reference at pages F-1 to F-7.
 
The financial statements of Sports Supplement Acquisition Group, Inc (formerly Cynergi Holdings, Inc.) for the Period February 27, 2007 (Inception) to January 31, 2008 included in our Registration Statement on Form SB-2, as amended and for the interim periods May 1, 2008 through October 31, 2008 included in our Quarterly Reports on Form 10-QSB for the periods ended October 31, 2008 are incorporated herein by reference.
 
PART III

ITEM 1.
INDEX TO EXHIBITS.

The information provided in Item 9.01 of this report is incorporated herein by reference.

ITEM 2. 
DESCRIPTION OF EXHIBITS.

The information provided in Item 9.01 this report is incorporated herein by reference.

Section 3 - Securities And Trading Markets

Item 3.02
Unregistered Sales of Equity Securities.

The information provided in paragraphs numbered 1 and 2 under the caption “ITEM 4 - RECENT SALES OF UNREGISTERED SECURITIES” Item 2.01 beginning on page 2 of this report is incorporated herein by reference.
 
 
22

 

Section 5 - Corporate Governance and Management

Item 5.06
Change in Shell Company Status.
 
The information provided in Items 1.01 and 2.01 of this report is incorporated herein by reference.
 
Section 9 - Financial Statements and Exhibits
 
Item 9.01
Financial Statements and Exhibits.
 
(a) Financial Statements of Acquired Business:
 
Audit report on ErgoPharm for the years ended December 31, 2006 & 2007
 
Financial statements for the activities of ErgoPharm for the 9 months ended September 30, 2008.
 
(b) Pro Forma Financial Information:
 
Pro-forma financial statements of the combined activities of Cynergi & ErgoPharm for the year ended December 31, 2007 and the nine months ending September 30, 2008.
 
Exhibits:
 
10.1
Share Exchange Agreement between Cynergi & SSAG
 
10.2
Asset purchase agreement between SSAG and Proviant Technologies, dated December 10, 2008
 
10.3
Non-compete agreement between SSAG and Proviant Technologies, dated December 10, 2008
 
10.4
Right of Refusal agreement between SSAG and Proviant Technologies, dated December 10, 2008
 
10.5
Short-term note between SSAG and Proviant Technologies, dated December 10, 2008
 
10.6
First long-term note between SSAG and Proviant Technologies, dated December 10, 2008
 
10.7
Second long-term note between SSAG and Proviant Technologies, dated December 10, 2008
 
10.8
Third long-term note between SSAG and Proviant Technologies, dated December 10, 2008
 
10.9
Voting agreement between SSAG and Proviant Technologies, dated December 10, 2008
 
10.10
Warrant agreement between SSAG and Proviant Technologies, dated December 10, 2008
 
10.11
Warrant agreement between Knights Bridge Capital Group and Cynergi, date December 31, 2008
 
 
23

 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
Sports Supplement Acquisition Group, Inc.
   
Date: January 12, 2009
By:  
/s/ James Klein
     
   
James Klein
     
 
Chief Executive Officer
 
 
24

 
 
 
MOORE & ASSOCIATES, CHARTERED
           ACCOUNTANTS AND ADVISORS
PCAOB REGISTERED

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
ErgoPharm

We have audited the accompanying statement of operations and retained earnings of ErgoPharm, a wholly owned unincorporated division of Proviant Technologies, Inc. as of December 31, 2007 and 2006, and the related statements of cash flows through December 31, 2007 and 2006. These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ErgoPharm, a wholly owned unincorporated division of Proviant Technologies, Inc., as of December 31, 2007 and 2006, and the results of its operations and its cash flows through December 31, 2007 and 2006, in conformity with accounting principles generally accepted in the United States of America.

/s/ Moore & Associates, Chartered

Moore & Associates Chartered
Las Vegas, Nevada
February 12, 2008

2675 S. Jones Blvd. Suite 109, Las Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501

 
F-1

 
 
ERGOPHARM
Balance Sheets

   
December 31,
   
December 31,
 
   
2007
   
2006
 
             
ASSETS
           
             
CURRENT ASSETS
           
             
Cash
  $ -     $ -  
Accounts receivable, net
    -       -  
Inventory
    -       -  
                 
Total Current Assets
    -       -  
                 
PROPERTIES AND EQUIPMENT, net
    -       -  
                 
OTHER ASSETS
    -       -  
                 
TOTAL ASSETS
  $ -     $ -  
                 
LIABILITIES AND EQUITY
               
                 
CURRENT LIABILITIES
               
                 
Accounts Payable
  $ -     $ -  
                 
Total Current Liabilities
    -       -  
                 
EQUITY
               
                 
Retained Earnings
    -       -  
                 
TOTAL ASSETS
  $ -     $ -  
 
The accompanying notes are an integral part of these financial statements.

 
F-2

 
 
ERGOPHARM
Statements of Operations and Retained Earnings

   
For the
   
For the
 
   
Year Ended
   
Year Ended
 
   
December 31,
   
December 31,
 
   
2007
   
2006
 
             
REVENUES, net
  $ 4,008,392     $ 3,482,666  
                 
COSTS OF SALES
    2,396,396       2,005,630  
                 
GROSS MARGIN
    1,611,996       1,477,036  
                 
OPERATING EXPENSES
               
                 
Sales and marketing
    71,833       93,415  
Payroll expenses
    75,492       59,507  
Rent and occupancy
    36,000       36,000  
Consulting fees
    70,000       70,000  
Insurance expense
    79,422       76,000  
General and administrative
    54,449       39,229  
                 
TOTAL OPERATING EXPENSES
    387,196       374,151  
                 
NET INCOME FROM OPERATIONS
    1,224,800       1,102,885  
                 
INCOME TAX EXPENSE
    477,672       430,125  
                 
NET INCOME
    747,128       672,760  
                 
BEGINNING RETAINED EARNINGS
    -       -  
                 
DISTRIBUTION TO OWNER
    (747,128 )     (672,760 )
                 
ENDING RETAINED EARNINGS
  $ -     $ -  

 
F-3

 
 
ERGOPHARM
Statements of Cash Flows

   
For the
   
For the
 
   
Year Ended
   
Year Ended
 
   
December 31,
   
December 31,
 
   
2007
   
2006
 
             
CASH FLOWS FROM  OPERATING ACTIVITIES:
           
             
Net Income
  $ 747,128     $ 672,670  
                 
Net Cash from Operating Activities
    747,128       672,670  
                 
CASH FLOWS FROM  INVESTING ACTIVITIES:
    -       -  
                 
CASH FLOWS FROM  INVESTING ACTIVITIES:
               
                 
Distribution to Owners
    (747,128 )     (672,670 )
                 
NET INCREASE (DECREASE) IN CASH
    -       -  
                 
BEGINNING CASH
    -       -  
                 
ENDING CASH
  $ -     $ -  
                 
SUPPLEMENTAL CASH FLOW INFORMATION:
               
                 
Income Taxes
  $ -     $ -  
Interest Expense
    -       -  
 
 
F-4

 

ErgoPharm
NOTES TO FINANCIAL STATEMENTS
 
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Activity and Industry – ErgoPharm (The Company) is an unincorporated division of Proviant Technologies, Inc., (the Parent) which markets a variety of sports supplement drinks and nutritional products. The Company's financial statements are prepared using the accrual method of accounting.  The Company operates strictly as a marketing division accordingly it has no inventory, accounts receivable or accounts payable. The Company has elected a December 31 year-end.

Fixed Assets – Fixed assets are carried at cost. Depreciation is computed using the straight-line method over estimated useful lives of the assets. The cost and related accumulated depreciation is removed from the accounts when assets are sold.  Maintenance and repairs are charged to income as incurred, whereas significant renewals and betterments are capitalized and the cost recovered through depreciation methods.

Advertising – The Company expenses advertising costs in the period in which they are incurred. Advertising expense was $64,536 and $85,652 for the years ended December 31, 2007 and 2006, respectively.

Income Taxes – The Company is taxed on a consolidated basis with the Parent whereby components of income and expense are passed through and taxed at the Parent level. The Company’s income tax expense is computed as though the Company operated as an independent entity using the marginal state and federal rates.

Deferred taxes are recognized for differences between the basis of assets and liabilities for financial statement and income tax purposes. The deferred tax asset represents the future benefit of these differences, while the deferred tax liability represents the future tax consequences of those differences. The Parent has additional items of income and expense which offset the net income of the Company and result in no income tax on a consolidated basis. Accordingly, the Company has no deferred tax assets or liabilities as of December 31, 2007 and 2006.

Equity-Based Compensation. – The Company adopted SFAS No. 123-R effective January 1, 2006 using the modified prospective method. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1,2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123-R.

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Inventories – Inventories are valued at the lower of cost or market. Cost is determined using the first-in, first out (FIFO) method.

 
F-5

 

ErgoPharm
NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 (Continued)

Trade Accounts Receivable – Trade accounts receivables are stated at the amount management expects to collect from balances at year-end. The Company provides an allowance for uncollectible accounts based on prior experience and management’s assessment of the collectability of existing accounts. The Company recorded bad debt expense of $-0- and $-0- for the years ended December 31, 2007 and 2006.

Recent Accounting Pronouncements – In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. Where applicable, SFAS No. 157 simplifies and codifies related guidance within GAAP and does not require any new fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier adoption is encouraged. The Company does not expect the adoption of SFAS No. 157 to have a significant effect on its financial position or results of operation.

In June 2006, the Financial Accounting Standards Board  issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109”, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  FIN 48 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006.  The Company does not expect the adoption of FIN 48 to have a material impact on its financial reporting, and the Company is currently evaluating the impact, if any, the adoption of FIN 48 will have on its disclosure requirements.

 
F-6

 

ErgoPharm
NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 (Continued)
 
In March 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 156, “Accounting for Servicing of Financial Assets—an amendment of FASB Statement No. 140.” This statement requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in any of the following situations: a transfer of the servicer’s financial assets that meets the requirements for sale accounting; a transfer of the servicer’s financial assets to a qualifying special-purpose entity in a guaranteed mortgage securitization in which the transferor retains all of the resulting securities and classifies them as either available-for-sale securities or trading securities; or an acquisition or assumption of an obligation to service a financial asset that does not relate to financial assets of the servicer or its consolidated affiliates. The statement also requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable, and permits an entity to choose either the amortization or fair value method for subsequent measurement of each class of servicing assets and liabilities. The statement further permits, at its initial adoption, a one-time reclassification of available for sale securities to trading securities by entities with recognized servicing rights, without calling into question the treatment of other available for sale securities under Statement 115, provided that the available for sale securities are identified in some manner as offsetting the entity’s exposure to changes in fair value of servicing assets or servicing liabilities that a servicer elects to subsequently measure at fair value and requires separate presentation of servicing assets and servicing liabilities subsequently measured at fair value in the statement of financial position and additional disclosures for all separately recognized servicing assets and servicing liabilities. This statement is effective for fiscal years beginning after September 15, 2006, with early adoption permitted as of the beginning of an entity’s fiscal year. Management believes the adoption of this statement will have no immediate impact on the Company’s financial condition or results of operations.

 
F-7

 

Sports Supplement Acquisition Group, Inc.
UNAUDITED CONDENSED COMBINED PRO FORMA BALANCE SHEET

   
Sports Supplement
         
Sports Supplement
                         
   
Acquisition Group Inc.
         
Acquisition Group Inc
                     
Adjusted
 
   
(Nevada)
         
(Delaware)
   
Combined
   
Pro Forma
         
ProForma
 
   
As of September 30, 2008
   
Totals
   
Adjustments
   
AJE
   
Totals
 
                                           
ASSETS
                                         
                                           
Current Assets:
                                         
Cash
  $ 7,853           $ -       7,853     $ 25,000      
[6]
    $ 32,853  
Prepaid expenses
    154             -       154       -               154  
Other current assets
    -             -       -       -               -  
                                                       
Total Current Assets
    8,007             -       8,007       25,000               33,007  
Intangible Assets:
                                  3,500,000      
[5]
         
      -             -       -       500,000      
[6]
      4,000,000  
                                                       
TOTAL ASSETS
  $ 8,007     $ -     $ -     $ 8,007     $ 4,025,000             $ 4,033,007  
                                                         
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                                                       
                                                         
Current Liabilities:
                                                       
Accounts payable
  $ 4,179             $ 9,172     $ 13,351     $ -             $ 13,351  
Related party payable
    22,586               -       22,586       (22,586 )    
[4]
      -  
Notes payable
    -               -       -       1,500,000      
[5]
      2,025,000  
      -               -       -       525,000      
[6]
         
                                                         
Total Current Liabilities
    26,765               9,172       35,937       2,002,414               2,038,351  
                                                         
Long-Term Liabilities:
                                                       
Notes payable
    -               -       -       2,000,000      
[5]
      2,000,000  
                                                         
Total Long-Term Payables
    -               -       -       2,000,000               2,000,000  
                                                         
Total Liabilities
    26,765               9,172       35,937       4,002,414               4,038,351  
                                                         
Stockholders' Equity:
                                                       
Preferred stock
    -               -       -       -               -  
                                      -                  
Common stock
    1,196               -       1,196       (1,046 )    
[1]
      330  
                                      180      
[3]
         
Additional paid-in capital
    60,804               -       60,804       1,046      
[1]
      3,498  
                                      (80,758 )    
[2]
         
                                      (180 )    
[3]
         
                                      22,586      
[4]
         
Accumulated deficit
    (80,758 )             (9,172 )     (89,930 )     80,758      
[2]
      (9,172 )
                                                         
Total Stockholders' Equity
    (18,758 )             (9,172 )     (27,930 )     22,586               (5,344 )
                                                         
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  $ 8,007             $ -     $ 8,007     $ 4,025,000             $ 4,033,007  
                                                         
____________________________
    -               -       -       -               -  

 
 

 

Sports Supplement Acquisition Group, Inc.
UNAUDITED CONDENSED COMBINED PRO FORMA STATEMENT OF OPERATIONS

   
Sports Supplement
   
Sports Supplement
                 
Pro-Forma
 
   
Acquisition Group Inc.
   
Acquisition Group Inc.
                 
Adjusted
 
   
(Nevada)
   
(Delaware)
   
Combined
           
Combined
 
   
For the Nine Months Ended September 30, 2008
   
Totals
   
Adjustments
 
AJE
 
Totals
 
                                 
REVENUES
                               
                                 
Sales revenue
  $ -     $ 3,151,739     $ 3,151,739     $ -       $ 3,151,739  
Other revenue
    -       -       -       -         -  
                                           
Total Revenues
    -       3,151,739       3,151,739       -         3,151,739  
                                           
COST OF SALES
    -       1,803,960       1,803,960       -         1,803,960  
                                           
GROSS PROFIT
    -       1,347,779       1,347,779       -         1,347,779  
                                           
OPERATING EXPENSES
                                         
                                           
General and administrative
    42,033       289,941       331,974       -         331,974  
Exploration costs
    500       -       500       -         500  
                                           
Total Costs and Expenses
    42,533       289,941       332,474       -         332,474  
                                           
OPERATING LOSS
    (42,533 )     1,057,838       1,015,305       -         1,015,305  
                                           
INCOME TAX EXPENSE
    -       (412,557 )     (412,557 )     -         (412,557 )
                                           
NET LOSS
  $ (42,533 )   $ 645,281     $ 602,748     $ -       $ 602,748  

 
 

 

Sports Supplement Acquisition Group, Inc.
UNAUDITED CONDENSED COMBINED PRO FORMA BALANCE SHEET

   
Sports Supplement
         
Sports Supplement
                         
   
Acquisition Group Inc.
         
Acquisition Group Inc.
                     
Adjusted
 
   
(Nevada)
         
(Delaware)
   
Combined
   
Pro Forma
         
ProForma
 
   
As of December 31, 2007
   
Totals
   
Adjustments
   
AJE
   
Totals
 
                                           
ASSETS
                                         
                                           
Current Assets:
                                         
Cash
  $ 39,175           $ -       39,175     $ 25,000      
[6]
    $ 64,175  
Prepaid expenses
    1,800             -       1,800       -               1,800  
Other current assets
    -             -       -       -               -  
                                                       
Total Current Assets
    40,975             -       40,975       25,000               65,975  
Intangible Assets
                                  3,500,000      
[5]
         
      -             -       -       500,000      
[6]
      4,000,000  
                                                       
TOTAL ASSETS
  $ 40,975     $ -     $ -     $ 40,975     $ 4,025,000             $ 4,065,975  
                                                         
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                                                       
                                                         
Current Liabilities:
                                                       
Accounts payable
  $ -             $ -     $ -     $ -             $ -  
Related party payable
    22,600               -       22,600       (22,600 )    
[4]
      -  
Notes payable
    -               -       -       1,500,000      
[5]
      2,025,000  
      -               -       -       525,000      
[6]
         
                                                         
Total Current Liabilities
    22,600               -       22,600       2,002,400               2,025,000  
                                                         
Long-Term Liabilities:
                                                       
Notes payable
    -               -       -       2,000,000      
[5]
      2,000,000  
                                                         
Total Long-Term Payables
    -               -       -       2,000,000               2,000,000  
                                                         
Total Liabilities
    22,600               -       22,600       4,002,400               4,025,000  
                                                         
Stockholders' Equity:
                                                       
Preferred stock
    -               -       -       -               -  
                                      -                  
Common stock
    104               -       104       (91 )    
[1]
      193  
                                      180      
[3]
         
Additional paid-in capital
    56,496               -       56,496       91      
[1]
      40,782  
                                      (38,225 )    
[2]
         
                                      (180 )    
[3]
         
                                      22,600      
[4]
         
Accumulated deficit
    (38,225 )             -       (38,225 )     38,225      
[2]
      -  
                                                         
Total Stockholders' Equity
    18,375               -       18,375       22,600               40,975  
                                                         
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  $ 40,975             $ -     $ 40,975     $ 4,025,000             $ 4,065,975  
                                                         
____________________________
    -               -       -       -               -  

 
 

 

Sports Supplement Acquisition Group, Inc.
UNAUDITED CONDENSED COMBINED PRO FORMA STATEMENT OF OPERATIONS

   
Sports Supplement
   
Sports Supplement
                 
Pro-Forma
 
   
Acquisition Group Inc.
   
Acquisition Group Inc.
                 
Adjusted
 
   
(Nevada)
   
(Delaware)
   
Combined
           
Combined
 
   
For the Year Ended December 31, 2007
   
Totals
   
Adjustments
 
AJE
 
Totals
 
                                 
REVENUES
                               
                                 
Sales revenue
  $ -     $ 4,008,392     $ 4,008,392     $ -       $ 4,008,392  
Other revenue
    -       -       -       -         -  
                                           
Total Revenues
    -       4,008,392       4,008,392       -         4,008,392  
                                           
COST OF SALES
    -       2,396,396       2,396,396       -         2,396,396  
                                           
GROSS PROFIT
    -       1,611,996       1,611,996       -         1,611,996  
                                           
OPERATING EXPENSES
                                         
                                           
General and administrative
    26,225       387,196       413,421       -         413,421  
Exploration costs
    12,000       -       12,000       -         12,000  
                                           
Total Costs and Expenses
    38,225       387,196       425,421       -         425,421  
                                           
OPERATING LOSS
    (38,225 )     1,224,800       1,186,575       -         1,186,575  
                                           
INCOME TAX EXPENSE
    -       (477,672 )     (477,672 )     -         (477,672 )
                                           
NET LOSS
  $ (38,225 )   $ 747,128     $ 708,903     $ -       $ 708,903  

 
 

 
 
Notes to Unaudited Pro Forma Consolidated Financial Statements
December 31, 2007 and September  30, 2008
 
 
The Merger of Sports Supplement Acquisition Group, Inc. (“Nevada”) and Sports Supplement Acquisition Group, Inc. (“Delaware”) is being treated as a recapitalization of Delaware for financial accounting purposes. Accordingly, the historical financial statements of Nevada prior to the Merger will be replaced with the historical financial statements of Delaware prior to the Merger. The balance sheets of Nevada are as of January 31, 2008 and October 31, 2008 and the balance sheets of Delaware are as of December 31, 2007 and September 30, 2008.  The statements of operations of Nevada are for the year ended January 31, 2008 and the nine months ended October 31, 2008 and the statements of operations of Delaware are for the year ended December 31, 2007 and for the nine months ended September 30, 2008.

(1)
Reflects the 1 share for 8 shares reverse split of the common stock of Nevada.

(2)
Eliminates accumulated deficit of Nevada.

(3)
Reflects the issuance of 18,000,000 shares of Nevada for all of the outstanding common shares of Delaware.

(4)
Reflects contribution of related party payable of Nevada to paid in capital.
   
(5)
Reflects purchase of Ergopharm by Delaware for $4,000,000 in cash and notes payable.
   
(6)
Reflects proceeds of $525,000 in convertible debt.
 

 
EX-10.1 2 v136667_ex10-1.htm
SHARE EXCHANGE AGREEMENT

This SHARE EXCHANGE AGREEMENT (“Agreement”) is made and entered into this 31st day of December, 2008, by and among Sports Supplement Acquisition Group, Inc., a Nevada corporation with its principal executive offices at 34 Hampton Road, Town Moor, Doncaster, South Yorkshire, England DN2 5DG (“Acquiror”), and Sports Supplement Acquisition Group Inc., a Delaware corporation with its principal executive offices at 2348 Lucerne Road, Suite 172, Mount-Royal, Quebec, Canada H3R 2J8 (“Acquiree”), and the shareholders of Acquiree listed on Schedule 2.1 attached hereto and made a part hereof (collectively referred to herein as the “Shareholders”).  Acquiror, Acquiree and the Shareholders are referred to severally herein as a “Party” and jointly as the “Parties”.

PREAMBLE

WHEREAS, Acquiree has 1,400 shares of common stock, no par value per share, issued and outstanding and owned by the Shareholders (the “Acquiree Common Stock”); and

WHEREAS, Acquiror desires to acquire all of the Acquiree Common Stock owned by the Shareholders, making Acquiree a wholly owned subsidiary of Acquiror, in exchange for 18,000,000 shares of Acquiror’s common stock, $.0001 par value (the “Acquiror Common Stock”), and the Shareholders similarly desire to make such exchange;

WHEREAS, the Parties further desire to enter into a series of related transactions, on the terms and conditions as set forth herein.

NOW, THEREFORE, in consideration of the respective covenants contained herein and intending to be legally bound hereby, the Parties hereto agree as follows:

ARTICLE I — DEFINITIONS

For convenience, certain terms used in this Agreement and not defined above or elsewhere,  are listed in alphabetical order and defined below (such terms as well as any other terms defined elsewhere in this Agreement shall be equally applicable to both the singular and plural forms of the terms defined).

A.           “Acquiror Indemnified Party” means Acquiror and each of its officers, directors, shareholders, employees, agents and counsel.

B.           “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or under common control with such Person.  For the purposes of this definition, “control” when used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “affiliated,” “controlling” and “controlled” have meanings correlative to the foregoing.

C.           “Agreement” means this Reorganization Agreement and the Schedules hereto.

 
 

 
 
D.           “Assets” means, with respect to Acquiror or Acquiree, as shown by the context in which used, all of the assets, properties, goodwill and rights of every kind and description, real and personal, tangible and intangible, wherever situated and whether or not reflected in such Party’s most recent financial statements, that are owned or possessed by such Party.

E.           “Benefit Plan” means all employee benefit, health, welfare, supplemental unemployment benefit, bonus, pension, profit sharing, deferred compensation, severance, incentive, stock compensation, stock purchase, retirement, hospitalization insurance, medical, dental, legal, disability, fringe benefit and similar plans, programs, arrangements or practices, including, without limitation, each “employee benefit plan” as defined in Section 3(3) of ERISA.

F.           “Business” means with respect to any Person the entire business and operations of such Person.

G.           “Business Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the state of New York generally are authorized or required by law or other government actions to close.

H.           “Charter Documents” means an entity’s certificate or articles of incorporation, and any amendments thereto.

I.           “Closing” is defined in Section 2.4(a).

J.           “Closing Date” is defined in Section 2.4(a).

K.           “Contract” means any written or oral contract, agreement, letter of intent, agreement in principle, lease, instrument or other commitment that is binding on any Person or its property under applicable Law.

L.           “Copyrights” means registered copyrights, copyright applications and unregistered copyrights.

M.           “Court Order” means any judgment, decree, injunction, order or ruling of any federal, state, local or foreign court or governmental or regulatory body or authority, or any arbitrator that is binding on any Person or its property under applicable Law.

N.           “Default” means (i) a breach, default or violation, (ii) the occurrence of an event that with or without the passage of time or the giving of notice, or both, would constitute a breach, default or violation or (iii) with respect to any Contract, the occurrence of an event that with or without the passage of time or the giving of notice, or both, would give rise to a right of termination, renegotiation or acceleration or a right to receive damages or a payment of penalties.

O.           “$” means United States dollars unless provided for otherwise herein.

 
 

 

P.           “Encumbrances” means any lien, mortgage, security interest, pledge, restriction on transferability, defect of title or other claim, charge or encumbrance of any nature whatsoever on any property or property interest.

Q.           “Environmental Condition” means any condition or circumstance, including the presence of Hazardous Substances which does or would (i) require assessment, investigation, abatement, correction, removal or remediation under any Environmental Law, (ii) give rise to any civil or criminal Liability under any Environmental Law, (iii) create or constitute a public or private nuisance or (iv) constitute a violation of or non-compliance with any Environmental Law.

R.           “Environmental Law” means all Laws, Court Orders, principles of common law, and permits, licenses, registrations, approvals or other authorizations of any Governmental Authority relating to Hazardous Substances, pollution, protection of the environment or human health.

S.           “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

T.           “GAAP” means United States generally accepted accounting principles including those set forth: (a) in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, (b) in the statements and pronouncements of the Financial Accounting Standards Board, (c) in such other statements by such other entity as approved by a significant segment of the accounting profession, and (d) the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Section 13 of the Securities Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC.

U.           “Governmental Authority” means any federal, state, local, municipal or foreign or other government or governmental agency or body.

V.           “Hazardous Substances” means any material, waste or substance (including, without limitation, any product) that may or could pose a hazard to the environment or human health or safety including, without limitation, (i) any “hazardous substances” as defined by the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §9601 et seq. and its implementing regulations, (ii) any “extremely hazardous substance,” “hazardous chemical” or “toxic chemical” as those terms are defined by the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. §11001 et seq. and its implementing regulations, (iii) any “hazardous waste,” as defined under the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq. and its implementing regulations, (iv) any “pollutant,” as defined under the Water Pollution Control Act, 33 U.S.C. §1251 et seq. and its implementing regulations as any of such Laws in clauses (i) through (iv) may be amended from time to time, and (v) any material, substance or waste regulated under any Laws or Court Orders that currently exist or that may be enacted, promulgated or issued in the future by any Governmental Authority concerning protection of the environment, pollution, health or safety or the public welfare.

 
 

 

W.           “Intellectual Property” means any Copyrights, Patents, Trademarks, technology, licenses, trade secrets, computer software and other intellectual property.

X.           “Knowledge” of any Shareholder means that which such Shareholder actually knows or, after diligent investigation commensurate with such Shareholder’s position with Acquiree, should have known.  “Knowledge” of Acquiror or Acquiree means that which an executive officer thereof actually knows or, after diligent investigation, should have known.

Y.           “NCL” means the Nevada Corporation Law, as amended through the date of this Agreement.

Z.            “Law” means any statute, law, ordinance, regulation, order, rule, common law principles or consent agreements of any Governmental Authority, including, without limitation, those covering environmental, energy, safety, health, transportation, bribery, record keeping, zoning, anti-discrimination, antitrust, wage and hour, and price and wage control matters.

AA.           “Liability” means any direct or indirect liability, indebtedness, obligation, expense, claim, loss, damage, deficiency, guaranty or endorsement of or by any Person.

BB.           “Litigation” means any lawsuit, action, arbitration, administrative or other proceeding, criminal prosecution or governmental investigation or inquiry.

CC.           “Material Adverse Effect” means a fact or event which has had or is reasonably likely to have a material adverse effect on the Assets, Business, financial condition or results of operations of Acquiror or Acquiree, as the case may be, as indicated by the context in which used, and when used with respect to representations, warranties, conditions, covenants or other provisions hereof means the individual effect of the situation to which it relates and also the aggregate effect of all similar situations unless the context indicates otherwise.

DD.           “Patents” means patents, patent applications, reissue patents, patents of addition, divisions, renewals, continuations, continuations-in-part, substitutions, additions and extensions of any of the foregoing.

EE.           “Person” means an individual or a corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind.

FF.           “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

GG.           “Regulation” means any federal, state, local or foreign rule or regulation.

HH.           “Schedule” means any Schedule attached to and forming part of this Agreement including Schedules 2.1, 4.4 and 4.5.

II.           “SEC” means the United States Securities and Exchange Commission.

 
 

 
 
JJ.           “Securities Act” means the Securities Act of 1933, as amended.

KK.           “Securities Exchange Act” means the Securities Exchange Act of 1934, as amended.

LL.           “Subsidiary” means any corporation or other legal entity of which Acquiror or Acquiree, as the case may be (either above or through or together with any other Subsidiary) owns, directly or indirectly, more than 50% of the stock or other equity interests the holders of which are generally entitled to vote for the election of directors or other governing body of such corporation or other entity.

MM.                      “Taxes” means any and all federal, state, local and foreign taxes, assessments and other governmental charges, duties, impositions, levies and liabilities, including, without limitation, taxes based upon gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, gains, franchise, withholding, payroll, recapture, employment, excise, unemployment, insurance, social security, business license, occupation, business organization, stamp, environmental and property taxes, together with all interest, penalties and additions imposed with respect to such amounts.

NN.           “Tax Return” means any report, return, election, notice, estimate, declaration, information statement and other forms and documents (including all schedules, exhibits and other attachments thereto) relating to and filed or required to be filed with a taxing authority in connection with any Taxes (including, without limitation, estimated Taxes).

OO.           “Trademarks” means registered trademarks, registered service marks, trademark and service mark applications and unregistered trademarks and service marks.

PP.           “Transaction Documents” means this Agreement and the other agreements described in Article III.

QQ.           “Transactions” means the purchase and sale of the Acquiree Common Stock, Acquiror Common Stock and the other transactions contemplated by the Transaction Documents.


ARTICLE II — PURCHASES, SALES AND
CANCELLATIONS OF SHARES, AND
RELATED TRANSACTIONS

2.1           SALE OF ACQUIREE STOCK.  Subject to the terms and conditions set forth in this Agreement, the Shareholders shall sell to Acquiror and Acquiror shall purchase from the Shareholders, an aggregate of 1,400 shares of Acquiree Common Stock.  Following the purchase of the Acquiree Common Stock, Acquiree shall be operated as a wholly owned subsidiary of Acquiror.  The amount of Acquiree Common Stock to be sold by each Shareholder is set forth in Schedule 2.1 hereto.  The Acquiree Common Stock currently represents and will represent at Closing all of the issued and outstanding capital stock of Acquiree.

 
 

 

2.2           CONSIDERATION FOR THE ACQUIREE COMMON STOCK.  (a) As consideration for the Acquiree Common Stock, Acquiror shall issue to the Shareholders an aggregate of 18,000,000 restricted shares of Acquiror Common Stock.  The Acquiror Common Stock shall be allocated among the Shareholders in direct proportion to their ownership of their Acquiree Common Stock, such that each Shareholder shall receive the same number of shares of Acquiror Common Stock that the Shareholder currently owns in Acquiree.  An aggregate of 18,000,000 shares of Acquiror Common Stock shall be issued to the Shareholders at the Closing.  Of this stock, an aggregate of 12,000,000 shares of Acquiror Common Stock shall be subject to the lock up agreement provided in paragraph 2.2(b) (below), with 6,000,000 shares of this stock to be released from the lock-up agreement on the six-month anniversary of the Closing Date and the remaining 6,000,000 shares of Acquiror Common Stock shall be released from the lock-up agreement on the first anniversary of the Closing Date.  Acquiror agrees that it shall, at all times prior to the issuance of all of the Acquiror Common Stock, reserve from its shares of authorized but unissued common stock a sufficient number of shares to allow it to make the issuances of Acquiror Common Stock provided for in this Section 2.2.

(b)  Each Shareholder hereby covenants and agrees, except as provided herein, not to (1) offer, sell, contract to sell, grant any option to purchase, hypothecate, pledge or options to acquire shares, or otherwise dispose of or (2) transfer title to (a “Prohibited Sale”) any of the shares (the “Acquired Shares”) of Acquiror Common Stock acquired by such Shareholder pursuant to or in connection with this Agreement, or upon the exercise of any options to acquire shares of Common Stock, during the periods set forth above, without the prior written consent of the Company. Notwithstanding the foregoing, the undersigned shall be permitted from time to time during such periods, without the prior written consent of the Company, as applicable, (i) to engage in transactions in connection with the undersigned’s participation in the Company’s stock option plans, (ii) to transfer all or any part of the Acquired Shares to any family member, for estate planning purposes , or to an affiliate thereof (as such term is defined in Rule 405 under the Securities Exchange Act of 1934, as amended), provided that such transferee agrees in writing with the Company to be bound hereby, (iii) to participate in a registered direct offering by the Company in which the undersigned participates as a selling stockholder or (iv) to participate in any transaction in which holders of the Common Stock of the Company participate or have the opportunity to participate pro rata, including, without limitation, an underwritten offering of Common Stock, a merger, consolidation or binding share exchange involving the Company, a disposition of the Common Stock in connection with the exercise of any rights, warrants or other securities distributed to the Company’s stockholders, or a tender or exchange offer for the Common Stock, and no transaction contemplated by the foregoing clauses (i) , (ii) or (iii) shall be deemed a Prohibited Sale for purposes of this provision.

2.3           CANCELLATION OF CERTAIN ACQUIROR SHARES.  Subject to the terms and conditions set forth in this Agreement, at the Closing, Acquiror Management will deliver 8,625,000 of the 14,950,000 shares of Acquiror common stock currently outstanding for cancellation (the “Share Cancellation”).

 
 

 

2.4           CLOSING.

(a)           The closing of the transactions set forth in Sections 2.1, 2.2 and 2.3 above (the “Closing”) shall be held at the offices of Corsair Advisors, Inc., 497 Delaware Avenue, Buffalo, New York 14202 as promptly as practicable after the execution of this Agreement, (and in any event within five (5) Business Days of the date of this Agreement) after satisfaction or waiver of the conditions to the consummation of the transactions set forth in Articles VIII and IX.  The date on which the Closing occurs is referred to herein as the “Closing Date.”
 
(b)           At the Closing, each of the Shareholders shall transfer to Acquiror good and marketable title to the Acquiree Common Stock owned by such Shareholder, free and clear of any and all liens, claims, encumbrances and adverse interests of any kind, by delivering to Acquiror the certificates for the Acquiree Common Stock in negotiable form, duly endorsed in blank, or with stock transfer powers attached thereto.  At the Closing, Acquiror shall provide the Shareholders with good and marketable title to an aggregate of 18,000,000 restricted shares of Acquiror Common Stock free and clear of any and all liens, claims, encumbrances and adverse interests of any kind by delivery to the Shareholders of certificates for such shares.  At the Closing, the Shareholders shall cause to be made available the books and records of Acquiree to Acquiror.  At the Closing, each of Acquiror and Acquiree shall deliver the other closing documents referenced in Articles IX and X.  At any time and from time to time after the Closing, the Parties shall duly execute, acknowledge and deliver all such further assignments, conveyances, instruments and documents, and shall take such other action consistent with the terms of this Agreement to carry out the transactions contemplated by this Agreement.
 
(c)           Acquiror’s board of directors currently consists of Ian Spowart. At the Closing, James Klein, the designee of the Shareholders, shall be appointed to and added to the board of directors of Acquiror. At the Closing, Michael Stott, the Acquiror’s current secretary shall resign and be replaced by James Klein who will also serve as president and chief executive officer, chief financial officer and treasurer, and Ian Spowart shall resign as officer but will continue to serve as director. Following the Closing, Acquiree shall appoint Carl Hastings, Lorne Wilansky and Andrew Gertler, and Knights Bridge Capital Group and the Shareholders agree to use their best efforts to mutually locate and designate a sixth director, for appointment to Acquiror’s board of directors. Acquiror agrees to appoint such designee to its board as promptly as practicable upon receiving notice of such designation. The parties acknowledge and agree that no assurance can be given that the Shareholders and Knights Bridge Capital Group will successfully find a mutually acceptable director.

ARTICLE III — REPRESENTATIONS AND WARRANTIES OF
ACQUIROR

Acquiror hereby represents and warrants to Shareholders as follows:

3.1           CORPORATE.  Acquiror is a corporation duly organized, validly existing and in good standing under the Laws under which it was incorporated.  Acquiror is qualified to do business as a foreign corporation in all jurisdictions where it is required to be so qualified, except where the failure to so qualify would not have a Material Adverse Effect.  The Charter Documents and by-laws of Acquiror have been duly adopted or ratified and are current, correct and complete.  The Charter Documents consist of Acquiror’s Certificate of Incorporation as filed with the State of Nevada on February 27, 2007 and amended on each of August 19, 2008 and December 4, 2008.  Acquiror has all necessary corporate power and authority to own, lease and operate its Assets and to carry on its Business as it is now being conducted.  Acquiror has no subsidiaries.

 
 

 
 
3.2           AUTHORIZATION.  Acquiror has the requisite corporate power and authority to execute and deliver the Transaction Documents to which it is a party and to perform the Transactions to be performed by it.  Such execution, delivery and performance by Acquiror has been duly authorized by all necessary corporate and shareholder action.  Each Transaction Document executed and delivered by Acquiror as of the date hereof has been duly executed and delivered by Acquiror and constitutes a valid and binding obligation of Acquiror enforceable against Acquiror in accordance with its terms, and any Transaction Document executed and delivered by Acquiror after the date hereof will be duly executed and delivered by Acquiror and will constitute a valid and binding obligation of Acquiror, enforceable against Acquiror in accordance with its terms, except as otherwise limited by bankruptcy, insolvency, reorganization and other laws affecting creditors’ rights generally, and except that the remedy of specific performance or other equitable relief is available only at the discretion of the court before which enforcement is sought.

