THIS NOTE HAS NOT BEEN THE SUBJECT OF REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS
OF ANY STATE AND HAS BEEN ISSUED IN RELIANCE ON EXEMPTIONS FROM
THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THIS
NOTE MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT AS PERMITTED UNDER SUCH SECURITIES
LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
CONVERTIBLE PROMISSORY NOTE
$__________ St. Petersburg, Florida
February __, 1996
FOR VALUE RECEIVED, the undersigned, Medcross, Inc., a
Florida corporation (hereinafter referred to as the "Maker"),
hereby promises to pay to _____________________ (the "Payee") at
_________________________________________________________________
__ or at such other place as the holder hereof may from time to
time designate in writing, the principal sum of
____________________________________________________
($__________) in one installment due upon the earlier of:
(i) August 31, 1996 or such later date as extended as set forth
below (the "Maturity Date"); or (ii) the Maker's receipt of
proceeds of at least Four Million Dollars ($4,000,000) from an
equity or debt financing conducted by the Maker (the "Accelerated
Maturity Date"), together with interest from and after the date
hereof at the rate of ten percent (10%) per annum computed on the
unpaid principal balance. Interest shall be paid by Maker to the
Payee on the Maturity Date or the Accelerated Maturity Date, as
applicable. By acceptance of this 10% Convertible Promissory
Note (the "Note"), the Payee represents, warrants, covenants and
agrees that he, she or it will abide by and be bound by its
terms.
1. Prepayment and Notices. The unpaid principal balance
outstanding under this Note may be prepaid in part or in full by
the Maker without penalty, upon thirty (30) days notice to the
Payee stating the repayment amount and repayment date (the
"Repayment Date"). The Maker must provide notice ten (10)
business days prior to an Accelerated Maturity Date to the Payee.
Any such notice must specify that the Payee may exercise its
conversion rights prior to the Repayment Date.
2. Conversion.
(a) Up to $1,250 of each $50,000 (i.e., 2.5%) of unpaid
principal amount of this Note shall be convertible at the option
of the Payee (the "Conversion Right") at any time after March 31,
1996 but prior to the close of business on the Maturity Date or
the Accelerated Maturity Date, as applicable, in the manner and
on the terms hereinafter set forth, into 17,500 shares of common
stock, par value $.007 per share (the "Common Stock") of the
Maker (the "Conversion Price"), subject to adjustment pursuant to
Section 4 hereof.
(b) [Intentionally Left Blank]
(c) The Maker may, at its sole option, elect to extend the
Maturity Date for six months after August 31, 1996, upon payment
by the Maker to the Payee of a cash payment equal to two and one-
half percent (2.5%) of the then outstanding principal balance of
such Note. In the event of extension by the Maker hereunder, the
interest rate with respect to the then renaming unpaid principal
balance shall be the simple annual rate of thirteen percent
(13%). Extension of the Maturity Date hereunder shall not affect
the conversion rights granted in this Note.
(d) Notwithstanding any other provision of this Note to the
contrary, upon receipt of notice of the Maker's intent to prepay
part or all of the principal amount hereunder or of an
Accelerated Maturity Date, the Payee may elect to exercise the
Conversion Right and convert pursuant to Section 2(a) hereof a
portion (as set forth in subsection (a) hereof) of the amount of
unpaid principal which the Maker intends to prepay, up to the
close of business on the last business day before the stated
Repayment Date.
(e) Upon the occurrence of an Event of Default, the
Conversion Right shall be amended such that the remaining unpaid
principal balance shall be converted into shares of Common Stock
at 40% of the Fair Market Value per share, but in no event less
than par value. For this purpose "Fair Market Value" per share
shall be the average of the closing bid and ask prices on the
last ten trading days of the prior calendar month.
3. Conversion Procedure. The Conversion Right may be exercised
by the Payee by the surrender of this Note (along with the
conversion form attached hereto duly executed) to the Maker at
the principal office of the Maker. Risk of loss prior to
surrender of this Note shall be borne by the Payee.
