EXHIBIT 4.2
Registered # 1
BELMAC CORPORATION
12% CONVERTIBLE SUBORDINATED PROMISSORY NOTE
$60,000.00 September 30, 1995
THIS NOTE IS ISSUED PURSUANT TO AN EXEMPTION
FROM THE REGISTRATION PROVISIONS OF
THE SECURITIES ACT OF 1933 (THE "ACT") AND
QUALIFICATION PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS. IT CANNOT BE SOLD,
HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS
REGISTERED PURSUANT TO THE ACT AND QUALIFIED
UNDER APPLICABLE STATE LAW OR, IN THE
OPINION OF COUNSEL TO MAKER, AN EXEMPTION
THEREFROM IS AVAILABLE.
FOR VALUE RECEIVED, the undersigned, BELMAC CORPORATION, a Florida corporation
with offices at One Urban Centre, Suite 550, 4830 West Kennedy Boulevard, Tampa,
Florida 33609-2517 ("Maker"), promises to pay to _____________________ with an
address at ______________________________ ("Payee"), on the closing of the
Public Offering (as defined in Section 3 below) except as otherwise provided
herein (the "Maturity Date"), the principal amount of Sixty Thousand
($60,000.00) Dollars in lawful money of the United States of America (the
"Principal") together with all accrued interest.
This Note bears simple interest (the "Interest") at the annual rate of twelve
percent (12%), which is payable, in arrears, on the Interest Payment Dates (as
defined in Section 1 below), until the Principal and all accrued Interest
thereon shall be paid in full. The Note is subordinated to certain of Maker's
indebtedness and is convertible into Maker's common stock (the "Common Stock"),
all as set forth below.
This Note is one of a series of notes (the "Notes"), all with the same terms and
conditions as those set forth herein, which may be issued by Maker up to the
aggregate principal amount of Seven Hundred and Twenty Thousand ($720,000)
Dollars. Each Note is included in a unit (the "Unit") which is part of an
offering of 12 Units (the "Offering") being conducted by Maker on a best efforts
basis. The Offering will terminate on the sooner of the sale of all of the Units
or September 30, 1995. Each Unit consists of one Note in the principal amount of
Sixty Thousand ($60,000) Dollars and 10,000 shares (the "Unit Shares") of Common
Stock. Accordingly, in connection with the acquisition of this Note, Payee has
also received 10,000 Unit Shares.
1. INTEREST.
Maker will pay Interest on the first day of each January, April, July and
October commencing on January 1, 1996 (the "Interest Payment Dates"). Interest
on the Note will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of delivery of the Note.
Interest will be computed on the basis of a 360-day year of twelve 30 day
months.
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Belmac Corporation
12% Convertible Subordinated
Promissory Note
2. METHOD OF PAYMENT.
Maker will pay Principal and Interest in money of the United States that at the
time of payment is legal tender for the payment of public and private debts.
However, Maker may pay Principal and Interest by its check payable in such
money. It may mail an Interest check to Payee's address as it first appears on
this Note or such other address as Payee shall give by notice to Maker. Payee
must surrender this Note to Maker to collect Principal payments.
3. PUBLIC OFFERING.
Maker currently plans to file a S-1 Registration Statement (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission")
covering a public offering (the "Public Offering") of its securities.
4. CONVERSION.
(a) Payee's right to Convert. Payee shall have the right, at any time until the
Principal is paid in full, to cause the conversion of all or any portion (if
such portion is One Thousand [$1,000] Dollars or a whole multiple of One
Thousand [$1,000] Dollars) of the Principal outstanding at the time such
conversion is effected into shares of Common Stock (the "Underlying Shares").
The price for conversion, subject to adjustment as provided below, shall be
Three ($3.00) Dollars per share. If the Public Offering is successfully
completed, the Payee must accept repayment of this Note at the closing unless he
has previously exercised his right to convert. On conversion no payment or
adjustment for interest will be made. Maker will round to the nearest share for
any fractional share.
(b) Mandatory Conversion. In the event that the Public Offering is not completed
by July 31, 1996 (the "Mandatory Conversion Date"), Payee shall be required to
convert the Principal into Common Stock at a price of Three ($3.00) Dollars per
share unless Maker shall have repaid this Note, together with accrued interest,
on or prior thereto. Maker shall pay all accrued but unpaid interest on the
conversion date to Payee on the date upon which the Underlying Shares are
delivered to Payee as provided in Paragraph 4(c) below.