3.3           VALIDITY OF CONTEMPLATED TRANSACTIONS.  The securities issuances to be made by Acquiror pursuant to this Agreement will be made in compliance with the Securities Act and applicable state securities Laws.  The Form 8-K filing to be made by Acquiror after the Closing with respect to the Transactions will be made in compliance with the Securities Exchange Act.    All required consents to the Transactions by Acquiror’s board of directors shall be obtained prior to the Closing.   With the exception of the above, neither the execution and delivery by Acquiror of the respective Transaction Documents to which it is or will be a party, nor the performance of the Transactions to be performed by it, will require any filing, consent or approval under or constitute a Default, or result in a loss of material benefit under, (a) to Acquiror’s Knowledge, any Law or Court Order to which Acquiror is subject, (b) the Charter Documents or bylaws of Acquiror, or (c) any Contracts to which Acquiror is a party or by which any of the Acquiror Assets may be subject.

3.4           ACQUIROR SEC REPORTS; FINANCIAL STATEMENTS.  Acquiror has filed all required forms, reports, statements, schedules and other documents with the SEC (collectively, the “Acquiror SEC Reports”).  Each of such Acquiror SEC Reports, at the time it was filed or was amended, complied in all material respects with all applicable requirements of the Securities Act and the Securities Exchange Act, and with the forms and Regulations of the SEC promulgated thereunder, and did not contain, at the time it was filed or was amended, any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The financial statements, including all related notes and schedules, contained in the Acquiror SEC Reports (or incorporated by reference therein) fairly present the financial position of Acquiror as at the respective dates thereof and the results of operations and cash flows of Acquiror for the periods indicated in accordance with GAAP applied on a consistent basis throughout the periods involved (except for changes in accounting principles disclosed in the notes thereto) and subject in the case of interim financial statements to normal year-end adjustments and the absence of notes.


 
 

 

3.5           CAPITALIZATION AND STOCK OWNERSHIP.  The total authorized capital stock of Acquiror consists of 1,150,000,000 shares of common stock, par value $.00001 per share and 1,150,000,000 shares of preferred stock, par value $.00001 per share.  Of such authorized capital stock, on the date hereof 14,950,000 shares of Acquiror Common Stock and no Shares of Acquiror Preferred Stock are issued and outstanding.  Following the Share Cancellation referred to in Section 2.3 hereof, and not taking into account the issuance of the Acquiror Common Stock at Closing, on the Closing Date, 6,325,000 shares of Acquiror Common Stock will be issued and outstanding.  All of the currently issued and outstanding shares of Acquiror’s common stock are validly issued, fully paid and non-assessable and all of the shares of Acquiror Common Stock and other shares of common stock of Acquiror to be issued pursuant to this Agreement will, when issued, have been validly issued, fully paid and non-assessable.  Other than restrictions related to its status as stock not registered under the Securities Act of 1933, as amended, no transfer or sale restrictions shall be applicable, at the time of issuance, to the Acquiror Common Stock and other restricted shares of common stock of Acquiror to be issued pursuant to this Agreement.  There are no existing options, warrants, calls, commitments or other rights of any character (including conversion or preemptive rights) relating to the acquisition of any issued or unissued capital stock or other securities of Acquiror.  Schedule 4.5 hereof sets forth (i) the capitalization of Acquiror that exists as at the date hereof; and (ii) the capitalization of Acquiror that will exist on the Closing Date following the issuance of 18,000,000 shares of Acquiror Common Stock, and the shares issued as a result of the SSAG convertible notes.

3.6           ACQUIROR FINANCIAL STATEMENTS.  As at the Closing Date, the Acquiror SEC Reports contain unaudited quarterly financial statements and audited yearend financial statements (singularly and collectively, the “Acquiror Financial Statements”).  The Acquiror Financial Statements fairly present the financial position of Acquiror as at the respective dates thereof and the results of operations of Acquiror for the periods indicated in accordance with GAAP applied on a consistent basis throughout the periods involved.  Acquiror has no material contingent Liabilities except as otherwise set forth in the Acquiror Financial Statements. As of the Closing, the Acquiror’s total liabilities shall not exceed $ 10,000.

3.7           TAXES.  Acquiror (i) has filed (or, in the case of Tax Returns not yet due, will file) with the appropriate governmental agencies all Tax Returns required to be filed on or before the Closing Date and all such Tax Returns filed were true, correct and complete in all respects, and (ii) has paid (or, in the case of Taxes not yet due, will pay), all Taxes shown on such Tax Returns.  Acquiror has (i) duly paid or caused to be paid all Taxes and all Taxes shown on Tax Returns that are or were due, and (ii) provided a sufficient reserve on the Acquiror Balance Sheet for the payment of all Taxes not yet due and payable.  No deficiency in respect of any Taxes which has been assessed against Acquiror remains unpaid, and Acquiror has no Knowledge of any unassessed Tax deficiencies or of any audits or investigations pending or threatened against Acquiror with respect to any Taxes.  Acquiror has not extended or waived the application of any applicable statute of limitations of any jurisdiction regarding the assessment or collection of any Tax or any Tax Return.  There are no liens for Taxes upon any assets of Acquiror except for liens for current Taxes not yet due.  Acquiror has to its Knowledge (i) complied with all provisions of the Code relating to the withholding and payment of Taxes and (ii) has made all deposits required by applicable Law to be made with respect to employees’ withholding and other payroll, employment or other withholding or related Taxes.

3.8           TITLE TO ASSETS AND RELATED MATTERS.  Acquiror has good and marketable title to the Acquiror Assets, free from any Encumbrances.  Acquiror owns all Acquiror Assets necessary or currently used in the operation of Acquiror’s Business.
 

 
3.9           REAL PROPERTY.  As of the date hereof, Acquiror does not own any real property.

3.10         LEGAL PROCEEDINGS; COMPLIANCE WITH LAW; GOVERNMENTAL PERMITS.

(a)           There is no Litigation that is pending or, to Acquiror’s Knowledge, threatened against Acquiror.  To Acquiror’s Knowledge, Acquiror is and has been in compliance with all applicable Laws, including Environmental Laws and applicable securities Laws, except where the failure to be in compliance would not have a Material Adverse Effect.  There has been no Default under any Laws applicable to Acquiror, including Environmental Laws.  There has been no Default with respect to any Court Order applicable to Acquiror.  Acquiror has not received any written notice and, to the Knowledge of Acquiror, no other communication has been received to the effect that it is not in compliance with any applicable Laws.
 
(b)           There is no Environmental Condition at any property presently or formerly owned or leased by Acquiror or any of its Subsidiaries which is reasonably likely to have a Material Adverse Effect.
 
(c)           Acquiror has all material consents, permits, franchises, licenses, concessions, registrations, certificates of occupancy, approvals and other authorizations of Governmental Authorities (collectively, the “Governmental Permits”) required in connection with the operation of its Business, all of which are in full force and effect.  Acquiror has complied with all of its Governmental Permits.
 
3.11         CONTRACTS AND COMMITMENTS.  Each Contract to which Acquiror is a party (i) is legal, valid, binding and enforceable by Acquiror except as otherwise limited by bankruptcy, insolvency, reorganization and other laws affecting creditors’ rights generally, and except that the remedy of specific performance or other equitable relief is available only at the discretion of the court before which enforcement is sought, and (ii) Acquiror, and to Acquiror’s Knowledge, any other party, is not in Default under any such Contract.  Acquiror is not subject to any Contract limiting the freedom of Acquiror to compete in any line of business, or with any Person, or in any geographic area or market.

3.12         EMPLOYEE RELATIONS.  Acquiror is not (a) a party to, involved in or, to Acquiror’s Knowledge, threatened by, any labor dispute or unfair labor practice charge, or (b) currently negotiating any collective bargaining agreement, and Acquiror has not experienced any work stoppage.

3.13         BENEFIT PLANS.  Acquiror has not sponsored or maintained any Benefit Plans since its inception.

3.14         PATENTS, TRADEMARKS, ETC.  Acquiror does not infringe upon or unlawfully or wrongfully use any Intellectual Property owned or claimed by another Person.  Acquiror does not utilize any Intellectual Property in the conduct of its Business.
 

 
3.15         ABSENCE OF CERTAIN CHANGES.  Since October 31, 2008, the date of the latest Acquiror balance sheet contained in an Acquiror SEC Report, Acquiror has conducted its business in the ordinary course, and, as of the date hereof, except as otherwise provided in this Agreement, there has not been, nor as of the Closing Date, will there have been:

(a)           any Material Adverse Effect on the Acquiror Business;
 
(b)           any distribution or payment declared or made in respect of Acquiror’s capital stock by way of dividends, purchase or redemption of shares or otherwise;
 
(c)           any increase in the compensation payable or to become payable to any current director or officer of Acquiror, nor any material change in any existing employment, severance, consulting arrangements or any Acquiror Benefit Plan;
 
(d)           any sale, assignment or transfer of any Acquiror Assets, or any additions to or transactions involving any Acquiror Assets, other than those made in the ordinary course of business;
 
(e)           other than in the ordinary course of business, any waiver or release of any material claim or right or cancellation of any material debt held by Acquiror;
 
 (f)           any change in practice with respect to Taxes, or any election, change of any election, or revocation of any election with respect to Taxes, or any settlement or compromise of any dispute involving a Tax Liability;
 
(g)           (i) any creation, or assumption of, any leases, long-term debt or any short-term debt for borrowed money other than under existing notes payable, lines of credit or other credit facility or in the ordinary course of business (ii) any assumption, granting of guarantees, endorsements or otherwise becoming liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person; (iii) any loans, advances or capital contributions to, or investments in, any other Person; or (iv) any other material increase in Liabilities or capital expenditures outside the ordinary course of business.
 
(h)           any material agreement, commitment or contract, except agreements, commitments or contracts for the purchase, sale or lease of goods or services in the ordinary course of business;
 
(i)           any authorization, recommendation, proposal or announcement of an intention to authorize, recommend or propose, or enter into any Contract with respect to, any (i) plan of liquidation or dissolution, (ii) acquisition of a material amount of assets or securities, (iii) disposition or Encumbrance of a material amount of assets or securities, (iv) merger or consolidation or (v) material change in its capitalization;
 
(j)           any change in accounting procedure or practice; or
 
(k)           any agreement or promise by Acquiror to (i) do any of the foregoing or (ii) do anything that would likely result in any of the foregoing.
 
3.16         CORPORATE RECORDS.  The minute books of Acquiror contain accurate and current copies of all Charter Documents and of all minutes of meetings, resolutions and other proceedings of its Board of Directors and stockholders.

 
 

 

3.17         FINDER’S FEES.  No Person is or will be entitled to any commission, finder’s fee or other payment in connection with the Transactions based on arrangements made by or on behalf of Acquiror.

3.18         PRE-CLOSING TRANSACTIONS.  Prior to Closing, all amounts due to related parties as described in the SEC Reports shall be forgiven.

ARTICLE IV —
REPRESENTATIONS AND WARRANTIES
OF ACQUIREE AND THE SHAREHOLDERS

Acquiree and each Shareholder, severally and not jointly, hereby represents and warrants to Acquiror as follows:

4.1           CORPORATE.  Acquiree is a corporation duly organized, validly existing and in good standing under the Laws under which it was incorporated. Acquiree is qualified to do business as a foreign corporation in any jurisdiction where it is required to be so qualified, except where the failure to so qualify would not have a Material Adverse Effect.  The Charter Documents and bylaws of Acquiree (all of which have been delivered or made available to Acquiror) have been duly adopted and are current, correct and complete.  The Charter Documents consist of Acquiree’s Certificate of Incorporation as filed pursuant to the Delaware General Corporation Law on November 2, 2007.  Acquiree has all necessary corporate power and authority to own, lease and operate the Acquiree Assets and to carry on the Acquiree Business as it is now being conducted. Acquiree has no Subsidiaries.

4.2           AUTHORIZATION.  Acquiree has the requisite corporate power and authority to execute and deliver the Transaction Documents to which it is a party and to perform the Transactions to be performed by it. Such execution, delivery and performance by Acquiree has been duly authorized by all necessary corporate and Shareholder action.  Each Shareholder has the capacity to execute and deliver the Transaction Documents to which he is a party and to perform the Transactions to be performed by him.  Each Transaction Document executed and delivered by Acquiree and any Shareholder as of the date hereof has been duly executed and delivered by Acquiree and each such Shareholder and constitutes a valid and binding obligation of Acquiree and each such Shareholder, enforceable against Acquiree and each such Shareholder in accordance with its terms, and any Transaction Documents executed and delivered by Acquiree and any Shareholder after the date hereof will be duly executed and delivered by Acquiree and each such Shareholder and will constitute a valid and binding obligation of Acquiree and each such Shareholder enforceable against Acquiree and each such Shareholder in accordance with its terms, except as otherwise limited by bankruptcy, insolvency, reorganization and other laws affecting creditors’ rights generally, and except that the remedy of specified performance or other equitable relief is available only at the discretion of the court before which enforcement is sought.

4.3           VALIDITY OF CONTEMPLATED TRANSACTIONS.  Neither the execution and delivery by Acquiree or any Shareholder of the respective Transaction Documents to which he is or will be a party, nor the performance of the Transactions to be performed by him, will require any filing, consent or approval which has not already been obtained or constitute a Default, or result in a loss of material benefit under, (a) to any Shareholder’s Knowledge, any Law or Court Order to which Acquiree or any Shareholder is subject, (b) the Charter Documents or bylaws of Acquiree, (c) any other Contracts to which Acquiree or any Shareholder is a party or by which any of the Acquiree Assets may be subject.

 
 

 

4.4           CAPITALIZATION AND STOCK OWNERSHIP.  The total authorized capital stock of Acquiree consists of 1,500 common shares.  Of such authorized capital stock, the only issued and outstanding shares on the date hereof are 1,400 shares of Acquiree common stock.  Except as set forth on Schedule 4.4, there are no existing options, warrants, calls, commitments or other rights of any character (including conversion or preemptive rights) relating to the acquisition of any issued or unissued capital stock or other securities of Acquiree.  All of the issued and outstanding shares of Acquiree common stock are validly issued, fully paid and non-assessable.

4.5           ACQUIREE FINANCIAL STATEMENTS. The financial statements of Acquiree as at September 30, 2008 (the “Acquiree Financial Statements”), delivered to Acquiror fairly present the financial position of Acquiree as at the respective dates thereof and the results of operations of Acquiree for the periods indicated in accordance with GAAP applied on a consistent basis throughout the periods involved.  For purposes of this Agreement, the Balance Sheet of Acquiree as of September 30, 2008 is referred to as the “Acquiree Balance Sheet” and the date thereof is referred to as the “Acquiree Balance Sheet Date.”  Acquiree has no material contingent Liabilities except as otherwise set forth in the Acquiree Financial Statements.

4.6           TAXES.  Acquiree (i) has filed (or, in the case of Tax Returns not yet due, will file) with the appropriate governmental agencies all Tax Returns required to be filed on or before the Closing Date and all such Tax Returns filed were true, correct and complete in all respects, and (ii) has paid (or, in the case of Taxes not yet due, will pay), all Taxes shown on such Tax Returns.  Acquiree has (i) duly paid or caused to be paid all Taxes and all Taxes shown on Tax Returns that are or were due, and (ii) provided a sufficient reserve on the Acquiree Balance Sheet for the payment of all Taxes not yet due and payable.  No deficiency in respect of any Taxes which has been assessed against Acquiree remains unpaid, and Acquiree has no Knowledge of any unassessed Tax deficiencies or of any audits or investigations pending or threatened against Acquiree with respect to any Taxes.  Acquiree has not extended or waived the application of any applicable statute of limitations of any jurisdiction regarding the assessment or collection of any Tax or any Tax Return.  There are no liens for Taxes upon any assets of Acquiree except for liens for current Taxes not yet due.

4.7           TITLE TO ASSETS AND RELATED MATTERS.  Acquiree has good and marketable title to the Acquiree Assets, free from any Encumbrances.  Acquiree owns all Acquiree Assets necessary or currently used in the operation of Acquiree’s Business.


4.8           REAL PROPERTY.  As of the date hereof, Acquiree does not own any real property.

4.9           LEGAL PROCEEDINGS; COMPLIANCE WITH LAW; GOVERNMENTAL PERMITS.

 
 

 

(a)           There is no Litigation that is pending or, to Acquiree’s or any Shareholder’s Knowledge, threatened against Acquiree.  To Acquiree’s or any Shareholder’s Knowledge, Acquiree is and has been in compliance with all applicable Laws, including applicable securities Laws, except where the failure to be in compliance would not have a Material Adverse Effect.  There has been no Default under any Laws applicable to Acquiree.  There has been no Default with respect to any Court Order applicable to Acquiree.  Acquiree has not received any written notice and, to the Knowledge of Acquiree or any Shareholder, no other communication has been received to the effect that it is not in compliance with any applicable Laws.  No Shareholder has reason to believe that any presently existing circumstances are likely to result in violations of any applicable Laws.
 
(b)           There is no Environmental Condition at any property presently or formerly owned or leased by Acquiree which is reasonably likely to have a Material Adverse Effect.
 
(c)           Acquiree has all material consents, permits, franchises, licenses, concessions, registrations, certificates of occupancy, approvals and other authorizations of Governmental Authorities (collectively, the “Governmental Permits”) required in connection with the operation of its Business, all of which are in full force and effect.  Acquiree has complied with all of its Governmental Permits.
 
4.10         CONTRACTS AND COMMITMENTS.  Each Contract to which Acquiree is a party (i) is legal, valid, binding and enforceable by Acquiree except as otherwise limited by bankruptcy, insolvency, reorganization and other laws affecting creditors’ rights generally, and except that the remedy of specific performance or other equitable relief is available only at the discretion of the court before which enforcement is sought, and (ii) Acquiree, and to Acquiree’s and any Shareholder’s  Knowledge, any other party, is not in Default under any such Contract.  Acquiree is not subject to any Contract limiting the freedom of Acquiree to compete in any line of business, or with any Person, or in any geographic area or market.

4.11         EMPLOYEE RELATIONS.  Acquiree is not (a) a party to, involved in or, to Acquiree’s and any Shareholder’s Knowledge, threatened by, any labor dispute or unfair labor practice charge, or (b) currently negotiating any collective bargaining agreement, and Acquiree has not experienced any work stoppage.

4.12         BENEFIT PLANS.  With the exception of a group insurance plan, Acquiree has not sponsored or maintained any Benefit Plans since its inception.

4.13         PATENTS, TRADEMARKS, ETC  Acquiree does not infringe upon or unlawfully or wrongfully use any Intellectual Property owned or claimed by another Person and no Person infringes on or wrongfully uses any Intellectual Property owned or claimed by Acquiree.  Acquiree owns or has valid rights to use all Intellectual Property used in the conduct of Acquiree Business, free and clear of all Encumbrances.

4.14         ABSENCE OF CERTAIN CHANGES.  Since the Acquiree Balance Sheet Date, Acquiree has conducted the Acquiree Business in the ordinary course, and, as of the date hereof, there has not been, nor as of the Closing Date, will there have been:

(a)           any Material Adverse Effect on the Acquiree Business;
 
(b)           any distribution or payment declared or made in respect of Acquiree’s capital stock by way of dividends, purchase or redemption of shares or otherwise;
 
 
 

 
 
(c)           any increase in the compensation payable or to become payable to any current director or officer of Acquiree, nor any material change in any existing employment, severance, consulting arrangements or any Acquiree Benefit Plan;
 
(d)           any sale, assignment or transfer of any Acquiree Assets, or any additions to or transactions involving any Acquiree Assets, other than those made in the ordinary course of business;
 
(e)           other than in the ordinary course of business, any waiver or release of any material claim or right or cancellation of any material debt held by Acquiree;
 
(f)           any change in practice with respect to Taxes, or any election, change of any election, or revocation of any election with respect to Taxes, or any settlement or compromise of any dispute involving a Tax Liability;
 
(g)           (i) any creation, or assumption of, any leases, long-term debt or any short-term debt for borrowed money other than under existing notes payable, lines of credit or other credit facility or in the ordinary course of business (ii) any assumption, granting of guarantees, endorsements or otherwise becoming liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person or (iii) any loans, advances or capital contributions to, or investments in, any other Person; or (iv) any other material increase in Liabilities or capital expenditures outside the ordinary course of business.
 
(h)           any material agreement, commitment or contract, except agreements, commitments or contracts for the purchase, sale or lease of goods or services in the ordinary course of business;
 
(i)           any authorization, recommendation, proposal or announcement of an intention to authorize, recommend or propose, or enter into any Contract with respect to, any (i) plan of liquidation or dissolution, (ii) acquisition of a material amount of assets or securities, (iii) disposition or Encumbrance of a material amount of assets or securities, (iv) merger or consolidation or (v) material change in its capitalization;
 
(j)           any change in accounting procedure or practice; or
 
(k)           any agreement or promise by Acquiree to (i) do any of the foregoing or (ii) do anything that would likely result in any of the foregoing.
 
4.15         CORPORATE RECORDS.  In all material respects, the minute books of Acquiree contain accurate, complete and current copies of all Charter Documents and of all minutes of meetings, resolutions and other proceedings of its Board of Directors and stockholders.

4.16         FINDER’S FEES.  No Person is or will be entitled to any commission, finder’s fee or other payment in connection with the Transactions based on arrangements made by or on behalf of Acquiree.

 
 

 

4.17         OWNERSHIP OF SHARES.  Each Shareholder is the record and beneficial owner of the Shares as set forth next to such Shareholder’s name on Schedule 2.1, and has sole management power over the disposition of such Shares.  The Shares owned by each Shareholder as set forth on Schedule 2.1 are free and clear of any liens, claims, encumbrances, and charges.  The Shares have not been sold, conveyed, encumbered, hypothecated or otherwise transferred by any Shareholder except pursuant to this Agreement.  Each Shareholder has the legal right to enter into and to consummate the Transactions contemplated hereby and otherwise to carry out his or her obligations hereunder.

4.18         INVESTMENT REPRESENTATIONS.        (a) Each Shareholder understands and acknowledges that (A) none of the Shares have been registered under the Securities Act of 1933, as amended (the “Securities Act”) or the securities laws of any state, based upon exemptions from such registration requirements; (B) the Shares are and will be “restricted securities” as said term is defined in Rule 144 of the Rules and Regulations promulgated under the Securities Act; (C) the Shares may not be sold or otherwise transferred unless they have been first registered under the Securities Act and all applicable state securities laws, or unless exemptions from such registration provisions are available with respect to said resale or transfer; and (D) Acquiror is under no contractual obligation to the undersigned to register the Shares under the Securities Act or any state securities laws.

(b)           Each Shareholder will not sell or otherwise transfer any of the Shares, or any interest therein, unless and until (A) said Shares shall have first been registered under the Securities Act and all applicable state securities laws; or (B) the undersigned shall obtain a written opinion from Acquiror’s counsel to the effect that the proposed sale or transfer is exempt from the registration provisions of the Securities Act and all applicable state securities laws.

(c)           Each Shareholder is acquiring the Shares for its own account for investment purposes only and not with a view to or for distributing or reselling such Shares or any part thereof or interest therein, without prejudice, however, to the undersigned's right to sell or otherwise dispose of all or any part of such Shares pursuant to an effective registration statement under the Securities Act and in compliance with applicable federal and state securities laws or under an exemption from such registration.

(d)           Each Shareholder has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment.

(e)           Each Shareholder understands that the certificates representing the Shares will bear a legend in substantially the following form:
 
 
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF (I) AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER SAID ACT OR (II) AN OPINION OF COMPANY COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
 
 
 
 

 

ARTICLE V — JOINT COVENANTS OF THE PARTIES

5.1           NOTIFICATION OF CERTAIN MATTERS.  Each of Acquiror, on the one hand, and Acquiree and the Shareholders, on the other hand, shall give prompt notice to each other of the following:

(a)           the occurrence or nonoccurrence of any event whose occurrence or nonoccurrence would be likely to cause either (i) any representation or warranty contained in this Agreement to be untrue or inaccurate at any time from the date hereof to the Closing Date, or (ii) directly or indirectly, any Material Adverse Effect; and
 
(b)           any material failure of such Party, or any officer, director, employee or agent of any thereof, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder.
 
5.2           ACCESS TO INFORMATION.  From the date hereof to the Closing Date, Acquiror and Acquiree shall, and shall cause its officers, directors, employees, auditors, counsel and agents to afford the officers, employees, auditors, counsel, financial advisors and agents of the other Party complete access at all reasonable times to such Party’s officers, employees, auditors, counsel, agents, properties, offices and other facilities and to all of their respective books and records, and shall furnish the other with all financial, operating and other data and information as such other Party may reasonably request.

5.3           PUBLIC ANNOUNCEMENTS.  Acquiror and Acquiree (a) shall use all reasonable efforts to develop a joint communications plan and each Party shall use all reasonable efforts to ensure that all press releases and other public statements with respect to the Transactions shall be consistent with such joint communications plan or, to the extent inconsistent therewith, shall have received the prior written approval of the other and (b) before issuing any press release or otherwise making any public statements with respect to the Transactions, will consult with each other as to its form and substance and shall not issue any such press release or make any such public statement prior to such consultation, except for each of (a) and (b) above as may be required by Law (it being agreed that the Parties hereto are entitled to disclose all requisite information concerning the Transactions in any filings required with the SEC).

5.4           COOPERATION.  Upon the terms and subject to the conditions hereof, each of the Parties shall use its commercially reasonable efforts to take or cause to be taken all actions and to do or cause to be done all things necessary, proper or advisable to consummate as promptly as practicable the Transactions and shall use its commercially reasonable efforts to obtain all required consents, and to effect all necessary filings under the Securities Act and the Exchange Act. Without limiting the generality of the foregoing, each Party shall use all commercially reasonable efforts to take, or cause to be taken, all other actions and to do, or cause to be done, all other things necessary, proper or advisable to fulfill the conditions herein to the extent that the fulfillment thereof is within a Party’s control.

 
 

 

5.5           EXPENSES.  Acquiror shall pay all of the legal, accounting and other expenses incurred by Acquiror in connection with the Transactions.  Acquiree shall pay all of the legal, accounting and other expenses incurred by Acquiree and the Shareholders in connection with the Transactions.

ARTICLE VI — COVENANTS OF ACQUIREE AND SHAREHOLDERS

6.1           OPERATION OF THE BUSINESS.  Except as contemplated by this Agreement or as expressly agreed to in writing by Acquiror, during the period from the date of this Agreement to the Closing Date, Acquiree will conduct its operations only in the ordinary course of business consistent with sound financial, operational and regulatory practice, and will take no action which would have a Material Adverse Effect on its ability to consummate the Transactions.  Without limiting the generality of the foregoing, except as otherwise expressly provided in this Agreement or related Schedules, prior to the Closing Date, Acquiree will not, and Shareholders shall not cause or permit Acquiree to, without the prior written consent of Acquiror:

(a)           amend its Charter Documents or bylaws (or similar organizational documents);
 
(b)           authorize for issuance, issue, sell, deliver, grant any options for, or otherwise agree or commit to issue, sell or deliver any shares of its capital stock or any other securities;
 
(c)           recapitalize, split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock; or purchase, redeem or otherwise acquire any of its securities or modify any of the terms of any such securities;
 
(d)           (i) create, incur, assume or permit to exist any long-term debt or any short-term debt for borrowed money other than under existing notes payable, lines of credit or other credit facilities or in the ordinary course of business; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other or (iii) make any loans, advances or capital contributions to, or investments in, any other Person;
 
(e)           (i) increase in any manner the rate of compensation of any of its directors, officers or other employees everywhere, (ii) pay or agree to pay any bonus, pension, retirement allowance, severance or other employee benefit except as required under currently existing Acquiree Benefit Plans, except for holiday bonuses in an aggregate amount not to exceed holiday bonuses for the prior year, or (iii) amend, terminate or enter into any employment, consulting, severance, change in control or similar agreements or arrangements with any of its directors, officers or other employees;
 
 
 

 

(f)           enter into any material agreement, commitment or contract, except agreements, commitments or contracts for the purchase, sale or lease of goods or services in the ordinary course of business;
 
(g)           other than in the ordinary course of business, authorize, recommend, propose or announce an intention to authorize, recommend or propose, or enter into any Contract with respect to, any (i) plan of liquidation or dissolution, (ii) acquisition of a material amount of assets or securities, (iii) disposition or Encumbrance of a material amount of assets or securities, (iv) merger or consolidation or (v) material change in its capitalization;
 
(h)           change any material accounting or Tax procedure or practice;
 
(i)           take any action the taking of which, or knowingly omit to take any action the omission of which, would cause any of the representations and warranties herein to fail to be true and correct in all material respects as of the date of such action or omission as though made at and as of the date of such action or omission;
 
(j)           compromise, settle or otherwise modify any material claim or litigation;
 
(k)           permit any existing insurance policy insuring Acquiree Assets to terminate; or
 
(l)           commit, promise or agree to do any of the foregoing.
 
6.2           MAINTENANCE OF THE ASSETS.  Acquiree shall use its reasonable best efforts to continue to maintain and service the Acquiree Assets consistent with past practice. Acquiree shall not directly or indirectly, sell or encumber all or any part of the Acquiree Assets, other than sales in the ordinary course of business or initiate or participate in any discussions or negotiations or enter into any agreement to do any of the foregoing.

6.3           EMPLOYEES AND BUSINESS RELATIONS.  Acquiree shall use commercially reasonable efforts to keep available the services of its current employees and agents and to maintain its relations and goodwill with its suppliers, customers, distributors and any others having business relations with it.

ARTICLE VII — COVENANTS OF ACQUIROR

7.1           OPERATION OF THE BUSINESS.  Except as contemplated by this Agreement or as expressly agreed to in writing by Acquiree and the Shareholders, during the period from the date of this Agreement to the Closing Date, Acquiror will conduct its operations only in the ordinary course of business consistent with sound financial, operational and regulatory practice, and will take no action which would have a Material Adverse Effect on its ability to consummate the transactions required by this Agreement.  Without limiting the generality of the foregoing, except as otherwise expressly provided in this Agreement or related Schedules, prior to the Closing Date, Acquiror will not without the prior written consent of Acquiree and the Shareholders:

(a)           amend its Charter Documents or bylaws (or similar organizational documents);
 
 
 

 

(b)           authorize for issuance, issue, sell, deliver, grant any options for, or otherwise agree or commit to issue, sell or deliver any shares of its capital stock or any other securities;
 
(c)           recapitalize, split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock; or purchase, redeem or otherwise acquire any of its securities or modify any of the terms of any such securities;
 
(d)           (i) create, incur, assume or permit to exist any long-term debt or any short-term debt for borrowed money other than under existing notes payable, lines of credit or other credit facilities or in the ordinary course of business; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other or (iii) make any loans, advances or capital contributions to, or investments in, any other Person;
 
(e)           (i) increase in any manner the rate of compensation of any of its directors, officers or other employees everywhere, (ii) pay or agree to pay any bonus, pension, retirement allowance, severance or other employee benefit except as required under currently existing Acquiree Benefit Plans, except for holiday bonuses in an aggregate amount not to exceed holiday bonuses for the prior year, or (iii) amend, terminate or enter into any employment, consulting, severance, change in control or similar agreements or arrangements with any of its directors, officers or other employees;
 
(f)           enter into any material agreement, commitment or contract, except agreements, commitments or contracts for the purchase, sale or lease of goods or services in the ordinary course of business;
 
(g)           other than in the ordinary course of business, authorize, recommend, propose or announce an intention to authorize, recommend or propose, or enter into any Contract with respect to, any (i) plan of liquidation or dissolution, (ii) acquisition of a material amount of assets or securities, (iii) disposition or Encumbrance of a material amount of assets or securities, (iv) merger or consolidation or (v) material change in its capitalization;
 
(h)           change any material accounting or Tax procedure or practice;
 
(i)           take any action the taking of which, or knowingly omit to take any action the omission of which, would cause any of the representations and warranties herein to fail to be true and correct in all material respects as of the date of such action or omission as though made at and as of the date of such action or omission;
 
(j)           compromise, settle or otherwise modify any material claim or litigation;
 
(k)           permit any existing insurance policy insuring Acquiror Assets to terminate; or
 
(l)           commit, promise or agree to do any of the foregoing.
 
 
 

 
 
7.2           MAINTENANCE OF THE ASSETS.  Acquiror shall use its reasonable best efforts to continue to maintain and service the Acquiror Assets consistent with past practice. Acquiror shall not directly or indirectly, sell or encumber all or any part of the Acquiror Assets, other than sales in the ordinary course of business or initiate or participate in any discussions or negotiations or enter into any agreement to do any of the foregoing.

7.3           EMPLOYEES AND BUSINESS RELATIONS.  Acquiror shall use commercially reasonable efforts to keep available the services of its current employees and agents and to maintain its relations and goodwill with its suppliers, customers, distributors and any others having business relations with it.

7.4           CHANGE OF NAME.  Following the Closing, the Acquiror shall change its name to “Sports Supplement Group, Inc.”

ARTICLE VIII — CONDITIONS
PRECEDENT TO OBLIGATIONS OF ACQUIREE
AND THE SHAREHOLDERS

The obligations of Shareholders to consummate the Transactions shall be subject to the satisfaction or waiver, on or before the Closing Date, of each of the following conditions:

8.1           REPRESENTATIONS AND WARRANTIES.  The representations and warranties of Acquiror contained in this Agreement shall be true and correct on the date hereof and (except to the extent such representations and warranties speak as of an earlier date) shall also be true and correct on and as of the Closing Date, except for changes contemplated by this Agreement, with the same force and effect as if made on and as of the Closing Date.

8.2           AGREEMENTS, CONDITIONS AND COVENANTS.  (a) Acquiror shall have performed or complied in all material respects with all agreements, conditions and covenants required by this Agreement to be performed or complied with by it on or before the Closing Date.

(b)           Prior to the Closing, the Acquiror shall have entered into a warrant agreement with Knights Bridge Capital Group, Inc. in form and substance reasonably acceptable to Acquiree, providing for the issuance of 1.8 million shares of Acquiror Common Stock in exchange for cash proceeds of $1 million; and subscription agreements in form and substance reasonably acceptable to Acquiror, providing for the issuance of 1.5 million shares of Acquiror Common Stock in exchange for cash proceeds of $500,000.

(c)           Without the written consent of Ian Spowart, so long as he is a director of the Company, for a period of six months from the date of this agreement, the Company shall not effect a reverse stock split.

8.3           MATERIAL ADVERSE EFFECT.  There shall have been no Material Adverse Effect on Acquiror.

8.4           CERTIFICATES.  Acquiree shall have received a certificate of an executive officer of Acquiror to the effect set forth in Sections 8.1, 8.2 and 8.3, respectively.

 
 

 

8.5           REQUIRED CONSENTS.  Acquiror shall have obtained all consents from third parties necessary for consummation of the Transactions or the absence of which would result in a Material Adverse Effect on Acquiror.

8.6           ANCILLARY DOCUMENTS.  Acquiror shall have tendered executed copies of the respective Transaction Documents to which it is intended to be a party.

8.7           LEGALITY.  All required governmental approvals shall have been obtained and any applicable waiting periods, shall have expired. No Law or Court Order shall have been enacted, entered, promulgated or enforced by any court or governmental entity that is in effect and that has the effect of making the Transactions illegal or otherwise prohibiting the consummation of the Transactions and no legal action shall be pending or threatened which is reasonably likely to have a Material Adverse Effect on any Party.

ARTICLE IX — CONDITIONS PRECEDENT TO OBLIGATIONS OF
ACQUIROR

The obligations of Acquiror to consummate the Transactions shall be subject to the satisfaction or waiver, on or before the Closing Date, of each of the following conditions:

9.1           REPRESENTATIONS AND WARRANTIES.  The representations and warranties of Acquiree and Shareholders contained in this Agreement shall be true and correct on the date hereof and (except to the extent such representations and warranties speak as of an earlier date) shall also be true and correct on and as of the Closing Date, except for changes contemplated by this Agreement, with the same force and effect as if made on and as of the Closing Date.

9.2           AGREEMENTS, CONDITIONS AND COVENANTS.  Acquiree and Shareholders shall have performed or complied in all material respects with all agreements, conditions and covenants required by this Agreement to be performed or complied with by each of them on or before the Closing Date.

9.3           MATERIAL ADVERSE EFFECT.  There shall have been no Material Adverse Effect on Acquiree.

9.4           CERTIFICATES.  Acquiror shall have received a certificate of an executive officer of Acquiree and each Shareholder to the effect set forth in Sections 9.1, 9.2 and 9.3, respectively.

9.5           REQUIRED CONSENTS.  Acquiree and Shareholders shall have obtained all consents from third parties necessary for the consummation of the Transactions or the absence of which would result in a Material Adverse Effect on Acquiree.

9.6           ANCILLARY DOCUMENTS.  Acquiree and each Shareholder shall have tendered executed copies of the Transaction Documents to which each of them is intended to be a party.

 
 

 

9.7           LEGALITY.  All required governmental approvals shall have been obtained and any applicable waiting periods, shall have expired. No Law or Court Order shall have been enacted, entered, promulgated or enforced by any court or governmental entity that is in effect and that has the effect of making the Transactions illegal or otherwise prohibiting the consummation of the Merger and no legal action shall be pending or threatened which is reasonably likely to have a Material Adverse Effect on any Party.
 
ARTICLE X — INDEMNIFICATION

10.1         SURVIVAL OF REPRESENTATIONS AND WARRANTIES.  All the provisions of this Agreement will survive the Closing notwithstanding any investigation at any time made by or on behalf of any Party hereto.  The representations and warranties set forth in Articles IV and V and in any certificate delivered in connection herewith with respect to any of those representations and warranties will terminate and expire on the date two (2) years after the Closing Date except in the event of fraud or intentional misrepresentation, in which case the survival period shall not be limited.  The expiration period with respect to tax matters, shall be the period ending ninety (90) days after the date upon which the right of any taxation authority to assess or reassess with respect to a claim for such taxes expires.  Additionally, the expiration period with respect to all matters set forth in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 4.1, 4.2, 4.3 and 4.4 shall be an unlimited period.  After a representation and warranty has terminated and expired, no indemnification will or may be sought pursuant to this Article X on the basis of that representation and warranty by any Person who would have been entitled pursuant to this Article X to indemnification on the basis of that representation and warranty prior to its termination and expiration, provided that, in the case of each representation and warranty that will terminate and expire as provided in this Section 10.1, no claim presented in writing for indemnification pursuant to this Article X on the basis of that representation and warranty prior to its termination and expiration will be affected in any way by that termination and expiration.  The Parties agree that no indemnification will be sought by any Party hereto under this Article XI where the amount of indemnification sought would be less than $10,000.