Consequently, hand delivery with written acknowledgement of
receipt by the Maker or registered or certified mail, return
receipt requested, is the preferred mode of delivery. Conversion
shall be deemed to have been effected on the date when such
delivery of the conversion notice is actually made or, if
earlier, at the expiration of five calendar days after being sent
to the Maker by the Payee by registered or certified mail, return
receipt requested, with postage thereon fully prepaid (the
"Conversion Date"). As promptly as practicable thereafter, the
Maker shall issue and deliver to the Payee: (a) a new note
representing the difference between principal amount of this Note
and the principal amount hereof which has been converted pursuant
hereto; and (b) certificates representing the number of shares of
Common Stock to which the Payee is entitled. The Maker shall not
be obligated to issue certificates representing shares of Common
Stock in the name of any party other than the Payee. The person
or entity in whose name the certificates representing the shares
of Common Stock issuable upon conversion hereof shall be deemed
to have become a holder of record on the next succeeding day on
which the transfer books are open, but the Conversion Price shall
be that in effect on the Conversion Date. The Maker covenants
that all securities which may be issued upon exercise of the
Conversion Right will, upon issuance, be fully paid and
nonassessable and free of all taxes, liens and charges caused or
created by the Maker with respect to the issuance thereof.
4. Adjustments. The number and kind of securities which may be
received upon the exercise of the Conversion Right and the
Conversion Price shall be subject to adjustment from time to time
upon the happening of certain events, as follows:
(a) Stock Splits and Combinations. If the Maker shall at
any time or from time to time after the date hereof effect a
subdivision of its outstanding shares of Common Stock, the
Conversion Price then in effect immediately before such
subdivision shall be proportionately decreased and the number of
shares purchasable upon conversion proportionately increase, and
conversely, if the Maker shall at any time or from time to time
after the date hereof combine its outstanding shares of Common
Stock, the Conversion Price then in effect immediately before
such combination shall be proportionately increased and the
number of shares purchasable upon conversion shall be
proportionately decreased. Any adjustment under this section
shall become effective upon the close of business on the date the
subdivision or combination becomes effective.
(b) Certain Dividends and Distributions. In the event that
the Maker shall at any time or from time to time after the date
hereof make or issue, or fix a record date for the determination
of holders of shares of Common Stock entitled to receive, a
dividend or other distribution payable in additional shares of
Common Stock, then and in each such event, the Conversion Price
then in effect shall be decreased as of the time of such issuance
or, in the event that such a record date shall have been fixed,
as of the close of business on such record date, by multiplying
the Conversion Price then in effect by a fraction:
(i) the numerator of which shall be the total number
of shares of Common Stock issued and outstanding immediately
prior to the time of such issuance or the close of business on
such record date; and
(ii) the denominator of which shall be the sum of the
total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of
business on such record date and the number of shares of Common
Stock issuable in payment of such dividend or distribution;
provided, however, that if such record date shall have been fixed
and such dividend is not fully paid or if such distribution is
not fully made on the date fixed therefor, the Conversion Price
shall be recomputed accordingly as of the close of business on
such record date and thereafter such Conversion Price shall be
adjusted pursuant to this subsection as of the time of actual
payment of such dividends or distributions.
(c) Other Dividends and Distributions. In the event that
the Maker at any time or from time to time after the date hereof
shall make or issue, or fix a record date for the determination
of holders of shares of Common Stock entitled to receive, a
dividend or other distribution payable in securities of the Maker
other than shares of Common Stock, then and in each such event
provisions shall be made so that the holder of this Note shall
receive, upon conversion of this Note, in addition to the number
of shares of Common Stock receivable thereupon, the amount of
securities of the Maker which such holder would have received had
its Note been converted into shares of Common Stock on the date
of such event and had thereafter, during the period from the date
of such event to and including the Conversion Date, retained such
securities (together with any distributions payable thereon
during such period) receivable by the holder as aforesaid during
such period, giving application to all adjustments called for
during such period under this section with respect to the rights
of the holder of the Note.