(c) Manner of Conversion. Payee may exercise his conversion right by giving
notice thereof to Maker setting forth the amount of Principal to be converted.
Within 15 days after the giving of such notice or the Mandatory Conversion Date,
as the case may be, Maker shall issue the number of Underlying Shares into which
the Principal is to be converted in accordance with the conversion price and
deliver to Payee a certificate or certificates therefor, registered in his name,
representing such Shares against delivery to Maker of this Note marked paid in
full. If only a portion of the Principal then outstanding is converted, Maker
shall deliver to Payee, together with the aforesaid certificate(s), a new
promissory note, in form and substance identical to this Note, except that the
principal amount thereof shall equal that portion of the Principal then
outstanding which has not been converted. Payee shall represent in writing to
Maker prior to the receipt of the Underlying Shares that such Shares will be
acquired by him for investment only and not for resale or with a view to the
distribution thereof, and shall agree that any certificates representing the
Shares may bear a
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Belmac Corporation
12% Convertible Subordinated
Promissory Note
legend, conspicuously noting such restriction, as Maker shall deem reasonably
necessary or desirable to enable it to comply with any applicable federal or
state laws or regulations.
5. ADJUSTMENT IN CONVERSION PRICE.
(a) Adjustment for Change in Capital Stock. Except as provided in Paragraph 5
(m) below, if Maker shall (i) declare a dividend on its outstanding Common Stock
in shares of its capital stock, (ii) subdivide its outstanding Common Stock,
(iii) combine its outstanding Common Stock into a smaller number of shares, or
(iv) issue any shares of its capital stock by reclassification of its Common
Stock (including any such reclassification in connection with a consolidation or
merger in which Maker is the continuing corporation), then in each such case the
conversion privilege and the conversion price in effect immediately prior to
such action shall be adjusted so that if the Note is thereafter converted Payee
may receive the number and kind of shares which he would have owned immediately
following such action if he had converted the Note immediately prior to such
action. Such adjustment shall be made successively whenever such event shall
occur. The adjustment shall become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification. If after an
adjustment Payee upon conversion of this Note may receive shares of two or more
classes of capital stock of Maker, Maker's Board of Directors shall determine
the allocation of the adjusted conversion price between the classes of capital
stock. After such allocation, the conversion privilege and conversion price of
each class of capital stock shall thereafter be subject to adjustment on terms
comparable to those applicable to Common Stock in this Section 5.
(b) Adjustment for Certain Issuances of Common Stock. If Maker shall at any time
or from time to time issue any shares of Common Stock (other than shares issued
as a dividend or distribution as provided in Paragraph 5 (a) above) for a
consideration per share less than the conversion price in effect on the date of
such issue, then, forthwith upon such issue, the conversion price in effect
immediately prior to such action (the "Existing Conversion Price") shall be
reduced by dividing the number of shares so issued by the total number of shares
outstanding after such issuance, multiplying the quotient by the difference
between the Existing Conversion Price and the price of the shares so issued and
subtracting the result from the Existing Conversion Price. In the case of an
issue of additional shares of Common Stock for cash, the consideration received
by Maker therefor shall be deemed to be the net cash proceeds received for such
shares, excluding cash received on account of accrued interest or accrued
dividends and after deducting therefrom any and all commissions and expenses
paid or incurred by Maker for any underwriting of, or otherwise in connection
with, the issue of such shares. The term "issue" shall be deemed to include the
sale or other disposition of shares held in Maker's treasury. The number of
shares outstanding at any given time shall not include shares in Maker's
treasury.