10.2         INDEMNIFICATION OF SHAREHOLDERS.  Acquiror covenants and agrees that it will indemnify each Shareholder against, and hold each Shareholder harmless from and in respect of, all losses, costs, expenses and damage claims that arise from, are based on, arise out of, or are attributable to (i) any breach of the representations and warranties of Acquiror or in certificates delivered by Acquiror in connection herewith; (ii) the nonfulfillment of any covenant or agreement on the part of Acquiror under this Agreement to be performed prior to or immediately after the Closing or (iii) any liability under the Securities Act, the Exchange Act or other applicable Law which arises out of or is based on (A) any untrue statement or alleged untrue statement of a material fact relating to Acquiror which is provided to Shareholders in writing by the Acquiror or (B) any omission or alleged omission to state therein a material fact relating to Acquiror required to be stated therein or necessary to make the statements therein not misleading, and not provided to Shareholders by Acquiror after a written request therefor (each damage claim described in Section 11.2 being a “Shareholder Indemnified Loss”).

 
 

 

10.3         INDEMNIFICATION OF ACQUIROR INDEMNIFIED PARTIES.  Each Shareholder, severally (in an amount that is in direct proportion to his, her or its ownership in Acquiree) covenants and agrees that he, she or it will indemnify each Acquiror Indemnified Party against, and hold each Acquiror Indemnified Party harmless from and in respect of, all losses, costs, expenses and damage claims that arise from, are based on, arise out of, or are attributable to (i) any breach of the representations and warranties of Acquiree or any Shareholder or in certificates delivered by Acquiree or any Shareholder in connection herewith; (ii) the nonfulfillment of any covenant or agreement on the part of Acquiree or any Shareholder under this Agreement to be performed prior to the Closing or (iii) any liability under the Securities Act, the Exchange Act or other applicable Law which arises out of or is based on (A) any untrue statement or alleged untrue statement of a material fact relating to Acquiree or any Shareholder, or any of them, which is provided to Acquiror or its counsel in writing by the Acquiree or any Shareholder or (B) any omission or alleged omission to state therein a material fact relating to Acquiree or any Shareholder, or any of them, required to be stated therein or necessary to make the statements therein not misleading, and not provided to Acquiror or its counsel by Acquiree or any Shareholder after a written request therefor (each damage claim described in Section 10.3 being an “Acquiror Indemnified Loss”).

10.4         CONDITIONS OF THIRD PARTY INDEMNIFICATION.

(a)           All claims for indemnification under this Agreement arising from third-party claims shall be asserted and resolved as follows in this Section 10.4.
 
(b)           A party claiming indemnification under this Agreement (an “Indemnified Party”) shall promptly (i) notify the party from whom indemnification is sought (the “Indemnifying Party”) of any third-party claim or claims asserted against the Indemnified Party (“Third Party Claim”) that could give rise to a right of indemnification under this Agreement and (ii) transmit to the Indemnifying Party a written notice (“Claim Notice”) describing in reasonable detail the nature of the Third Party Claim, a copy of all papers served with respect to that claim (if any), an estimate of the amount of damages attributable to the Third Party Claim to the extent feasible (which estimate shall not be conclusive of the final amount of such claim) and the basis for the Indemnified Party’s request for indemnification under this Agreement. Except as set forth in Section 10.1, the failure to promptly deliver a Claim Notice shall not relieve the Indemnifying Party of its obligations to the Indemnified Party with respect to the related Third Party Claim except to the extent that the resulting delay is materially prejudicial to the defense of that claim. Within 15 days after receipt of any Claim Notice (the “Election Period”), the Indemnifying Party shall notify the Indemnified Party (i) whether the Indemnifying Party disputes its potential liability to the Indemnified Party under this Article XII with respect to that Third Party Claim and (ii) if the Indemnifying Party does not dispute its potential liability to the Indemnified Party with respect to that Third Party Claim, whether the Indemnifying Party desires, at the sole cost and expense of the Indemnifying Party, to defend the Indemnified Party against that Third Party Claim.
 
 
 

 

(c)           If the Indemnifying Party does not dispute its potential liability to the Indemnified Party and notifies the Indemnified Party within the Election Period that the Indemnifying Party elects to assume the defense of the Third Party Claim, then the Indemnifying Party shall have the right to defend, at its sole cost and expense, that Third Party Claim by all appropriate proceedings, which proceedings shall be prosecuted diligently by the Indemnifying Party to a final conclusion or settled at the discretion of the Indemnifying Party in accordance with this Section 11.4(c) and the Indemnified Party will furnish the Indemnifying Party with all information in its possession, subject to a confidentiality agreement, with respect to that Third Party Claim and otherwise cooperate with the Indemnifying Party in the defense of that Third Party Claim; provided, however, that the Indemnifying Party shall not enter into any settlement with respect to any Third Party Claim that (i) purports to limit the activities of, or otherwise restrict in any way, any Indemnified Party or any Affiliate of any Indemnified Party, (ii) involves a guilty plea to any crime or (iii) involves a fine or penalty, whether or not paid by the Indemnifying Party, without the prior consent of that Indemnified Party (which consent may be withheld in the sole discretion of that Indemnified Party). The Indemnified Party is hereby authorized, at the sole cost and expense of the Indemnifying Party, to file, during the Election Period, any motion, answer or other pleadings that the Indemnified Party shall deem necessary or appropriate to protect its interests or those of the Indemnifying Party. The Indemnified Party may participate in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this Section 11.4(c) and will bear its own costs and expenses with respect to that participation; provided, however, that if the named parties to any such action (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party, and the Indemnified Party has been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Indemnifying Party, then the Indemnified Party may employ separate counsel at the expense of the Indemnifying Party (provided that such expenses are reasonable), and, on its written notification of that employment, the Indemnifying Party shall not have the right to assume or continue the defense of such action on behalf of the Indemnified Party.
 
(d)           If the Indemnifying Party (i) within the Election Period (A) disputes its potential liability to the Indemnified Party under this Article X, (B) elects not to defend the Indemnified Party pursuant to Section 11.4(c) or (C) fails to notify the Indemnified Party that the Indemnifying Party elects to defend the Indemnified Party pursuant to Section 10.4(c) or (ii) elects to defend the Indemnified Party pursuant to Section 11.4(c) but fails diligently and promptly to prosecute or settle the Third Party Claim, then the Indemnified Party shall have the right to defend, at the sole cost and expense of the Indemnifying Party (provided that such expenses are reasonable) (if the Indemnified Party is entitled to indemnification hereunder), the Third Party Claim by all appropriate proceedings, which proceedings shall be promptly and vigorously prosecuted by the Indemnified Party to a final conclusion or settled. The Indemnified Party shall have full control of such defense and proceedings. Notwithstanding the foregoing, if the Indemnifying Party has delivered a written notice to the Indemnified Party to the effect that the Indemnifying Party disputes its potential liability to the Indemnified Party under this Article X and if such dispute is resolved in favor of the Indemnifying Party, the Indemnifying Party shall not be required to bear the costs and expenses of the Indemnified Party’s defense pursuant to this Section 10.4 or of the Indemnifying Party’s participation therein at the Indemnified Party’s request, and the Indemnified Party shall reimburse the Indemnifying Party in full for all reasonable costs and expenses of such litigation. The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified Party pursuant to this Section 10.4(d), and the Indemnifying Party shall bear its own costs and expenses with respect to such participation.
 
 
 

 

(e)           In the event any Indemnified Party should have a claim against any Indemnifying Party hereunder that does not involve a Third Party Claim, the Indemnified Party shall transmit to the Indemnifying Party a written notice (the “Indemnity Notice”) describing in reasonable detail the nature of the claim, an estimate of the amount of Losses attributable to that claim to the extent feasible (which estimate shall not be conclusive of the final amount of such claim) and the basis of the Indemnified Party’s request for indemnification under this Agreement. If the Indemnifying Party does not notify the Indemnified Party within 15 days from its receipt of the Indemnity Notice that the Indemnifying Party disputes such claim, the claim specified by the Indemnified Party in the Indemnity Notice shall be deemed a liability of the Indemnifying Party hereunder. If the Indemnifying Party has timely disputed such claim, as provided above, such dispute shall be resolved by proceedings in an appropriate court of competent jurisdiction if the parties do not reach a settlement of such dispute within 30 days after notice of a dispute is given.
 
(f)           Payments of all amounts owing by an Indemnifying Party pursuant to this Article XI relating to a Third Party Claim shall be made within 30 days after the latest of (i) the settlement of that Third Party Claim, (ii) the expiration of the period for appeal of a final adjudication of that Third Party Claim or (iii) the expiration of the period for appeal of a final adjudication of the Indemnifying Party’s liability to the Indemnified Party under this Agreement. Payments of all amounts owing by an Indemnifying Party pursuant to Section 10.4(e) shall be made within 30 days after the later of (i) the expiration of the 30-day Indemnity Notice period or (ii) the expiration of the period for appeal of a final adjudication of the Indemnifying Party’s liability to the Indemnified Party under this Agreement.
 
10.5         REMEDIES NOT EXCLUSIVE.  The remedies provided in this Agreement shall not be exclusive of any other rights or remedies available to one party against the other, either at law or in equity.

ARTICLE XI — TERMINATION

11.1         GROUNDS FOR TERMINATION.  This Agreement may be terminated at any time before the Closing Date:

(a)           By mutual written consent of Acquiror and Shareholders owning at least 51% of the Shares.
 
(b)           By Acquiror or Shareholders owning at least 51% of the Shares, if the Closing shall not have been consummated within  five (5) business days of the date of this Agreement (the “Termination Date”); provided, however, that the right to terminate this Agreement under this Section 11.1(b) shall not be available to any Party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of the Closing Date to occur on or before the Termination Date;
 
(c)           By Acquiror or Shareholders owning at least 51% of the Shares if a court of competent jurisdiction or governmental, regulatory or administrative agency or commission shall have issued a Court Order (which Court Order the Parties shall use commercially reasonable efforts to lift) that permanently restrains, enjoins or otherwise prohibits the Transactions, and such Court Order shall have become final and nonappealable;
 
(d)           By Shareholders owning at least 51% of the Shares if Acquiror shall have breached, or failed to comply with, in any material respect, any of its obligations under this Agreement or any representation or warranty made by Acquiror shall have been incorrect in any material respect when made, and such breach, failure or misrepresentation is not cured within 3 days after notice thereof, and in either case, any such breaches, failures or misrepresentations, individually or in the aggregate, results or would reasonably be expected to result in a failure to satisfy a condition to Acquiror’s obligations to consummate the transactions contemplated hereby;
 
 
 

 

(e)           By Acquiror if Acquiree or any Shareholder shall have breached, or failed to comply with, in any material respect, any of its obligations under this Agreement or any representation or warranty made by it shall have been incorrect in any material respect when made, and such breach, failure or misrepresentation is not cured within 3 days after notice thereof, and in either case, any such breaches, failures or misrepresentations, individually or in the aggregate, results or would reasonably be expected to result in a failure to satisfy a condition to Acquiree’s or any Shareholder’s obligations to consummate the transactions contemplated hereby;
 
11.2         EFFECT OF TERMINATION.

(a)           Except as otherwise provided in Section 11.2(b) hereof, if this Agreement is terminated pursuant to Section 11.1(a), (b) or (c), this Agreement shall be terminated and there shall be no liability on the part of any of the Parties.  Notwithstanding the foregoing, nothing herein shall relieve any Party from liability for any willful breach hereof; provided that the provisions of Section 5.5, and this Section 11.2 shall survive the termination hereof.
 
ARTICLE XII — GENERAL MATTERS

12.1         CONTENTS OF AGREEMENT.  This Agreement, together with the other Transaction Documents, set forth the entire understanding of the Parties hereto with respect to the Transactions and supersedes all prior agreements or understandings among the Parties regarding those matters.

12.2         PARTIES IN INTEREST, ASSIGNMENT, ETC  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, legal representatives, successors and permitted assigns of the Parties hereto. No Party hereto shall assign this Agreement or any right, benefit or obligation hereunder. Any term or provision of this Agreement may be waived at any time by the Party entitled to the benefit thereof by a written instrument duly executed by such Party. The Parties hereto shall execute and deliver any and all documents and take any and all other actions that may be deemed reasonably necessary by their respective counsel to complete the Transactions. Nothing in this Agreement is intended or will be construed to confer on any Person other than the Parties hereto any rights or benefits hereunder.

12.3         INTERPRETATION.  Unless the context of this Agreement clearly requires otherwise, (a) references to the plural include the singular, the singular the plural, the part the whole, (b) references to any gender include all genders, (c) “or” has the inclusive meaning frequently identified with the phrase “and/or,” (d) “including,” “includes” or similar words has the inclusive meaning frequently identified with the phrase “but not limited to” and (e) references to “hereunder” or “herein” relate to this Agreement. The section and other headings contained in this Agreement are for reference purposes only and shall not control or affect the construction of this Agreement or the interpretation thereof in any respect. Section, subsection, and Schedule references are to this Agreement unless otherwise specified. The Schedules referred to in this Agreement will be deemed to be a part of this Agreement. Each accounting term used herein that is not specifically defined herein shall have the meaning given to it under GAAP.

 
 

 

12.4         NOTICES.  All notices that are required or permitted hereunder shall be in writing and shall be sufficient if personally delivered or sent by a nationally recognized overnight courier upon proof of delivery. Any notices shall be deemed given upon receipt at the address set forth below, unless such address is changed by notice to the other Party hereto:

If to Acquiror:
Sports Supplement Acquisition Group, Inc.
at the address in the recital hereto

If to Acquiree to:
Sports Supplement Acquisition Group Inc.
Attention: James Klein, President
2348 Lucerne Road, Suite 172
Mount-Royal, QC H3R 2J8 Canada

 
If to any Stockholder, to such Stockholder as follows:
 
c/o Sports Supplement Acquisition Group Inc.
 
2348 Lucerne Road, Suite 172
 
Mount-Royal, QC H3R 2J8 Canada

12.5         GOVERNING LAW.  This Agreement shall be construed and interpreted in accordance with the Laws of the State of Nevada without regard to its provisions concerning conflict of laws.

12.6         COUNTERPARTS.  This Agreement may be executed in two or more counterparts, each of which shall be binding as of the date first written above, and all of which shall constitute one and the same instrument. Each such copy shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

12.7         WAIVERS.  Compliance with the provisions of this Agreement may be waived only by a written instrument specifically referring to this Agreement and signed by the Party waiving compliance. No course of dealing, nor any failure or delay in exercising any right, will be construed as a waiver, and no single or partial exercise of a right will preclude any other or further exercise of that or any other right.

12.8         MODIFICATION.  No supplement, modification or amendment of this Agreement will be binding unless made in a written instrument that is signed by each of the Parties to this Agreement.

 
 

 

12.9         ENFORCEMENT OF AGREEMENT.  The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement was not performed in accordance with its specific terms or was otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction, this being in addition to any other remedy to which they are entitled at law or equity.

12.10       SEVERABILITY.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable Law in an acceptable manner to the end that the Transactions are fulfilled to the extent possible.

12.11       FURTHER ASSURANCES.  The Parties hereto agree to execute and deliver such further instruments and documents as may reasonably be requested by another Party in order to carry out fully the intent and accomplish the purposes of this Reorganization Agreement and the Transactions referred to herein.
 
[Signatures on following pages]
 
 
 

 

IN WITNESS WHEREOF, this Agreement has been executed by the Parties hereto as of the day and year first written above.

Acquiror:
Acquiree:

Sports Supplement Acquisition Group Inc.
Sports Supplement Acquisition Group Inc.
   
   
By: /s/ Ian Spowart                                       
By: /s/ James Klein                                     
Name: Ian Spowart
Name: James Klein
Title: President
Title: President


Shareholders:

The James Klein Family Trust
 
/s/ James Klein                                               
Proviant Technologies Inc.
 
/s/ Ramlakhan Boodram                              
   
   
3311180 Canada Inc.
 
/s/ Joseph P Galda as Attorney in Fact      
Howard Greenspoon
 
/s/ Joseph P Galda as Attorney in Fact     
   
   
Felicia Kaufman
 
/s/ Joseph P Galda as Attorney in Fact      
Joseph Galda
 
/s/ Joseph P Galda                                         
   
   
Dr. David Greenberg
 
/s/ Joseph P Galda as Attorney in Fact       
4122852 Canada Inc
 
/s/ Lorne Wilansky                                        
   
   
Andrew Gertler
 
/s/ Joseph P Galda as Attorney in Fact       
Brett Hastings
 
/s/ Brett Hastings                                          


 
 

 
 
 
Dr. Carl Hastings
 
/s/ Dr. Carl Hastings                                       
Steve Hastings
 
/s/ Steve Hastings                                         
   
   
RCL Amro Holdings Inc.
 
/s/ Arthur Amro                                              
Stephen Gertler
 
/s/ Joseph P Galda as Attorney in Fact       
   
   
Melanie Jones
 
/s/ Melanie Jones                                           
 
 
 
 

 

SCHEDULE 2.1

SHAREHOLDER
 
NUMBER OF
ACQUIREE SHARES
TO BE SOLD
 
ADDRESS
The James Klein Family Trust
    721.55  
4929 Ponsard Avenue
Montreal, QC H3W 2A6
           
Proviant Technologies Inc
    400.00  
306 West Hensley Drive
Champaign, IL 61822
           
3311180 Canada Inc
    77.80  
25 Holly Road
Hampstead, QC H3X 3K6
           
Howard Greenspoon
    58.33  
6020 Tommy Douglas
Montreal, QC H3X 4A6
           
Felicia Kaufman
    31.11  
6555 Mozart Road
Cote-St-Luc, QC H4W 3H9
           
Joseph Galda
    23.33  
497 Delaware Avenue
Buffalo, New York 14202
           
David Greenberg
    19.44  
619 Bathurst Street
Toronto, ON M5S 2P8
           
4122852 Canada Inc
    15.56  
154 Finchley Road
Montreal, QC H3X 3A4
           
Andrew Gertler
    11.67  
6555 Mozart Road
Cote-St-Luc, QC H4W 3H9
           
Brett Hastings
    9.72  
312 Cypress Place Drive
Wildwood, MO  63040
           
Carl Hastings
    9.72  
19 Grand Meridien Ct.
Wildwood, MO  63005
           
Steve Hastings
    9.72  
417 Blackwolf Run Drive
Wildwood, MO  63040
           
RCL Amro Holdings
    5.83  
71 Downshire
Hampstead, QC H3X 3H4
           
Stephen Gertler
    3.89  
6555 Mozart Road
Cote-St-Luc, QC H4W 3H9
           
Melanie Jones
    2.33  
31 Little Avenue
Barrie ON L4N 2Z4
           
TOTAL
    1,400    
 
 
 

 

SCHEDULE 4.4

ACQUIREE DEBT AND WARRANTS OUTSTANDING AT TIME OF CLOSING

At time of Closing, the Acquiree has $ 525,000 of convertible debt, and 4,335,000 warrants outstanding, as follows:

4122852 Canada Inc. — $ 200,000 in debt, convertible into 600,000 post-Closing shares, with 600,000 5-year $ 0.75 post-Closing warrants

RCL AMRO Holdings Inc. — $ 125,000 in debt, convertible into 375,000 post-Closing shares, with 375,000 5-year $ 0.75 post-Closing warrants

6894283 Canada Inc. — $ 75,000 in debt, convertible into 225,000 post-Closing shares, with 225,000 5-year $ 0.75 post-Closing warrants

David Greenberg — $ 15,000 in debt, convertible into 45,000 post-Closing shares, with 45,000 5-year $ 0.75 post-Closing warrants

Ron Taverner — $ 10,000 in debt, convertible into 30,000 post-Closing shares, with 30,000 5-year $ 0.75 post-Closing warrants

Lorne Wilansky — 600,000 5-year $ 0.75 post-Closing warrants

Proviant Technologies Inc. — 2,000,000 5-year $ 0.75 post-Closing warrants, vesting ratably on December 10, 2009, December 10, 2010 and December 10, 2011.

3311180 Canada Inc. — 1,750,000 5-year $ 0.04 post-Closing warrants, vesting ratably on the 6 month, 12 month, 18 month and 24 month anniversaries of 3311180 Canada Inc. providing or securing working capital financing on terms acceptable to the Company.

Knights Bridge Capital Group — $ 100,000 in debt, convertible into 300,000 post-Closing shares.

Eric Boyd and Alex Greystoke — 80,000 post-Closing shares each pursuant to consulting agreements with Acquiree.
 
 
 

 

SCHEDULE 4.5
 
ACQUIROR CAPITALIZATION AT TIME
OF EXECUTION OF THIS AGREEMENT
 
Shares of Common Stock Outstanding:
    14,950,000  
Shares of Preferred Stock Outstanding:
    0  

ACQUIROR CAPITALIZATION
IMMEDIATELY FOLLOWING CLOSING

Shares of Common Stock Outstanding:
    24,325,000 (1)
Shares of Preferred Stock Outstanding:
    0  

(1)           An additional 10,645,000 common shares are being reserved for issuance with respect to (i) 1,575,000 common shares underlying the SSAG Convertible Debt (ii) 1,275,000 warrants underlying the SSAG Convertible Debt, (iii) the 4,335,000 warrants referred to in Section 4.4; and (iv) an aggregate of 3,460,000 common shares to be issued as a result of the subscriptions and warrants referred to in Section 8.2, and pursuant to the consulting agreements with the Acquiree.

 
 

 
EX-10.2 3 v136667_ex10-2.htm

 
ASSET PURCHASE, TECHNOLOGY TRANSFER AND
LICENCE AGREEMENT

BETWEEN
 
PROVIANT TECHNOLOGIES, INC.
 
AND
 
SPORTS SUPPLEMENT ACQUISITION GROUP INC.
 
December 10, 2008
 


 

 

ASSET PURCHASE, TECHNOLOGY TRANSFER AND LICENCE AGREEMENT
 
THIS AGREEMENT made the 10th day of December, 2008,
 
BETWEEN:
 
PROVIANT TECHNOLOGIES, INC.,
a corporation incorporated under the laws of Illinois,
 
(hereinafter referred to as the “Seller”),
 
- and - -
 
SPORTS SUPPLEMENT ACQUISITION GROUP INC.,
a corporation incorporated under the laws of Delaware,
 
(hereinafter referred to as “Purchaser”).
 
THIS AGREEMENT WITNESSES THAT in consideration of the respective covenants, agreements, representations, warranties and indemnities of the parties herein contained and for other good and valuable consideration (the receipt and sufficiency of which are acknowledged by each party), the parties agree as follows:
 
SECTION 1
INTERPRETATION
 
1.1
Definitions
 
For the purposes of this Agreement, unless the context otherwise requires, the following terms shall have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings:
 
Affiliate” means, with respect to any Person, any other Person Controlling, Controlled by, or under common Control with, such Person.
 
Applicable Laws” means all laws, statutes, ordinances, regulations, rules, by-laws, judgments, decrees or orders of any Authority having jurisdiction over the Seller or over any part of the Purchased Assets, including without limitation, the Employment Legislation.
 
 “Assumed Liabilities” has the meaning set out in subsection 3.6.
 
Authority” means any governmental or regulatory authority, department, body or agency or any court, tribunal, bureau, commission, arbitrator or arbitration board or other similar body, whether federal, state, state or municipal.

 

 

Books and Records” means all books and records relating to the Purchased Assets (other than books and records required to be retained by the Seller, copies of which will be made available to the Purchaser).
 
Business Day” means any day, other than a Saturday or a Sunday, or a statutory public holiday in the State of Illinois.
 
Purchaser Shares” has the meaning set out in subsection 3.2.
 
 “Cash Payment” means all payments made by the Purchaser pursuant to subsections 3.2(i) and 3.2(ii).
 
Claim” has the meaning set out in subsection 10.3.
 
 “Closing Date” means December 10, 2008, or such other date as the Seller and the Purchaser may mutually determine.
 
“Commission” means the Securities and Exchange Commission.
 
Common Stock” means the common stock, par value $0.001 per share, of the Purchaser.
 
 “Contracts” means any agreement, indenture, contract, lease, deed of trust, licence, option, instrument, orders or other commitment, whether written or oral.
 
 “Control” and its derivatives mean, with regard to any Person, the legal, beneficial or equitable ownership, directly or indirectly, of more than 50% of the capital stock (or other ownership interests, if not a corporation) of such Person ordinarily having voting or equivalent rights.
 
Derivative Works” means any work of authorship that is based, in whole or in part, upon any pre-existing works, such as a revision, modification, translation, abridgement, condensation, expansion or any other form in which such pre-existing works may be recast, transformed or adopted and which, if prepared without authorization of the owner of the copyright in such pre-existing work, would constitute an infringement of copyright in that work.
 
Direct Claim” has the meaning set out in Section 10.3.
 
 “Employment Legislation” means any applicable Federal or state employment legislation.
 
Encumbrance” means any encumbrance, lien, charge, hypothec, pledge, mortgage, title retention agreement, security interest of any nature, adverse claim, exception, reservation, easement, right of occupation, any matter capable of registration against title, option, right of pre-emption, privilege or any contract to create any of the foregoing.
 
 “Indemnified Party” has the meaning set out in subsection 10.3.
 
Indemnifying Party” has the meaning set out in subsection 10.3.

 
- 2 - -

 

Intellectual Property” means all industrial or intellectual property in any jurisdiction, including: (a) trademarks, service marks, trade names, brand names, domain names and other identifying names or marks; (b) patents and patent rights; (c) registered and unregistered industrial designs; (d) trade secrets and other confidential or non-public business information, including ideas, formulae, compositions, inventor's notes, discoveries and improvements, know-how, business processes and techniques, manufacturing and production processes and techniques, and research and development information (whether or not patentable), invention disclosures, unpatented blueprints, drawings, specifications, designs, plans, proposals and technical data, business and marketing plans and supplier lists and information; (e) writings and other copyrightable works of authorship, including computer programs, data bases, business processes and documentation therefore, and all copyrights to any of the foregoing; (f) moral rights and waivers thereof; (g) internet protocol addresses and all other network addresses; (h) registrations of, and applications to register, any of the foregoing with any government authority and any renewals or extensions thereof; and (j) any claims or causes of action arising out of or related to any infringement or misappropriation of any of the foregoing.
 
 “knowledge of the Seller and any equivalent expressions means the knowledge of the officers of the Seller involved with the business conducted with the Purchased Assets who would reasonably be expected to have knowledge of the subject matter at hand, after due inquiry.
 
 “Licensed Intellectual Property” means, collectively, the Licensed Patents and the Licensed Trademarks and the domain names listed in Schedule 2.2(c).
 
 “Licensed Patents” means the patent applications described in Schedule 2.2(a).
 
 “Licensed Trademarks” means the trademark applications described in Schedule 2.2(b) and 2.2(c).
 
Losses”, in respect of any matter, means all claims, demands, proceedings, losses, damages, liabilities, deficiencies, costs and expenses (including, without limitation, all legal and other professional fees and disbursements, interest, penalties and amounts paid in settlement) arising directly as a consequence of such matter.
 
“Manufacturing Agreement” means the Manufacturing Agreement, dated as the Closing Date, between the Purchaser and the Seller, in the form attached as Exhibit C attached hereto.
 
“Non-Compete Agreement” means the Non-Compete Agreement, dated as the Closing Date, between the Purchaser and the Seller, in the form attached as Exhibit D attached hereto.
 
 “Notes” has the meaning set out in subsection 3.2.
 
 “Permits” has the meaning set out in subsection 4.1.
 
 “Person” means an individual, corporation, partnership, joint venture, association, trust, pension fund, union, Authority or other entity.

 
- 3 - -

 

 “Products” means (a) the following product formulas currently offered by Seller: 6-OXO Extreme, ClearShot and AMP 2; and (b) the following products comprised of a single chemical compound or ingredient currently offered by Seller: 6-OXO, 11-OXO, 1-AD and Geranamine, but does not include other products marketed by the Seller or any third party which include such chemical compounds or ingredients and other active ingredients that make such other products distinctively different from the acquired Products.
 
 “Purchase Price” has the meaning set out in subsection 3.1.
 
Purchased Assets” has the meaning set out in subsection 2.1.
 
 “Right of First Refusal Agreement” means the Right of First Refusal Agreement, dated as the Closing Date, between the Purchaser and the Seller, in the form attached as Exhibit E attached hereto.
 
“Securities Act” means the United States Securities Act of 1933, as amended.
 
“Service Agreement” means the Service Agreement, dated as the Closing Date, between the Purchaser and the Seller, in the form attached as Exhibit F attached hereto.
 
 Time of Closing” means 11:00 a.m. (local time) on the Closing Date, or such other time on the Closing Date as the Seller and the Purchaser may mutually determine.
 
Third Party Claim” has the meaning set out in subsection 10.3.
 
 Transaction Agreements” means, collectively, this Agreement, the Note, the Warrant Agreement, the Service Agreement, the Manufacturing Agreement, the Non-Compete Agreement, the Voting Agreement and the Right of First Refusal Agreement.
 
 “Transferred Know-How” means all of the trade secrets, know-how, confidential information and other intangible property and Intellectual Property rights owned by the Seller which are used by the Seller as of the date hereof exclusively in connection with and required for the operation of the Purchased Assets, other than Licensed Patents and Licensed Trademarks.
 
“Voting Agreement” means the Voting Agreement, dated as the Closing Date, among the Purchaser, the Seller and James Klein, in the form attached as Exhibit G attached hereto.
 
 “Warrant Agreement” means the Warrant Agreement, dated as of the Closing Date, between the Purchaser and the Seller, in the form attached as Exhibit H hereto.
 
1.2
Currency
 
Unless otherwise indicated, all dollar amounts in this Agreement are expressed in United States funds.

 
- 4 - -

 
 
1.3
Sections and Headings
 
The division of this Agreement into sections and the insertion of headings are for convenience of reference only and shall not affect the interpretation of this Agreement. Unless otherwise indicated, any reference in this Agreement to a Section or Schedule refers to the specified Section of or Schedule to this Agreement and any reference in this Agreement to a Section shall include a subsection of such Section, as applicable.
 
1.4
Number and Gender
 
In this Agreement, words importing the singular number only shall include the plural and vice versa and words importing gender shall include all genders.
 
1.5
Entire Agreement
 
This Agreement and the Transaction Documents constitute the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether written or oral.  There are no conditions, covenants, agreements, representations, warranties or other provisions, express or implied, collateral, statutory or otherwise, relating to the subject matter hereof except as herein provided.
 
1.6
Time of Essence
 
Time shall be of the essence in this Agreement.
 
1.7
Applicable Law
 
This Agreement shall be construed, interpreted and enforced in accordance with, and the respective rights and obligations of the parties shall be governed by, the laws of the State of Illinois and the federal laws of the United States applicable therein and each party irrevocably attorns to the exclusive jurisdiction of the courts of such State and the federal courts located therein and all courts competent to hear appeals therefrom.
 
1.8
Severability
 
If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such determination shall not impair or affect the validity, legality or enforceability of the remaining provisions hereof, and each provision is hereby declared to be separate, severable and distinct.
 
1.9
Successors and Assigns
 
This Agreement shall ensure to the benefit of and shall be binding on and enforceable by the parties and, where the context so permits, their respective successors and permitted assigns.  Neither party may assign any of its rights or obligations hereunder without the prior written consent of the other party.
 
1.10
Amendment and Waivers
 
No amendment or waiver of any provision of this Agreement shall be binding on either party unless consented to in writing by such party.  No waiver of any provision of this Agreement shall constitute a waiver of any other provision, nor shall any waiver constitute a continuing waiver unless otherwise provided.

 
- 5 - -

 
 
1.11
Schedules
 
The Schedules are attached to and form part of this Agreement.  Where no Schedule as referred to following is attached, the Schedule shall be deemed to be attached and shall be interpreted as “Nil.”
 
SECTION 2
PURCHASE AND SALE OF PURCHASED ASSETS AND SUBSCRIPTION
 
2.1
Transfer of Purchased Assets
 
Subject to the applicable provisions of this Agreement, the Seller agrees to sell, assign and transfer to the Purchaser and the Purchaser agrees to purchase and assume from the Seller, all right, title, obligations and interest of the Seller in and to the following property and assets (collectively, the “Purchased Assets”):
 
 
(a)
Products.  All of the Seller's right, title and interest to the Products;
 
 
(b)
Trade Show Booth.  The Seller’s right and title to the trade show booth; and
 
 
(c)
Transferred Know-How.  All of the Seller's right, title and interest in and to the Transferred Know-How.
 
 
(d)
Inventory.  All of the Seller’s right, title and interest in Products constituting finished goods held for inventory.
 
 
(e)
Deposits.  All of the Seller’s right, title and interest in customer deposits related to the Products.
 
 
(f)
Transferred Trademarks and Web Domains.  All of the Seller’s right, title and interest in the Trademarks and Web Domains listed  in Schedule 2.1(f).
 
2.2
Licensed Intellectual Property
 
Subject to the applicable provisions of this Agreement:
 
 
(a)
Licensed Patents.  The Seller hereby agrees to license to the Purchaser and the Purchaser hereby agrees to license from the Seller, effective as of and from the Closing Date, a non-exclusive, transferable, irrevocable, fully-paid, license to make, have made, use, sell, have sold, import and distribute the subject matter of the Licensed Patents described in Schedule 2.2(a) for a term limited to the term of such License’s Patent; and
 
 
(b)
Non-Exclusive Licensed Trademarks.  The Seller hereby agrees to license to the Purchaser and the Purchaser hereby agrees to license from the Seller, effective as of and from the Closing Date, a non-exclusive, transferable upon written consent of Seller (which consent shall not be unreasonably withheld), irrevocable, fully-paid, license to use the Licensed Trademarks described in Schedule 2.2(b); provided, however, Purchaser shall have the exclusive right to name a product after the Licensed Trademarks described in Schedule 2.2(b) and no other customer of Seller shall be permitted use such Licensed Trademarks other than to identify the applicable ingredient on its label as being covered by the Licensed Trademark owned by Seller.
 
 
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SECTION 3
PURCHASE PRICE
 
3.1
Purchase Price
 
The aggregate purchase price (the “Purchase Price”) payable by the Purchaser for the Purchased Assets (other than Inventory) and the license hereby granted in the Licensed Intellectual Property shall be equal to the value of the Purchaser Shares, Notes and warrants subject to the Warrant Agreement issued in subsection 3.2 hereof and Cash Payment (as defined below), such sum being the aggregate fair market value of the Purchased Assets and the license of the Licensed Intellectual Property as at the Time of Closing.
 
3.2
Satisfaction of Purchase Price
 
The Purchase Price shall be payable as follows,
 
 
(i)
Upon Closing, the parties shall execute a letter of direction issued to Tummelson, Bryan & Knox, LLP authorizing the release to Seller of the earnest deposit in the amount of $100,000 (less any bank wire fees)  previously deposited therewith by Purchaser,
 
 
(ii)
the Purchaser hereby agrees to issue and deliver to the Seller at the Time of Closing, a wire transfer in the amount of $400,000,
 
 
(iii)
the Purchaser hereby agrees to issue and deliver to the Seller, a non-interest bearing note (the “Short-Term Note”) in the form of Exhibit A providing for the payment from time to time within 75 days of closing of an aggregate amount of $1,500,000,
 
 
(iv)
the Purchaser hereby agrees to deliver to the Seller certificates representing an aggregate of 400 shares of Purchaser’s common stock (the “Purchaser Shares”) registered in the name of the Seller,
 
 
(v)
the Purchaser hereby agrees to issue and deliver to the Seller, its notes (the “Long-Term Notes,” and, together with the Short-Term Note, the “Notes”) in the form of Exhibits B-1, B-2 and B-3 providing for the payment on the first, second and third anniversaries of Closing, the amount of $ 666,666, $ 666,666 and $ 666,668 respectively plus interest at the rate of 7% per annum, and
 
 
(vi)
the Purchaser hereby agrees to issue and deliver to the Seller the Warrant Agreement evidencing a warrant effective upon the Purchaser’s becoming a public reporting company to purchase 2,000,000 shares of the Purchaser’s common stock at an exercise price of $0.75 (in each case, after giving effect to the contemplated reverse acquisition which has been disclosed to Seller) which vests ratably on the first, second and third anniversaries of its effective date and which expires on the fifth anniversary thereof.
 
 
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3.3
Purchase of Inventory
 
As of the Closing Date, the Purchaser and Seller shall conduct an inventory of all of Seller’s manufactured goods related to the purchased Products.  The Purchaser shall acquire such inventory according to the pricing schedule attached as Schedule 3.3, to be paid in cash within 60 days of the final determination of the Inventory.
 
3.4
Allocation of Purchase Price
 
The Seller and the Purchaser agree to negotiate in good faith the allocation of the Purchase Price among the purchased assets prior to the Closing Date and to report the purchase and sale of the Purchased Assets and the license hereby granted in the Licensed Intellectual Property for all federal, state and local tax purposes in a manner consistent with such allocation.
 
3.5
Assumed Liabilities
 
The Purchaser hereby assumes, with effect as of the Closing Date, those liabilities of the Seller listed in Schedule 3.5 (the “Assumed Liabilities”).  The Purchaser shall not assume nor have any responsibility with respect to any debt or obligation of the Seller except as specifically listed herein.
 
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE SELLER
 
The Seller represents and warrants to the Purchaser as follows and acknowledges that the Purchaser is relying on such representations and warranties in connection with its purchase of the Purchased Assets and the license hereby granted in the Licensed Intellectual Property:
 
4.1
Organization
 
The Seller is a corporation existing under the laws of Illinois and has the corporate power to own the Purchased Assets and to enter into this Agreement and to perform its obligations hereunder.
 
4.2
Authorization
 
This Agreement has been duly authorized, executed and delivered by the Seller and is a legal, valid and binding obligation of the Seller, enforceable against the Seller by the Purchaser in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency and other laws affecting the rights of creditors generally and except that equitable remedies may be granted only in the discretion of a court of competent jurisdiction.
 
4.3
No Other Agreements to Purchase
 
No person other than the Purchaser has any written or oral agreement or option or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option for the purchase or acquisition from the Seller of any of the Purchased Assets.

 
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4.4
No Violation
 
The execution and delivery of this Agreement by the Seller and the consummation of the transactions herein provided for will not result in:
 
 
(a)
except for the requirement to give the required notices and to obtain the required consents described in Schedules 4.7(a) and 4.7(b), the material breach or violation of any of the provisions of, or constitute a material default under, or materially conflict with or cause the acceleration of any obligation of the Seller under:
 
 
(i)
any Contract to which the Seller is a party or by which it or its properties are bound;
 
 
(ii)
any provision of the organizational documents or by-laws or resolutions of the board of directors (or any committee thereof) or shareholder of the Seller;
 
 
(iii)
any judgment, decree, order or award of any court, governmental body or arbitrator having jurisdiction over the Seller;
 
 
(iv)
any Permit; or
 
 
(v)
any Applicable Law; nor
 
 
(b)
the creation or imposition of any Encumbrance on any of the Purchased Assets.
 