(d) Reclassification, Exchange or Substitution. If the
shares of Common Stock issuable upon the conversion of this Note
shall be changed into the same or different number of shares of
any class or classes of capital stock, whether by capital
reorganization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend provided
for above, or a reorganization, merger, consolidation or sale of
assets provided for in subsection (e) below), then and in each
such event, the holder of this Note shall have the right
thereafter to convert this Note into the kind and amount of
shares of capital stock and other securities and property
receivable upon such reorganization, reclassification or other
change, as the holder of the number of shares of Common Stock
into which this Note might have been converted immediately prior
to such reorganization, reclassification or change, all subject
to further adjustment as provided herein.
(e) Reorganization, Merger, Consolidation or Sale of
Assets. If, at any time or from time to time, there shall be a
capital reorganization of the shares of Common Stock (other than
a subdivision, combination, reclassification or exchange of
shares provided for elsewhere in this section) or a merger or
consolidation of the Maker with or into another corporation, or
the sale of all or substantially all of the Maker's properties
and assets to any other person or entity, then as a part of such
reorganization, merger, consolidation or sale, provision shall be
made so that the holder of this Note shall thereafter be entitled
to receive upon conversion of this Note, the number of shares of
capital stock or other securities or property of the Maker, or of
the successor corporation resulting from such merger or
consolidation or sale, to which the holder of shares of Common
Stock deliverable upon conversion would have been entitled on
such reorganization, merger, consolidation, or sale. In any such
case, appropriate adjustment shall be made in the application of
the provisions of this section with respect to the rights of the
holder of this Note after the reorganization, merger,
consolidation or sale to the end that the provisions of this
section (including adjustment of the Conversion Price then in
effect and the number of shares of Common Stock receivable upon
conversion of this Note) shall be applicable after that event as
nearly equivalent hereto as may be practicable.
(f) Minimum Adjustment. Notwithstanding anything to the
contrary set forth herein, no adjustment of the Conversion Price
shall be made in an amount equal to less than one cent ($.01),
but any such lesser adjustment shall be carried forward and shall
be made at the time and together with the next subsequent
adjustment which together with any adjustments so carried forward
shall amount to one cent ($.01) or more.
(g) Certificate of Adjustment. Upon the occurrence of each
adjustment or readjustment of the applicable Conversion Price
pursuant to this section, the Maker shall promptly compute such
adjustment or readjustment in accordance with the terms hereof
and prepare and furnish to the holder of this Note a certificate,
signed by the Chairman of the Board, the President or the Chief
Financial Officer, setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or
readjustment is based.
(h) Notices of Record Date. If and in the event that:
(i) the Maker shall set a record date for the purpose
of entitling the holders of shares of Common Stock to receive a
dividend, or any other distribution, payable otherwise than in
cash;
(ii) the Maker shall set a record date for the purpose
of entitling the holders of shares of Common Stock to subscribe
for or purchase any shares of any class or to receive any other
rights;
(iii) there shall occur any capital reorganization
of the Maker, reclassification of the shares of capital stock of
the Maker (other than a subdivision or combination of its
outstanding shares of Common Stock), consolidation or merger of
the Maker with or into another corporation, or sale of all or
substantially all of the assets of the Maker; or
(iv) there shall occur a voluntary or involuntary
dissolution, liquidation, or winding up of the Maker;
then, and in any such case, the Maker shall cause to be mailed to
the holder of record of this Note, at least thirty (30) days
prior to the dates hereinafter specified, a notice stating the
date: (A) which has been set as the record date for the purpose
of such dividend, distribution, or rights; or (B) on which such
reclassification, reorganization, consolidation, merger, sale,
dissolution, liquidation or winding up is to take place and the
record date as of which the holder of record shall be entitled to
exchange this Note for securities or other property deliverable
upon such reclassification, reorganization, consolidation,
merger, sale, dissolution, liquidation or winding up.
(i) Exceptions. The Maker will execute a purchase
agreement with I-LINK Worldwide Inc. ("ILINK") pursuant to which
the Company will acquire all of the issued and outstanding shares
of stock of ILINK in exchange for the issuance of securities of
the Maker (the "ILINK Acquisition"). Notwithstanding anything to
the contrary set forth elsewhere herein, the provisions hereof
relating to adjustments shall not be operative and no adjustment
which otherwise may have been required pursuant hereto shall be
made as a result of the issuance of securities by the Company in
connection with or related in any way to the ILINK Acquisition.