(c) Subscription Offerings. In case Maker shall issue rights, options, or
warrants to all holders of Common Stock entitling them to subscribe for or
purchase Common Stock (or securities convertible into or exchangeable for Common
Stock) at a price per share (or having a conversion price per share, in the case
of a security convertible into or exchangeable for Common Stock) less than the
Current Market Price per share of Common Stock on the record date for the
determination of stockholders entitled to receive such rights, then in each such
case the conversion price shall be adjusted by multiplying the
conversion price in effect immediately prior to such
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Belmac Corporation
12% Convertible Subordinated
Promissory Note
record date by a fraction, of which the numerator shall be the number of shares
of Common Stock outstanding on such record date plus the number of shares of
Common Stock which the aggregate offering price of the total number of shares of
Common Stock so to be offered (or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such "current market
price" and of which the denominator shall be the number of shares of Common
Stock outstanding on such record date plus the number of additional shares of
Common Stock to be offered for subscription or purchase (or into which the
convertible or exchangeable securities so to be offered are initially
convertible or exchangeable). Such adjustment shall become effective at the
close of business on such record date; provided, however, that, to the extent
the shares of Common Stock (or securities convertible into or exchangeable for
shares of Common Stock) are not delivered, the conversion price shall be
readjusted after the expiration of such one of such rights, options, or warrants
(but only to the extent that this Note is not converted after such expiration),
to the conversion price which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made upon the basis of
delivery of only the number of shares of Common Stock (or securities convertible
into or exchangeable for shares of Common Stock) actually issued. In case any
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by Maker's Board of Directors. Shares of Common Stock
owned by or held for the account of Maker or any majority-owned subsidiary shall
not be deemed outstanding for the purpose of any such computation.
(d) Other Rights to Acquire Common Stock. In case Maker shall distribute to all
holders of Common Stock (including any such distribution made to the
stockholders of Maker in connection with a consolidation or merger in which
Maker is the continuing corporation) evidences of its indebtedness or assets
(other than cash dividends or distributions and dividends payable in shares of
Common Stock), or options or warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase shares of Common Stock
(excluding those referred to in Paragraph 5 (c) above), then in each such case
the conversion price shall be adjusted by multiplying the conversion price in
effect immediately prior to the record date for the determination of
stockholders entitled to receive such distribution by a fraction, of which the
numerator shall be the Current Market Price per share of Common Stock on such
record date, less the fair market value (as determined in good faith by Maker's
Board of Directors) of the portion of the evidences of indebtedness or assets so
to be distributed, or of such subscription rights, options, or warrants or
convertible or exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock, applicable to one share, and of which the
denominator shall be such Current Market Price per share of Common Stock. Such
adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of such distribution retroactive to the record date
for the determination of stockholders entitled to receive such distribution.
(e) Current Market Price. For the purpose of any computation under Paragraphs 5
(c) and (d) above, the "Current Market Price" per share of Common Stock on any
date shall be deemed to be the average of the daily closing prices for the 30
consecutive trading days commencing 45 trading days before such date. The
closing price for each day shall be the last reported sales price regular way
or, in case no such reported sale takes place on such day, the closing bid price
regular way, in either case on the principal national securities exchange on
which the Common Stock is listed or admitted to trading or, if the Common Stock
is not listed or admitted to trading on any national securities exchange, the
highest reported bid price as furnished by the National Association of
Securities Dealers, Inc. through NASDAQ or similar organization if NASDAQ is no
longer
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Belmac Corporation
12% Convertible Subordinated
Promissory Note
reporting such information, or by the National Daily Quotation Bureau or similar
organization if the Common Stock is not then quoted on an inter-dealer quotation
system. If on any such date the Common Stock is not quoted by any such
organization, the fair value of the Common Stock on such date, as determined by
Maker's Board of Directors, shall be used.
(f) Minimum Adjustment. No adjustment in the conversion price shall be required
if such adjustment is less than $0.10; provided, however, that any adjustments
which by reason of this Paragraph 5(f) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 5 shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be.
(g) Referral of Adjustment. In any case in which this Section 5 shall require
that an adjustment in the conversion price be made effective as of a record date
for a specified event, if the Note shall have been converted after such record
date Maker may elect to defer until the occurrence of such event issuing to
Payee the shares, if any, issuable upon such conversion over and above the
shares, if any, issuable upon such conversion on the basis of the conversion
price in effect prior to such adjustment; provided, however, that Maker shall
deliver to Payee a due bill or other appropriate instrument evidencing Payee's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(h) Number of Shares. Upon each adjustment of the conversion price as a result
of the calculations made in Paragraphs 5(a) through (d) above, the Note shall
thereafter evidence the right to purchase, at the adjusted conversion price,
that number of shares (calculated to the nearest thousandth) obtained by
dividing (i) the product obtained by multiplying the number of shares
purchasable upon conversion of the Note prior to adjustment of the number of
shares by the conversion price in effect prior to adjustment of the conversion
price by (ii) the conversion price in effect after such adjustment of the
conversion price.