4.5
Title
 
The Purchased Assets are owned beneficially by the Seller with good title thereto, and at Closing will be transferred to the Purchaser free and clear of all Encumbrances.
 
4.6
Compliance with Laws; Permits
 
The Seller has complied in all material respects with all Applicable Laws applicable to the Purchased Assets.  Schedule 4.6 sets out a complete and accurate list of all permits issued by Authorities, licenses, approvals, consents, registrations, certificates and other authorizations (collectively, the “Permits”) held by or granted to the Seller which are material to the Purchased Assets, and there are no other material Permits necessary for the Purchaser to use the Purchased Assets as currently used by the Seller, or for the Seller to own or lease the Purchased Assets in compliance with Applicable Law.  All such Permits are valid, subsisting and in good standing and the Seller is not in material default or breach of any Permit and, to the knowledge of the Seller, no proceeding is pending or threatened to revoke or limit any Permits.  The Seller has provided a true and complete copy of each Permit listed in Schedule 4.6 and all amendments thereto to the Purchaser.
 
4.7
Consents and Approvals
 
 
(a)
Except as described in Schedule 4.7(a), there is no requirement to make any filing with or give any notice to any Authority, or obtain any Permit as a condition to the lawful consummation of the transactions contemplated by this Agreement other than those which relate solely to the identity of the Purchaser or the nature of any business carried on by the Purchaser.
 
 
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(b)
There is no requirement under any Contract to which the Seller is a party or by which it or its properties are bound to give any notice to, or to obtain the consent or approval of, any party to such agreement, instrument or commitment relating to the consummation of the transactions contemplated by this Agreement, except for the notifications, consents and approvals described in Schedule 4.7(b).
 
4.8
Litigation
 
Except as described in Schedule 4.8, there are no actions, suits, proceedings, audits, investigations or complaints (whether or not purportedly on behalf of the Seller) pending or, to the knowledge of the Seller, threatened, at law or in equity or before or by any Authority against the Seller, which could affect the Purchased Assets or result in an Encumbrance upon any of the Purchased Assets.
 
4.9
Intellectual Property
 
 
(a)
Intellectual Property.  All patents, patent applications and software owned by the Seller and required for the use of the Purchased Assets (as such business has been operated by the Seller prior to the date of this Agreement) are listed in Schedule 4.9(a).
 
 
(b)
Title.
 
 
(i)
Other than the third party licensees of the Licensed Intellectual Property listed in Schedule 4.10(b)(i), the Seller owns all right, title and interest in and to each item of the Licensed Patents and, to the knowledge of the Seller, the Transferred Know-How, free and clear of all Encumbrances and any co-ownership interests, and the Seller has not authorized any Person to use, or granted any option to acquire any rights to, or licences to use, or sold, assigned or otherwise transferred, any of the Licensed Intellectual Property.
 
 
(ii)
Other than the third party licensees of the Licensed Patents listed in Schedule 4.10(b)(i) and, no notice from any other Person has been received by the Seller that any Person has any right, title or interest in or to or right to use any of the Licensed Patents or Transferred Know-How.
 
 
(iii)
The Seller has the right to grant the licences hereby granted to each item of the Licensed Patents.
 
 
(c)
Validity.
 
 
(i)
To the knowledge of the Seller, the Licensed Intellectual Property and Transferred Know-How have not been used or enforced, or failed to be used or enforced by the Seller, in a manner that would result in the non-renewal, abandonment, cancellation or unenforceability of any of the Transferred Know-How or the Licensed Intellectual Property.
 
 
(ii)
To the knowledge of the Seller, all of the Transferred Know-How and the Licensed Intellectual Property is in full force and effect.
 
 
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(iii)
The Seller has renewed or made applications for renewal within the applicable renewal periods for all registered Licensed Intellectual Property.  The Seller has not received written notice that any application for registration or issuance of any Licensed Intellectual Property by or for the benefit of the Seller has been rejected.  The Seller has not received written notice that any Person has challenged the validity of or opposed the registration of any of the Licensed Patents.
 
 
(d)
Claims Against Validity.
 
 
(i)
The Seller has not received any written notice of any adverse claim or litigation and is not party to any litigation challenging the validity, ownership or enforceability of any of the Licensed Intellectual Property, or the Seller's right to use, assign or license (as applicable) the Licensed Intellectual Property.
 
 
(ii)
To the knowledge of the Seller, there are no facts which cast doubt on the validity or enforceability of any of the Seller's rights in the Licensed Intellectual Property other than usual doubts related to the possibility that an examiner or a Person opposed in interest may seek, as may occur in the ordinary course of the prosecution or enforcement of Intellectual Property rights, to narrow, disallow or challenge the validity or the scope of protection sought or obtained by the Seller in such Intellectual Property.
 
 
(e)
Non-Infringement.
 
 
(i)
To the knowledge of the Seller, the use of the Licensed Intellectual Property does not infringe upon or breach any rights in the Intellectual Property of any other Person.  As of the date hereof, the use of the Licensed Intellectual Property does not require the payment (other than as may be required in connection with the use of any commercial software which may be required for the use of the Licensed Intellectual Property) of any royalty, fee or other payment or the conferral of any other benefit on another Person.
 
 
(ii)
The Seller has not received any written notice of any adverse claim, litigation or assertion of infringement and the Seller is not a party to any litigation alleging that the use of the Purchased Assets, as now carried on infringes upon or breaches any rights in the Intellectual Property of any other Person.
 
 
(iii)
To the knowledge of the Seller, there is no unauthorized use, infringement or misappropriation of any Licensed Intellectual Property by any Person.  The Seller has not covenanted or agreed with any Person not to sue or otherwise enforce any legal rights with respect to any of the Licensed Intellectual Property.
 
 
(f)
Protection of Rights.  The Seller has employed commercially reasonable measures to protect its rights in the Licensed Intellectual Property and to maintain the validity of its Intellectual Property rights therein.
 
 
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4.10
Inventory.
 
All of the finished goods inventory is in good saleable condition and any write downs in respect of spoiled or obsolete inventory have been taken in accordance with GAAP.
 
4.11
Securities Representations
 
 
(a)
Investment Intent.    Seller is acquiring the Purchaser Shares for its own account and not with a view to any distribution of the Purchaser Shares acquired by it, and it has no present arrangement to sell any of its Purchaser shares to or through any Person, provided that this representation shall not be construed as an undertaking to hold any Purchaser Shares for any minimum or other specific term, and the shareholders reserve the right to dispose of Purchaser Shares at any time in accordance with Applicable Law.
 
 
(b)
Sophistication.    Seller has such experience in business and financial matters that it is capable of evaluating the merits and risks of an investment in the Purchaser Shares. Each such shareholder acknowledges that an investment in the Purchaser Shares is speculative and involves a high degree of risk.
 
 
(c)
Access to Information.    The Seller has received or had access to all documents, records and other information pertaining to the Purchaser that it has requested,  and has been given the opportunity to meet or have telephonic discussions with representatives of the Purchaser, to ask questions of them, to receive answers concerning the terms and conditions of this investment and to obtain information that the Purchaser possesses or can acquire without unreasonable effort or expense that is necessary to verify the accuracy of the information provided to the Seller.
 
 
(d)
Certification.    At the Closing, Seller will provide a certificate confirming these representations in form and substance satisfactory to the Purchaser.
 
SECTION 5
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
 
The Purchaser represents and warrants to the Seller as follows and acknowledges and confirms that the Seller is relying on such representations and warranties in connection with its sale of the Purchased Assets in exchange for the Purchaser Shares, and other consideration hereunder:
 
5.1
Organization
 
The Purchaser is existing under the laws of Delaware and has the corporate power to enter into this Agreement and to perform its obligations hereunder and has the corporate power to enter into this Agreement and to perform its obligations hereunder.

 
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5.2
Authorization
 
This Agreement has been duly authorized, executed and delivered by the Purchaser and is a legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser by the Seller in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency and other laws affecting the rights of creditors generally and except that equitable remedies may only be granted in the discretion of a court of competent jurisdiction.  All necessary corporate action has been taken by the Purchaser to authorize the issuance of the Purchaser Shares, Notes and Warrant Agreement to the Seller and upon receipt by the Seller of the Purchase Price, the Purchaser Shares will be issued as fully paid and non-assessable shares in full compliance with applicable securities laws (assuming the accuracy of the Seller’s representations in Section 4.11).
 
5.3
No Violation
 
The execution and delivery of this Agreement by the Purchaser and the consummation of the transactions herein provided for will not result in  the material breach or violation of any of the provisions of, or constitute a material default under, or materially conflict with or cause the acceleration of any obligation of the Purchaser under:
 
 
(a)
any Contract to which the Purchaser is a party or by which it is or its properties are bound;
 
 
(b)
any provision of the organizational documents or by-laws or resolutions of the board of directors (or any committee thereof) of the Purchaser;
 
 
(c)
any judgment, decree, order or award of any court, governmental body or arbitrator having jurisdiction over the Purchaser; or
 
 
(d)
any law, statute, ordinance, regulation, rule, by-law, judgement, decree or order of any Authority having jurisdiction over the Purchaser.
 
5.4
Consents and Approvals
 
Except as set out in Schedule 5.4, there is no requirement for the Purchaser to make any filing with or give any notice to any Authority, or obtain any Permit as a condition to the lawful consummation of the transactions contemplated by this Agreement.  There is no requirement under any Contract to which the Purchaser is a party or by which it or its properties are bound to give any notice to, or to obtain the consent or approval of, any party to such Contract relating to the consummation of the transactions contemplated by this Agreement, the failure of which to provide such notice or obtain such consent would prevent the Purchaser from fulfilling its obligations under this Agreement.
 
5.5
Litigation
 
There are no actions, suits, proceedings, audits, investigations or complaints (whether or not purportedly on behalf of the Purchaser) pending or, to the best of the knowledge of the Purchaser, threatened, at law or in equity or before or by any Authority against the Purchaser which adversely affects or challenges the legality, validity or enforceability of this Agreement, any of the Transaction Agreements or the Seller Shares.
 
5.6
Capitalization
 
The capitalization of the Purchaser is as described on Schedule 5.6.  Immediately prior to Closing, the Purchaser’s shareholders listed on Schedule 5.6 shall be the only record or beneficial owners of the Purchaser’s common stock or other securities of any kind of the Purchaser.  There are no outstanding or authorized stock option, stock appreciation, phantom stock or similar rights with respect to the Purchaser and there are no obligations, agreements or understandings on the part of the Purchaser to issue, grant or sell any securities of any kind or class of the Purchaser outstanding, or any rights or commitments convertible into any kind or class of securities of the Purchaser currently outstanding.

 
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SECTION 6
SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES
 
6.1
Survival of Covenants, Representations and Warranties
 
To the extent that they have not been fully performed at or prior to the Time of Closing, the covenants, representations and warranties contained in this Agreement and in all certificates and documents delivered pursuant to or contemplated by this Agreement shall survive the closing of the transactions contemplated hereby and shall continue for the applicable limitation period notwithstanding such closing nor any investigation made by or on behalf of the party entitled to the benefit thereof; provided, however, that the representations and warranties set out in Section 4 and Section 5 and the corresponding representations and warranties set out or incorporated in the certificate to be delivered pursuant to subsection 8.1(a) (other than those contained in Sections 4.1 and 5.1(Organization), 4.2 and 5.2(Authorization), 4.3 (No Other Agreements to Purchase), 4.5 (Title)) shall terminate on the day that is fifteen (15) months after the Closing Date.
 
SECTION 7
COVENANTS
 
7.1
Operate in Ordinary Course.
 
From and after the date hereof through to the Closing Date, the Seller shall operate in the ordinary course with past practice.  Without limiting the foregoing, the Seller shall not without the written consent of the Purchaser:
 
 
(a)
accelerate the collection of accounts receivable;
 
 
(b)
discount inventory; or
 
 
(c)
increase the salary or benefits of any of its employees.
 
7.2
Preservation of Organization.
 
The Seller shall use reasonable commercial efforts to preserve intact its relationships with its employees, provided that this Agreement shall not require the Seller to increase the salary of or make other payments to its employees.

 
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7.3
Access to Purchased Business and Purchased Assets
 
The Seller shall forthwith make available to the Purchaser and its authorized representatives and, if requested by the Purchaser, provide a copy to the Purchaser of, all title documents, Contracts, policies, plans, reports, licences, orders, Permits and all other documents, information and data relating to the Purchased Assets.  The Seller shall afford the Purchaser and its authorized representatives reasonable access to the Purchased Assets.  At the request of the Purchaser, the Seller shall execute such consents, authorizations and directions as may be necessary to permit any inspection of the Purchased Assets or to enable the Purchaser or its authorized representatives to obtain full access to all files and records relating to any of the Purchased Assets maintained by Authorities.  At the Purchaser's request, the Seller shall co-operate with the Purchaser in arranging any such meetings as the Purchaser may reasonably request with employees, auditors, accountants, solicitors or any other persons engaged or previously engaged to provide services to the Seller who have knowledge of matters relating to the Purchased Assets.  The exercise of any rights of inspection by or on behalf of the Purchaser under this Section 7.1 shall not mitigate or otherwise affect the representations and warranties of the Seller hereunder which shall continue in full force and effect as provided in subsection 6.1.
 
7.4
Delivery of Books and Records
 
At the Time of Closing, pursuant to subsection 9.1 there shall be delivered to the Purchaser by the Seller copies of such Books and Records relating to the Purchased Assets as the Purchaser may reasonably request, to the extent such Books and Records have been retained by the Seller.  The Purchaser agrees that it will preserve the Books and Records so delivered to it for a period of six years from the Closing Date, or for such longer period as is required by any applicable law, and will permit the Seller or its authorized representatives reasonable access thereto in connection with the affairs of the Seller relating thereto, but the Purchaser shall not be responsible or liable to the Seller for or as a result of any accidental loss or destruction of or damage to any such Books and Records.
 
7.5
Delivery of Conveyancing Documents
 
The Seller shall deliver to the Purchaser all necessary deeds, conveyances, bills of sale, assurances, transfers, assignments and any other documentation necessary or reasonably required to transfer the Purchased Assets to the Purchaser with a good title, free and clear of all Encumbrances.
 
7.6
Retention of Collins, McDonald & Gann, P.C., McDonald & Gann, P.C.
 
Each of Seller and Purchaser agrees to retain Collins, McDonald & Gann, P.C. for a minimum of six months after Closing at a fee of $1,500 per month.
 
7.7
Right of First Refusal Agreement
 
Seller and Purchaser shall perform their obligations under the Right of First Refusal Agreement.
 
7.8
Non-Compete Agreement
 
Seller and Purchaser shall perform their obligations under the Non-Compete Agreement.
 
7.9
Voting Agreement
 
Seller, James Klein and Purchaser shall perform their obligations under the Voting Agreement.

 
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7.10
Insurance
 
Upon Closing, Purchaser shall maintain comprehensive general liability insurance, including contract liability, products liability, bodily injury and property damage insurance, in an amount not less than $2,000,000 coverage per occurrence.
 
7.11
No Change in Purchaser’s Capitalization
 
Until the closing of the contemplated reverse acquisition which has been disclosed to the Seller, Purchaser shall not effect any change in its capitalization as set forth on Schedule 5.6 without the prior written consent of the Seller, which the Seller may grant or withhold in its sole and absolute discretion.
 
SECTION 8
CONDITIONS OF CLOSING
 
8.1
Conditions of Closing in Favour of the Purchaser
 
The purchase and sale of the Purchased Assets is subject to the following terms and conditions for the exclusive benefit of the Purchaser, to be performed or fulfilled at or prior to the Time of Closing:
 
 
(a)
Representations and Warranties.  The representations and warranties of the Seller contained in this Agreement shall be true and correct at the Time of Closing in all material respects (except where a representation and warranty contains a materiality qualification, in which case the representation and warranty shall be true and correct at the Time of Closing in all respects) with the same force and effect as if such representations and warranties were made at and as of such time, and a certificate executed by the Seller, dated the Closing Date, to that effect shall have been delivered to the Purchaser, such certificate to be in form and substance satisfactory to the Purchaser, acting reasonably;
 
 
(b)
Covenants.  All of the terms, covenants and conditions of this Agreement to be complied with or performed by the Seller at or before the Time of Closing shall have been complied with or performed in all material respects, and a certificate executed by a senior officer of the Seller, dated the Closing Date, to that effect shall have been delivered to the Purchaser, such certificate to be in form and substance satisfactory to the Purchaser, acting reasonably;
 
 
(c)
Regulatory Consents.  There shall have been obtained from all appropriate Authorities such consents and approvals as are required to be obtained by the Seller to permit the change of ownership of the Purchased Assets contemplated hereby, including, without limitation, those described in Schedule 4.7(a), in each case in form and substance satisfactory to the Purchaser, acting reasonably;
 
 
(d)
Contractual Consents.  Subject to Section  7.4, the Seller shall have given or obtained the notices, consents and approvals described in Schedule 4.7(b), in each case in form and substance satisfactory to the Purchaser, acting reasonably;
 
 
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(e)
No Action or Proceeding.  No legal or regulatory action or proceeding shall be pending or threatened by any person against the Licensed Intellectual Property or to enjoin, restrict or prohibit the purchase and sale of the Purchased Assets contemplated hereby or the performance of any party's obligations under any agreement contemplated in this Agreement to be executed and delivered by either party at the Time of Closing;
 
 
(f)
No Material Damage.  No material damage by fire or other hazard to the whole or any material part of the Purchased Assets shall have occurred prior to the Time of Closing;
 
 
(g)
No Encumbrances.  All Encumbrances on the Purchased Assets, except Permitted Encumbrances shall have been validly discharged;
 
 
(h)
Transaction Agreements.  The Transaction Agreements shall have been entered into by the parties thereto, in a form satisfactory to the parties thereto, acting reasonably.
 
If any of the conditions contained in this subsection 8.1 shall not be performed or fulfilled at or prior to the Time of Closing to the satisfaction of the Purchaser, acting reasonably, the Purchaser may, by notice to the Seller, terminate this Agreement and the obligations of the Seller and the Purchaser under this Agreement shall be terminated.  Any such condition may be waived in whole or in part by the Purchaser without prejudice to any claims it may have for breach of covenant, representation or warranty.
 
8.2
Conditions of Closing in Favour of the Seller
 
The purchase and sale of the Purchased Assets is subject to the following terms and conditions for the exclusive benefit of the Seller, to be performed or fulfilled at or prior to the Time of Closing:
 
 
(a)
Representations and Warranties.  The representations and warranties of the Purchaser contained in this Agreement shall be true and correct in all material respects at the Time of Closing (except where a representation and warranty contains a materiality qualification, in which case the representation and warranty shall be true and correct at the Time of Closing in all respects) with the same force and effect as if such representations and warranties were made at and as of such time, and a certificate executed by the Purchaser, and a certificate executed by the Purchaser, each dated the Closing Date, to that effect shall have been delivered to the Seller, such certificates to be in form and substance satisfactory to the Seller, acting reasonably;
 
 
(b)
Covenants.  All of the terms, covenants and conditions of this Agreement to be complied with or performed by the Purchaser at or before the Time of Closing shall have been complied with or performed in all material respects, and a certificate executed by a senior officer of the Purchaser, and a certificate executed by a senior officer of the Purchaser, each dated the Closing Date, to that effect shall have been delivered to the Seller, such certificates to be in form and substance satisfactory to the Seller, acting reasonably;
 
 
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(c)
No Action or Proceeding.  No legal or regulatory action or proceeding shall be pending or threatened by any person to enjoin, restrict or prohibit the purchase and sale of the Purchased Assets contemplated hereby or the performance of any party's obligations under any agreement contemplated in this Agreement to be executed and delivered by either party at the Time of Closing;
 
 
(d)
Transaction Agreements.  The Transaction Agreements shall have been entered into by the parties thereto in a form satisfactory to the Seller, acting reasonably;
 
 
(e)
Share Certificate.  The Purchaser shall have delivered to the Seller certificates representing the Purchaser Shares registered in the name of Seller; and
 
 
(f)
Cash Payment, Warrant Agreement and Notes.  The Purchaser shall have delivered to the Seller the Cash Payment, Warrant Agreement and the Notes in accordance with subsection 3.2 hereof.
 
If any of the conditions contained in this subsection 8.2 shall not be performed or fulfilled at or prior to the Time of Closing to the satisfaction of the Seller, acting reasonably, the Seller may, by notice to the Purchaser, terminate this Agreement and the obligations of the Seller and the Purchaser under this Agreement shall be terminated.  Any such condition may be waived in whole or in part by the Seller without prejudice to any claims it may have for breach of covenant, representation or warranty.
 
SECTION 9
CLOSING DATE AND TRANSFER OF POSSESSION
 
9.1
Place of Closing
 
The closing of the purchase and sale of the Purchased Assets shall take place at the Time of Closing at the offices Corsair Advisors, Inc., 497 Delaware Avenue, Buffalo, New York 14202 and Tummelson, Bryan & Knox, LLP, PO Box 99, Urbana, Illinois 61803 provided however that such closing may be effected by electronic delivery of signature pages (by either email or facsimile transmission) and funds and securities will be held in escrow pending closing instruction to such counsel by the Purchaser and the Seller.
 
9.2
Further Assurances
 
From time to time subsequent to the Closing Date, each party to this Agreement covenants and agrees that it will at all times after such date, at the expense of the requesting party, promptly execute and deliver all such documents, including, without limitation, all such additional conveyances, transfers, assignments, consents and other assurances and do all such other acts and things as the other party, acting reasonably, may from time to time request be executed or done in order to better evidence or perfect or effectuate any provision of this Agreement or of any agreement or other document executed pursuant to this Agreement or any of the respective obligations intended to be created hereby or thereby.

 
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SECTION 10
INDEMNIFICATION
 
10.1
Indemnification by the Seller
 
The Seller agrees to indemnify and save harmless the Purchaser from all Losses suffered or incurred by the Purchaser as a result of or arising directly or indirectly out of or in connection with:
 
 
(a)
any breach by the Seller of or any inaccuracy in any representation or warranty of the Seller contained in this Agreement or in any agreement, certificate or other closing document delivered pursuant hereto (provided that the Seller shall not be required to indemnify or save harmless the Purchaser in respect of any breach of or inaccuracy in any representation or warranty unless the Purchaser shall have provided notice to the Seller in accordance with subsection 10.3 on or prior to the expiration of the applicable time period related to such representation and warranty as set out in Section 6.1);
 
 
(b)
any breach or non-performance by the Seller of any covenant to be performed by it which is contained in this Agreement or in any agreement, certificate or other closing document delivered pursuant hereto; and
 
 
(c)
any liabilities, obligations or commitments of the Seller related to the Purchased Assets, existing at or prior to the Time of Closing or arising from or relating to the period prior to the Time of Closing (provided however that any such liabilities, obligations or commitments, to the extent that they arise from or relate to the period after the Time of Closing, shall be the responsibility of the Purchaser);.
 
provided that the indemnity by the Seller pursuant to this Section 10.1 shall not be for any Losses in connection with liabilities, obligations or commitments related to the Assigned Contracts arising after the Time of Closing.
 
10.2
Indemnification by the Purchaser
 
The Purchaser agrees to indemnify and save harmless the Seller from all Losses suffered or incurred by the Seller as a result of or arising directly or indirectly out of or in connection with:
 
 
(a)
any breach by the Purchaser of or any inaccuracy in any representation or warranty contained in this Agreement or in any agreement, instrument, certificate or other closing document delivered pursuant hereto (provided that the Purchaser shall not be required to indemnify or save harmless the Seller in respect of any breach of or inaccuracy in any representation or warranty unless the Seller shall have provided notice to the Purchaser in accordance with subsection 10.3 on or prior to the expiration of the applicable time period related to such representation and warranty as set out in subsection 6.1);
 
 
(b)
any breach or non-performance by the Purchaser of any covenant to be performed by it which is contained in this Agreement or in any agreement, certificate or other closing document delivered pursuant hereto, including any breach or non performance by the Purchaser of any covenant to be performed after the Time of Closing in connection with the Assigned Contracts; and
 
 
- 19 - -

 
 
 
(c)
the operations of the Purchased Assets after the Time of Closing including, without limitation, any failure by the Purchaser to pay, satisfy, discharge, perform or fulfil any of the Assumed Liabilities.
 
10.3
Notice of Claim
 
In the event that a party (the “Indemnified Party”) shall become aware of any claim, proceeding or other matter (a “Claim”) in respect of which the other party (the “Indemnifying Party”) has agreed to indemnify the Indemnified Party pursuant to this Agreement, the Indemnified Party shall promptly give written notice thereof to the Indemnifying Party.  Such notice shall specify whether the Claim arises as a result of a claim by a person against the Indemnified Party (a “Third Party Claim”) or whether the Claim does not so arise (a “Direct Claim”), and shall also specify with reasonable particularity (to the extent that the information is available), the factual basis for the Claim and the amount of the Claim, if known.  If, through the fault of the Indemnified Party, the Indemnifying Party does not receive notice of any Claim in time effectively to contest the determination of any liability susceptible of being contested, the Indemnifying Party shall be entitled to set off against the amount claimed by the Indemnified Party the amount of any Losses incurred by the Indemnifying Party resulting from the Indemnified Party's failure to give such notice on a timely basis.
 
10.4
Direct Claims
 
With respect to any Direct Claim, following receipt of notice from the Indemnified Party of the Claim, the Indemnifying Party shall have thirty (30) Business Days to make such investigation of the Claim as is considered necessary or desirable.  For the purpose of such investigation, the Indemnified Party shall make available to the Indemnifying Party the information relied upon by the Indemnified Party to substantiate the Claim, together with all such other information as the Indemnifying Party may reasonably request.  If both parties agree at or prior to the expiration of such thirty-day period (or any mutually agreed upon extension thereof) to the validity and amount of such Claim, the Indemnifying Party shall immediately pay to the Indemnified Party the full agreed upon amount of the Claim.  If the parties are unable to resolve the dispute within a reasonable time, and in any event within thirty (30) Business Days of such written request (or a mutually agreed upon extension thereof), the dispute shall, at the request of either party, be referred to binding arbitration in accordance with the provisions of Schedule 10.4.
 
 
- 20 - -

 
 
10.5
Third Party Claims
 
With respect to any Third Party Claim, the Indemnifying Party shall have the right, at its expense, to participate in or assume control of the negotiation, settlement or defence of the Claim and, in such event, the Indemnifying Party shall reimburse the Indemnified Party for all the Indemnified Party's out-of-pocket expenses as a result of such participation or assumption.  If the Indemnifying Party elects to assume such control, the Indemnified Party shall have the right to participate in the negotiation, settlement or defence of such Third Party Claim and to retain counsel to act on its behalf, provided that the fees and disbursements of such counsel shall be paid by the Indemnified Party unless the Indemnifying Party consents to the retention of such counsel or unless the named parties to any action or proceeding include both the Indemnifying Party and the Indemnified Party and the representation of both the Indemnifying Party and the Indemnified Party by the same counsel would be inappropriate due to the actual or potential differing interests between them (such as the availability of different defences).  If the Indemnifying Party, having elected to assume such control, thereafter fails to defend the Third Party Claim within a reasonable time, the Indemnified Party shall be entitled to assume such control at the expense of the Indemnifying Party, and the Indemnifying Party shall be bound by the results obtained by the Indemnified Party with respect to such Third Party Claim.
 
10.6
Settlement of Third Party Claims
 
If the Indemnifying Party fails to assume control of the defence of any Third Party Claim, the Indemnified Party shall have the exclusive right to contest, settle or pay the amount claimed provided the Indemnified Party has given the Indemnifying Party at least five business days prior written notice of any proposed settlement, compromise or payment and afforded the Indemnifying Party an opportunity to consult with the Indemnified Party regarding the proposed settlement, compromise or payment.  Whether or not the Indemnifying Party assumes control of the negotiation, settlement or defence of any Third Party Claim, the Indemnifying Party shall not settle any Third Party Claim without the written consent of the Indemnified Party, which consent shall not be unreasonably withheld or delayed; provided, however, that the liability of the Indemnifying Party shall be limited to the proposed settlement amount if any such consent is not obtained for any reason.
 
10.7
Dollar Limitations
 
No Indemnifying Party shall have any liability under the indemnification provisions of this Section 10 unless and until the gross aggregate amount of Claims brought by the Indemnified Party exceeds $40,000.  The aggregate amount of all Claims for which an Indemnifying Party shall be obligated to pay pursuant to this Section 10 shall be limited to the amount of $4,000,000.
 
10.8
No Right of Set-Off
 
The Purchaser shall have no right under any circumstances to offset or deduct, in whole or in part, the amount of any Losses or any settlement, compromise or payment resulting from one or more Claims giving rise to a claim for indemnification against any amounts owed by the Purchaser to the Seller pursuant to the terms of this Agreement or any of the Transaction Agreements.
 
10.9
Co-operation
 
The Indemnified Party and the Indemnifying Party shall co-operate fully with each other with respect to Third Party Claims, and shall keep each other fully advised with respect thereto (including supplying copies of all relevant documentation promptly as it becomes available).

 
- 21 - -

 
 
10.10
Exclusivity
 
The provisions of this Section 10 shall apply to any Claim for breach of any covenant, representation, warranty, indemnity or other provision of this Agreement or any certificate delivered pursuant to this Agreement (other than a claim for specific performance or injunctive relief) with the intent that all such Claims shall be subject to the limitations and other provisions contained in this Section 10.
 
SECTION 11
MISCELLANEOUS
 
11.1
Neutral Construction
 
The Parties represent and agree that the final terms of this Agreement are the product of fair and arm's length negotiations between the Parties, each of whom has sought and received legal advice from counsel of its own choosing with regard to its contents and the rights and obligations affected hereby. The Parties agree that this Agreement shall therefore be deemed to have been drafted by them jointly and equally, and that the provisions of this Agreement should not be construed against either Party for reason that such Party had a greater degree of drafting responsibility for such provision(s).
 
11.2
Notices.
 
 
(a)
Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be delivered by personal delivery, by over night courier, by telecopy or similar means of recorded electronic communication or by registered mail addressed as follows:
 
If to the Seller:
Proviant Technologies, Inc.
309 W. Hensley Rd.
Champaign, Illinois  61826
Attention: Ramlakhan Boodram, President
Fax No.: (217) 398-0002

If to the Purchaser:

Sports Supplement Acquisition Group Inc.
2348 Lucerne Road, Suite 172
Mount-Royal, QC H3R 2J8
Attention: James Klein
Fax No.: (514) 735-0012
 
 
(b)
Any such notice or other communication delivered by personal delivery or overnight courier shall be deemed to have been given and received on the day on which it was delivered (or, if such day is not a Business Day, on the next following Business Day), and if transmitted by telecopier, on the day of transmission thereof if such day is a Business Day and is received before 5:00 pm (local time to the recipient) or otherwise on the next Business Day after the day of transmittal, provided that the party so transmitting the notice has received confirmation of its successful transmittal, and if mailed or sent by registered mail, on the fifth Business Day following the date of mailing; provided, however, that if at the time of mailing or within three Business Days thereafter there is or occurs a labour dispute or other event which might reasonably be expected to disrupt the delivery of documents by mail, any notice or other communication hereunder shall be delivered or transmitted by means personal delivery, telecopier or recorded electronic communication as aforesaid.
 
 
- 22 - -

 
 
 
(c)
Either party may at any time change its address for service from time to time by giving notice to the other party in accordance with this subsection 11.2.
 
11.3
Commissions, etc
 
Each party agrees to indemnify and save harmless the other party from and against all Losses suffered or incurred in respect of any commission or other remuneration payable or alleged to be payable to any broker, agent or other intermediary who purports to act or have acted for or on behalf of the other party.
 
11.4
Consultation
 
The parties shall consult with each other before issuing any press release or making any other public announcement with respect to this Agreement or the transactions contemplated hereby and, except as required by any applicable law or regulatory requirement, neither of them shall issue any such press release or make any such public announcement without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed.
 
11.5
Disclosure
 
Prior to any public announcement of the transaction contemplated hereby pursuant to subsection 11.4, neither party shall disclose this Agreement or any aspects of such transaction except to its board of directors, its senior management, its legal, accounting, financial or other professional advisors, any financial institution or other investor contacted by it with respect to any financing required in connection with such transaction and counsel to such institution or other investor, or as may be required by any applicable law or any regulatory authority or stock exchange having jurisdiction.
 
11.6
Reasonable Commercial Efforts
 
The parties acknowledge and agree that, for all purposes of this Agreement, an obligation on the part of either party to use reasonable commercial efforts to obtain any waiver, consent, approval, permit, licence or other document shall not require such party to make any payment to any person for the purpose of procuring the same, other than payments for amounts due and payable to such person, payments for incidental expenses incurred by such person and payments required by any applicable law or regulation.
 
11.7
Counterparts
 
This Agreement may be executed in counterparts, each of which shall constitute an original and all of which taken together shall constitute one and the same instrument. Execution may be made by facsimile signature which, for all purposes, shall be deemed to be an original.

 
- 23 - -

 

IN WITNESS WHEREOF this Agreement has been executed by the parties.
 
 
PROVIANT TECHNOLOGIES, INC.
   
 
Per:
/s/ Ramlakhan Boodram
 
Name:    Ramlakhan Boodram
 
Title:      President
     
 
SPORTS SUPPLEMENT
 
ACQUISITION GROUP INC.
   
 
Per:
/s/ James Klein
 
Name:   James Klein
 
Title:     President
 
 
- 24 - -

 
EX-10.3 4 v136667_ex10-3.htm
NON-COMPETITITON AGREEMENT

THIS AGREEMENT is made as of the 10th day of December, 2008.

BETWEEN:

PROVIANT TECHNONOLGIES, INC. (hereinafter called the “Vendor”)

- and-

SPORTS SUPPLEMENT ACQUISITION GROUP, INC. (hereinafter called the “Corporation” or “SSAG”)

WHEREAS SSAG has entered into an Asset Purchase, Technology Transfer and License Agreement (the “Purchase Agreement”) dated as of December 10, 2008, whereby SSAG shall purchase certain assets of the Vendor;

AND WHEREAS consummation of the transactions contemplated by the Purchase Agreement by SSAG is conditional on, inter alia, the execution and delivery of this Agreement by the Vendor;

AND WHEREAS the Vendor is a party to the Purchase Agreement and is obtaining consideration thereunder;

NOW, THEREFORE, in order to facilitate the consummation of the transactions contemplated by the Purchase Agreement, in consideration of the sum of Ten Dollars ($10.00) and in consideration of the premises and the covenants hereinafter set forth, the receipt and sufficiency of which is hereby acknowledged, the parties hereto acknowledge, agree and covenant as follows:

ARTICLE 1
INTERPRETATION

1.1         Definitions

In this Agreement, unless otherwise defined here, capitalized terms shall have the meanings given to such terms in the Purchase Agreement  Certain other terms are defined in this Agreement, including the recitals and this Section, and the words and phrases set forth below shall have the following meanings, namely:

“Current Businesses Acquired by SSAG” means the business of the Vendor with respect to the sale of the Products solely in the sports nutrition market;

 
- 1 - -

 

“Proprietary Information” means confidential information owned, controlled or in the possession of the Corporation and the Vendor, including, without limitation:

 
(i)
trade secrets and confidential or proprietary information, knowledge, documents or materials owned, developed or possessed by the Corporation or the Vendor, whether in tangible or intangible form, which are not publicly disseminated information; and

 
(ii)
information pertaining to the Corporation’s or the Vendor’s research, operations, customers (including identities of customers and prospective customers, identities of individual contacts at business entities which are customers or prospective customers, and their respective preferences, businesses or habits), business relationships (including those with suppliers and others), products (including prices, costs, markets, sales or contents), mailing lists, marketing or sales strategies, financial information or measures, business methods, future business plans, databases, matters of a technical nature (including know-how, data, formulae, secret processes and designs and models), operating procedures, knowledge of the Corporation’s or the Vendor’s organization, and other information owned, developed or possessed by or on behalf of the Corporation but does not include information, knowledge, documents or materials which become public knowledge through no fault or omission of the Vendor.

Notwithstanding the foregoing, Proprietary Information shall not include information that is or becomes a part of the public domain through no direct or indirect act or omission of the Vendor.

“Purchase Agreement” has the meaning ascribed to that term in the recitals;

“Products” has the meaning given to such term in the Purchase Agreement;

“Restricted Period” has the meaning ascribed to that term in Section 3.1; and

“Territory” means the world.

1.2         Articles, Sections and Headings

The division of this Agreement into Articles, Sections and subsections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. Unless otherwise stated specifically in this Agreement, any reference in this Agreement to an Article, Section or subsection refers to the specified Article, Section or subsection of this Agreement.

1.3         Rules of Construction

Unless the context otherwise requires:
 
 
- 2 - -

 

 
(a)
words importing the singular number only shall include the plural and vice versa and words including the masculine gender shall include the feminine and neuter genders and vice versa; and

 
(b)
the word “including” means including without limitation.

ARTICLE 2
PROPRIETARY AND CONFIDENTIAL INFORMATION

2.1         Proprietary Information

The Vendor acknowledges and agrees that:

 
(a)
it is privy to the Proprietary Information;

 
(b)
the Proprietary Information is unique and valuable to the Corporation; and

 
(c)
the Corporation would suffer irreparable injury if the Proprietary Information, or any portion thereof, was divulged to those in competition with the Corporation.

2.2         Confidentiality

Except with the prior written approval of SSAG, the Vendor shall not:

 
(a)
directly or indirectly, disclose any Proprietary Information to any person except authorized personnel of SSAG or the Vendor or as required by law; nor

 
(b)
publish or make use of any Proprietary Information in any manner whatsoever.

2.3         Disclosure of Proprietary Information

Prior to any disclosure of the Proprietary Information which is required by law, the Vendor, if permitted by law, shall give SSAG reasonable prior notice of any such disclosure, and, if requested by and at the expense of SSAG, shall permit and co-operate with any effort by SSAG to obtain a protective order or similar protection. SSAG shall reimburse the Vendor for all reasonable costs it incurs in assisting SSAG in seeking such an order.