5. Reservation. The Maker covenants that, during the period
within which the Conversion Right may be exercised, the Maker
will at all times have authorized and reserved for the purpose of
issuance upon exercise of the Conversion Right, a sufficient
number of shares of Common Stock (or other securities subject to
the Conversion Right) to provide for the exercise of the
Conversion Right in full.
6. Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of this Note. In lieu of any
fractional shares of Common Stock to which the Payee would
otherwise be entitled, the Maker shall pay an amount equal to the
product of such fraction multiplied by the fair value of one
share of Common Stock on the Conversion Date, as determined in
good faith by the Board of Directors of the Maker.
7. Registration Rights. The Maker hereby covenants and agrees
as follows:
(a) Definitions. For purposes of this section:
(i) The terms "register," "registered" and
"registration" refer to a registration effected by preparing and
filing a registration statement or similar document in compliance
with the Securities Act of 1933, as amended (the "Securities
Act"), and the declaration of effectiveness of such registration
statement or other document by the Securities and Exchange
Commission (the "SEC").
(ii) The term "Registrable Securities" means: (A) the
shares of Common Stock issued or issuable upon conversion of this
Note; or (B) any other securities of the Maker issued as (or
issuable upon the conversion or exercise of any warrant, right or
other security which is issued as) a dividend or other
distribution with respect to, in exchange for or in replacement
of the shares of Common Stock referenced in subsection (A)
immediately above, excluding in all cases, however, any
Registrable Securities sold to the public pursuant to a
registration or an exemption from registration.
(iii) The number of shares of "Registrable
Securities then outstanding" shall be the number of securities
outstanding which are Registrable Securities.
(iv) The term "Holder" as used hereinafter in this
Section 7 means any person or entity owning of record Registrable
Securities.
(b) Demand Registration Rights. This Note has been issued
in conjunction with the issuance of other Notes pursuant to a
private debt financing conducted by the Maker. In connection
therewith, the following registration rights are provided:
(i) If the Maker shall receive at any time after March
1, 1996, a written request (the "Demand Request") from the
Holders of not less than fifty percent (50%) of the shares of
Common Stock issued or issuable upon conversion of the Notes (the
"Initiating Holders") that the Maker file a registration
statement under the Securities Act covering the registration of
at least fifty percent (50%) of the Registrable Securities then
outstanding, then the Maker shall promptly give written notice of
such Demand Request (the "Registration Notice"), together with a
list of the jurisdictions in which the Maker intends to attempt
to qualify such securities under applicable state securities
laws, to all Holders within sixty (60) days, or as soon as
legally permissible, subject to the provisions of Section
7(b)(ii), file a registration statement under the Securities Act
relating to or otherwise including all Registrable Securities
which the Initiating Holders have requested to be registered,
together with all or such portion of the Registrable Securities
of any other Holder who requests to be included by notice to the
Maker, which notice must be given within thirty (30) days after
the Registration Notice from the Maker described above.
(ii) If the Initiating Holders intend to distribute the
Registrable Securities covered by the Demand Request by means of
an underwriting, they shall so advise the Maker as a part of the
Demand Request made pursuant hereto and the Maker shall include
such information in the Registration Notice referred to in
Section 7(b)(i) above.
(iii) All Holders proposing to distribute their
securities through an underwriting (together with the Maker as
provided in Section 7(d)(v) below) shall enter into an
underwriting agreement in customary form with the managing
underwriter selected for such underwriting by the Holders of more
than fifty percent (50%) of the shares of Common Stock issued or
issuable to the Initiating Holders and reasonably acceptable to
the Maker. Notwithstanding any other provision of this section,
if the managing underwriter advises the Initiating Holders in
writing that marketing factors require a limitation of the number
of securities to be underwritten, the Initiating Holders shall so
advise all Holders of Registrable Securities, and the number of
shares of Registrable Securities that may be included in the
registration statement and underwriting shall be allocated among
all Holders thereof in proportion, as nearly as practicable, to
the respective amounts of Registrable Securities which would
otherwise be entitled to inclusion in such registration held by
such Holders at the time of filing the registration statement.