(i) When No Adjustment Required. No adjustment need be made for a transaction
referred to in Paragraphs 5(a) through (d) above if Payee is permitted to
participate in the transaction on a basis no less favorable than any other party
and at a level which would preserve Payee's percentage equity participation in
the Common Stock upon conversion of the Note. No adjustment need be made for
sales of Common Stock pursuant to a Company plan for reinvestment of dividends
or interest, the granting of options and/or the exercise options outstanding
under any of Maker's currently existing stock option plans, or the exercise of
any other of Maker's currently outstanding options. No adjustment need be made
for a change in the par value or no par value of the Common Stock. If the Note
becomes convertible solely into cash, no adjustment need be made thereafter.
Interest will not accrue on the cash.
(j) Notice of Adjustment. Whenever the conversion price is adjusted, Maker shall
promptly mail to Payee a notice of the adjustment together with a certificate
from Maker's independent public accountants briefly /stating the facts requiring
the adjustment and the manner of computing it. The certificate shall be evidence
that the adjustment is correct.
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Belmac Corporation
12% Convertible Subordinated
Promissory Note
(k) Voluntary Reduction. Maker from time to time may reduce the conversion price
by any amount for any period of time if the period is at least 20 days and if
the reduction is irrevocable during the period. Whenever the conversion price is
reduced, Maker shall mail to Payee a notice of the reduction. Maker shall mail
the notice at least 15 days before the date the reduced conversion price takes
effect. The notice shall state the reduced conversion price after the period it
will be in effect. A reduction of the conversion price does not change or adjust
the conversion price otherwise in effect for purposes of Paragraphs 5 (a)
through (d) above.
(l) Notice of Certain Transactions. If (i) Maker takes any action that would
require an adjustment in the conversion price pursuant to this Section 5; or
(ii) there is a liquidation or dissolution of Maker, Maker shall mail to Payee a
notice stating the proposed record date for a distribution or effective date of
a reclassification, consolidation, merger, transfer, lease, liquidation or
dissolution. Maker shall mail the notice at least 15 days before such date.
Failure to mail the notice or any defect in it shall not affect the validity of
the transaction.
(m) Reorganization of Company. If Maker is a party to a merger, consolidation or
a transaction in which it transfers or leases substantially all of its assets
which reclassifies or changes its outstanding Common Stock, the person obligated
to deliver securities, cash or other assets upon conversion of the Note shall
assume the terms of this Note. If the issuer of securities deliverable upon
conversion of the Note is an affiliate of the surviving, transferee or lessee
corporation, that issuer shall join in such assumption. The assumption agreement
shall provide that the Payee may convert this Note into the kind and amount of
securities, cash or other assets which he would have owned immediately after the
consolidation, merger, transfer or lease if he had converted the Note
immediately before the effective date of the transaction. The assumption
agreement shall provide for adjustments which shall be as nearly equivalent as
may be practical to the adjustments provided for in this Section 5. The
successor company shall mail to Payee a notice briefly describing the assumption
agreement. If this Paragraph applies, Paragraph 5 (a) above does not apply.
(n) Maker Determination Final. Any determination that Maker or its Board of
Directors must make pursuant to this Section 5 shall be conclusive, absent
manifest error.
6. INCLUSION OF SECURITIES IN REGISTRATION STATEMENT; RIGHT TO REGISTRATION.
(a) Payee's Right to Include Securities in Registration Statement. Maker will
include the Unit Shares owned by Payee and the Underlying Shares in the
Registration Statement on the condition that Payee provides Maker and its
counsel, in a timely fashion, with all information Maker's counsel may
reasonably require in order to effect such inclusion. Maker will use its best
efforts to have the Registration Statement declared effective by the Commission
but no assurance to this effect can be given or, if the Registration Statement
is declared effective, that the Public Offering will ever be successfully
completed.