ARTICLE 3
NON-COMPETITION

3.1         Non-Competition

              For a period commencing on the Closing Date and continuing thereafter until the seventh  anniversary of the Closing Date (the “Restricted Period”), the Vendor agrees that it shall not, directly or indirectly, whether through a corporation, subsidiary or otherwise, individually or in partnership, jointly or in conjunction with any person, firm, association, syndicate, corporation or any other entity, whether as principal, agent, employer, consultant, partner, or otherwise, do any of the following without the consent of SSAG:
 
 
- 3 - -

 

 
(a)
compete with the Current Business Acquired by SSAG within the Territory;

 
(b)
lend money to, guarantee the debts and obligations of, invest in, or have any other interest in (whether financial or otherwise) any person or entity engaging in any business within the Territory which is competitive with the Current Business Acquired by SSAG;

 
(c)
directly or indirectly solicit or attempt to solicit any employee of the Corporation for the purpose of encouraging, enticing, or causing said employee to terminate employment with the Corporation;

 
(d)
directly or indirectly solicit or attempt to solicit, without the prior written consent of SSAG, not to be unreasonably withheld, any business or non-employee of SSAG providing consulting, marketing or other services to the Corporation or to not provide or cease to provide such services to the Corporation;

 
(e)
directly or indirectly take any action which could reasonably result in the relations between the Corporation and its suppliers or customers to be impaired; or

 
(f)
directly or indirectly take any action which could reasonably be foreseen to be detrimental to the Corporation, except that the Vendor may exercise or enforce any of its rights and remedies against the Corporation arising under this Agreement, the Purchase Agreement, the Transaction Agreements or any other agreements entered into between the Vendor and the Corporation.

Notwithstanding anything in this Agreement to the contrary, the parties acknowledge and understand that the Vendor may continue, without restriction hereunder, (a) to market to third parties 6-OXO, 11-OXO, 1-AD and Geranamine as ingredients, and not as stand alone products, that, when combined with other active ingredients, render such third party formulations distinctively different from any of the Products (provided that the Corporation acknowledges that all third party products containing any of the aforementioned ingredients of the Vendor as of the date of this Agreement constitute distinctively different formulations), (b) to develop and sell under its own label or otherwise any products to be marketed outside of the sports nutrition market, and (c) subject to the terms of that certain Right of First Refusal Agreement dated of even date herewith by and between the parties, to market any new proprietary ingredient, whether as a stand alone product or an ingredient, in the sports nutrition market or otherwise.
 
 
- 4 - -

 

3.2         Material Interest

The Vendor agrees that the Corporation has a material interest in preserving the relationships the Current Business Acquired by SSAG has developed with customers against impairment by competitive activities of an existing or former director, officer, employee, consultant or shareholder and Vendor shall use reasonable commercial efforts to preserve such relationships for the benefit of the Corporation. Accordingly, the Vendor agrees that the restrictions and covenants in Articles 2 and 3 and the Vendor’s agreement to such restrictions and covenants as evidenced by its execution of this Agreement constitute a material inducement to SSAG entering into this Agreement and the Purchase Agreement and that SSAG would not enter into this Agreement nor the Purchase Agreement absent these inducements.

3.3         Independent Covenants

The Vendor agrees that the restrictions and covenants contained in Articles 2 and 3 are reasonable and necessary for the protection of the Corporation and each shall be construed independently of any provisions of this Agreement and the existence of any claim or cause of action by the Vendor against the Corporation, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Corporation of the covenants or restrictions in this Agreement; provided however, that if any provision shall be held to be illegal, invalid or unenforceable in any jurisdiction, this decision shall not affect any other covenants or provisions of this Agreement or the application of any other covenant or provision in respect of each year during which the other covenants or provisions are to continue.

ARTICLE 4
INJUNCTIVE RELIEF

4.1          Injunctive Relief

The parties agree that as set out in Sections 3.2 and 3.3, the provisions of Articles 2 and 3 are essential and reasonable for the protection of the Corporation and, if breached, will result in irreparable harm to the Corporation. Without prejudice to any and all remedies which may be available to the Corporation, at law or in equity, injunctive relief is the only sufficient relief for a breach of the covenants of the Vendor under Articles 2 or 3 and the Vendor hereby agrees that the Corporation shall be entitled to injunctive relief, including an interim injunction, in any court of competent jurisdiction, to enforce any of the covenants of the Vendor in this Agreement, upon the breach or threatened breach thereof, together with reimbursement of all reasonable solicitor and client fees and other expenses incurred in connection therewith.

ARTICLE 5
MISCELLANEOUS

5.1         Further Assurances

Each of the parties to this Agreement will, from time to time and at all times hereafter, but without further consideration, do such further acts and deliver all such further assurances, deeds and documents as shall be reasonably required in order to fully perform and carry out the terms of this Agreement.
 
 
- 5 - -

 

5.2         Governing Laws

This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois.

5.3         Counterparts

This Agreement may be executed in one or more counterparts, including facsimile transmission thereof, each of which shall be deemed an original and when so executed all such counterparts taken together shall form one agreement and shall be valid and binding on all parties to this Agreement.

5.4         Entire Agreement

This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and there are no other written or verbal agreements or representations, warranties or covenants related hereto. This Agreement is separately enforceable.

5.5         No Waiver

The failure of any party to this Agreement to insist upon strict performance of a covenant in this Agreement or of any obligation in this Agreement, irrespective of the length of time for which such failure continues, shall not be a waiver of such party’s right to demand strict compliance in the future. No consent or waiver, express or implied, to or of any breach or default in the performance of any obligation in this Agreement shall constitute a consent or waiver to or of any other breach or default in the performance of the same or of any other obligation in this Agreement.

5.6         Enurement

This Agreement shall be binding upon and shall enure to the benefit of each of the parties to this Agreement and their respective trustees, receivers, legal representatives, successors and assigns.

5.7         Notices

All notices and other communications pursuant to this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, sent by telecopy, facsimile or overnight courier, or mailed by registered mail (postage prepaid and return receipt requested), to the party to whom the same is so delivered, sent or mailed at the following addresses (or at such other address for a party as shall be specified by like notice):

Proviant Technologies, Inc.
309 W. Hensley Rd.
Champaign, Illinois  61826
Fax:  (217) 398-0002
Attention: Ramlakhan Boodram, President

 
- 6 - -

 

Sports Supplement Acquisition Group, Inc.
2348 Lucerne Road, Suite 172
Mount-Royal, QC H3R2J8
Fax: (514) 735-0012
Attention: James Klein, Chief Executive Officer

Notices delivered personally or by telecopy or facsimile shall be deemed delivered as of actual receipt, mailed notices shall be deemed delivered three days after mailing and notices delivered by overnight courier shall be deemed delivered one day after the date of sending. Any notice sent by mail will be promptly confirmed by telecopy.

IN WITNESS WHEREOF the parties to this Agreement have executed this Agreement as of the day and year first above written.

PROVIANT TECHNOLGIES, INC.
 
SPORTS SUPPLEMENT ACQUISITION GROUP,
INC.
     
Per:
/s/ Ramlakhan Boodram  
Per:
/s/ James Klein
Name:   Ramlakhan Boodram
 
Name:  James Klein
Title:     President
 
Title:    President
 
 
- 7 - -

 
EX-10.4 5 v136667_ex10-4.htm
 
RIGHT OF FIRST REFUSAL AGREEMENT

         THIS RIGHT OF FIRST REFUSAL AGREEMENT (this "Agreement") is made as of December 10, 2008, between Sports Supplement Acquisition Group, Inc., a Delaware corporation (the "Company"), and Proviant Technologies, Inc., an Illinois corporation ("Proviant").

         WHEREAS, the Company is acquiring concurrently with the execution and delivery of this Agreement certain assets of Proviant (the “Acquisition”); and

         WHEREAS, as a condition to the Acquisition, Proviant has agreed to provide the rights of first refusal as provided herein;

         NOW, THEREFORE, the undersigned agree as follows:

         1.       COMPANY'S RIGHTS OF FIRST REFUSAL

         Before (i) a sale of a majority of the outstanding shares of Proviant or a sale of substantially all of the assets of Proviant or (ii) the sale or license of any new proprietary ingredients for use in the sports supplement market, the Company or its assignee(s) shall have a right of first refusal to purchase the shares or assets or license the ingredients (in either case, a “Transaction”) on the terms and conditions set forth in this Section (the "Right of First Refusal").

          The rights granted with regard to paragraph 1(i) shall be for a period of four years from the date hereof.  The rights granted with regard to paragraph 1(ii) shall be for a period of seven years from the date hereof.

          In connection with any such sale of shares or assets, Proviant shall be free to disclose to any potential purchaser the provisions of this Agreement and such disclosure will not be considered to be a breach of any confidentiality agreement of the parties.

                  (a) Notice of Proposed Transfer. Proviant shall(a) deliver to the Company a written notice (the "Notice") stating: (i) Proviant’s' bona fide intention to enter into a Transaction; (ii) the name of each proposed purchaser or licensee ("Proposed Purchaser"); and (iii) the proposed terms of the Transaction; and (b) offer the Transaction on the same terms to the Company or its assignee(s).

                  (b) Exercise of Right of First Refusal. At any time within 30 days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to Proviant, elect to enter into the Transaction.

                  (c) Proviant’s Right to Transfer or License.  If the Company fails to accept the Transaction within 30 days of the Notice, then Proviant may enter into the Transaction with the Proposed Purchaser, provided that such Transaction is consummated within one hundred twenty (120) days after the date of the Notice. If the Transaction described in the Notice is not consummated within such period, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Transaction may take place.
 


                  (d) Assignment of Right of First Refusal. The Right of First Refusal shall be assignable by the Company upon Proviant’s consent, which consent shall not be unreasonably withheld.

  (e) With regard to the development of a new sports supplement product as provided in paragraph ii above, company shall have the right to license the same exclusively for a period of one year from the date of notice to company from Proviant that the product has been developed.  Such right shall be dependent upon the parties entering into an agreement as to performance guarantees, minimum purchases, and costs and shall be valid for a period of one year.  After notification of the development of the product company will have 30 days to approve and accept the new product and, if accepted, to provide within 30 days the first purchase order.  If company does not accept the product and provide its first order within said 30 day period, Proviant is free to sell the product to any entity it chooses.

  (f) This Agreement shall be for a period of four years from the date hereof.  Thereafter this Agreement can be renewed by mutual agreement of the parties on such terms and for such period as may be agreed in writing.

         2.       GENERAL PROVISIONS

                  (a) This Agreement shall be governed by the laws of the State of Illinois as they apply to contracts entered into and wholly to be performed in such state. This Agreement represents the entire agreement between the parties with respect to the Company's Right of First Refusal and may only be modified or amended in writing signed by both parties.

                  (b) Any notice, demand or request required or permitted to be given by either the Company or Proviant pursuant to the terms of this Agreement shall be in writing and shall be deemed given (i) when delivered personally, (ii) five days after it is deposited in the U.S. mail, certified with return receipt requested and with postage prepaid, or (iii) one day after deposit (prepaid) with a nationally recognized overnight courier, and addressed to the party being notified at its address specified on the applicable signature page hereto or such other address which the addressee may subsequently notify the other party in writing.

                  (c) Either party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, nor prevent that party thereafter from enforcing each and every other provision of this Agreement. The rights granted both parties herein are cumulative and shall not constitute a waiver of either party’s right to assert all other legal remedies available to it under the circumstances.

                  (d) The parties acknowledge that money damages may not be an adequate remedy for violations of this Agreement and that any party may, in its sole discretion, apply to a court of competent jurisdiction for specific performance or injunctive or such other relief as such court may deem just and proper to enforce this Agreement or to prevent any violation hereof and, to the extent permitted by applicable law, each party waives any objection to the imposition of such relief in appropriate circumstances.
 


                  (e) This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

                  (f) Each party to this Agreement represents that such party has duly authorized, executed and delivered this Agreement and that this Agreement is a valid and binding obligation of such party, enforceable against such party in accordance with its terms.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the first date above written.

 
Sports Supplement Acquisition Group, Inc.
         
By
/s/ Ramlakhan Boodram  
By
/s/ James Klein
Name: Ramlakhan Boodram
 
Name: James Klein
Title:   President
 
Title: President
         
Address:
 
Address:
     
 
2348 Lucerne Road, Suite 172
Champaign, Illinois 61826
 
Mount-Royal, QC H3R 2J8

 
 

 

EX-10.5 6 v136667_ex10-5.htm
 
NEITHER THIS NOTE NOR ANY SECURITIES WHICH MAY BE ISSUED UPON CONVERSION HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR OTHERWISE QUALIFIED UNDER ANY STATE OR OTHER SECURITIES LAW.  NEITHER THIS NOTE NOR ANY SUCH SECURITIES MAY BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND REGISTRATION OR OTHER QUALIFICATION UNDER ANY APPLICABLE STATE OR OTHER SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION OR OTHER QUALIFICATION IS NOT REQUIRED.
 
CONVERTIBLE PROMISSORY NOTE
 
$1,500,000
December 10, 2008
 
FOR VALUE RECEIVED, Sports Supplement Acquisition Group, Inc., a Delaware corporation (the “COMPANY”), hereby unconditionally promises to pay to the order of PROVIANT TECHNOLOGIES, INC., a corporation organized under the laws of the State of Illinois (“LENDER”), at 309 W. Hensley Rd., Champaign, Illinois 61826 or such other address given to the Company by Lender, the principal sum of One Million Five Hundred Thousand ($1,500,000) Dollars, in lawful money of the United States of America, on the Maturity Date.
 
1.      DEFINITIONS. When used in this Note, the following terms shall have the respective meanings specified herein or in the section referred to:
 
“BUSINESS DAY” means any day other than a Saturday, Sunday, or other day on which a bank is authorized to be closed under the laws of Illinois.
 
 “COMMON STOCK” means the Common Stock, par value $0.001 per share, of the Company.
 
“COMPANY” means Sports Supplement Acquisition Group, Inc.
 
“CONVERSION PRICE” means the Current Market Price less 50%, except as otherwise adjusted pursuant to SECTIONS 8(d).
 
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“CURRENT MARKET PRICE” means, when used with respect to any security as of any date, the volume weighted average trading price during the ninety (90) Trading Days determined by the last sale price, regular way, or, in case no such sale takes place on such date, the closing bid price, regular way, of such security in either case as reported on the Nasdaq Global Market, or, if such security is not listed or admitted to trading on the Nasdaq Global Market, as reported on the Nasdaq SmallCap Market, or if such security is not listed or admitted to trading on any national or international securities exchange or the Nasdaq Global Market or the Nasdaq SmallCap Market, the average of the high bid and low asked prices of such security in the over-the-counter market as reported by the National Association of Securities Dealers, Inc. Automated Quotations System or such other system then in use or, if such security is not quoted by any such organization, the average of the closing bid and asked prices of such security furnished by an New York Stock Exchange member firm selected by the Company. If such security is not quoted by any such organization and no such New York Stock Exchange member firm is able to provide such prices, then the Current Market Price of such security shall be the fair market value thereof as determined in good faith by the Board of Directors of the Company without any discount for lack of marketability or minority interest; provided, however, if Lender disagrees with the Current Market Price determined by the Board of Directors, Lender may appoint and shall pay for an appraiser to establish the Current Market Price.  Such appraiser shall have free and full access to all corporate records such appraiser shall require to reach its opinion.  The appraiser shall have 60 days from the event requiring the calculation of the Current Market Price hereunder to complete such appraisal.  If the appraiser’s Current Market Price is within ten percent (10%) of the Current Market Price determined by the Board of Directors above, the Current Market Price shall be the average of the Current Market Price determined by the Board of Directors and the Current Market Price determined by Lender’s appraiser.  If the difference between the Current Market Price determined by the Board of Directors and the Current Market Price determined by Lender’s appraiser is greater than ten percent (10%), the Current Market Price shall be determined by an appraiser from a regionally-recognized arbitration service with expertise in valuing such security agreed to and appointed by the parties.  Such appointed arbitrator shall determine the Current Market Price by accepting and adopting either the Current Market Price determined by the Board of Directors or the Current Market Price determined by Lender’s appraiser.
 
“EVENT OF DEFAULT” is defined in SECTION 4 hereof.
 
“EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended.
 
“LOAN DOCUMENTS” means this Note, the Other Notes and all other documents evidencing Obligation.
 
“MATURITY DATE” means February 23, 2009.
 
 “NOTE” refers to this Convertible Promissory Note.
 
“OBLIGATION” shall mean all indebtedness, liabilities, and obligations, of the Company arising under this Note, the Other Notes and any other Loan Documents.
 
“OTHER NOTES” shall mean any Convertible Promissory Note, other than this Note, issued by the Company to Lender.
 
“PERSON” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, charitable foundation, unincorporated organization, government or any agency or political subdivision thereof, or any other entity.
 
 “SEC” means the Securities and Exchange Commission and any successor thereof.
 
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“TRADING DAY” means each Monday, Tuesday, Wednesday, Thursday, and Friday, other than any day on which securities are not traded on the applicable securities exchange or in the applicable securities market.
 
2.      PAYMENT.
 
(a)    PRINCIPAL PAYMENTS. The unpaid principal balance of this Note shall payable from time to time, but no more frequently than weekly, as such funds become available to the Company; provided, however, that an aggregate of at least Five Hundred Thousand Dollars ($500,000) of the principal balance of this Note shall be due and payable on or before January 15, 2009.  The remaining unpaid principal balance of this Note shall be finally due and payable on the Maturity Date.
 
(b)    PAYMENTS GENERALLY. Except as otherwise provided herein, all payments of principal of and interest, if any, on this Note shall be made by the Company to Lender by cashier’s check. Should this Note become due and payable on any day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day. Payments made to Lender by the Company hereunder shall be applied first to accrued interest, if any, and then to principal.
 
3.      WAIVER. The Company waives presentment, demand, protest, notice of protest and non-payment, or other notice of default, notice of acceleration and intention to accelerate, or other notice of any kind, and agrees that its liability under this Note shall not be affected by any renewal or extension in the time of payment hereof, or in any indulgences, or by any release or change in any security for the payment of this Note, and hereby consents to any and all renewals, extensions, indulgences, releases, or changes, regardless of the number of such renewals, extensions, indulgences, releases, or changes.
 
4.      EVENTS OF DEFAULT AND REMEDIES. An “EVENT OF DEFAULT” shall exist hereunder if any one or more of the following events shall occur and be continuing: (a) the Company shall fail to pay the entire principal balance of this Note on the Maturity Date and such failure shall continue for five (5) Business Days after such payment became due; or (b) the Company shall fail to perform any of the covenants or agreements contained herein or in any other Loan Document and such failure shall continue unremedied for thirty (30) days after written notice thereof; or (c) any representation or warranty made by the Company to Lender herein or in any other Loan Document shall prove to be untrue or inaccurate in any material respect; or (d) an event of default shall occur with respect to any Other Note pursuant to its terms; or (e) the Company shall (1) apply for or consent to the appointment of a receiver, trustee, intervener, custodian, or liquidator of itself or of all or a substantial part of its assets, (2) be adjudicated bankrupt or insolvent or file a voluntary petition for bankruptcy or admit in writing that it is unable to pay its debts as they become due, (3) make a general assignment for the benefit of creditors, (4) file a petition or answer seeking reorganization or an arrangement with creditors or to take advantage of any bankruptcy or insolvency laws, or (5) file an answer admitting the material allegations of, or consent to, or default in answering, a petition filed against it in any bankruptcy, reorganization, or insolvency proceeding, or take corporate action for the purpose of effecting any of the foregoing; or (f) an order, judgment, or decree shall be entered by any court of competent jurisdiction or other competent authority approving a petition seeking reorganization of the Company appointing a receiver, trustee, intervener, or liquidator of the Company, or of all or substantially all of its assets, and such order, judgment, or decree shall continue unstayed and in effect for a period of thirty (30) days; or (g) the dissolution or liquidation of the Company; or (h) the Company shall default in the payment of any indebtedness of such Company in excess of $250,000 individually or in the aggregate or default shall occur in respect of any note or credit agreement relating to any such indebtedness and such default shall continue for more than the period of grace, if any, specified therein; or (i) any final judgment(s) for the payment of money in excess of the sum of $250,000 individually or in the aggregate shall be rendered against the Company and such judgment(s) shall not be satisfied or discharged at least ten (10) days prior to the date on which any of the Company's assets could be lawfully sold to satisfy such judgment(s).
 
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Upon the occurrence of any Event of Default hereunder, then the holder hereof may, at its option, (i) declare the entire unpaid principal balance of the Obligation together with interest accrued on the Obligation from the date of issuance of this Note at the rate of twelve percent (12%) per annum to be immediately due and payable, and (ii) pursue and enforce any of Lender's rights and remedies available pursuant to this Note, the Other Notes, or any applicable law or agreement; provided, however, in the case of any Event of Default specified in PARAGRAPH (e) or (f) of this SECTION 4 with respect to the Company, without any notice to the Company or any other act by Lender, the entire unpaid principal balance of the Obligation together with interest accrued on the Obligation from the date of issuance of this Note at the rate of twelve percent (12%) per annum shall become immediately due and payable.
 
     In addition, upon an Event of Default, Lender shall have the right to nominate two additional directors to the Board of Directors of the Company pursuant to that certain Voting Agreement of even date herewith by and between the Company and Lender.

5.      REPRESENTATIONS AND COVENANTS.
 
(a)    REPRESENTATIONS. The Company represents and warrants to Lender that:
 
(i)       The Company is duly organized and in good standing under the laws of the state of its incorporation, formation, or organization;
 
(ii)      The Company has full power and authority to enter into this Note and the other Loan Documents, to execute and deliver the Loan Documents, and to incur the obligations provided for in the Loan Documents, all of which has been duly authorized by all necessary action.
 
(iii)     the Loan Documents are the legal and binding obligations of the Company, enforceable in accordance with their respective terms;
 
(iv)     neither the execution and delivery of this Note and the other Loan Documents, nor consummation of any of the transactions herein or therein contemplated, nor compliance with the terms and provisions hereof or thereof, will contravene or conflict with any provision of law, statute, or regulation to which the Company is subject or any judgment, license, order, or permit applicable to the Company or any indenture, mortgage, deed of trust, or other instrument to which the Company may be subject; no consent, approval, authorization, or order of any court, governmental authority, or third party is required in connection with the execution, delivery, and performance by the Company of this Note or any of the other Loan Documents or to consummate the transactions contemplated herein or therein.
 
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(b)    AFFIRMATIVE COVENANTS. Until payment in full of the Obligation, the Company agrees and covenants that the Company shall:
 
(i)      conduct its business in an orderly and efficient manner consistent with good business practices and in accordance with all valid regulations, laws, and orders of any governmental authority and will act in accordance with customary industry standards in maintaining and operating its assets, properties, and investments;
 
(ii)     maintain complete and accurate books and records of its transactions in accordance with generally accepted accounting principles, and, if an Event of Default exists, will give Lender access during business hours to all books, records and documents of the Company and permit Lender to make and take away copies thereof, provided the Lender signs a confidentiality agreement;
 
(iii)    upon the registration of the Company’s shares of Common Stock under the Exchange Act, furnish to Lender (i) unless the  following are filed with the SEC through EDGAR and are  available to the public  through  EDGAR,  within two (2) Business Days after the filing thereof with the SEC, a copy of Company’s Annual Reports on Form 10-K, its Quarterly  Reports on Form 10-Q, any Current  Reports on Form 8-K and any  registration  statements  (other than on Form S-8) or amendments  filed pursuant to the Securities Act of 1933, as amended;  (ii) on the same day as the release  thereof,  facsimile or email copies of all press releases  issued by Company;  and (iii) copies of any notices and other information made available or given to the stockholders of Company generally, contemporaneously with the making available or giving thereof to the stockholders;
 
(iv)    furnish to Lender, immediately upon becoming aware of the existence of any condition or event constituting an Event of Default or event which, with the lapse of time and/or giving of notice would constitute an Event of Default, written notice specifying the nature and period of existence thereof and any action which the Company is taking or proposes to take with respect thereto;
 
(v)     promptly notify Lender of: (A) any material adverse change in its financial condition or business; (B) any default under any material agreement, contract, or other instrument to which the Company is a party or by which any of its properties are bound, or any acceleration of any maturity of any indebtedness owing by the Company; (C) any material adverse claim against or affecting the Company or any of its properties; and (D) any litigation, or any claim or controversy which might become the subject of litigation, against the Company or affecting the Company's property, if such litigation or potential litigation might, in the event of an unfavorable outcome, have a material adverse effect on the Company's financial condition or business or might cause an Event of Default;
 
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(vi)    promptly furnish to Lender, at Lender's reasonable request, such additional financial or other information concerning assets, liabilities, operations, and transactions of the Company as Lender may from time to time reasonably request, subject to restrictions imposed by state and federal securities laws;
 
(vii)   promptly pay all lawful claims, whether for labor, materials, or otherwise, which might or could, if unpaid, become a lien or charge on any property or assets of the Company, unless and to the extent only that the same are being contested in good faith by appropriate proceedings and reserves have been established therefor;
 
(viii)  maintain on its properties insurance of responsible and reputable companies in such amounts and covering such risks as is prudent and is usually carried by companies engaged in businesses similar to that of the Company; the Company shall furnish Lender, on request, with certified copies of insurance policies or other appropriate evidence of compliance with the foregoing covenant;
 
(ix)    comply with all applicable legal requirements of any governmental authority;
 
(x)      preserve and maintain all licenses, privileges, franchises, certificates, and the like necessary for the operation of its business; and
 
(xi)     pay and discharge all taxes, assessments, and governmental charges or levies imposed upon it or upon its income or profits, or upon any property belonging to it, before such amounts become delinquent.
 
 (c)   NEGATIVE COVENANTS. Until payment in full of the Obligation, the Company covenants that the Company shall not without the prior written consent of Lender, in its sole and absolute discretion, (A) sell all or substantially all the Company's assets, or (B) pay any dividends on any of its outstanding capital stock, or purchase, redeem, or repurchase any of its capital stock.
 
(d)    REPRESENTATIONS. The Lender represents and warrants to the Company that:
 
(i) it is an “accredited investor” as defined under the Securities Act, and the SEC’s Regulation D promulgated thereunder and agrees not to engage in hedging transactions unless in compliance with the Securities Act;
 
(ii) it has carefully considered the resulting answers and all other information available to the undersigned with respect to the Company;
 
(iii) it has relied solely upon the investigations of the Company made by or on behalf of the Lender in evaluating the suitability of an investment in the Company, and the Lender recognizes that an investment in the Company involves a high degree of risk;
 
(iv) it has been advised that there is not currently a market for the shares of Common Stock and it may be difficult to readily liquidate this investment;
 
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(v) it understands that no securities administrator of any state has made any finding or determination relating to the fairness of this investment and that no securities administrator of any state has recommended or endorsed, or will recommend or endorse, the Note or the underlying equity of the Company into which the Note may be converted;

(vi) it will not attempt to sell, transfer, assign, pledge or otherwise dispose of all or any portion of the Note or Common Stock issuable upon conversion thereof unless it is registered under the Securities Act or unless in the opinion of counsel satisfactory to the Company an exemption from such registration is available; and

(vii) it has received no general solicitation or general advertising (including communications published in any newspaper, magazine or other broadcast) and that no public solicitation or advertisement with respect to the offering of the Note or Common Stock has been made to it.

6.      NO WAIVER. No waiver by Lender of any of its rights or remedies hereunder or under any other document evidencing or securing this Note or otherwise, shall be considered a waiver of any other subsequent right or remedy of Lender; no delay or omission in the exercise or enforcement by Lender of any rights or remedies shall ever be construed as a waiver of any right or remedy of Lender; and no exercise or enforcement of any such rights or remedies shall ever be held to exhaust any right or remedy of Lender.
 
7.      USURY LAWS. Regardless of any provision contained in this Note, Lender shall never be deemed to have contracted for or be entitled to receive, collect, or apply as interest on this Note (whether termed interest herein or deemed to be interest by judicial determination or operation of law) any amount in excess of the maximum rate which may lawfully be charged (the “Maximum Rate”), in the event that Lender ever receives, collects, or applies as interest any such excess, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance of this Note, and, if the principal balance of this Note is paid in full, then any remaining excess shall forthwith be paid to the Company. In determining whether or not the interest paid or payable under any specific contingency exceeds the highest Maximum Rate, the Company and Lender shall, to the maximum extent permitted under applicable law, (a) characterize any non-principal payment (other than payments which are expressly designated as interest payments hereunder) as an expense or fee rather than as interest, (b) exclude voluntary prepayments and the effect thereof, and (c) spread the total amount of interest throughout the entire contemplated term of this Note so that the interest rate is uniform throughout such term; provided, that if this Note is paid and performed in full prior to the end of the full contemplated term hereof, and if the interest received for the actual period of existence thereof exceeds the Maximum Rate, if any, then Lender or any holder hereof shall refund to the Company the amount of such excess, or credit the amount of such excess against the aggregate unpaid principal balance of all advances made by the Lender or any holder hereof under this Note at the time in question.
 
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8.      CONVERSION RIGHTS.
 
(a)    CONVERSION PRIVILEGE. Upon an Event of Default, Lender, at its option may convert all or any portion of the outstanding principal balance of and accrued interest upon this Note and the Other Notes into the number of Shares of Common Stock obtained by dividing (i) the unpaid principal amount of, and interest through the date of conversion on, this Note and the Other Notes to be converted, by (ii) the Conversion Price.
 
 (b)   CONVERSION PROCEDURE. To convert this Note pursuant to this SECTION 8, Lender must
 
(i) complete and sign a “Form of Election to Convert” attached hereto as Exhibit A;
 
(ii) pay any transfer or similar tax if required by SECTION 8(e); and
 
(iii) if the conversion is of the entire unpaid principal of and accrued interest upon this Note and any or all of the Other Notes, then surrender this Note and such Other Notes to the Company. As promptly as practicable after delivery of an Election to Convert in accordance with this SECTION 8(b), the Company shall issue and deliver to Lender a certificate or certificates for the full number of whole shares of Common Stock.
 
(c)    CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional shares of Common Stock, scrip representing fractional shares of Common Stock, or Warrants for fractional shares of Common Stock shall be issued upon conversion of the principal of, or interest on, this Note and any or all of the Other Notes. If any fractional share of Common Stock would be issuable upon the conversion of any portion of this Note and any or all of the Other Notes, the Company shall pay a cash adjustment therefor in respect of such fractional share equal to the product of (i) the percentage representing such fractional share multiplied by (ii) the Conversion Price.
 
(d)    EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER, OR SALE. In the event of (i) any reclassification (including, without limitation, a reclassification effected by means of an exchange or tender offer by the Company) but excluding a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), (ii) any consolidation, merger or combination of the Company with another corporation as a result of which holders of Common Stock shall be entitled to receive securities or other property (including cash) with respect to or in exchange for Common Stock or (iii) any sale or conveyance of the property of the Company as, or substantially as, an entirety to any other corporation as a result of which holders of Common Stock shall be entitled to receive securities or other property (including cash) with respect to or in exchange for Common Stock, then the Company or the successor or purchasing corporation, as the case may be, shall enter into an Amended and Restated Note providing that this Note shall be convertible into the kind and amount of securities or other property (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance which Lender would have received if this Note had been converted immediately prior to such reclassification, change, consolidation, merger, combination, sale or conveyance. Such Amended and Restated Note shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this SECTION 8. Whenever an Amended and Restated Note is entered into as provided herein, the Company shall promptly provide Lender with an Officer's Certificate setting forth a brief statement of the facts requiring such Amended and Restated Note. The provisions of this SECTION 8 shall similarly apply to all successive events of the type described in this SECTION 8.
 
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(e)    TAXES ON SHARES ISSUED. The issuance of a certificate or certificates on conversion of this Note shall be made without charge to the Lender for any tax or charge with respect to the issuance thereof. The Company shall not, however, be required to pay any tax or charge which may be payable with respect to any transfer involved in the issuance and delivery of a certificate or certificates in any name other than that of Lender, and the Company shall not be required to issue or deliver any such certificate or certificates unless and until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or charge or shall have established to the satisfaction of the Company that such tax or charge has been paid.
 
(f)     RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE WITH GOVERNMENT REQUIREMENTS. The Company shall reserve, out of its authorized but unissued Common Stock or its Common Stock held in treasury, sufficient shares of Common Stock to provide for the conversion of all of this Note and the Other Notes at the Conversion Price.
 
Before taking any action which would cause an adjustment reducing the Conversion Price below the then par value, if any, of the Common Stock issuable upon conversion of this Note and the Other Notes, the Company will take all corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue Common Stock at such adjusted Conversion Price. The Company covenants that all Common Stock which may be issued upon conversion of this Note and any or all of the Other Notes will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance and delivery thereof. The Company covenants that if any Common Stock issued or delivered upon conversion of this Note and any or all of the Other Notes hereunder requires registration with or approval of any governmental authority under any applicable federal or state law (excluding federal or state securities laws) before such Common Stock may be lawfully issued, the Company will in good faith and as expeditiously as possible endeavor to secure such registration or approval, as the case may be.
 
(g)    NOTICE TO LENDER PRIOR TO CERTAIN ACTIONS. In the event that:
 
(i)       the Company shall declare or authorize any event which could result in an adjustment in the Conversion Price under SECTION 8(d) or require the execution of an Amended and Restated Note; or
 
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(ii)      the Company shall authorize the combination, consolidation or merger of the Company for which approval of any stockholders of the Company is required, the sale or transfer of all or substantially all of the assets of the Company or the voluntary or involuntary dissolution, liquidation or winding-up of the Company in whole or in part; then, in each such case, the Company shall give or cause to be given to Lender, as promptly as possible but in any event at least seven (7) Business Days prior to the applicable date hereinafter specified, a notice stating the date on which a record is to be taken for the purpose of determining the holders of outstanding Common Stock entitled to participate in such event, the date on which such event is expected to become effective or occur and the date on which it is expected that holders of outstanding Common Stock of record shall be entitled to surrender their shares, or receive any items, in connection with such event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
 
 9.     NOTICE. Whenever this Note requires or permits any notice, approval, request, or demand from one party to another, the notice, approval, request, or demand must be in writing and shall be deemed to have been given when personally served or when deposited in the United States mails, registered or certified, return receipt requested, addressed to the party to be notified at the following address (or at such other address as may have been designated by written notice):
 
 
Lender:
To the address in the first paragraph hereof
     
 
The Company:
Sports Supplement Acquisition Group, Inc.
2348 Lucerne Road, Suite 172
Mount-Royal, QC H3R 2J8
Attention: James Klein
 
10.    AMENDMENT. This Note may be amended or modified only by written instrument duly executed by the Company and Lender.
 
11.    COSTS. If this Note is placed in the hands of an attorney for collection, or if it is collected through any legal proceeding at law or in equity, or in bankruptcy, receivership, or other court proceedings, then the Company agrees to pay all costs of collection, including, but not limited to, court costs and reasonable attorneys' fees, including all costs of appeal.
 
12.    SUCCESSORS AND ASSIGNS. This Note shall inure to the benefit of Lender and its successors and assigns; provided, however, Lender may not (without the prior written consent of the Company, such consent not to be unreasonably withheld or delayed and such consent not to be required if an Event of Default exists) assign or negotiate this Note to any Person.
 
13.    GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED, AND APPLIED IN ACCORDANCE WITH THE LAWS OF ILLINIOS.
 
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14.    FINAL AGREEMENT. THIS NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT AGREEMENTS BETWEEN THE PARTIES (OTHER THAN SUBSEQUENT WRITTEN AMENDMENTS). THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
 
 
SPORTS SUPPLEMENT ACQUISITION
GROUP, INC.:
   
 
a Delaware corporation
   
 
By: /s/ James Klein
   
Name: James Klein
   
Title: Chief Executive Officer
 
 
PROVIANT TECHNOLOGIES, INC.:
   
 
An Illinois Corporation
   
 
By: /s/ Ramlakhan Boodram
   
Name:  Ramlakhan Boodram
   
Title:   President

 
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EXHIBIT A
 
FORM OF ELECTION TO CONVERT

(To be executed by Lender upon conversion of the Note)
 
TO:     SPORTS SUPPLEMENT ACQUISITION GROUP, INC.
 
The undersigned, holder of that certain Convertible Note in the original Principal Amount of $1,500,000, dated as of December 10, 2008 (the “Note”), issued by Sports Supplement Acquisition Group, Inc. (the “Company”), hereby exercises his/her/its right to convert unpaid principal of, and accrued interest upon, the Note, equal to $_______________, into Common Stock of the Company pursuant to the terms of the Note.
 
Please issue the Common Stock, as applicable, as follows:
 

Print or Type Name
 

 Social Security or Other Identifying Number
 

 Street Address
 

 

City
State
Zip Code
 
and deliver it to the above address, unless a different address is indicated below.

The undersigned hereby warrants and represents that it is (A) an “accredited investor” as defined under the Securities Act, and the SEC’s Regulation D promulgated thereunder; or (B) not a U.S. person (as defined in Rule 902(o) of the Securities Act of 1933, as amended (the “Securities Act”)), is not acquiring the shares of Common Stock purchased hereunder for the account or benefit of any U.S. person, will resell the shares of Common Stock purchased hereunder, and the Shares of Common Stock of Common Stock issuable upon conversion of such shares of Common Stock, only in accordance with (1) the provisions of Regulation S promulgated under the Securities Act (“Regulation S”), (2) pursuant to an effective registration statement under the Securities Act, or (3) pursuant to an available exemption from registration under the Securities Act, and only in compliance with the terms and provisions of this Agreement; and agrees not to engage in hedging transactions unless in compliance with the Securities Act
 
Dated:_______________
 
 
Signature

 
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EX-10.6 7 v136667_ex10-6.htm
 
NEITHER THIS NOTE NOR ANY SECURITIES WHICH MAY BE ISSUED UPON CONVERSION HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR OTHERWISE QUALIFIED UNDER ANY STATE OR OTHER SECURITIES LAW.  NEITHER THIS NOTE NOR ANY SUCH SECURITIES MAY BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND REGISTRATION OR OTHER QUALIFICATION UNDER ANY APPLICABLE STATE OR OTHER SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION OR OTHER QUALIFICATION IS NOT REQUIRED.
 
CONVERTIBLE PROMISSORY NOTE
 
$666,666
December 10, 2008
 
FOR VALUE RECEIVED, Sports Supplement Acquisition Group, Inc., a Delaware corporation (the “COMPANY”), hereby unconditionally promises to pay to the order of PROVIANT TECHNOLOGIES, INC., a corporation organized under the laws of the State of Illinois (“LENDER”), at 309 W. Hensley Rd., Champaign, Illinois 61826 or such other address given to the Company by Lender, the principal sum of Six Hundred Sixty-Six Thousand Six Hundred and Sixty-Six ($666,666) Dollars, in lawful money of the United States of America, together with interest (calculated on the basis of a 360-day year) on the unpaid principal balance from day-to-day remaining, computed until maturity at the rate per annum which shall from day-to-day be equal to the Applicable Rate.
 