If any Holder of Registrable Securities disapproves of the terms
of the underwriting, such person may elect to withdraw therefrom
by written objection to the Maker, the managing underwriter and,
unless otherwise provided, the Initiating Holders. Any
Registrable Securities excluded or withdrawn from the
underwriting by reason of the managing underwriter's marketing
limitation may be included in such registration statement but the
sale thereof may be deferred up to ninety (90) days after the
effective date thereof at the request of the managing
underwriter. If the managing underwriter has not limited the
number of Registrable Securities to be underwritten, the Maker
may include securities for its own account in such registration
if the managing underwriter so agrees and if the number of
Registrable Securities which would otherwise have been included
in such registration and underwriting will not thereby be
limited.
(iv) The Maker shall be obligated to effect only one
demand registration pursuant hereto.
(c) Piggy-Back Registration Rights. In the event that (but
without any obligation to do so) the Maker proposes to register
any of its securities under the Securities Act in connection with
the public offering of such securities solely for cash (other
than a registration on Form S-4, Form S-8 or any form which does
not include substantially the same information as would be
required to be included in a registration statement covering the
sale of the Registrable Securities), the Maker shall promptly
give each Holder written notice of such registration (the
"Piggy-Back Notice"); provided, however, that the Maker shall
have no obligation to so notify Holders with respect to any
registration after three years after the issuance of this Note
and shall have no obligation if the managing underwriter of the
subject proposed offering expresses its objection thereto to the
Maker. Upon the written request of each Holder given within
twenty (20) days after receipt of such Piggy-Back Notice from the
Maker, the Maker shall, subject to the provisions of Section 7(h)
below, cause to be included in the registration statement filed
by the Maker under the Securities Act all of the Registrable
Securities that each such Holder has requested to be registered;
provided, however, that the Maker shall have no such obligation
if the managing underwriter of the subject proposed offering has
expressed its objection to the same to the Maker.
(d) Obligations of the Maker. Whenever required under this
section to file a registration statement to effect the
registration of any Registrable Securities, the Maker shall, as
expeditiously as reasonably possible:
(i) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become
effective, and, upon the request of the Holders of at least fifty
percent (50%) of the Registrable Securities registered
thereunder, keep such registration statement effective for at
least nine (9) months.
(ii) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus
included therein as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement.
(iii) Furnish to the Holders such numbers of copies
of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such
other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by
them.
(iv) Use its best efforts to register and qualify the
securities covered by such registration statement under the
securities laws of such jurisdictions as shall be reasonably
requested by the Holders for the distribution of the securities
covered by the registration statement, provided that the Maker
shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to
service of process in any such jurisdiction.
(v) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting
agreement with terms generally satisfactory to the managing
underwriter of such offering.
(vi) Notify the Holders promptly after the Maker shall
have received notice thereof, of the time when the registration
statement becomes effective or any supplement to any prospectus
forming a part of the registration statement has been filed.
(vii) Notify the Holders of any stop order
suspending the effectiveness of the registration statement and
use its reasonable best efforts to remove such stop order.
(e) Furnish Information. It shall be a condition precedent
to the obligations of the Maker to take any action pursuant
hereto that any Holder seeking to include any of its Registrable
Securities in a registration statement filed by the Maker
pursuant hereto shall furnish to the Maker such information
regarding itself, the Registrable Securities held by it, and the
intended method of disposition of such securities as shall be
required to effect the registration of its Registrable
Securities. In that connection, each such Holder shall be
required to represent to the Maker that all such information
which is given is both complete and accurate in all material
respects. Each of such Holders shall deliver to the Maker a
statement in writing from the beneficial owners of such
securities that such beneficial owners bona fide intend to sell,
transfer or otherwise dispose of such securities.
(f) Definition of Expenses.
(i) "Registration Expenses" shall mean all expenses
incurred by the Maker in complying with Sections 7(b), 7(c) and
7(d) hereof, including without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel
for the Maker, blue sky fees and expenses, and the expense of any
special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Maker
which shall be paid in any event by the Maker).
(ii) "Selling Expenses" shall mean all underwriting
discounts, selling commissions and underwriters' expense
allowance applicable to the sale and all fees and disbursements
of any special counsel (other than the Maker's regular counsel)
for any Holder.