(b) Payee's Right to Registration. If the Registration Statement shall not be
declared effective by December 31, 1995, then upon receipt of notice (the
"Registration Request Notice") requesting registration of Unit Shares and
Underlying Shares from the holders of the majority of such Shares, on only one
occasion, after December 31, 1995 and before December 31, 1997, Maker will offer
to Payee the opportunity to include his Unit Shares and Underlying Shares in
such registration. Maker will use its best efforts to file with the Commission
as promptly
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Belmac Corporation
12% Convertible Subordinated
Promissory Note
as practicable, a registration statement (the "Demand Registration Statement"),
utilizing year end audited financial statements, and will use its best efforts
to have the Demand Registration Statement declared effective and remain
effective until the earlier of nine months or the date all Unit Shares and
Underlying Shares registered thereby have been sold. Maker will also use its
best efforts to qualify the Unit Shares and Underlying Shares under the
securities laws of the state where Payee resides. This offer to Payee shall be
made within 20 days after Maker receives the Registration Request Notice. This
demand registration right may be exercised one time only. If Payee elects to
include his Unit Shares and Underlying Shares in the Demand Registration
Statement, he will, in a timely fashion, provide Maker and its counsel with such
information and execute such documents as Maker's counsel may reasonably require
to prepare and process the registration statement.
(c) Copies of Registration Statements and Prospectuses. Maker will provide
Payee with a copy of the Registration Statement or the Demand Registration
Statement, as the case may be, and any amendment thereto, and copies of the
final prospectus included therein in such quantities as may reasonably be
required to permit Payee to sell his Unit and Underlying Shares after the
Registration Statement or Demand Registration Statement is declared effective by
the Commission.
(d) Maker's Obligation to Bear Expenses of Registration. Maker will bear all
expenses (except underwriting discounts and commission, if any, and the legal
fees and expenses, if any, of counsel to Payee,) necessary and incidental to the
performance of its obligations under this Section 6.
7. SUBORDINATION; PARI PASSU WITH OTHER NOTES.
The Note is subordinated to Senior Debt, which is the principal of and premium,
if any, and interest (including post-petition interest, if any) on, and any
other payment due pursuant to the terms of instruments creating or evidencing
Indebtedness of Maker outstanding on the date of this Note or Indebtedness
thereafter created, incurred, assumed or guaranteed by Maker and all renewals,
extensions and refunding thereof, which is payable to banks or other traditional
long-term institutional lenders such as insurance companies and pension funds,
unless in the instrument creating or evidencing such Indebtedness, it is not
provided that such Indebtedness is senior in right of payment to this Note.
Notwithstanding the foregoing, Senior Debt with respect to Maker or any
subsidiary thereof shall not include (i) any Indebtedness of Maker to any such
subsidiary for money borrowed or advanced from such subsidiary and (ii) any
Indebtedness representing the redemption price of any preferred stock.
"Indebtedness", as applied to any entity means any indebtedness, contingent or
otherwise, in respect of borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such entity or only to a portion
thereof), or evidenced by bonds, notes, debentures or similar instruments or
letters of credit, or representing the balance deferred and unpaid of the
purchase price of any property or interest therein, except any such balance that
constitutes a trade payable, if and to the extent that such indebtedness would
appear as a liability upon a balance sheet of such entity prepared on a
consolidated basis in accordance with generally accepted accounting principles.
Senior Debt must be paid before the Note may be paid. This Note shall be paid on
a pari passu basis with all other Notes. Upon request of Maker Payee shall
execute such subordination agreements with holders of Senior Debt as shall be
reasonably requested.
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Belmac Corporation
12% Convertible Subordinated
Promissory Note
8. COVENANTS OF MAKER.
Maker covenants and agrees that from and after the date hereof and until the
date of repayment in full of the Principal and Interest, it shall comply with
the following conditions:
(a) Maintenance of Existence and Conduct of Business. Maker shall, and shall
cause each of its subsidiaries to (i) do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and rights; and (ii) continue to conduct its business so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times.
(b) Books and Records. Maker shall, and shall cause each of its subsidiaries to
use its reasonable efforts to keep adequate books and records of account with
respect to its business activities.
(c) Insurance. Maker shall use its reasonable efforts to maintain insurance
policies insuring such risks as are customarily insured against by companies
engaged in businesses similar to those operated by Maker. All such policies are
to be carried with reputable insurance carriers and shall be in such amounts as
are customarily insured against by companies with similar assets and properties
engaged in a similar business.