1.      DEFINITIONS. When used in this Note, the following terms shall have the respective meanings specified herein or in the section referred to:
 
“APPLICABLE RATE” means seven percent (7%) per annum, except as otherwise provided in SECTION 4.
 
“BUSINESS DAY” means any day other than a Saturday, Sunday, or other day on which a bank is authorized to be closed under the laws of Illinois.
 
 “COMMON STOCK” means the Common Stock, par value $0.001 per share, of the Company.
 
“COMPANY” means Sports Supplement Acquisition Group, Inc.
 
“CONVERSION PRICE” means the Current Market Price less 25%, except as otherwise adjusted pursuant to SECTION 8(e).

 
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“CURRENT MARKET PRICE” means, when used with respect to any security as of any date, the volume weighted average trading price during the ninety (90) Trading Days determined by the last sale price, regular way, or, in case no such sale takes place on such date, the closing bid price, regular way, of such security in either case as reported on the Nasdaq Global Market, or, if such security is not listed or admitted to trading on the Nasdaq Global Market, as reported on the Nasdaq SmallCap Market, or if such security is not listed or admitted to trading on any national or international securities exchange or the Nasdaq Global Market or the Nasdaq SmallCap Market, the average of the high bid and low asked prices of such security in the over-the-counter market as reported by the National Association of Securities Dealers, Inc. Automated Quotations System or such other system then in use or, if such security is not quoted by any such organization, the average of the closing bid and asked prices of such security furnished by an New York Stock Exchange member firm selected by the Company. If such security is not quoted by any such organization and no such New York Stock Exchange member firm is able to provide such prices, then the Current Market Price of such security shall be the fair market value thereof as determined in good faith by the Board of Directors of the Company without any discount for lack of marketability or minority interest.
 
“DEFAULT CONVERSION PRICE” means the Current Market Price less 45%, except as otherwise set forth in any Other Note with a maturity date prior to the Maturity Date and/or as adjusted pursuant to SECTION 8(e).
 
“EVENT OF DEFAULT” is defined in SECTION 4 hereof.
 
“EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended.
 
 “INTEREST PAYMENT DATE” means (a) each January 1, April 1, July 1 and October 1 of each calendar year during the term of this Note, and (b) the Maturity Date.
 
 “LOAN DOCUMENTS” means this Note, the Other Notes and all other documents evidencing Obligation.
 
“MATURITY DATE” means December 10, 2009.
 
 “NOTE” refers to this Convertible Promissory Note.
 
“OBLIGATION” shall mean all indebtedness, liabilities, and obligations, of the Company arising under this Note, the Other Notes and any other Loan Documents.
 
“OTHER NOTES” shall mean any Convertible Promissory Note, other than this Note, issued by the Company to Lender.
 
“PERSON” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, charitable foundation, unincorporated organization, government or any agency or political subdivision thereof, or any other entity.
 
 “SEC” means the Securities and Exchange Commission and any successor thereof.
 
“TRADING DAY” means each Monday, Tuesday, Wednesday, Thursday, and Friday, other than any day on which securities are not traded on the applicable securities exchange or in the applicable securities market.

 
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2.      PAYMENT.
 
(a) INTEREST AND PRINCIPAL PAYMENTS. The unpaid principal of, and interest on, this Note shall be due and payable as follows:
 
(i)   Interest, computed in accordance with the terms hereof, shall be due and payable quarterly as it accrues on each Interest Payment Date, commencing on April 1, 2009; and
 
(ii)  the unpaid principal of, and interest on, this Note shall be finally due and payable on the Maturity Date.
 
(b) VOLUNTARY PREPAYMENT. The Company reserves the right, upon fifteen (15) Business Days' prior written notice to Lender, which notice shall set forth the Current Market Price and all supporting calculations thereof, to prepay the outstanding principal balance of this Note, in whole or in part, at any time and from time to time. All prepayments shall be made together with payment of interest accrued on the amount of principal being prepaid through the date of such prepayment.
 
(c)  PAYMENTS GENERALLY. Except as otherwise provided herein, all payments of principal of and interest on this Note shall be made by the Company to Lender by fedwire or other immediately available funds. Should the principal of, or any installment of the principal of or interest on, this Note become due and payable on any day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day, and interest shall be payable with respect to such extension. Payments made to Lender by the Company hereunder shall be applied first to accrued interest and then to principal.
 
3.      WAIVER. The Company waives presentment, demand, protest, notice of protest and non-payment, or other notice of default, notice of acceleration and intention to accelerate, or other notice of any kind, and agrees that its liability under this Note shall not be affected by any renewal or extension in the time of payment hereof, or in any indulgences, or by any release or change in any security for the payment of this Note, and hereby consents to any and all renewals, extensions, indulgences, releases, or changes, regardless of the number of such renewals, extensions, indulgences, releases, or changes.

 
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4.      EVENTS OF DEFAULT AND REMEDIES. An “EVENT OF DEFAULT” shall exist hereunder if any one or more of the following events shall occur and be continuing: (a) the Company shall fail to pay when due any principal of, or interest upon, this Note or the Obligation and such failure shall continue for five (5) Business Days after such payment became due; or (b) the Company shall fail to perform any of the covenants or agreements contained herein or in any other Loan Document and such failure shall continue unremedied for thirty (30) days after written notice thereof; or (c) any representation or warranty made by the Company to Lender herein or in any other Loan Document shall prove to be untrue or inaccurate in any material respect; or (d) an event of default shall occur with respect to any Other Note pursuant to its terms; or (e) the Company shall (1) apply for or consent to the appointment of a receiver, trustee, intervener, custodian, or liquidator of itself or of all or a substantial part of its assets, (2) be adjudicated bankrupt or insolvent or file a voluntary petition for bankruptcy or admit in writing that it is unable to pay its debts as they become due, (3) make a general assignment for the benefit of creditors, (4) file a petition or answer seeking reorganization or an arrangement with creditors or to take advantage of any bankruptcy or insolvency laws, or (5) file an answer admitting the material allegations of, or consent to, or default in answering, a petition filed against it in any bankruptcy, reorganization, or insolvency proceeding, or take corporate action for the purpose of effecting any of the foregoing; or (f) an order, judgment, or decree shall be entered by any court of competent jurisdiction or other competent authority approving a petition seeking reorganization of the Company appointing a receiver, trustee, intervener, or liquidator of the Company, or of all or substantially all of its assets, and such order, judgment, or decree shall continue unstayed and in effect for a period of thirty (30) days; or (g) the dissolution or liquidation of the Company; or (h) the Company shall default in the payment of any indebtedness of such Company in excess of $250,000 individually or in the aggregate or default shall occur in respect of any note or credit agreement relating to any such indebtedness and such default shall continue for more than the period of grace, if any, specified therein; or (i) any final judgment(s) for the payment of money in excess of the sum of $250,000 individually or in the aggregate shall be rendered against the Company and such judgment(s) shall not be satisfied or discharged at least ten (10) days prior to the date on which any of the Company's assets could be lawfully sold to satisfy such judgment(s).
 
Upon the occurrence of any Event of Default hereunder, then the holder hereof may, at its option, (i) (A) declare the entire unpaid principal balance and accrued interest upon the Obligation to be immediately due and payable and such unpaid principal balance and accrued interest upon the Obligation shall accrue interest thereafter at the rate of twelve percent (12%) per annum, and (B) pursue and enforce any of Lender's rights and remedies available pursuant to this Note, the Other Notes, or any applicable law or agreement; provided, however, in the case of any Event of Default specified in PARAGRAPH (e) or (f) of this SECTION 4 with respect to the Company, without any notice to the Company or any other act by Lender, the principal balance and interest accrued on this Note shall become immediately due and payable and such unpaid principal balance and accrued interest upon the Obligation shall accrue interest thereafter at the rate of twelve percent (12%) per annum; or (ii) exercise its conversion rights arising upon an Event of Default set forth in SECTION 8.
 
     In addition, upon an Event of Default, Lender shall have the right to nominate one additional director to the Board of Directors of the Company pursuant to that certain Voting Agreement of even date herewith by and between the Company and Lender.
 
5.      REPRESENTATIONS AND COVENANTS.
 
(a) REPRESENTATIONS. The Company represents and warrants to Lender that:
 
(i) The Company is duly organized and in good standing under the laws of the state of its incorporation, formation, or organization;

 
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(ii) The Company has full power and authority to enter into this Note and the other Loan Documents, to execute and deliver the Loan Documents, and to incur the obligations provided for in the Loan Documents, all of which has been duly authorized by all necessary action.
 
(iii) the Loan Documents are the legal and binding obligations of the Company, enforceable in accordance with their respective terms;
 
(iv) neither the execution and delivery of this Note and the other Loan Documents, nor consummation of any of the transactions herein or therein contemplated, nor compliance with the terms and provisions hereof or thereof, will contravene or conflict with any provision of law, statute, or regulation to which the Company is subject or any judgment, license, order, or permit applicable to the Company or any indenture, mortgage, deed of trust, or other instrument to which the Company may be subject; no consent, approval, authorization, or order of any court, governmental authority, or third party is required in connection with the execution, delivery, and performance by the Company of this Note or any of the other Loan Documents or to consummate the transactions contemplated herein or therein.
 
(b) AFFIRMATIVE COVENANTS. Until payment in full of the Obligation, the Company agrees and covenants that the Company shall:
 
(i) conduct its business in an orderly and efficient manner consistent with good business practices and in accordance with all valid regulations, laws, and orders of any governmental authority and will act in accordance with customary industry standards in maintaining and operating its assets, properties, and investments;
 
(ii) maintain complete and accurate books and records of its transactions in accordance with generally accepted accounting principles, and, if an Event of Default exists, will give Lender access during business hours to all books, records and documents of the Company and permit Lender to make and take away copies thereof, provided the Lender signs a confidentiality agreement;
 
(iii) upon the registration of the Company’s shares of Common Stock under the Exchange Act, furnish to Lender (i) unless the  following are filed with the SEC through EDGAR and are  available to the public  through  EDGAR,  within two (2) Business Days after the filing thereof with the SEC, a copy of Company’s Annual Reports on Form 10-K, its Quarterly  Reports on Form 10-Q, any Current  Reports on Form 8-K and any  registration  statements  (other than on Form S-8) or amendments  filed pursuant to the Securities Act of 1933, as amended;  (ii) on the same day as the release  thereof,  facsimile or email copies of all press releases  issued by Company;  and (iii) copies of any notices and other information made available or given to the stockholders of Company generally, contemporaneously with the making available or giving thereof to the stockholders;
 
(iv) furnish to Lender, immediately upon becoming aware of the existence of any condition or event constituting an Event of Default or event which, with the lapse of time and/or giving of notice would constitute an Event of Default, written notice specifying the nature and period of existence thereof and any action which the Company is taking or proposes to take with respect thereto;

 
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(v) promptly notify Lender of: (A) any material adverse change in its financial condition or business; (B) any default under any material agreement, contract, or other instrument to which the Company is a party or by which any of its properties are bound, or any acceleration of any maturity of any indebtedness owing by the Company; (C) any material adverse claim against or affecting the Company or any of its properties; and (D) any litigation, or any claim or controversy which might become the subject of litigation, against the Company or affecting the Company's property, if such litigation or potential litigation might, in the event of an unfavorable outcome, have a material adverse effect on the Company's financial condition or business or might cause an Event of Default;
 
(vi) promptly furnish to Lender, at Lender's reasonable request, such additional financial or other information concerning assets, liabilities, operations, and transactions of the Company as Lender may from time to time reasonably request, subject to restrictions imposed by state and federal securities laws;
 
(vii) promptly pay all lawful claims, whether for labor, materials, or otherwise, which might or could, if unpaid, become a lien or charge on any property or assets of the Company, unless and to the extent only that the same are being contested in good faith by appropriate proceedings and reserves have been established therefor;
 
(viii) maintain on its properties insurance of responsible and reputable companies in such amounts and covering such risks as is prudent and is usually carried by companies engaged in businesses similar to that of the Company; the Company shall furnish Lender, on request, with certified copies of insurance policies or other appropriate evidence of compliance with the foregoing covenant;
 
(ix) comply with all applicable legal requirements of any governmental authority;
 
(x) preserve and maintain all licenses, privileges, franchises, certificates, and the like necessary for the operation of its business; and
 
(xi) pay and discharge all taxes, assessments, and governmental charges or levies imposed upon it or upon its income or profits, or upon any property belonging to it, before such amounts become delinquent.
 
 (c) NEGATIVE COVENANTS. Until payment in full of the Obligation, the Company covenants that the Company shall not without the prior written consent of Lender, in its sole and absolute discretion, (A) sell all or substantially all the Company's assets, or (B) pay any dividends on any of its outstanding capital stock, or purchase, redeem, or repurchase any of its capital stock.

 
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(d) REPRESENTATIONS. The Lender represents and warrants to the Company that:
 
(i) it is an “accredited investor” as defined under the Securities Act, and the SEC’s Regulation D promulgated thereunder and agrees not to engage in hedging transactions unless in compliance with the Securities Act;
 
(ii) it has carefully considered the resulting answers and all other information available to the undersigned with respect to the Company;
 
(iii) it has relied solely upon the investigations of the Company made by or on behalf of the Lender in evaluating the suitability of an investment in the Company, and the Lender recognizes that an investment in the Company involves a high degree of risk;
 
(iv) it has been advised that there is not currently a market for the shares of Common Stock and it may be difficult to readily liquidate this investment;
 
(v) it understands that no securities administrator of any state has made any finding or determination relating to the fairness of this investment and that no securities administrator of any state has recommended or endorsed, or will recommend or endorse, the Note or the underlying equity of the Company into which the Note may be converted;

(vi) it will not attempt to sell, transfer, assign, pledge or otherwise dispose of all or any portion of the Note or Common Stock issuable upon conversion thereof unless it is registered under the Securities Act or unless in the opinion of counsel satisfactory to the Company an exemption from such registration is available; and

(vii) it has received no general solicitation or general advertising (including communications published in any newspaper, magazine or other broadcast) and that no public solicitation or advertisement with respect to the offering of the Note or Common Stock has been made to it.

6.      NO WAIVER. No waiver by Lender of any of its rights or remedies hereunder or under any other document evidencing or securing this Note or otherwise, shall be considered a waiver of any other subsequent right or remedy of Lender; no delay or omission in the exercise or enforcement by Lender of any rights or remedies shall ever be construed as a waiver of any right or remedy of Lender; and no exercise or enforcement of any such rights or remedies shall ever be held to exhaust any right or remedy of Lender.

 
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7.      USURY LAWS. Regardless of any provision contained in this Note, Lender shall never be deemed to have contracted for or be entitled to receive, collect, or apply as interest on this Note (whether termed interest herein or deemed to be interest by judicial determination or operation of law) any amount in excess of the maximum rate which may lawfully be charged (the “Maximum Rate”), in the event that Lender ever receives, collects, or applies as interest any such excess, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance of this Note, and, if the principal balance of this Note is paid in full, then any remaining excess shall forthwith be paid to the Company. In determining whether or not the interest paid or payable under any specific contingency exceeds the highest Maximum Rate, the Company and Lender shall, to the maximum extent permitted under applicable law, (a) characterize any non-principal payment (other than payments which are expressly designated as interest payments hereunder) as an expense or fee rather than as interest, (b) exclude voluntary prepayments and the effect thereof, and (c) spread the total amount of interest throughout the entire contemplated term of this Note so that the interest rate is uniform throughout such term; provided, that if this Note is paid and performed in full prior to the end of the full contemplated term hereof, and if the interest received for the actual period of existence thereof exceeds the Maximum Rate, if any, then Lender or any holder hereof shall refund to the Company the amount of such excess, or credit the amount of such excess against the aggregate unpaid principal balance of all advances made by the Lender or any holder hereof under this Note at the time in question.
 
8.      CONVERSION RIGHTS.
 
(a) CONVERSION PRIVILEGE GENERALLY. During the period of time commencing on the date hereof and continuing until the payment in full of this Note absent an Event of Default, Lender, at its option may convert all or any portion of outstanding principal balance of this Note into the number of Shares of Common Stock obtained by dividing (i) the unpaid principal amount of, and interest through the date of conversion on, this Note to be converted, by (ii) the Conversion Price.
 
(b) CONVERSION PRIVILEGE UPON EVENT OF DEFAULT.  Upon the occurrence of an Event of Default, Lender, at its option may convert all or any portion of outstanding principal balance of and accrued interest upon this Note and the Other Notes into the number of Shares of Common Stock obtained by dividing (i) the unpaid principal amount of, and interest through the date of conversion on, this Note and the Other Notes to be converted, by (ii) the Default Conversion Price.
 
(c)  CONVERSION PROCEDURE. To convert this Note pursuant to this SECTION 8, Lender must
 
(i) complete and sign a “Form of Election to Convert” attached hereto as Exhibit A;
 
(ii) pay any transfer or similar tax if required by SECTION 8(f); and
 
(iii) if the conversion is of the entire unpaid principal of and accrued interest upon this Note, then surrender this Note to the Company. As promptly as practicable after delivery of an Election to Convert in accordance with this SECTION 8(c), the Company shall issue and deliver to Lender a certificate or certificates for the full number of whole shares of Common Stock.
 
(d) CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional shares of Common Stock, scrip representing fractional shares of Common Stock, or Warrants for fractional shares of Common Stock shall be issued upon conversion of the principal of, or interest on, this Note. If any fractional share of Common Stock would be issuable upon the conversion of any portion of this Note, the Company shall pay a cash adjustment therefor in respect of such fractional share equal to the product of (i) the percentage representing such fractional share multiplied by (ii) the applicable Conversion Price or Default Conversion Price, as the case may be.

 
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(e) EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER, OR SALE. In the event of (i) any reclassification (including, without limitation, a reclassification effected by means of an exchange or tender offer by the Company) but excluding a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), (ii) any consolidation, merger or combination of the Company with another corporation as a result of which holders of Common Stock shall be entitled to receive securities or other property (including cash) with respect to or in exchange for Common Stock or (iii) any sale or conveyance of the property of the Company as, or substantially as, an entirety to any other corporation as a result of which holders of Common Stock shall be entitled to receive securities or other property (including cash) with respect to or in exchange for Common Stock, then the Company or the successor or purchasing corporation, as the case may be, shall enter into an Amended and Restated Note providing that this Note shall be convertible into the kind and amount of securities or other property (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance which Lender would have received if this Note had been converted immediately prior to such reclassification, change, consolidation, merger, combination, sale or conveyance. Such Amended and Restated Note shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this SECTION 8. Whenever an Amended and Restated Note is entered into as provided herein, the Company shall promptly provide Lender with an Officer's Certificate setting forth a brief statement of the facts requiring such Amended and Restated Note. The provisions of this SECTION 8 shall similarly apply to all successive events of the type described in this SECTION 8.
 
(f) TAXES ON SHARES ISSUED. The issuance of a certificate or certificates on conversion of this Note shall be made without charge to the Lender for any tax or charge with respect to the issuance thereof. The Company shall not, however, be required to pay any tax or charge which may be payable with respect to any transfer involved in the issuance and delivery of a certificate or certificates in any name other than that of Lender, and the Company shall not be required to issue or deliver any such certificate or certificates unless and until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or charge or shall have established to the satisfaction of the Company that such tax or charge has been paid.
 
(g) RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE WITH GOVERNMENT REQUIREMENTS. The Company shall reserve, out of its authorized but unissued Common Stock or its Common Stock held in treasury, sufficient shares of Common Stock to provide for the conversion of all of this Note.

 
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Before taking any action which would cause an adjustment reducing the Conversion Price or the Default Conversion Price, as the case may be, below the then par value, if any, of the Common Stock issuable upon conversion of this Note, the Company will take all corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue Common Stock at such adjusted Conversion Price or Default Conversion Price, as the case may be. The Company covenants that all Common Stock which may be issued upon conversion of this Note will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance and delivery thereof. The Company covenants that if any Common Stock issued or delivered upon conversion of this Note hereunder requires registration with or approval of any governmental authority under any applicable federal or state law (excluding federal or state securities laws) before such Common Stock may be lawfully issued, the Company will in good faith and as expeditiously as possible endeavor to secure such registration or approval, as the case may be.
 
(h) NOTICE TO LENDER PRIOR TO CERTAIN ACTIONS. In the event that:
 
(i) the Company shall declare or authorize any event which could result in an adjustment in the Conversion Price or the Default Conversion Price, as the case may be, under SECTION 8(e) or require the execution of an Amended and Restated Note; or
 
(ii) the Company shall authorize the combination, consolidation or merger of the Company for which approval of any stockholders of the Company is required, the sale or transfer of all or substantially all of the assets of the Company or the voluntary or involuntary dissolution, liquidation or winding-up of the Company in whole or in part; then, in each such case, the Company shall give or cause to be given to Lender, as promptly as possible but in any event at least seven (7) Business Days prior to the applicable date hereinafter specified, a notice stating the date on which a record is to be taken for the purpose of determining the holders of outstanding Common Stock entitled to participate in such event, the date on which such event is expected to become effective or occur and the date on which it is expected that holders of outstanding Common Stock of record shall be entitled to surrender their shares, or receive any items, in connection with such event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
 
9.      NOTICE. Whenever this Note requires or permits any notice, approval, request, or demand from one party to another, the notice, approval, request, or demand must be in writing and shall be deemed to have been given when personally served or when deposited in the United States mails, registered or certified, return receipt requested, addressed to the party to be notified at the following address (or at such other address as may have been designated by written notice):

 
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Lender:
To the address in the first paragraph hereof
   
The Company:
Sports Supplement Acquisition Group, Inc.
2348 Lucerne Road, Suite 172
Mount-Royal, QC H3R 2J8
Attention: James Klein
 
10.    AMENDMENT. This Note may be amended or modified only by written instrument duly executed by the Company and Lender.
 
11.    COSTS. If this Note is placed in the hands of an attorney for collection, or if it is collected through any legal proceeding at law or in equity, or in bankruptcy, receivership, or other court proceedings, then the Company agrees to pay all costs of collection, including, but not limited to, court costs and reasonable attorneys' fees, including all costs of appeal.
 
12.    SUCCESSORS AND ASSIGNS. This Note shall inure to the benefit of Lender and its successors and assigns; provided, however, Lender may not (without the prior written consent of the Company, such consent not to be unreasonably withheld or delayed and such consent not to be required if an Event of Default exists) assign or negotiate this Note to any Person.
 
13.    GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED, AND APPLIED IN ACCORDANCE WITH THE LAWS OF ILLINIOS.
 
14.    FINAL AGREEMENT. THIS NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT AGREEMENTS BETWEEN THE PARTIES (OTHER THAN SUBSEQUENT WRITTEN AMENDMENTS). THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
 
[Signature Page Follows]
 
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SPORTS SUPPLEMENT ACQUISITION GROUP, INC.:
 
a Delaware corporation
 
By:
/s/ James Klein
   
 
Name: James Klein
   
 
Title: Chief Executive Officer
 
PROVIANT TECHNOLOGIES, INC.:
 
An Illinois Corporation
 
By:
/s/ Ramlakhan Boodram
   
 
Name:   Ramlakhan Boodram
   
 
Title:   President

 
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EXHIBIT A
 
FORM OF ELECTION TO CONVERT

(To be executed by Lender upon conversion of the Note)
 
TO:     SPORTS SUPPLEMENT ACQUISITION GROUP, INC.
 
The undersigned, holder of that certain Convertible Note in the original Principal Amount of $666,666, dated as of December 10, 2008 (the “Note”), issued by Sports Supplement Acquisition Group, Inc. (the “Company”), hereby exercises his/her/its right to convert unpaid principal of, and accrued interest upon, the Note, equal to $_______________, into Common Stock of the Company pursuant to the terms of the Note.
 
Please issue the Common Stock, as applicable, as follows:
 

Print or Type Name
 

Social Security or Other Identifying Number
 

Street Address
 

 
City                                                                        State                                                   60;         Zip Code

and deliver it to the above address, unless a different address is indicated below.

The undersigned hereby warrants and represents that it is (A) an “accredited investor” as defined under the Securities Act, and the SEC’s Regulation D promulgated thereunder; or (B) not a U.S. person (as defined in Rule 902(o) of the Securities Act of 1933, as amended (the “Securities Act”)), is not acquiring the shares of Common Stock purchased hereunder for the account or benefit of any U.S. person, will resell the shares of Common Stock purchased hereunder, and the Shares of Common Stock of Common Stock issuable upon conversion of such shares of Common Stock, only in accordance with (1) the provisions of Regulation S promulgated under the Securities Act (“Regulation S”), (2) pursuant to an effective registration statement under the Securities Act, or (3) pursuant to an available exemption from registration under the Securities Act, and only in compliance with the terms and provisions of this Agreement; and agrees not to engage in hedging transactions unless in compliance with the Securities Act

Dated: ___________________
   
   
Signature

 
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EX-10.7 8 v136667_ex10-7.htm
 
NEITHER THIS NOTE NOR ANY SECURITIES WHICH MAY BE ISSUED UPON CONVERSION HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR OTHERWISE QUALIFIED UNDER ANY STATE OR OTHER SECURITIES LAW.  NEITHER THIS NOTE NOR ANY SUCH SECURITIES MAY BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND REGISTRATION OR OTHER QUALIFICATION UNDER ANY APPLICABLE STATE OR OTHER SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION OR OTHER QUALIFICATION IS NOT REQUIRED.
 
CONVERTIBLE PROMISSORY NOTE
 
$666,666
December 10, 2008
 
FOR VALUE RECEIVED, Sports Supplement Acquisition Group, Inc., a Delaware corporation (the “COMPANY”), hereby unconditionally promises to pay to the order of PROVIANT TECHNOLOGIES, INC., a corporation organized under the laws of the State of Illinois (“LENDER”), at 309 W. Hensley Rd., Champaign, Illinois 61826 or such other address given to the Company by Lender, the principal sum of Six Hundred Sixty-Six Thousand Six Hundred and Sixty-Six ($666,666) Dollars, in lawful money of the United States of America, together with interest (calculated on the basis of a 360-day year) on the unpaid principal balance from day-to-day remaining, computed until maturity at the rate per annum which shall from day-to-day be equal to the Applicable Rate.
 
1.      DEFINITIONS. When used in this Note, the following terms shall have the respective meanings specified herein or in the section referred to:
 
“APPLICABLE RATE” means seven percent (7%) per annum, except as otherwise provided in SECTION 4.
 
“BUSINESS DAY” means any day other than a Saturday, Sunday, or other day on which a bank is authorized to be closed under the laws of Illinois.
 
 “COMMON STOCK” means the Common Stock, par value $0.001 per share, of the Company.
 
“COMPANY” means Sports Supplement Acquisition Group, Inc.
 
“CONVERSION PRICE” means the Current Market Price less 25%, except as otherwise adjusted pursuant to SECTION 8(e).

 
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“CURRENT MARKET PRICE” means, when used with respect to any security as of any date, the volume weighted average trading price during the ninety (90) Trading Days determined by the last sale price, regular way, or, in case no such sale takes place on such date, the closing bid price, regular way, of such security in either case as reported on the Nasdaq Global Market, or, if such security is not listed or admitted to trading on the Nasdaq Global Market, as reported on the Nasdaq SmallCap Market, or if such security is not listed or admitted to trading on any national or international securities exchange or the Nasdaq Global Market or the Nasdaq SmallCap Market, the average of the high bid and low asked prices of such security in the over-the-counter market as reported by the National Association of Securities Dealers, Inc. Automated Quotations System or such other system then in use or, if such security is not quoted by any such organization, the average of the closing bid and asked prices of such security furnished by an New York Stock Exchange member firm selected by the Company. If such security is not quoted by any such organization and no such New York Stock Exchange member firm is able to provide such prices, then the Current Market Price of such security shall be the fair market value thereof as determined in good faith by the Board of Directors of the Company without any discount for lack of marketability or minority interest.
 
“DEFAULT CONVERSION PRICE” means the Current Market Price less 40%, except as otherwise set forth in any Other Note with a maturity date prior to the Maturity Date and/or as adjusted pursuant to SECTION 8(e).
 
“EVENT OF DEFAULT” is defined in SECTION 4 hereof.
 
“EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended.
 
 “INTEREST PAYMENT DATE” means (a) each January 1, April 1, July 1 and October 1 of each calendar year during the term of this Note, and (b) the Maturity Date.
 
 “LOAN DOCUMENTS” means this Note, the Other Notes and all other documents evidencing Obligation.
 
“MATURITY DATE” means December 10, 2010.
 
 “NOTE” refers to this Convertible Promissory Note.
 
“OBLIGATION” shall mean all indebtedness, liabilities, and obligations, of the Company arising under this Note, the Other Notes and any other Loan Documents.
 
“OTHER NOTES” shall mean any Convertible Promissory Note, other than this Note, issued by the Company to Lender.
 
“PERSON” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, charitable foundation, unincorporated organization, government or any agency or political subdivision thereof, or any other entity.
 
 “SEC” means the Securities and Exchange Commission and any successor thereof.
 
“TRADING DAY” means each Monday, Tuesday, Wednesday, Thursday, and Friday, other than any day on which securities are not traded on the applicable securities exchange or in the applicable securities market.

 
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2.      PAYMENT.
 
(a)    INTEREST AND PRINCIPAL PAYMENTS. The unpaid principal of, and interest on, this Note shall be due and payable as follows:
 
(i)    Interest, computed in accordance with the terms hereof, shall be due and payable quarterly as it accrues on each Interest Payment Date, commencing on April 1, 2009; and
 
(ii)   the unpaid principal of, and interest on, this Note shall be finally due and payable on the Maturity Date.
 
(b)    VOLUNTARY PREPAYMENT. The Company reserves the right, upon fifteen (15) Business Days' prior written notice to Lender, which notice shall set forth the Current Market Price and all supporting calculations thereof, to prepay the outstanding principal balance of this Note, in whole or in part, at any time and from time to time. All prepayments shall be made together with payment of interest accrued on the amount of principal being prepaid through the date of such prepayment.
 
(c)    PAYMENTS GENERALLY. Except as otherwise provided herein, all payments of principal of and interest on this Note shall be made by the Company to Lender by fedwire or other immediately available funds. Should the principal of, or any installment of the principal of or interest on, this Note become due and payable on any day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day, and interest shall be payable with respect to such extension. Payments made to Lender by the Company hereunder shall be applied first to accrued interest and then to principal.
 
3.      WAIVER. The Company waives presentment, demand, protest, notice of protest and non-payment, or other notice of default, notice of acceleration and intention to accelerate, or other notice of any kind, and agrees that its liability under this Note shall not be affected by any renewal or extension in the time of payment hereof, or in any indulgences, or by any release or change in any security for the payment of this Note, and hereby consents to any and all renewals, extensions, indulgences, releases, or changes, regardless of the number of such renewals, extensions, indulgences, releases, or changes.

 
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4.      EVENTS OF DEFAULT AND REMEDIES. An “EVENT OF DEFAULT” shall exist hereunder if any one or more of the following events shall occur and be continuing: (a) the Company shall fail to pay when due any principal of, or interest upon, this Note or the Obligation and such failure shall continue for five (5) Business Days after such payment became due; or (b) the Company shall fail to perform any of the covenants or agreements contained herein or in any other Loan Document and such failure shall continue unremedied for thirty (30) days after written notice thereof; or (c) any representation or warranty made by the Company to Lender herein or in any other Loan Document shall prove to be untrue or inaccurate in any material respect; or (d) an event of default shall occur with respect to any Other Note pursuant to its terms; or (e) the Company shall (1) apply for or consent to the appointment of a receiver, trustee, intervener, custodian, or liquidator of itself or of all or a substantial part of its assets, (2) be adjudicated bankrupt or insolvent or file a voluntary petition for bankruptcy or admit in writing that it is unable to pay its debts as they become due, (3) make a general assignment for the benefit of creditors, (4) file a petition or answer seeking reorganization or an arrangement with creditors or to take advantage of any bankruptcy or insolvency laws, or (5) file an answer admitting the material allegations of, or consent to, or default in answering, a petition filed against it in any bankruptcy, reorganization, or insolvency proceeding, or take corporate action for the purpose of effecting any of the foregoing; or (f) an order, judgment, or decree shall be entered by any court of competent jurisdiction or other competent authority approving a petition seeking reorganization of the Company appointing a receiver, trustee, intervener, or liquidator of the Company, or of all or substantially all of its assets, and such order, judgment, or decree shall continue unstayed and in effect for a period of thirty (30) days; or (g) the dissolution or liquidation of the Company; or (h) the Company shall default in the payment of any indebtedness of such Company in excess of $250,000 individually or in the aggregate or default shall occur in respect of any note or credit agreement relating to any such indebtedness and such default shall continue for more than the period of grace, if any, specified therein; or (i) any final judgment(s) for the payment of money in excess of the sum of $250,000 individually or in the aggregate shall be rendered against the Company and such judgment(s) shall not be satisfied or discharged at least ten (10) days prior to the date on which any of the Company's assets could be lawfully sold to satisfy such judgment(s).
 
Upon the occurrence of any Event of Default hereunder, then the holder hereof may, at its option, (i) (A) declare the entire unpaid principal balance and accrued interest upon the Obligation to be immediately due and payable and such unpaid principal balance and accrued interest upon the Obligation shall accrue interest thereafter at the rate of twelve percent (12%) per annum, and (B) pursue and enforce any of Lender's rights and remedies available pursuant to this Note, the Other Notes, or any applicable law or agreement; provided, however, in the case of any Event of Default specified in PARAGRAPH (e) or (f) of this SECTION 4 with respect to the Company, without any notice to the Company or any other act by Lender, the principal balance and interest accrued on this Note shall become immediately due and payable and such unpaid principal balance and accrued interest upon the Obligation shall accrue interest thereafter at the rate of twelve percent (12%) per annum; or (ii) exercise its conversion rights arising upon an Event of Default set forth in SECTION 8.
 
     In addition, upon an Event of Default, Lender shall have the right to nominate one additional director to the Board of Directors of the Company pursuant to that certain Voting Agreement of even date herewith by and between the Company and Lender.
 
5.      REPRESENTATIONS AND COVENANTS.
 
(a)    REPRESENTATIONS. The Company represents and warrants to Lender that:
 
(i)   The Company is duly organized and in good standing under the laws of the state of its incorporation, formation, or organization;

 
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(ii)  The Company has full power and authority to enter into this Note and the other Loan Documents, to execute and deliver the Loan Documents, and to incur the obligations provided for in the Loan Documents, all of which has been duly authorized by all necessary action.
 
(iii) the Loan Documents are the legal and binding obligations of the Company, enforceable in accordance with their respective terms;
 
(iv) neither the execution and delivery of this Note and the other Loan Documents, nor consummation of any of the transactions herein or therein contemplated, nor compliance with the terms and provisions hereof or thereof, will contravene or conflict with any provision of law, statute, or regulation to which the Company is subject or any judgment, license, order, or permit applicable to the Company or any indenture, mortgage, deed of trust, or other instrument to which the Company may be subject; no consent, approval, authorization, or order of any court, governmental authority, or third party is required in connection with the execution, delivery, and performance by the Company of this Note or any of the other Loan Documents or to consummate the transactions contemplated herein or therein.
 
(b)   AFFIRMATIVE COVENANTS. Until payment in full of the Obligation, the Company agrees and covenants that the Company shall:
 
(i)  conduct its business in an orderly and efficient manner consistent with good business practices and in accordance with all valid regulations, laws, and orders of any governmental authority and will act in accordance with customary industry standards in maintaining and operating its assets, properties, and investments;
 
(ii) maintain complete and accurate books and records of its transactions in accordance with generally accepted accounting principles, and, if an Event of Default exists, will give Lender access during business hours to all books, records and documents of the Company and permit Lender to make and take away copies thereof, provided the Lender signs a confidentiality agreement;
 
(iii) upon the registration of the Company’s shares of Common Stock under the Exchange Act, furnish to Lender (i) unless the  following are filed with the SEC through EDGAR and are  available to the public  through  EDGAR,  within two (2) Business Days after the filing thereof with the SEC, a copy of Company’s Annual Reports on Form 10-K, its Quarterly  Reports on Form 10-Q, any Current  Reports on Form 8-K and any  registration  statements  (other than on Form S-8) or amendments  filed pursuant to the Securities Act of 1933, as amended;  (ii) on the same day as the release  thereof,  facsimile or email copies of all press releases  issued by Company;  and (iii) copies of any notices and other information made available or given to the stockholders of Company generally, contemporaneously with the making available or giving thereof to the stockholders;
 
(iv) furnish to Lender, immediately upon becoming aware of the existence of any condition or event constituting an Event of Default or event which, with the lapse of time and/or giving of notice would constitute an Event of Default, written notice specifying the nature and period of existence thereof and any action which the Company is taking or proposes to take with respect thereto;

 
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(v) promptly notify Lender of: (A) any material adverse change in its financial condition or business; (B) any default under any material agreement, contract, or other instrument to which the Company is a party or by which any of its properties are bound, or any acceleration of any maturity of any indebtedness owing by the Company; (C) any material adverse claim against or affecting the Company or any of its properties; and (D) any litigation, or any claim or controversy which might become the subject of litigation, against the Company or affecting the Company's property, if such litigation or potential litigation might, in the event of an unfavorable outcome, have a material adverse effect on the Company's financial condition or business or might cause an Event of Default;
 
(vi) promptly furnish to Lender, at Lender's reasonable request, such additional financial or other information concerning assets, liabilities, operations, and transactions of the Company as Lender may from time to time reasonably request, subject to restrictions imposed by state and federal securities laws;
 
(vii) promptly pay all lawful claims, whether for labor, materials, or otherwise, which might or could, if unpaid, become a lien or charge on any property or assets of the Company, unless and to the extent only that the same are being contested in good faith by appropriate proceedings and reserves have been established therefor;
 
(viii) maintain on its properties insurance of responsible and reputable companies in such amounts and covering such risks as is prudent and is usually carried by companies engaged in businesses similar to that of the Company; the Company shall furnish Lender, on request, with certified copies of insurance policies or other appropriate evidence of compliance with the foregoing covenant;
 
(ix)   comply with all applicable legal requirements of any governmental authority;
 
(x)    preserve and maintain all licenses, privileges, franchises, certificates, and the like necessary for the operation of its business; and
 
(xi)   pay and discharge all taxes, assessments, and governmental charges or levies imposed upon it or upon its income or profits, or upon any property belonging to it, before such amounts become delinquent.
 
 (c)  NEGATIVE COVENANTS. Until payment in full of the Obligation, the Company covenants that the Company shall not without the prior written consent of Lender, in its sole and absolute discretion, (A) sell all or substantially all the Company's assets, or (B) pay any dividends on any of its outstanding capital stock, or purchase, redeem, or repurchase any of its capital stock.