(g) Expenses of Registration. All Registration Expenses
incurred in connection with any registration, qualification or
compliance herewith, shall be borne by the Maker, and all Selling
Expenses shall be borne by the Holders of the securities so
registered pro rata on the basis of the number of Registrable
Securities so registered. Notwithstanding the foregoing, the
Holders may withdraw a request made within forty-five (45) days
of the end of the Maker's fiscal year if the audited financial
statements of the Maker for such year and at such year-end
materially and adversely differ from the information known to the
Holders at the time of their request, in which event the Holders
shall not be required to pay any of such Registration Expenses
and shall retain the right to require the Maker to register
Registrable Securities pursuant to Section 7(b).
(h) Underwriting Requirements. All Holders proposing to
distribute their securities through an underwriting pursuant
hereto shall (together with the Maker and any other holders
distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the
underwriter or underwriters selected for underwriting by the
Maker. Notwithstanding any other provision of this section, at
the request of the managing underwriter, the Holder shall delay
the sale of Registrable Securities which such Holder has
requested be registered under this section for the ninety (90)
day period commencing with the effective date of the registration
statement. Notwithstanding anything to the contrary herein, no
such delay shall be required with respect to securities offered
by holders of securities who have requested the Maker to register
such securities pursuant to a mandatory registration obligation
of the Maker. If any Holder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written
notice to the Maker and the underwriter. Any Registrable
Securities excluded or withdrawn from such underwriting shall not
be withdrawn from such registration except at the election of the
Holder.
(i) Delay of Registration. No Holder shall have any right
to obtain or seek an injunction restraining or otherwise delaying
any such registration as the result of any controversy that might
arise with respect to the interpretation or implementation of
this section.
(j) Indemnification. In the event that any Registrable
Securities are included in a registration statement pursuant
hereto:
(i) To the extent permitted by law, the Maker will
indemnify and hold harmless each Holder, the officers, directors
and partners of each Holder, any underwriter (as defined in the
Securities Act) for such Holder and each person or entity, if
any, that controls such Holder or underwriter within the meaning
of the Securities Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), against any losses, claims, damages
or liabilities (joint or several) to which they may become
subject under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or
violations (collectively a "Violation"): (A) any untrue
statement or alleged untrue statement of a material fact
contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto; (B) the omission or
alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not
misleading; or (C) any violation or alleged violation by the
Maker of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law; and
the Maker will reimburse each such Holder, officer, director or
partner, underwriter or controlling person for any legal or other
expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity
agreement contained in this subsection shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the
Maker (which consent shall not be unreasonably withheld), nor
shall the Maker be liable in any such case for any such loss,
claim, damage, liability or action to the extent that it arises
out of or is based upon a Violation which occurs in reliance upon
and in conformity with written information furnished expressly
for use in connection with such registration by any such Holder,
underwriter or controlling person; and further provided, however,
that the foregoing indemnity agreement is subject to the
condition that, insofar as it relates to any untrue statement,
alleged untrue statement, omission or alleged omission made in
any preliminary prospectus but eliminated or remedied in the
definitive prospectus, such indemnity agreement shall not inure
to the benefit of the underwriter (or the benefit of any person
or entity that controls such underwriter), if a copy of the
definitive prospectus was not sent or given to such person or
entity with or prior to the confirmation of the sale of such
securities to such person or entity.
(ii) To the extent permitted by law, each selling
Holder, severally and not jointly, will indemnify and hold
harmless the Maker, each of its directors, each of its officers
who have signed the registration statement, each person, if any,
who controls the Maker within the meaning of the Securities Act
or the Exchange Act, any underwriter (within the meaning of the
Securities Act) for the Maker, any person who (or entity that)
controls such underwriter, and any other Holder selling
securities in such registration statement or any of its directors
or officers or any person who controls such Holder, against any
losses, claims, damages or liabilities (joint or several) to
which the Maker or any such director, officer, controlling person
(or entity), or underwriter or controlling person, or other such
Holder or director, officer or controlling person may become
subject, under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are
based upon any Violation, in each case to the extent (and only to
the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder
expressly for use in connection with such registration; and each
such Holder will reimburse any legal or other expenses reasonably
incurred by the Maker or any such director, officer, controlling
person (or entity), underwriter or controlling person (or
entity), other Holder, officer, director or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the
indemnity agreement contained in this subsection shall not apply
to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the
consent of the Holder, which consent shall not be unreasonably
withheld.
(iii) Promptly after receipt by an indemnified
party under this Section 7(j) of notice of the commencement of
any action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 7(j), notify the
indemnifying party in writing of the commencement thereof and the
indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any
other indemnifying party similarly notified, to assume the
defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an indemnified party shall have
the right to retain its own counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to
notify an indemnifying party within a reasonable time of the
commencement of any such action, to the extent prejudicial to its
ability to defend such action, shall relieve such indemnifying
party of any liability to the indemnified party under this
Section 7(j), but the omission so to notify the indemnifying
party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 7(j).
(k) Reports Under Securities Exchange Act of 1934. With a
view toward making available to Holders the benefits of Rule 144
promulgated under the Securities Act and any other rule or
regulation of the SEC that may at any time permit a Holder to
sell securities of the Maker to the public without registration,
the Maker agrees to:
(i) use its best efforts to make and keep public
information available, as those terms are understood and defined
in Rule 144, at all times;
(ii) use its best efforts to file with the SEC in a
timely manner all reports and other documents required of the
Maker under the Securities Act and the Exchange Act; and
(iii) furnish to any Holder, so long as the Holder
owns any Registrable Securities, forthwith upon request such
information as may be reasonably requested in order to allow any
Holder to avail himself of any rule or regulation of the SEC
which permits the selling of any such securities without
registration.
(l) Termination of the Maker's Obligations.
(i) The Maker shall have no obligation pursuant to
Sections 7(b) or 7(c) with respect to any request made by any
Holder after the third anniversary of the Maturity Date.
(ii) Notwithstanding any provision hereof to the
contrary, the Maker shall not be required to effect any
registration under the Securities Act or under any state
securities laws on behalf of any Holder or Holders if, in the
reasonable opinion of counsel for the Maker, the offering or
transfer by such Holder or Holders in the manner proposed
(including, without limitation, the number of shares proposed to
be offered or transferred and the method of offering or transfer)
is exempt from the registration requirements of the Securities
Act and the securities laws of applicable states.
8. Miscellaneous.
(a) Restricted Securities. By acceptance hereof, the Payee
understands and agrees that this Note and the shares of Common
Stock issuable upon conversion hereof are "restricted securities"
under the federal securities laws inasmuch as they are being
acquired from the Maker in a transaction not involving a public
offering and have not been the subject of registration under the
Securities Act and that under such laws and applicable
regulations such securities may be resold in the absence of
registration under the Securities Act only in certain limited
circumstances. The Payee hereby represents that it is familiar
with Rule 144 promulgated under the Securities Act, as presently
in effect, and understands the resale limitations imposed thereby
and by the Securities Act.
(b) Further Limitations on Disposition. This Note may not
be negotiated, assigned or transferred by Payee. The Payee
further agrees not to make any disposition of all or any portion
of this Note (or of the securities issuable upon conversion
hereof) unless and until:
(i) there is then in effect a registration statement
under the Securities Act covering such proposed disposition and
such disposition is made in accordance with such registration
statement;
(ii) such disposition is made in accordance with Rule
144 under the Securities Act; or
(iii) the Payee shall have notified the Maker of
the proposed disposition and shall have furnished the Maker with
a detailed statement of the circumstances surrounding the
proposed disposition, and the Payee shall have furnished the
Maker with an opinion of counsel, which opinion of counsel shall
be reasonably satisfactory to the Maker, that such disposition
will not require registration under the Securities Act and will
be in compliance with applicable state securities laws.
(c) Legends. It is understood that this Note and each
certificate evidencing shares of Common Stock issuable upon
conversion hereof (or evidencing any other securities issued with
respect thereto pursuant to any stock split, stock dividend,
merger or other form of reorganization or recapitalization) shall
bear the legends (in addition to any legends which may be
required in the opinion of the Maker's counsel by the securities
laws of the state where the Payee is located) set forth on the
first page of this Note.