 
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(d)   REPRESENTATIONS. The Lender represents and warrants to the Company that:
 
(i) it is an “accredited investor” as defined under the Securities Act, and the SEC’s Regulation D promulgated thereunder and agrees not to engage in hedging transactions unless in compliance with the Securities Act;
 
(ii) it has carefully considered the resulting answers and all other information available to the undersigned with respect to the Company;
 
(iii) it has relied solely upon the investigations of the Company made by or on behalf of the Lender in evaluating the suitability of an investment in the Company, and the Lender recognizes that an investment in the Company involves a high degree of risk;
 
(iv) it has been advised that there is not currently a market for the shares of Common Stock and it may be difficult to readily liquidate this investment;
 
(v) it understands that no securities administrator of any state has made any finding or determination relating to the fairness of this investment and that no securities administrator of any state has recommended or endorsed, or will recommend or endorse, the Note or the underlying equity of the Company into which the Note may be converted;

(vi) it will not attempt to sell, transfer, assign, pledge or otherwise dispose of all or any portion of the Note or Common Stock issuable upon conversion thereof unless it is registered under the Securities Act or unless in the opinion of counsel satisfactory to the Company an exemption from such registration is available; and

(vii) it has received no general solicitation or general advertising (including communications published in any newspaper, magazine or other broadcast) and that no public solicitation or advertisement with respect to the offering of the Note or Common Stock has been made to it.

6.      NO WAIVER. No waiver by Lender of any of its rights or remedies hereunder or under any other document evidencing or securing this Note or otherwise, shall be considered a waiver of any other subsequent right or remedy of Lender; no delay or omission in the exercise or enforcement by Lender of any rights or remedies shall ever be construed as a waiver of any right or remedy of Lender; and no exercise or enforcement of any such rights or remedies shall ever be held to exhaust any right or remedy of Lender.

 
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7.      USURY LAWS. Regardless of any provision contained in this Note, Lender shall never be deemed to have contracted for or be entitled to receive, collect, or apply as interest on this Note (whether termed interest herein or deemed to be interest by judicial determination or operation of law) any amount in excess of the maximum rate which may lawfully be charged (the “Maximum Rate”), in the event that Lender ever receives, collects, or applies as interest any such excess, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance of this Note, and, if the principal balance of this Note is paid in full, then any remaining excess shall forthwith be paid to the Company. In determining whether or not the interest paid or payable under any specific contingency exceeds the highest Maximum Rate, the Company and Lender shall, to the maximum extent permitted under applicable law, (a) characterize any non-principal payment (other than payments which are expressly designated as interest payments hereunder) as an expense or fee rather than as interest, (b) exclude voluntary prepayments and the effect thereof, and (c) spread the total amount of interest throughout the entire contemplated term of this Note so that the interest rate is uniform throughout such term; provided, that if this Note is paid and performed in full prior to the end of the full contemplated term hereof, and if the interest received for the actual period of existence thereof exceeds the Maximum Rate, if any, then Lender or any holder hereof shall refund to the Company the amount of such excess, or credit the amount of such excess against the aggregate unpaid principal balance of all advances made by the Lender or any holder hereof under this Note at the time in question.
 
8.      CONVERSION RIGHTS.
 
(a)   CONVERSION PRIVILEGE GENERALLY. During the period of time commencing on the date hereof and continuing until the payment in full of this Note absent an Event of Default, Lender, at its option may convert all or any portion of outstanding principal balance of this Note into the number of Shares of Common Stock obtained by dividing (i) the unpaid principal amount of, and interest through the date of conversion on, this Note to be converted, by (ii) the Conversion Price.
 
(b)   CONVERSION PRIVILEGE UPON EVENT OF DEFAULT.  Upon the occurrence of an Event of Default, Lender, at its option may convert all or any portion of outstanding principal balance of and accrued interest upon this Note and the Other Notes into the number of Shares of Common Stock obtained by dividing (i) the unpaid principal amount of, and interest through the date of conversion on, this Note and the Other Notes to be converted, by (ii) the Default Conversion Price.
 
(c)    CONVERSION PROCEDURE. To convert this Note pursuant to this SECTION 8, Lender must
 
(i) complete and sign a “Form of Election to Convert” attached hereto as Exhibit A;
 
(ii) pay any transfer or similar tax if required by SECTION 8(f); and
 
(iii) if the conversion is of the entire unpaid principal of and accrued interest upon this Note, then surrender this Note to the Company. As promptly as practicable after delivery of an Election to Convert in accordance with this SECTION 8(c), the Company shall issue and deliver to Lender a certificate or certificates for the full number of whole shares of Common Stock.
 
(d)    CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional shares of Common Stock, scrip representing fractional shares of Common Stock, or Warrants for fractional shares of Common Stock shall be issued upon conversion of the principal of, or interest on, this Note. If any fractional share of Common Stock would be issuable upon the conversion of any portion of this Note, the Company shall pay a cash adjustment therefor in respect of such fractional share equal to the product of (i) the percentage representing such fractional share multiplied by (ii) the applicable Conversion Price or Default Conversion Price, as the case may be.

 
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(e)    EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER, OR SALE. In the event of (i) any reclassification (including, without limitation, a reclassification effected by means of an exchange or tender offer by the Company) but excluding a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), (ii) any consolidation, merger or combination of the Company with another corporation as a result of which holders of Common Stock shall be entitled to receive securities or other property (including cash) with respect to or in exchange for Common Stock or (iii) any sale or conveyance of the property of the Company as, or substantially as, an entirety to any other corporation as a result of which holders of Common Stock shall be entitled to receive securities or other property (including cash) with respect to or in exchange for Common Stock, then the Company or the successor or purchasing corporation, as the case may be, shall enter into an Amended and Restated Note providing that this Note shall be convertible into the kind and amount of securities or other property (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance which Lender would have received if this Note had been converted immediately prior to such reclassification, change, consolidation, merger, combination, sale or conveyance. Such Amended and Restated Note shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this SECTION 8. Whenever an Amended and Restated Note is entered into as provided herein, the Company shall promptly provide Lender with an Officer's Certificate setting forth a brief statement of the facts requiring such Amended and Restated Note. The provisions of this SECTION 8 shall similarly apply to all successive events of the type described in this SECTION 8.
 
(f)     TAXES ON SHARES ISSUED. The issuance of a certificate or certificates on conversion of this Note shall be made without charge to the Lender for any tax or charge with respect to the issuance thereof. The Company shall not, however, be required to pay any tax or charge which may be payable with respect to any transfer involved in the issuance and delivery of a certificate or certificates in any name other than that of Lender, and the Company shall not be required to issue or deliver any such certificate or certificates unless and until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or charge or shall have established to the satisfaction of the Company that such tax or charge has been paid.
 
(g)    RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE WITH GOVERNMENT REQUIREMENTS. The Company shall reserve, out of its authorized but unissued Common Stock or its Common Stock held in treasury, sufficient shares of Common Stock to provide for the conversion of all of this Note.

 
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Before taking any action which would cause an adjustment reducing the Conversion Price or the Default Conversion Price, as the case may be, below the then par value, if any, of the Common Stock issuable upon conversion of this Note, the Company will take all corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue Common Stock at such adjusted Conversion Price or Default Conversion Price, as the case may be. The Company covenants that all Common Stock which may be issued upon conversion of this Note will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance and delivery thereof. The Company covenants that if any Common Stock issued or delivered upon conversion of this Note hereunder requires registration with or approval of any governmental authority under any applicable federal or state law (excluding federal or state securities laws) before such Common Stock may be lawfully issued, the Company will in good faith and as expeditiously as possible endeavor to secure such registration or approval, as the case may be.
 
(h)    NOTICE TO LENDER PRIOR TO CERTAIN ACTIONS. In the event that:
 
(i)  the Company shall declare or authorize any event which could result in an adjustment in the Conversion Price or the Default Conversion Price, as the case may be, under SECTION 8(e) or require the execution of an Amended and Restated Note; or
 
(ii) the Company shall authorize the combination, consolidation or merger of the Company for which approval of any stockholders of the Company is required, the sale or transfer of all or substantially all of the assets of the Company or the voluntary or involuntary dissolution, liquidation or winding-up of the Company in whole or in part; then, in each such case, the Company shall give or cause to be given to Lender, as promptly as possible but in any event at least seven (7) Business Days prior to the applicable date hereinafter specified, a notice stating the date on which a record is to be taken for the purpose of determining the holders of outstanding Common Stock entitled to participate in such event, the date on which such event is expected to become effective or occur and the date on which it is expected that holders of outstanding Common Stock of record shall be entitled to surrender their shares, or receive any items, in connection with such event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
 
 9.     NOTICE. Whenever this Note requires or permits any notice, approval, request, or demand from one party to another, the notice, approval, request, or demand must be in writing and shall be deemed to have been given when personally served or when deposited in the United States mails, registered or certified, return receipt requested, addressed to the party to be notified at the following address (or at such other address as may have been designated by written notice):

 
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Lender:
To the address in the first paragraph hereof
     
 
The Company:
Sports Supplement Acquisition Group, Inc.
2348 Lucerne Road, Suite 172
Mount-Royal, QC H3R 2J8
Attention: James Klein

10.    AMENDMENT. This Note may be amended or modified only by written instrument duly executed by the Company and Lender.
 
11.    COSTS. If this Note is placed in the hands of an attorney for collection, or if it is collected through any legal proceeding at law or in equity, or in bankruptcy, receivership, or other court proceedings, then the Company agrees to pay all costs of collection, including, but not limited to, court costs and reasonable attorneys' fees, including all costs of appeal.
 
12.    SUCCESSORS AND ASSIGNS. This Note shall inure to the benefit of Lender and its successors and assigns; provided, however, Lender may not (without the prior written consent of the Company, such consent not to be unreasonably withheld or delayed and such consent not to be required if an Event of Default exists) assign or negotiate this Note to any Person.
 
13.    GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED, AND APPLIED IN ACCORDANCE WITH THE LAWS OF ILLINIOS.
 
14.    FINAL AGREEMENT. THIS NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT AGREEMENTS BETWEEN THE PARTIES (OTHER THAN SUBSEQUENT WRITTEN AMENDMENTS). THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
 
[Signature Page Follows]
 
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SPORTS SUPPLEMENT ACQUISITION
GROUP, INC.:
   
 
a Delaware corporation
   
 
By: /s/ James Klein
   
   
Name: James Klein
   
   
Title: Chief Executive Officer

 
PROVIANT TECHNOLOGIES, INC.:
   
 
An Illinois Corporation
   
 
By: /s/ Ramlakhan Boodram
   
   
Name:   Ramlakhan Boodram
   
   
Title:   President

 
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EXHIBIT A
 
FORM OF ELECTION TO CONVERT

(To be executed by Lender upon conversion of the Note)
 
TO:     SPORTS SUPPLEMENT ACQUISITION GROUP, INC.
 
The undersigned, holder of that certain Convertible Note in the original Principal Amount of $666,666, dated as of December 10, 2008 (the “Note”), issued by Sports Supplement Acquisition Group, Inc. (the “Company”), hereby exercises his/her/its right to convert unpaid principal of, and accrued interest upon, the Note, equal to $_______________, into Common Stock of the Company pursuant to the terms of the Note.
 
Please issue the Common Stock, as applicable, as follows:
 

Print or Type Name
 

Social Security or Other Identifying Number
 

Street Address
 

City
State
Zip Code

and deliver it to the above address, unless a different address is indicated below.

The undersigned hereby warrants and represents that it is (A) an “accredited investor” as defined under the Securities Act, and the SEC’s Regulation D promulgated thereunder; or (B) not a U.S. person (as defined in Rule 902(o) of the Securities Act of 1933, as amended (the “Securities Act”)), is not acquiring the shares of Common Stock purchased hereunder for the account or benefit of any U.S. person, will resell the shares of Common Stock purchased hereunder, and the Shares of Common Stock of Common Stock issuable upon conversion of such shares of Common Stock, only in accordance with (1) the provisions of Regulation S promulgated under the Securities Act (“Regulation S”), (2) pursuant to an effective registration statement under the Securities Act, or (3) pursuant to an available exemption from registration under the Securities Act, and only in compliance with the terms and provisions of this Agreement; and agrees not to engage in hedging transactions unless in compliance with the Securities Act

     
 
Signature

 
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EX-10.8 9 v136667_ex10-8.htm
 
NEITHER THIS NOTE NOR ANY SECURITIES WHICH MAY BE ISSUED UPON CONVERSION HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR OTHERWISE QUALIFIED UNDER ANY STATE OR OTHER SECURITIES LAW.  NEITHER THIS NOTE NOR ANY SUCH SECURITIES MAY BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND REGISTRATION OR OTHER QUALIFICATION UNDER ANY APPLICABLE STATE OR OTHER SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION OR OTHER QUALIFICATION IS NOT REQUIRED.
 
CONVERTIBLE PROMISSORY NOTE
 
$666,667
December 10, 2008
 
FOR VALUE RECEIVED, Sports Supplement Acquisition Group, Inc., a Delaware corporation (the “COMPANY”), hereby unconditionally promises to pay to the order of PROVIANT TECHNOLOGIES, INC., a corporation organized under the laws of the State of Illinois (“LENDER”), at 309 W. Hensley Rd., Champaign, Illinois 61826 or such other address given to the Company by Lender, the principal sum of Six Hundred Sixty-Six Thousand Six Hundred and Sixty-Seven ($666,667) Dollars, in lawful money of the United States of America, together with interest (calculated on the basis of a 360-day year) on the unpaid principal balance from day-to-day remaining, computed until maturity at the rate per annum which shall from day-to-day be equal to the Applicable Rate.
 
1.     DEFINITIONS. When used in this Note, the following terms shall have the respective meanings specified herein or in the section referred to:
 
“APPLICABLE RATE” means seven percent (7%) per annum, except as otherwise provided in SECTION 4.
 
“BUSINESS DAY” means any day other than a Saturday, Sunday, or other day on which a bank is authorized to be closed under the laws of Illinois.
 
 “COMMON STOCK” means the Common Stock, par value $0.001 per share, of the Company.
 
“COMPANY” means Sports Supplement Acquisition Group, Inc.
 
“CONVERSION PRICE” means the Current Market Price less 25%, except as otherwise adjusted pursuant to SECTION 8(e).

 
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“CURRENT MARKET PRICE” means, when used with respect to any security as of any date, the volume weighted average trading price during the ninety (90) Trading Days determined by the last sale price, regular way, or, in case no such sale takes place on such date, the closing bid price, regular way, of such security in either case as reported on the Nasdaq Global Market, or, if such security is not listed or admitted to trading on the Nasdaq Global Market, as reported on the Nasdaq SmallCap Market, or if such security is not listed or admitted to trading on any national or international securities exchange or the Nasdaq Global Market or the Nasdaq SmallCap Market, the average of the high bid and low asked prices of such security in the over-the-counter market as reported by the National Association of Securities Dealers, Inc. Automated Quotations System or such other system then in use or, if such security is not quoted by any such organization, the average of the closing bid and asked prices of such security furnished by an New York Stock Exchange member firm selected by the Company. If such security is not quoted by any such organization and no such New York Stock Exchange member firm is able to provide such prices, then the Current Market Price of such security shall be the fair market value thereof as determined in good faith by the Board of Directors of the Company without any discount for lack of marketability or minority interest.
 
“DEFAULT CONVERSION PRICE” means the Current Market Price less 35%, except as otherwise set forth in any Other Note with a maturity date prior to the Maturity Date and/or as adjusted pursuant to SECTION 8(e).
 
“EVENT OF DEFAULT” is defined in SECTION 4 hereof.
 
“EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended.
 
 “INTEREST PAYMENT DATE” means (a) each January 1, April 1, July 1 and October 1 of each calendar year during the term of this Note, and (b) the Maturity Date.
 
 “LOAN DOCUMENTS” means this Note, the Other Notes and all other documents evidencing Obligation.
 
“MATURITY DATE” means December 10, 2011.
 
 “NOTE” refers to this Convertible Promissory Note.
 
“OBLIGATION” shall mean all indebtedness, liabilities, and obligations, of the Company arising under this Note, the Other Notes and any other Loan Documents.
 
“OTHER NOTES” shall mean any Convertible Promissory Note, other than this Note, issued by the Company to Lender.
 
“PERSON” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, charitable foundation, unincorporated organization, government or any agency or political subdivision thereof, or any other entity.
 
 “SEC” means the Securities and Exchange Commission and any successor thereof.
 
“TRADING DAY” means each Monday, Tuesday, Wednesday, Thursday, and Friday, other than any day on which securities are not traded on the applicable securities exchange or in the applicable securities market.

 
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2.     PAYMENT.
 
(a)   INTEREST AND PRINCIPAL PAYMENTS. The unpaid principal of, and interest on, this Note shall be due and payable as follows:
 
(i)    Interest, computed in accordance with the terms hereof, shall be due and payable quarterly as it accrues on each Interest Payment Date, commencing on April 1, 2009; and
 
(ii)   the unpaid principal of, and interest on, this Note shall be finally due and payable on the Maturity Date.
 
(b)   VOLUNTARY PREPAYMENT. The Company reserves the right, upon fifteen (15) Business Days' prior written notice to Lender, which notice shall set forth the Current Market Price and all supporting calculations thereof, to prepay the outstanding principal balance of this Note, in whole or in part, at any time and from time to time. All prepayments shall be made together with payment of interest accrued on the amount of principal being prepaid through the date of such prepayment.
 
(c)   PAYMENTS GENERALLY. Except as otherwise provided herein, all payments of principal of and interest on this Note shall be made by the Company to Lender by fedwire or other immediately available funds. Should the principal of, or any installment of the principal of or interest on, this Note become due and payable on any day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day, and interest shall be payable with respect to such extension. Payments made to Lender by the Company hereunder shall be applied first to accrued interest and then to principal.
 
3.     WAIVER. The Company waives presentment, demand, protest, notice of protest and non-payment, or other notice of default, notice of acceleration and intention to accelerate, or other notice of any kind, and agrees that its liability under this Note shall not be affected by any renewal or extension in the time of payment hereof, or in any indulgences, or by any release or change in any security for the payment of this Note, and hereby consents to any and all renewals, extensions, indulgences, releases, or changes, regardless of the number of such renewals, extensions, indulgences, releases, or changes.

 
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4.     EVENTS OF DEFAULT AND REMEDIES. An “EVENT OF DEFAULT” shall exist hereunder if any one or more of the following events shall occur and be continuing: (a) the Company shall fail to pay when due any principal of, or interest upon, this Note or the Obligation and such failure shall continue for five (5) Business Days after such payment became due; or (b) the Company shall fail to perform any of the covenants or agreements contained herein or in any other Loan Document and such failure shall continue unremedied for thirty (30) days after written notice thereof; or (c) any representation or warranty made by the Company to Lender herein or in any other Loan Document shall prove to be untrue or inaccurate in any material respect; or (d) an event of default shall occur with respect to any Other Note pursuant to its terms; or (e) the Company shall (1) apply for or consent to the appointment of a receiver, trustee, intervener, custodian, or liquidator of itself or of all or a substantial part of its assets, (2) be adjudicated bankrupt or insolvent or file a voluntary petition for bankruptcy or admit in writing that it is unable to pay its debts as they become due, (3) make a general assignment for the benefit of creditors, (4) file a petition or answer seeking reorganization or an arrangement with creditors or to take advantage of any bankruptcy or insolvency laws, or (5) file an answer admitting the material allegations of, or consent to, or default in answering, a petition filed against it in any bankruptcy, reorganization, or insolvency proceeding, or take corporate action for the purpose of effecting any of the foregoing; or (f) an order, judgment, or decree shall be entered by any court of competent jurisdiction or other competent authority approving a petition seeking reorganization of the Company appointing a receiver, trustee, intervener, or liquidator of the Company, or of all or substantially all of its assets, and such order, judgment, or decree shall continue unstayed and in effect for a period of thirty (30) days; or (g) the dissolution or liquidation of the Company; or (h) the Company shall default in the payment of any indebtedness of such Company in excess of $250,000 individually or in the aggregate or default shall occur in respect of any note or credit agreement relating to any such indebtedness and such default shall continue for more than the period of grace, if any, specified therein; or (i) any final judgment(s) for the payment of money in excess of the sum of $250,000 individually or in the aggregate shall be rendered against the Company and such judgment(s) shall not be satisfied or discharged at least ten (10) days prior to the date on which any of the Company's assets could be lawfully sold to satisfy such judgment(s).
 
Upon the occurrence of any Event of Default hereunder, then the holder hereof may, at its option, (i) (A) declare the entire unpaid principal balance and accrued interest upon the Obligation to be immediately due and payable and such unpaid principal balance and accrued interest upon the Obligation shall accrue interest thereafter at the rate of twelve percent (12%) per annum, and (B) pursue and enforce any of Lender's rights and remedies available pursuant to this Note, the Other Notes, or any applicable law or agreement; provided, however, in the case of any Event of Default specified in PARAGRAPH (e) or (f) of this SECTION 4 with respect to the Company, without any notice to the Company or any other act by Lender, the principal balance and interest accrued on this Note shall become immediately due and payable and such unpaid principal balance and accrued interest upon the Obligation shall accrue interest thereafter at the rate of twelve percent (12%) per annum; or (ii) exercise its conversion rights arising upon an Event of Default set forth in SECTION 8.
 
     In addition, upon an Event of Default, Lender shall have the right to nominate one additional director to the Board of Directors of the Company pursuant to that certain Voting Agreement of even date herewith by and between the Company and Lender.
 
5.     REPRESENTATIONS AND COVENANTS.
 
(a)   REPRESENTATIONS. The Company represents and warrants to Lender that:
 
(i)    The Company is duly organized and in good standing under the laws of the state of its incorporation, formation, or organization;

 
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(ii)   The Company has full power and authority to enter into this Note and the other Loan Documents, to execute and deliver the Loan Documents, and to incur the obligations provided for in the Loan Documents, all of which has been duly authorized by all necessary action.
 
(iii)  the Loan Documents are the legal and binding obligations of the Company, enforceable in accordance with their respective terms;
 
(iv)  neither the execution and delivery of this Note and the other Loan Documents, nor consummation of any of the transactions herein or therein contemplated, nor compliance with the terms and provisions hereof or thereof, will contravene or conflict with any provision of law, statute, or regulation to which the Company is subject or any judgment, license, order, or permit applicable to the Company or any indenture, mortgage, deed of trust, or other instrument to which the Company may be subject; no consent, approval, authorization, or order of any court, governmental authority, or third party is required in connection with the execution, delivery, and performance by the Company of this Note or any of the other Loan Documents or to consummate the transactions contemplated herein or therein.
 
(b)   AFFIRMATIVE COVENANTS. Until payment in full of the Obligation, the Company agrees and covenants that the Company shall:
 
(i)    conduct its business in an orderly and efficient manner consistent with good business practices and in accordance with all valid regulations, laws, and orders of any governmental authority and will act in accordance with customary industry standards in maintaining and operating its assets, properties, and investments;
 
(ii)   maintain complete and accurate books and records of its transactions in accordance with generally accepted accounting principles, and, if an Event of Default exists, will give Lender access during business hours to all books, records and documents of the Company and permit Lender to make and take away copies thereof, provided the Lender signs a confidentiality agreement;
 
(iii)  upon the registration of the Company’s shares of Common Stock under the Exchange Act, furnish to Lender (i) unless the  following are filed with the SEC through EDGAR and are  available to the public  through  EDGAR,  within two (2) Business Days after the filing thereof with the SEC, a copy of Company’s Annual Reports on Form 10-K, its Quarterly  Reports on Form 10-Q, any Current  Reports on Form 8-K and any  registration  statements  (other than on Form S-8) or amendments  filed pursuant to the Securities Act of 1933, as amended;  (ii) on the same day as the release  thereof,  facsimile or email copies of all press releases  issued by Company;  and (iii) copies of any notices and other information made available or given to the stockholders of Company generally, contemporaneously with the making available or giving thereof to the stockholders;
 
(iv)  furnish to Lender, immediately upon becoming aware of the existence of any condition or event constituting an Event of Default or event which, with the lapse of time and/or giving of notice would constitute an Event of Default, written notice specifying the nature and period of existence thereof and any action which the Company is taking or proposes to take with respect thereto;

 
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(v)   promptly notify Lender of: (A) any material adverse change in its financial condition or business; (B) any default under any material agreement, contract, or other instrument to which the Company is a party or by which any of its properties are bound, or any acceleration of any maturity of any indebtedness owing by the Company; (C) any material adverse claim against or affecting the Company or any of its properties; and (D) any litigation, or any claim or controversy which might become the subject of litigation, against the Company or affecting the Company's property, if such litigation or potential litigation might, in the event of an unfavorable outcome, have a material adverse effect on the Company's financial condition or business or might cause an Event of Default;
 
(vi)  promptly furnish to Lender, at Lender's reasonable request, such additional financial or other information concerning assets, liabilities, operations, and transactions of the Company as Lender may from time to time reasonably request, subject to restrictions imposed by state and federal securities laws;
 
(vii) promptly pay all lawful claims, whether for labor, materials, or otherwise, which might or could, if unpaid, become a lien or charge on any property or assets of the Company, unless and to the extent only that the same are being contested in good faith by appropriate proceedings and reserves have been established therefor;
 
(viii) maintain on its properties insurance of responsible and reputable companies in such amounts and covering such risks as is prudent and is usually carried by companies engaged in businesses similar to that of the Company; the Company shall furnish Lender, on request, with certified copies of insurance policies or other appropriate evidence of compliance with the foregoing covenant;
 
(ix)  comply with all applicable legal requirements of any governmental authority;
 
(x)   preserve and maintain all licenses, privileges, franchises, certificates, and the like necessary for the operation of its business; and
 
(xi)  pay and discharge all taxes, assessments, and governmental charges or levies imposed upon it or upon its income or profits, or upon any property belonging to it, before such amounts become delinquent.
 
 (c)  NEGATIVE COVENANTS. Until payment in full of the Obligation, the Company covenants that the Company shall not without the prior written consent of Lender, in its sole and absolute discretion, (A) sell all or substantially all the Company's assets, or (B) pay any dividends on any of its outstanding capital stock, or purchase, redeem, or repurchase any of its capital stock.

 
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(d)   REPRESENTATIONS. The Lender represents and warrants to the Company that:
 
(i) it is an “accredited investor” as defined under the Securities Act, and the SEC’s Regulation D promulgated thereunder and agrees not to engage in hedging transactions unless in compliance with the Securities Act;
 
(ii) it has carefully considered the resulting answers and all other information available to the undersigned with respect to the Company;
 
(iii) it has relied solely upon the investigations of the Company made by or on behalf of the Lender in evaluating the suitability of an investment in the Company, and the Lender recognizes that an investment in the Company involves a high degree of risk;
 
(iv) it has been advised that there is not currently a market for the shares of Common Stock and it may be difficult to readily liquidate this investment;
 
(v) it understands that no securities administrator of any state has made any finding or determination relating to the fairness of this investment and that no securities administrator of any state has recommended or endorsed, or will recommend or endorse, the Note or the underlying equity of the Company into which the Note may be converted;

(vi) it will not attempt to sell, transfer, assign, pledge or otherwise dispose of all or any portion of the Note or Common Stock issuable upon conversion thereof unless it is registered under the Securities Act or unless in the opinion of counsel satisfactory to the Company an exemption from such registration is available; and

(vii) it has received no general solicitation or general advertising (including communications published in any newspaper, magazine or other broadcast) and that no public solicitation or advertisement with respect to the offering of the Note or Common Stock has been made to it.

6.     NO WAIVER. No waiver by Lender of any of its rights or remedies hereunder or under any other document evidencing or securing this Note or otherwise, shall be considered a waiver of any other subsequent right or remedy of Lender; no delay or omission in the exercise or enforcement by Lender of any rights or remedies shall ever be construed as a waiver of any right or remedy of Lender; and no exercise or enforcement of any such rights or remedies shall ever be held to exhaust any right or remedy of Lender.

 
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7.     USURY LAWS. Regardless of any provision contained in this Note, Lender shall never be deemed to have contracted for or be entitled to receive, collect, or apply as interest on this Note (whether termed interest herein or deemed to be interest by judicial determination or operation of law) any amount in excess of the maximum rate which may lawfully be charged (the “Maximum Rate”), in the event that Lender ever receives, collects, or applies as interest any such excess, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance of this Note, and, if the principal balance of this Note is paid in full, then any remaining excess shall forthwith be paid to the Company. In determining whether or not the interest paid or payable under any specific contingency exceeds the highest Maximum Rate, the Company and Lender shall, to the maximum extent permitted under applicable law, (a) characterize any non-principal payment (other than payments which are expressly designated as interest payments hereunder) as an expense or fee rather than as interest, (b) exclude voluntary prepayments and the effect thereof, and (c) spread the total amount of interest throughout the entire contemplated term of this Note so that the interest rate is uniform throughout such term; provided, that if this Note is paid and performed in full prior to the end of the full contemplated term hereof, and if the interest received for the actual period of existence thereof exceeds the Maximum Rate, if any, then Lender or any holder hereof shall refund to the Company the amount of such excess, or credit the amount of such excess against the aggregate unpaid principal balance of all advances made by the Lender or any holder hereof under this Note at the time in question.
 
8.     CONVERSION RIGHTS.
 
(a)   CONVERSION PRIVILEGE GENERALLY. During the period of time commencing on the date hereof and continuing until the payment in full of this Note absent an Event of Default, Lender, at its option may convert all or any portion of outstanding principal balance of this Note into the number of Shares of Common Stock obtained by dividing (i) the unpaid principal amount of, and interest through the date of conversion on, this Note to be converted, by (ii) the Conversion Price.
 
(b)   CONVERSION PRIVILEGE UPON EVENT OF DEFAULT.  Upon the occurrence of an Event of Default, Lender, at its option may convert all or any portion of outstanding principal balance of and accrued interest upon this Note and the Other Notes into the number of Shares of Common Stock obtained by dividing (i) the unpaid principal amount of, and interest through the date of conversion on, this Note and the Other Notes to be converted, by (ii) the Default Conversion Price.
 
(c)   CONVERSION PROCEDURE. To convert this Note pursuant to this SECTION 8, Lender must
 
(i) complete and sign a “Form of Election to Convert” attached hereto as Exhibit A;
 
(ii) pay any transfer or similar tax if required by SECTION 8(f); and
 
(iii) if the conversion is of the entire unpaid principal of and accrued interest upon this Note, then surrender this Note to the Company. As promptly as practicable after delivery of an Election to Convert in accordance with this SECTION 8(c), the Company shall issue and deliver to Lender a certificate or certificates for the full number of whole shares of Common Stock.
 
(d)   CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional shares of Common Stock, scrip representing fractional shares of Common Stock, or Warrants for fractional shares of Common Stock shall be issued upon conversion of the principal of, or interest on, this Note. If any fractional share of Common Stock would be issuable upon the conversion of any portion of this Note, the Company shall pay a cash adjustment therefor in respect of such fractional share equal to the product of (i) the percentage representing such fractional share multiplied by (ii) the applicable Conversion Price or Default Conversion Price, as the case may be.

 
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(e)   EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER, OR SALE. In the event of (i) any reclassification (including, without limitation, a reclassification effected by means of an exchange or tender offer by the Company) but excluding a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), (ii) any consolidation, merger or combination of the Company with another corporation as a result of which holders of Common Stock shall be entitled to receive securities or other property (including cash) with respect to or in exchange for Common Stock or (iii) any sale or conveyance of the property of the Company as, or substantially as, an entirety to any other corporation as a result of which holders of Common Stock shall be entitled to receive securities or other property (including cash) with respect to or in exchange for Common Stock, then the Company or the successor or purchasing corporation, as the case may be, shall enter into an Amended and Restated Note providing that this Note shall be convertible into the kind and amount of securities or other property (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance which Lender would have received if this Note had been converted immediately prior to such reclassification, change, consolidation, merger, combination, sale or conveyance. Such Amended and Restated Note shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this SECTION 8. Whenever an Amended and Restated Note is entered into as provided herein, the Company shall promptly provide Lender with an Officer's Certificate setting forth a brief statement of the facts requiring such Amended and Restated Note. The provisions of this SECTION 8 shall similarly apply to all successive events of the type described in this SECTION 8.
 
(f)    TAXES ON SHARES ISSUED. The issuance of a certificate or certificates on conversion of this Note shall be made without charge to the Lender for any tax or charge with respect to the issuance thereof. The Company shall not, however, be required to pay any tax or charge which may be payable with respect to any transfer involved in the issuance and delivery of a certificate or certificates in any name other than that of Lender, and the Company shall not be required to issue or deliver any such certificate or certificates unless and until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or charge or shall have established to the satisfaction of the Company that such tax or charge has been paid.
 
(g)   RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE WITH GOVERNMENT REQUIREMENTS. The Company shall reserve, out of its authorized but unissued Common Stock or its Common Stock held in treasury, sufficient shares of Common Stock to provide for the conversion of all of this Note.

 
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Before taking any action which would cause an adjustment reducing the Conversion Price or the Default Conversion Price, as the case may be, below the then par value, if any, of the Common Stock issuable upon conversion of this Note, the Company will take all corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue Common Stock at such adjusted Conversion Price or Default Conversion Price, as the case may be. The Company covenants that all Common Stock which may be issued upon conversion of this Note will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance and delivery thereof. The Company covenants that if any Common Stock issued or delivered upon conversion of this Note hereunder requires registration with or approval of any governmental authority under any applicable federal or state law (excluding federal or state securities laws) before such Common Stock may be lawfully issued, the Company will in good faith and as expeditiously as possible endeavor to secure such registration or approval, as the case may be.
 
(h)   NOTICE TO LENDER PRIOR TO CERTAIN ACTIONS. In the event that:
 
(i)    the Company shall declare or authorize any event which could result in an adjustment in the Conversion Price or the Default Conversion Price, as the case may be, under SECTION 8(e) or require the execution of an Amended and Restated Note; or
 
(ii)   the Company shall authorize the combination, consolidation or merger of the Company for which approval of any stockholders of the Company is required, the sale or transfer of all or substantially all of the assets of the Company or the voluntary or involuntary dissolution, liquidation or winding-up of the Company in whole or in part; then, in each such case, the Company shall give or cause to be given to Lender, as promptly as possible but in any event at least seven (7) Business Days prior to the applicable date hereinafter specified, a notice stating the date on which a record is to be taken for the purpose of determining the holders of outstanding Common Stock entitled to participate in such event, the date on which such event is expected to become effective or occur and the date on which it is expected that holders of outstanding Common Stock of record shall be entitled to surrender their shares, or receive any items, in connection with such event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
 
 9.    NOTICE. Whenever this Note requires or permits any notice, approval, request, or demand from one party to another, the notice, approval, request, or demand must be in writing and shall be deemed to have been given when personally served or when deposited in the United States mails, registered or certified, return receipt requested, addressed to the party to be notified at the following address (or at such other address as may have been designated by written notice):
 
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Lender:
To the address in the first paragraph hereof
     
 
The Company:
Sports Supplement Acquisition Group, Inc.
2348 Lucerne Road, Suite 172
Mount-Royal, QC H3R 2J8
Attention: James Klein
 
10.   AMENDMENT. This Note may be amended or modified only by written instrument duly executed by the Company and Lender.
 
11.   COSTS. If this Note is placed in the hands of an attorney for collection, or if it is collected through any legal proceeding at law or in equity, or in bankruptcy, receivership, or other court proceedings, then the Company agrees to pay all costs of collection, including, but not limited to, court costs and reasonable attorneys' fees, including all costs of appeal.
 
12.   SUCCESSORS AND ASSIGNS. This Note shall inure to the benefit of Lender and its successors and assigns; provided, however, Lender may not (without the prior written consent of the Company, such consent not to be unreasonably withheld or delayed and such consent not to be required if an Event of Default exists) assign or negotiate this Note to any Person.
 
13.   GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED, AND APPLIED IN ACCORDANCE WITH THE LAWS OF ILLINIOS.
 
14.   FINAL AGREEMENT. THIS NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT AGREEMENTS BETWEEN THE PARTIES (OTHER THAN SUBSEQUENT WRITTEN AMENDMENTS). THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
 
[Signature Page Follows]
 
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SPORTS SUPPLEMENT ACQUISITION GROUP, INC.:
   
 
a Delaware corporation
   
 
By: /s/ James Klein
   
 
Name: James Klein
   
 
Title: Chief Executive Officer
 
 
PROVIANT TECHNOLOGIES, INC.:
   
 
An Illinois Corporation
   
 
By: /s/ Ramlakhan Boodram
   
 
Name:   Ramlakhan Boodram
   
 
Title:   President

 
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EXHIBIT A
 
FORM OF ELECTION TO CONVERT

(To be executed by Lender upon conversion of the Note)
 
TO:     SPORTS SUPPLEMENT ACQUISITION GROUP, INC.
 
The undersigned, holder of that certain Convertible Note in the original Principal Amount of $666,667, dated as of December 10, 2008 (the “Note”), issued by Sports Supplement Acquisition Group, Inc. (the “Company”), hereby exercises his/her/its right to convert unpaid principal of, and accrued interest upon, the Note, equal to $_______________, into Common Stock of the Company pursuant to the terms of the Note.
 
Please issue the Common Stock, as applicable, as follows:
 
 
Print or Type Name
 
 
Social Security or Other Identifying Number
 
 
Street Address
 
 
City
State
Zip Code

and deliver it to the above address, unless a different address is indicated below.

The undersigned hereby warrants and represents that it is (A) an “accredited investor” as defined under the Securities Act, and the SEC’s Regulation D promulgated thereunder; or (B) not a U.S. person (as defined in Rule 902(o) of the Securities Act of 1933, as amended (the “Securities Act”)), is not acquiring the shares of Common Stock purchased hereunder for the account or benefit of any U.S. person, will resell the shares of Common Stock purchased hereunder, and the Shares of Common Stock of Common Stock issuable upon conversion of such shares of Common Stock, only in accordance with (1) the provisions of Regulation S promulgated under the Securities Act (“Regulation S”), (2) pursuant to an effective registration statement under the Securities Act, or (3) pursuant to an available exemption from registration under the Securities Act, and only in compliance with the terms and provisions of this Agreement; and agrees not to engage in hedging transactions unless in compliance with the Securities Act

   
   
Signature
 
 
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EX-10.9 10 v136667_ex10-9.htm
SPORTS SUPPLEMENT ACQUISITION GROUP, INC.
VOTING AGREEMENT


THIS VOTING AGREEMENT (this “Agreement”) is entered into as of the 10th day of December, 2008, by and among Sports Supplement Acquisition Group, Inc., a Delaware corporation (the “Company”), and Proviant Technologies, Inc., an Illinois corporation (“Proviant”) and The James Klein Family Trust (“Klein” and, together with Proviant, the “Shareholders”).