9. Presentment. Except as set forth herein, Maker waives
presentment, demand and presentation for payment, notice of
nonpayment and dishonor, protest and notice of protest and
expressly agrees that this Note or any payment hereunder may be
extended from time to time by the Payee without in any way
affecting the liability of Maker.
10. Notices.
(a) Notices to the Payee. Any notice required by the
provisions of this Note to be given to the holder hereof shall be
in writing and may be delivered by personal service, facsimile
transmission or by registered or certified mail, return receipt
requested, with postage thereon fully prepaid or overnight
delivery courier. All such communications shall be addressed to
the Payee of record at its address appearing on the books of the
Maker. Service of any such communication made only by mail shall
be deemed complete on the date of actual delivery as shown by the
addressee's registry or certification receipt or at the
expiration of the third (3rd) business day after the date of
mailing, whichever is earlier in time.
(b) Notices to the Maker. Whenever any provision of this
Note requires a notice to be given or a request to be made to the
Maker by the Payee or the holder of any other security of the
Maker obtained in connection with a recapitalization, merger,
dividend or other event affecting this Note, then and in each
such case, any such notice or request shall be in writing and
shall be sent by registered or certified mail, return receipt
requested with postage thereon fully prepaid to the Maker at its
principal place of business.
No notice given or request made hereunder shall be valid
unless signed by the Payee of this Note or other holder giving
such notice or request (or, in the case of a notice or request by
Holders of a specified percent in aggregate principal amount of
outstanding Notes, unless signed by each Holder of a Note whose
Note has been counted in constituting the requisite percentage of
Notes required to give such notice or make such request).
11. Events of Default.
(a) Each of the following shall constitute an event of
default (an "Event of Default") hereunder: (i) the failure to
pay when due any principal or interest hereunder; (ii) the
violation by the Maker of any covenant or agreement contained in
this Note and the continuance of such violation for a period of
thirty (30) days after written notice from the Payee to the Maker
of such failure; (iii) any change in control of the Maker which
the Board of Directors of the Maker deems to be hostile or
unfriendly; (iv) the assignment for the benefit of creditors by
the Maker; (v) the application for the appointment of a receiver
or liquidator for the Maker or for property of the Maker;
(vi) the filing of a petition in bankruptcy by or against the
Maker; (vii) the issuance of an attachment or the entry of a
judgment against the Maker in excess of $50,000; (viii) a default
by the Maker with respect to any other material indebtedness or
obligation; (ix) the making or sending of a notice of an intended
bulk sale by the Maker; or (x) the termination of existence,
dissolution or insolvency of the Maker. Upon the occurrence of
any of the foregoing Events of Default, this Note shall be
considered to be in default and the entire unpaid principal sum
hereof, together with accrued interest, shall at the option of
the holder hereof become immediately due and payable in full.
Upon the occurrence of an Event of Default which remains uncured
as set forth herein and the placement of this Note in the hands
of an attorney for collection, the Maker agrees to pay reasonable
collection costs and expenses, including reasonable attorneys'
fees and interest from the date of the default at the rate of
fifteen percent (15%) per annum computed on the unpaid principal
balance.
(b) The Payee may waive any Event of Default hereunder.
Such waiver shall be evidenced by written notice or other
document specifying the Event or Events of Default being waived
and shall be binding on all existing or subsequent Payees under
this Note.
12. Construction; Governing Law. The validity and construction
of this Note and all matters pertaining hereto are to be
determined in accordance with the laws of the State of Florida
without regard to the conflicts of law principles thereof.
* * * * *
IN WITNESS WHEREOF, Maker, by its appropriate officers
thereunto duly authorized, has executed this Convertible
Promissory Note and affixed its corporate seal as of this _____
day of February, 1996.
MEDCROSS, INC.
By:
Henry Y.L. Toh, President
ATTEST:
Stephanie E. Giallourakis, Secretary
CONVERSION FORM
The undersigned hereby elects to convert
_________________________________ Dollars ($_____________) (not
to exceed 2.5%) of the unpaid principal amount of the attached
10% Convertible Promissory Note (the "Note") into shares of
Common Stock of the Maker.
Date: Signature:
(Sign exactly as your name appears
on the Note)