RECITALS:

A.  Klein owns a majority of the issued and outstanding shares of Common Stock, par value $0.001 per share (the “Common Stock”), of the Company on the date hereof.

B.  Pursuant to that Asset Purchase, Technology Transfer and License Agreement by and between the Company and Proviant, dated of even date herewith (the “Purchase Agreement”), Proviant agreed to transfer or license to the Company certain assets in return for the consideration set forth in the Purchase Agreement, which consideration included 400 shares of the Company’s Common Stock, on the terms and conditions set forth in the Purchase Agreement.  Capitalized terms used herein but not otherwise defined shall have the respective meanings ascribed to them in the Purchase Agreement.

C.  In order to induce Proviant to enter into the Purchase Agreement, Klein has agreed to enter into this Voting Agreement to provide certain voting agreements with respect to the election of the directors to the Company’s Board of Directors.

NOW, THEREFORE, in consideration of the mutual promises and other consideration hereinafter set forth, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties agree as follows:

1.           VOTING.

Pursuant to the By-laws of the Company, the number of directors to comprise the Company’s Board of Directors (the “Company Board”) has been fixed at five.  Each Shareholder hereby agrees that from and after the date hereof, such Shareholder will vote all shares of the Company’s capital stock over which such Shareholder has voting control or are owned by such Shareholder, beneficially or of record, on the record date fixed for a determination of those shareholders entitled to vote in any election of directors of the Company, or will cause such shares to be voted and shall take all other necessary or desirable actions within such Shareholder’s control (including in his or her capacity as a shareholder, director, member of a board committee or officer of the Company or otherwise, and including, without limitation, attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of written consents in lieu of meetings), and the Company shall take all necessary or desirable actions within its control (including, without limitation, calling special board and shareholder meetings), so that:

 
 

 
 
(i)           the authorized number of directors on the Company Board is established and remains at five directors, except as otherwise set forth herein or, until such time as the Notes are paid in full, with the written consent of Proviant, not to be unreasonably withheld;

(ii)                      there shall be elected to the Company Board (A) Klein and two persons nominated by Klein, (B) one person nominated by Proviant (the “Proviant Director”), and (C) one person nominated by Cynergi Holdings;

(iii)                      any committees of the Company Board shall be created only upon the approval of a majority of the Company Board and the membership of each such committee (if any) shall include the Proviant Director;

(iv)                      the membership of the board of directors or other governing body of any subsidiary of the Company shall include the Proviant Director;

(v)           there shall not be removed from the Company Board, with or without cause, any Proviant Director without the written request of Proviant;

(vi)                      in the event that Proviant requests in writing that any Proviant Director be removed from the Company Board or any committee thereof, such director shall be so removed;

(vii)                      in the event that any Proviant Director ceases to serve as a member of the Company Board during his or her term of office, the resulting vacancy on the Company Board shall be filled by a representative who shall be a new Proviant Director designated in the same manner as such former Proviant Director; and

(viii)                      each member of the Company Board or any committee thereof shall be reimbursed for reasonable out-of-pocket expenses incurred as a result of fulfilling his or her duties as a Director of the Company.
 
2.           APPOINTMENT OF ADDITIONAL PROVIANT DIRECTORS.
 
Upon an event of default under any of the Notes, Proviant may appoint such additional members to the Company Board pursuant to Section 1 as provided in any such Note and the Shareholders and the Company shall take and vote in favor of any and all actions necessary to permit such appointment(s), including, but not limited to, increasing the authorized number of directors on the Company Board accordingly.

 
-2-

 
 
3.           MISCELLANEOUS.

3.1                      Consent Required.  Any term, covenant, agreement or condition of this Agreement may be amended or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), with the consent of each of the parties hereto.

3.2                      Notices.  All communications (other than those sent to shareholders generally) provided for hereunder shall be in writing and delivered or mailed by registered or certified mail, by reputable overnight delivery, or by telecopy to the Shareholder’s address in the Company’s stock record books.

3.3                      Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns and shall inure to the benefit of and be binding upon each Shareholder and each Shareholder’s successors and assigns.

3.4                      Governing Law.  This Agreement and securities issued and sold hereunder shall be governed by and construed in accordance with Illinois law, without reference to conflict of laws principles.

3.5                      Captions.  The descriptive headings of the various Sections or parts of this Agreement are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.

3.6                      Number and Gender.  Where required by the context, singular words or pronouns shall be construed as plural, plural words and pronouns shall be construed as singular and the gender of personal pronouns shall be construed as either masculine, feminine or neuter.

3.7                      Severability.  In the event that any one or more of the provisions contained in this Agreement or in any instrument referred to herein shall, for any reason, be held to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement.

3.8                      Entire Agreement.  This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and supersedes all prior and/or contemporaneous agreements.

3.9                      Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

3.10                      Termination.  This Agreement shall terminate upon the earlier of (i) the Company’s sale, lease or other disposition of all or substantially all of its assets, (ii) the acquisition of the Company by another entity by means of merger or consolidation resulting in the exchange of the outstanding shares of the Company for securities or consideration issued, or caused to be issued, by the acquiring Company or its subsidiary (other than a merger effected exclusively for the purpose of changing the domicile of the Company), or (iii) a transaction or series of related transactions in which the stockholders of the Company owning a majority of the voting power of the Company immediately prior to such transaction do not own a majority of the outstanding shares of the capital stock or equity interests of the entity surviving the transaction; provided Proviant is a party thereto.

 
-3-

 
 
3.11                      Injunctive Relief.  In addition to its right to damages and any other right it may have, each party hereto shall have the right to obtain injunctive or other equitable relief to restrain any breach or threatened breach of or otherwise to specifically enforce this Agreement, it being agreed that money damages alone would be inadequate to compensate such party and would be an inadequate remedy for such breach.

3.12                      Counsel Fees.  If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which each party may be entitled.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

Proviant Technologies, Inc.
Sports Supplement Acquisition Group, Inc.
   
   
By /s/ Ramlakhan Boodram                        
By /s/ James Klein                                            
Name: Ramlakhan Boodram
Name: James Klein
Title: President
Title: President


The James Klein Family Trust


 /s/ James Klein                                           
Per: James Klein, Trustee
 
 
-4-

 
EX-10.10 11 v136667_ex10-10.htm

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS.  THIS WARRANT MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS SUCH SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS IN ACCORDANCE WITH SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.

Warrant No. [__]

No. of Shares of Common Stock:  2,000,000

WARRANT

to Purchase Common Stock of

Sports Supplement Acquisition Group, Inc.
a Delaware corporation

THIS WARRANT IS TO CERTIFY THAT Proviant Technologies, Inc. ("Purchaser"), is entitled to purchase from Sports Supplement Acquisition Group, Inc., a Delaware corporation (the "Company"), 2,000,000 shares of Common Stock (or any whole number portion thereof) at an exercise price of $0.75 per share, all on the terms and conditions hereinafter provided.

Section 1.  Certain Definitions.  As used in this Warrant, unless the context otherwise requires:

"Charter” shall mean the Certificate of Incorporation of the Company, as in effect from time to time.

"Common Stock" shall mean the Company's authorized Common Stock, par value $0.001 per share.

"Exercise Price" shall mean the exercise price per share of Common Stock set forth above, as adjusted from time to time pursuant to Section 3 hereof.

"Securities Act" shall mean the Securities Act of 1933, as amended.

"Warrant" shall mean this Warrant and all additional or new warrants issued upon division or combination of, or in substitution for, this Warrant.  All such additional or new warrants shall at all times be identical as to terms and conditions and date, except as to the number of shares of Common Stock for which they may be exercised.

 
 

 

Warrantholder” shall mean the Purchaser, as the initial holder of this Warrant, and its nominees, successors or assigns, including any subsequent holder of this Warrant to whom it has been legally transferred.

"Warrant Stock" shall mean the shares of Common Stock purchasable by the holder of this Warrant upon the exercise of such Warrant.

Section 2.  Exercise of Warrant.

(a)  At any time and from time to time after the dates on which this Warrant shall vest but prior to five years from the execution date of this agreement, (the “Expiration Date"), the Warrantholder may exercise this Warrant, in whole or from time to time in part.  This Warrant shall vest ratably as to one third of the total number of shares of Common Stock for which it shall be exercised on each the first, second and third anniversary of the date hereof.

(b)(i)  The Warrantholder shall exercise this Warrant by means of delivering to the Company at its office identified in Section 15 hereof (i) a written notice of exercise, including the number of shares of Warrant Stock to be delivered pursuant to such exercise, (ii) this Warrant and (iii) payment equal to the Exercise Price in accordance with Section 2(b)(ii).  In the event that any exercise shall not be for all shares of Warrant Stock purchasable hereunder, a new Warrant registered in the name of the Warrantholder, of like tenor to this Warrant and for the remaining shares of Warrant Stock purchasable hereunder, shall be delivered to the Warrantholder within ten (10) days of any such exercise.  Such notice of exercise shall be in the Subscription Form set out at the end of this Warrant.

(ii) The Warrantholder may pay the Exercise Price to the Company either by cash, certified check or wire transfer.

(c)  Upon exercise of this Warrant and delivery of the Subscription Form with proper payment relating thereto, the Company shall cause to be executed and delivered to the Warrantholder a certificate or certificates representing the aggregate number of fully-paid and nonassessable shares of Common Stock issuable upon such exercise.

(d)  The stock certificate or certificates for Warrant Stock to be delivered in accordance with this Section 2 shall be in such denominations as may be specified in said notice of exercise and shall be registered in the name of the Warrantholder or such other name or names as shall be designated in said notice.  Such certificate or certificates shall be deemed to have been issued and the Warrantholder or any other person so designated to be named therein shall be deemed to have become the holder of record of such shares, including to the extent permitted by law the right to vote such shares or to consent or to receive notice as stockholders, as of the time said notice is delivered to the Company as aforesaid.

(e)  The Company shall pay all expenses payable in connection with the preparation, issue and delivery of stock certificates under this Section 2, including any transfer taxes resulting from the exercise of the Warrant and the issuance of Warrant Stock hereunder.

 
 

 

(f)  All shares of Common Stock issuable upon the exercise of this Warrant in accordance with the terms hereof shall be validly issued, fully paid and nonassessable, and free from all liens and other encumbrances thereon, other than liens or other encumbrances created by the Warrantholder.

(g)  In no event shall any fractional share of Common Stock of the Company be issued upon any exercise of this Warrant.  If, upon any exercise of this Warrant, the Warrantholder would, except as provided in this paragraph, be entitled to receive a fractional share of Common Stock, then the Company shall deliver in cash to such holder an amount equal to such fractional interest.

Section 3.  Adjustment of Warrant Stock and Exercise Price.  The Exercise Price and the number and kind of Warrant Stock purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the happening of certain events as hereinafter provided. The Exercise Price in effect at any time and the number and kind of securities purchasable upon exercise of each Warrant shall be subject to adjustment as follows:

(a)           In case of any consolidation or merger of the Company with another corporation (other than a merger with another corporation in which the Company is the surviving corporation and which does not result in any reclassification or change — other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination — of outstanding Common Stock issuable upon such exercise), the rights of the Holder of this Warrant shall be adjusted in the manner described below:
 
(i)           In the event that the Company is the surviving corporation or is merged into a wholly owned subsidiary for the purpose of incorporating the Company in a different jurisdiction, this Warrant shall, without payment of additional consideration therefor, be deemed modified so as to provide that the Holder of this Warrant, upon the exercise thereof, shall procure, in lieu of each share of Common Stock theretofore issuable upon such exercise, the kind and amount of shares of stock, other securities, money and property receivable upon such consolidation or merger by the holder of each share of Common Stock, had exercise of this Warrant occurred immediately prior to such consolidation or merger. This Warrant (as adjusted) shall be deemed to provide for further adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 3.  The provisions of this clause (i) shall similarly apply to successive reclassifications, changes, consolidations and mergers.
 
(ii)           In the event that the Company is not the surviving corporation (except in the case of a merger of the Company into a wholly owned subsidiary for the purpose of incorporating the Company in a different jurisdiction), Holder shall be given at least fifteen (15) days prior written notice of such transaction and shall be permitted to exercise this Warrant, to the extent it is exercisable as of the date of such notice, during this fifteen (15) day period.  Subject to the Company’s and its successor’s obligations under Section 5, upon expiration of such fifteen (15) day period, this Warrant and all of Holder's rights hereunder shall terminate.

 
 

 

(b)   If the Company, at any time while this Warrant, or any portion thereof, remains outstanding and unexpired, by reclassification of securities or otherwise, shall change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change and the Exercise Price therefor shall be appropriately adjusted, all subject to further adjustment as provided in this Section 3.
 
(c)           In case the Company shall (i) pay a dividend or make a distribution on its shares of Common Stock in shares of Common Stock, (ii) subdivide or classify its outstanding Common Stock into a greater number of shares, or (iii) combine or reclassify its outstanding Common Stock into a smaller number of shares, the Exercise Price in effect at the time of the record date for such dividend or distribution or of the effective date of such subdivision, combination or reclassification, shall be proportionally adjusted so that the Holder of this Warrant exercised after such date shall be entitled to receive the aggregate number and kind of shares that, if this Warrant had been exercised by such Holder immediately prior to such date, such Holder would have been entitled to receive upon such dividend, subdivision, combination or reclassification.  For example, if the Company declares a 2 for 1 stock dividend or stock split and the Exercise Price immediately prior to such event was $0.75 per share, the adjusted Exercise Price immediately after such event would be $0.38 per share. Such adjustment shall be made successively whenever any event listed above shall occur.  Whenever the Exercise Price payable upon exercise of each Warrant is adjusted pursuant to this subsection (c), the number of shares of Warrant Stock purchasable upon exercise of this Warrant shall simultaneously be adjusted by multiplying the number of shares of Warrant Stock initially issuable upon exercise of this Warrant by the Exercise Price in effect on the date hereof and dividing the product so obtained by the Exercise Price, as adjusted.
 
(d)           In the event that at any time, as a result of an adjustment made pursuant to subsection (a), (b) or (c) above, the Holder of this Warrant thereafter shall become entitled to receive any Warrant Stock of the Company, other than Common Stock, thereafter the number of such other shares so receivable upon exercise of this Warrant 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 subsections (a), (b) or (c) above.
 
(e)           Irrespective of any adjustments in the Exercise Price or the number or kind of Warrant Stock purchasable upon exercise of this Warrant, Warrants theretofore or thereafter issued may continue to express the same price and number and kind of shares as are stated in the similar Warrants initially issuable pursuant to this Warrant.
 
(f)           Whenever the Exercise Price shall be adjusted as required by the provisions of the foregoing Section 3, the Company shall forthwith file in the custody of its Secretary or an Assistant Secretary at its principal office and with its stock transfer agent, if any, an officer's certificate showing the adjusted Exercise Price determined as herein provided, setting forth in reasonable detail the facts requiring such adjustment, including a statement of the number of additional shares of Common Stock, if any, and such other facts as shall be necessary to show the reason for and the manner of computing such adjustment.  Each such officer's certificate shall be made available at all reasonable times for inspection by the holder and the Company shall, forthwith after each such adjustment, mail a copy by certified mail of such certificate to the Holder.

 
 

 

(g)           All calculations under this Section 6 shall be made to the nearest cent or to the nearest one one-hundredth (1/100th) of a share, as the case may be.

Section 4.  Division and Combination.  This Warrant may be divided or combined with other Warrants upon presentation at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Warrantholder or its agent or attorney.  The Company shall pay all expenses in connection with the preparation, issue and delivery of Warrants under this Section 4, including any transfer taxes resulting from the division or combination hereunder.  The Company agrees to maintain at its aforesaid office books for the registration of the Warrants.

Section 5.  Reclassification, Etc.  In case of any reclassification or change of the outstanding Common Stock of the Company (other than as a result of a subdivision, combination or stock dividend), or in case of any consolidation of the Company with, or merger of the Company into, or conveyance of all or substantially all of the Company’s assets to, another corporation or other business organization (other than a consolidation or merger in which the Company is the continuing corporation and which does not result in a change-of-control of the Company) at any time prior to the Expiration Date, then, as a condition of such reclassification, reorganization, change, consolidation, merger or conveyance, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Warrantholder, so that the Warrantholder shall have the right prior to the Expiration Date to purchase, at a total price not to exceed that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable upon such reclassification, reorganization, change, consolidation, merger or conveyance by a holder of the number of shares of Common Stock of the Company which might have been purchased by the Warrantholder immediately prior to such reclassification, reorganization, change, consolidation, merger or conveyance.  In any such case appropriate provisions shall be made with respect to the rights and interest of the Warrantholder to the end that the provisions hereof (including provisions for the adjustment of the Exercise Price and of the number of shares purchasable upon exercise of this Warrant) shall thereafter be applicable in relation to any shares of stock and other securities and property thereafter deliverable upon exercise hereof.

Section 6.  Reservation and Authorization of Capital Stock.  The Company shall at all times reserve and keep available for issuance (i) such number of its authorized but unissued shares of Common Stock as will be sufficient to permit the exercise in full of all outstanding Warrants and (ii) such number of its authorized but unissued shares of Common Stock as will be sufficient to permit the conversion of all such Common Stock.

Section 7.  Stock and Warrant Books.  The Company will not at any time, except upon dissolution, liquidation or winding up, close its stock books or Warrant books so as to result in preventing or delaying the exercise of any Warrant.

Section 8.  Limitation of Liability.  No provisions hereof, in the absence of affirmative action by the Warrantholder to purchase Warrant Stock hereunder, shall give rise to any liability of the Warrantholder to pay the Exercise Price or as a stockholder of the Company (whether such liability is asserted by the Company or creditors of the Company).

 
 

 

Section 9.  No Stockholder Rights.  Until the shares of Warrant Stock subject to this Warrant are issued to Purchaser upon exercise of the Warrant, (i) Purchaser shall have no right to vote the Warrant Stock in connection with any matters to which holders of Common Stock are entitled to vote and shall have no other rights as a stockholder of the Company with respect to the shares of Warrant Stock, and (ii) Purchaser shall have no preemptive rights with respect to such Warrant Stock.

Section 10.  Transfer.  This Warrant and the rights set forth herein, may not be sold, gifted, assigned, pledged, hypothecated, encumbered or otherwise directly or indirectly transferred, in whole or in part, except (i) together with the transfer of all of the Common Stock which Warrantholder acquired by conversion of the Notes issued to Warrantholder concurrently with issuance of this Warrant to Warrantholder or (ii) with the prior written consent of the Company, not to be unreasonably withheld; provided, however, that if the Warrantholder is a partnership, the Warrantholder may, upon prior written notice to the Company, transfer its entire interest in this Warrant to its partners provided that such transfer complies with all applicable federal and state securities laws.  Any attempted transfer in violation of this section shall be void and of no force or effect.

Section 11.  Investment Representations; Restrictions on Transfer of Warrant  Stock.  Unless a current registration statement under the Securities Act shall be in effect with respect to the Warrant Stock to be issued upon exercise of this Warrant, the Warrantholder, by accepting this Warrant, covenants and agrees that, at the time of exercise hereof, and at the time of any proposed transfer of Warrant Stock acquired upon exercise hereof, such Warrantholder will deliver to the Company a written statement that the securities acquired by the Warrantholder upon exercise hereof are for the account of the Warrantholder or are being held by the Warrantholder as trustee, investment manager, investment advisor or as any other fiduciary for the account of the beneficial owner or owners for investment and are not acquired with a view to, or for sale in connection with, any distribution thereof (or any portion thereof) and with no present intention (at any such time) of offering and distributing such securities (or any portion thereof).

Section 12.  Loss, Destruction of Warrant Certificates.  Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of any warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity satisfactory to the Company or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same aggregate number of shares of Common Stock.

Section 13.  Amendments.  The terms of this Warrant may be amended, and the observance of any term herein may be waived, but only with the written consent of the Company and the Warrantholder.

 
 

 

Section 14.  Notices Generally.  Any notice, request, consent, other communication or delivery pursuant to the provisions hereof shall be in writing and shall be sent by one of the following means:  (i) by registered or certified first class mail, postage prepaid, return receipt requested; (ii) by facsimile transmission with confirmation of receipt; (iii) by overnight courier service; or (iv) by personal delivery, and shall be properly addressed to the Warrantholder at the last known address or facsimile number appearing on the books of the Company, or, except as herein otherwise expressly provided, to the Company at its principal executive office at [provide] or such other address or facsimile number as shall have been furnished to the party giving or making such notice, demand or delivery.

Section 15.  No Impairment.  The Company shall not by any action, including, without limitation, amending its Certificate of Incorporation or through any reorganization, conveyance of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but shall at all times in good faith assist in the carrying out of all such terms and in the taking of all such reasonable actions as may be necessary or appropriate to protect the rights of the Warrantholder against impairment.

Section 16.  Successors and Assigns.  This Warrant shall bind and inure to the benefit of and be enforceable by the parties hereto and their respective permitted successors and assigns.

Section 17.  Governing Law.  In all respects, including all matters of construction, validity and performance, this Warrant and the obligations arising hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware applicable to contracts made and performed in such State, without regard to the conflict of law rules thereof.

*  *  *  *  *  *  *

 
 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in its name by its Chief Executive Officer.

Dated:  [date of reverse merger]

  SPORTS SUPPLEMENT ACQUISITION GROUP,
  INC., a Delaware corporation
     
 
By:
/s/ James Klein
 
Name:
James Klein
 
Title:
Chief Executive Officer

 
 

 

SUBSCRIPTION FORM

(to be executed only upon exercise of Warrant)

To:          Sports Supplement Acquisition Group, Inc.
        [provide]

The undersigned, pursuant to the provisions set forth in the attached Warrant (No. __), hereby irrevocably elects to purchase __________ shares of the Common Stock covered by such Warrant and herewith makes payment of $__________, representing the full purchase price for such shares at the price per share provided for in such Warrant.

Dated:
   
Name:
 
     
 
Signature
 
     
 
Address:
 
     
 
   

 
 

 
EX-10.11 12 v136667_ex10-11.htm

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS.  THIS WARRANT MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS SUCH SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS IN ACCORDANCE WITH SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.

Warrant No. K-1

No. of Shares of Common Stock:  1,800,000

WARRANT

to Purchase Common Stock of

Sports Supplement Acquisition Group, Inc.
a Nevada corporation

THIS WARRANT IS TO CERTIFY THAT Knights Bridge Capital Group Inc. ("Purchaser"), or its assigns, is entitled to purchase from Sports Supplement Acquisition Group, Inc., a Nevada corporation (the "Company"), 1,800,000 fully paid and nonassessable shares of Common Stock (or any whole number portion thereof) for an aggregate purchase price of $1,000,000, all on the terms and conditions hereinafter provided.

Section 1.  Certain Definitions.  As used in this Warrant, unless the context otherwise requires:

"Charter” shall mean the Certificate of Incorporation of the Company, as in effect from time to time.

"Common Stock" shall mean the Company's authorized Common Stock, par value $0.001 per share.

"Exercise Price" shall mean the exercise price per share of Common Stock set forth above, as adjusted from time to time pursuant to Section 3 hereof.

"Securities Act" shall mean the Securities Act of 1933, as amended.

"Warrant" shall mean this Warrant and all additional or new warrants issued upon division or combination of, or in substitution for, this Warrant.  All such additional or new warrants shall at all times be identical as to terms and conditions and date, except as to the number of shares of Common Stock for which they may be exercised.

 
 

 

Warrantholder” shall mean the Purchaser, as the initial holder of this Warrant, and its nominees, successors or assigns, including any subsequent holder of this Warrant to whom it has been legally transferred.

"Warrant Stock" shall mean the shares of Common Stock purchasable by the holder of this Warrant upon the exercise of such Warrant.

Section 2.  Exercise of Warrant.

(a)  At any time and from time to time after the dates on which this Warrant shall vest but prior to 90 days from the execution date of this Warrant, (the “Expiration Date"), the Warrantholder may exercise this Warrant, in whole or from time to time in part.  This Warrant shall vest in full on the date hereof.

(b)(i)  The Warrantholder shall exercise this Warrant by means of delivering to the Company at its office identified in Section 14 hereof (i) a written notice of exercise, including the number of shares of Warrant Stock to be delivered pursuant to such exercise, (ii) this Warrant and (iii) payment equal to the Exercise Price in accordance with Section 2(b)(ii).  In the event that any exercise shall not be for all shares of Warrant Stock purchasable hereunder, a new Warrant registered in the name of the Warrantholder, of like tenor to this Warrant and for the remaining shares of Warrant Stock purchasable hereunder, shall be delivered to the Warrantholder within ten (10) days of any such exercise.  Such notice of exercise shall be in the “Subscription Form” set out at the end of this Warrant.

(ii) The Warrantholder may pay the Exercise Price to the Company either by cash, certified check or wire transfer

(c)  Upon exercise of this Warrant and delivery of the Subscription Form with proper payment relating thereto, the Company shall cause to be executed and delivered to the Warrantholder a certificate or certificates representing the aggregate number of fully-paid and nonassessable shares of Common Stock issuable upon such exercise.

(d)  The stock certificate or certificates for Warrant Stock to be delivered in accordance with this Section 2 shall be in such denominations as may be specified in said notice of exercise and shall be registered in the name of the Warrantholder or such other name or names as shall be designated in said notice.  Such certificate or certificates shall be deemed to have been issued and the Warrantholder or any other person so designated to be named therein shall be deemed to have become the holder of record of such shares, including to the extent permitted by law the right to vote such shares or to consent or to receive notice as stockholders, as of the time said notice is delivered to the Company as aforesaid.

(e)  The Company shall pay all expenses payable in connection with the preparation, issue and delivery of stock certificates under this Section 2, including any transfer taxes resulting from the exercise of the Warrant and the issuance of Warrant Stock hereunder.

 
 

 

(f)  All shares of Common Stock issuable upon the exercise of this Warrant in accordance with the terms hereof shall be validly issued, fully paid and nonassessable, and free from all liens and other encumbrances thereon, other than liens or other encumbrances created by the Warrantholder.

(g)  In no event shall any fractional share of Common Stock of the Company be issued upon any exercise of this Warrant.  If, upon any exercise of this Warrant, the Warrantholder would, except as provided in this paragraph, be entitled to receive a fractional share of Common Stock, then the Company shall deliver in cash to such holder an amount equal to such fractional interest.

(h)  The Company may call this Warrant on the 55th day after the execution date of this Warrant.  In such event, Warrantholder shall have 5 business days to exercise  this  Warrant according to the terms hereof.

Section 3.  Adjustment of Warrant Stock and Exercise Price.  The Exercise Price and the number and kind of Warrant Stock purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the happening of certain events as hereinafter provided. The Exercise Price in effect at any time and the number and kind of securities purchasable upon exercise of each Warrant shall be subject to adjustment as follows:

(a)           In case of any consolidation or merger of the Company with another corporation (other than a merger with another corporation in which the Company is the surviving corporation and which does not result in any reclassification or change — other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination — of outstanding Common Stock issuable upon such exercise), the rights of the Warrantholder shall be adjusted in the manner described below:
 
(i)           In the event that the Company is the surviving corporation or is merged into a wholly owned subsidiary for the purpose of incorporating the Company in a different jurisdiction, this Warrant shall, without payment of additional consideration therefor, be deemed modified so as to provide that the Warrantholder, upon the exercise thereof, shall procure, in lieu of each share of Common Stock theretofore issuable upon such exercise, the kind and amount of shares of stock, other securities, money and property receivable upon such consolidation or merger by the holder of each share of Common Stock, had exercise of this Warrant occurred immediately prior to such consolidation or merger. This Warrant (as adjusted) shall be deemed to provide for further adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 3.  The provisions of this clause (i) shall similarly apply to successive reclassifications, changes, consolidations and mergers.
 
(ii)           In the event that the Company is not the surviving corporation (except in the case of a merger of the Company into a wholly owned subsidiary for the purpose of incorporating the Company in a different jurisdiction), Warrantholder shall be given at least fifteen (15) days prior written notice of such transaction and shall be permitted to exercise this Warrant, to the extent it is exercisable as of the date of such notice, during this fifteen (15) day period.  Subject to the Company’s and its successor’s obligations under Section 5, upon expiration of such fifteen (15) day period, this Warrant and all of Warrantholder's rights hereunder shall terminate.

 
 

 

(b)           If the Company, at any time while this Warrant, or any portion thereof, remains outstanding and unexpired, by reclassification of securities or otherwise, shall change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change and the Exercise Price therefor shall be appropriately adjusted, all subject to further adjustment as provided in this Section 3.
 
(c)           In case the Company shall (i) pay a dividend or make a distribution on its shares of Common Stock in shares of Common Stock, (ii) subdivide or classify its outstanding Common Stock into a greater number of shares, or (iii) combine or reclassify its outstanding Common Stock into a smaller number of shares, the Exercise Price in effect at the time of the record date for such dividend or distribution or of the effective date of such subdivision, combination or reclassification, shall be proportionally adjusted so that the Warrantholder exercised after such date shall be entitled to receive the aggregate number and kind of shares that, if this Warrant had been exercised by such Warrantholder immediately prior to such date, such Warrantholder would have been entitled to receive upon such dividend, subdivision, combination or reclassification.  For example, if the Company declares a 2 for 1 stock dividend or stock split and the Exercise Price immediately prior to such event was $0.75 per share, the adjusted Exercise Price immediately after such event would be $0.38 per share. Such adjustment shall be made successively whenever any event listed above shall occur.  Whenever the Exercise Price payable upon exercise of each Warrant is adjusted pursuant to this subsection (c), the number of shares of Warrant Stock purchasable upon exercise of this Warrant shall simultaneously be adjusted by multiplying the number of shares of Warrant Stock initially issuable upon exercise of this Warrant by the Exercise Price in effect on the date hereof and dividing the product so obtained by the Exercise Price, as adjusted.
 
(d)           In the event that at any time, as a result of an adjustment made pursuant to subsection (a), (b) or (c) above, the Warrantholder thereafter shall become entitled to receive any Warrant Stock of the Company, other than Common Stock, thereafter the number of such other shares so receivable upon exercise of this Warrant 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 subsections (a), (b) or (c) above.
 
(e)           Irrespective of any adjustments in the Exercise Price or the number or kind of Warrant Stock purchasable upon exercise of this Warrant, Warrants theretofore or thereafter issued may continue to express the same price and number and kind of shares as are stated in the similar Warrants initially issuable pursuant to this Warrant.
 
(f)           Whenever the Exercise Price shall be adjusted as required by the provisions of the foregoing Section 3, the Company shall forthwith file in the custody of its Secretary or an Assistant Secretary at its principal office and with its stock transfer agent, if any, an officer's certificate showing the adjusted Exercise Price determined as herein provided, setting forth in reasonable detail the facts requiring such adjustment, including a statement of the number of additional shares of Common Stock, if any, and such other facts as shall be necessary to show the reason for and the manner of computing such adjustment.  Each such officer's certificate shall be made available at all reasonable times for inspection by the holder and the Company shall, forthwith after each such adjustment, mail a copy by certified mail of such certificate to the Holder.

 
 

 

(g)           All calculations under this Section 6 shall be made to the nearest cent or to the nearest one one-hundredth (1/100th) of a share, as the case may be.

Section 4.  Division and Combination.  This Warrant may be divided or combined with other Warrants upon presentation at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Warrantholder or its agent or attorney.  The Company shall pay all expenses in connection with the preparation, issue and delivery of Warrants under this Section 4, including any transfer taxes resulting from the division or combination hereunder.  The Company agrees to maintain at its aforesaid office books for the registration of the Warrants.

Section 5.  Reclassification, Etc.  In case of any reclassification or change of the outstanding Common Stock of the Company (other than as a result of a subdivision, combination or stock dividend), or in case of any consolidation of the Company with, or merger of the Company into, or conveyance of all or substantially all of the Company’s assets to, another corporation or other business organization (other than a consolidation or merger in which the Company is the continuing corporation and which does not result in a change-of-control of the Company) at any time prior to the Expiration Date, then, as a condition of such reclassification, reorganization, change, consolidation, merger or conveyance, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Warrantholder, so that the Warrantholder shall have the right prior to the Expiration Date to purchase, at a total price not to exceed that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable upon such reclassification, reorganization, change, consolidation, merger or conveyance by a holder of the number of shares of Common Stock of the Company which might have been purchased by the Warrantholder immediately prior to such reclassification, reorganization, change, consolidation, merger or conveyance.  In any such case appropriate provisions shall be made with respect to the rights and interest of the Warrantholder to the end that the provisions hereof (including provisions for the adjustment of the Exercise Price and of the number of shares purchasable upon exercise of this Warrant) shall thereafter be applicable in relation to any shares of stock and other securities and property thereafter deliverable upon exercise hereof.

Section 6.  Reservation and Authorization of Capital Stock.  The Company shall at all times reserve and keep available for issuance (i) such number of its authorized but unissued shares of Common Stock as will be sufficient to permit the exercise in full of all outstanding Warrants and (ii) such number of its authorized but unissued shares of Common Stock as will be sufficient to permit the conversion of all such Common Stock.

 
 

 

Section 7.  Stock and Warrant Books.  The Company will not at any time, except upon dissolution, liquidation or winding up, close its stock books or Warrant books so as to result in preventing or delaying the exercise of any Warrant.

Section 8.  Limitation of Liability.  No provisions hereof, in the absence of affirmative action by the Warrantholder to purchase Warrant Stock hereunder, shall give rise to any liability of the Warrantholder to pay the Exercise Price or as a stockholder of the Company (whether such liability is asserted by the Company or creditors of the Company).

Section 9.  No Stockholder Rights.  Until the shares of Warrant Stock subject to this Warrant are issued to Purchaser upon exercise of the Warrant, (i) Purchaser shall have no right to vote the Warrant Stock in connection with any matters to which holders of Common Stock are entitled to vote and shall have no other rights as a stockholder of the Company with respect to the shares of Warrant Stock, and (ii) Purchaser shall have no preemptive rights with respect to such Warrant Stock.

Section 10.  Transfer.  The transfer of this Warrant and all rights hereunder, in whole or in part, is registrable at the office or agency of the Company, upon surrender of this Warrant properly endorsed.  Each taker and Warrantholder, by taking or holding the same, consents and agrees that this Warrant, when endorsed in blank, shall be deemed negotiable, and that the holder hereof, when this Warrant shall have been so endorsed, may be treated by the Company and all other persons dealing with this Warrant as the absolute owner and holder hereof for any purpose and as the person entitled to exercise the rights represented by this Warrant, or to the registration of transfer hereof on the books of the Company; and until due presentment for registration of transfer on such books the Company may treat the registered holder hereof as the owner and holder for all purposes, and the Company shall not be affected by notice to the contrary.

Section 11.  Investment Representations; Restrictions on Transfer of Warrant  Stock.  Unless a current registration statement under the Securities Act shall be in effect with respect to the Warrant Stock to be issued upon exercise of this Warrant, the Warrantholder, by accepting this Warrant, covenants and agrees that, at the time of exercise hereof, and at the time of any proposed transfer of Warrant Stock acquired upon exercise hereof, such Warrantholder will deliver to the Company a written statement that the securities acquired by the Warrantholder upon exercise hereof are for the account of the Warrantholder or are being held by the Warrantholder as trustee, investment manager, investment advisor or as any other fiduciary for the account of the beneficial owner or owners for investment and are not acquired with a view to, or for sale in connection with, any distribution thereof (or any portion thereof) and with no present intention (at any such time) of offering and distributing such securities (or any portion thereof).

Section 12.  Loss, Destruction of Warrant Certificates.  Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of any warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity satisfactory to the Company or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same aggregate number of shares of Common Stock.

 
 

 

Section 13.  Amendments.  The terms of this Warrant may be amended, and the observance of any term herein may be waived, but only with the written consent of the Company and the Warrantholder.

Section 14.  Notices Generally.  Any notice, request, consent, other communication or delivery pursuant to the provisions hereof shall be in writing and shall be sent by one of the following means:  (i) by registered or certified first class mail, postage prepaid, return receipt requested; (ii) by facsimile transmission with confirmation of receipt; (iii) by overnight courier service; or (iv) by personal delivery, and shall be properly addressed to the Warrantholder at the last known address or facsimile number appearing on the books of the Company, or, except as herein otherwise expressly provided, to the Company at its principal executive office or such other address or facsimile number as shall have been furnished to the party giving or making such notice, demand or delivery.

Section 15.  No Impairment.  The Company shall not by any action, including, without limitation, amending its Charter or through any reorganization, conveyance of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but shall at all times in good faith assist in the carrying out of all such terms and in the taking of all such reasonable actions as may be necessary or appropriate to protect the rights of the Warrantholder against impairment.

Section 16.  Successors and Assigns.  This Warrant shall bind and inure to the benefit of and be enforceable by the parties hereto and their respective permitted successors and assigns.

Section 17.  Governing Law.  In all respects, including all matters of construction, validity and performance, this Warrant and the obligations arising hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Nevada applicable to contracts made and performed in such State, without regard to the conflict of law rules thereof.

Section 18. Registration.  If the issuance of any shares of Common Stock required to be reserved for purposes of exercise or conversion of this Warrant or for the conversion of such shares requires registration with, or approval of, any Federal governmental authority under any Federal or state law (other than any registration under the Securities Act) or listing on any national securities exchange, before such shares may be issued upon exercise or conversion of this Warrant or such conversion, the Company will, at its expense, use its best efforts to cause such shares to be duly registered or approved, or listed on the relevant national securities exchange, as the case may be, at such time, so that such shares may be issued in accordance with the terms hereof and so converted.

*  *  *  *  *  *  *

 
 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in its name by its Chief Executive Officer.

Dated:  December 31, 2008.

 
SPORTS SUPPLEMENT ACQUISITION GROUP,
 
INC., a Nevada corporation
     
 
By:
/s/ James Klein
 
Name:
James Klein
 
Title:
Chief Executive Officer

 
 

 

SUBSCRIPTION FORM

(to be executed only upon exercise of Warrant)

To:          Sports Supplement Acquisition Group, Inc.
               497 Delaware Avenue
               Buffalo, New York 14202

The undersigned, pursuant to the provisions set forth in the attached Warrant (No. __), hereby irrevocably elects to purchase __________ shares of the Common Stock covered by such Warrant and herewith makes payment of $__________, representing the full purchase price for such shares at the price per share provided for in such Warrant.

Dated:
   
Name:
 
     
 
Signature
 
     
 
Address:
 
     
     

 
 

 
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