(d) Compliance with Law. Maker shall use its reasonable, efforts to comply in
all material respects with all federal, state and local laws and regulations
applicable to it which if breached would have a material adverse effect on
Maker's business or financial condition.
9. REPRESENTATIONS AND WARRANTIES OF MAKER.
Maker represents and warrants that it: (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida and
has all requisite corporate power to carry on its business as now conducted and
to own its properties and assets it now owns; (ii) is duly qualified or licensed
to do business as a foreign corporation in good standing in the jurisdictions in
which ownership of property or the conduct of its business requires such
qualification except jurisdictions in which the failure to qualify to do
business will have no material adverse effect on its business, prospects,
operations, properties, assets or condition (financial or otherwise); (iii) has
full power and authority to execute and deliver this Note, and that the
execution and delivery of this Note will not result in the breach of or default
under, with or without the giving of notice and/or the passage of time, any
other agreement, arrangement or indenture to which it is a party or by which it
may be bound, or the violation of any law, statute, rule, decree, judgment or
regulation binding upon it; and (iv) has taken and will take all acts required,
including but not limited to authorizing the signatory hereof on its behalf to
execute this Note, so that upon the execution and delivery of this Note, it
shall constitute the valid and legally binding obligation of Maker enforceable
in accordance with the terms thereof.
10. DEFAULTS AND REMEDIES.
(a) Events of Default. The occurrence or existence of any one or more of the
following events or conditions (regardless of the reasons therefor) shall
constitute an "Event of Default" hereunder:
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12% Convertible Subordinated
Promissory Note
(i) Maker shall fail to make any payment of Principal or Interest when
due and payable or declared due and payable pursuant to the terms
hereof and such failure shall remain uncured for a period of 30 days
after notice thereof has been given by Payee to Maker;
(ii) Maker shall fail at any time to be in material compliance with any
of the covenants set forth in Section 8 of this Note, or shall fail at
any time to be in material compliance with or neglect to perform, keep
or observe any of the provisions of this Note to be complied with,
performed, kept or observed by Maker and such failure shall remain
uncured for a period of 45 days after notice thereof has been given by
Payee to Maker;
(iii) Any representation or warranty made in this Note by Maker shall
be untrue or incorrect in any material respect as of the date when made
or deemed made;
(iv) A case or proceeding shall have been commenced against Maker in a
court having competent jurisdiction seeking a decree or order in
respect of Maker (A) under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other applicable federal,
state or foreign bankruptcy or other similar law; (B) appointing a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or
similar official) of Maker, or any of Maker's properties; or (C)
ordering the winding-up or liquidation of the affairs of Maker, and
such case or proceeding shall remain unstayed or undismissed for a
period of 90 consecutive days or such court shall enter a decree or
order granting the relief sought in such case or proceeding; or
(v) Maker shall (A) file a petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or any
other applicable federal, state or foreign bankruptcy or other similar
law; or (B) consent to the institution of proceedings thereunder or to
the filing of any such petition or to the appointment of or the taking
of possession by a custodian, receiver, liquidator, assignee, trustee
or sequestrator (or similar official) of Maker, or any of Maker's
properties.
(b) Remedies. If an Event of Default occurs and is continuing, the holders of at
least 25% in principal amount of the Notes may declare all of the Notes to be
due and payable immediately by notice to Maker.
11. MAKER'S RIGHT TO PREPAY.
Maker may prepay this Note or any portion thereof at any time without incurring
any penalty.
12. ACKNOWLEDGMENT OF PAYEE'S INVESTMENT REPRESENTATIONS.
By accepting this Note Payee acknowledges that this Note has not been and will
not be registered under the Act or qualified under any state securities laws and
that the transferability thereof is restricted by the registration provisions of
the Act as well as such state laws. Based upon the representations and
agreements being made by him herein, this Note is being issued to him
pursuant to an exemption from such registration provided by Sections
4 (2) and 4 (6) of the Act and applicable state securities law
qualification exemptions. Payee represents that he
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12% Convertible Subordinated
Promissory Note
is acquiring the Note for his own account, for investment purposes only and not
with a view to resale or other distribution thereof, nor with the intention of
selling, transferring or otherwise disposing of all or any part of it for any
particular event or circumstance, except selling, transferring or disposing of
it only upon full compliance with all applicable provisions of the Act, the
Securities Exchange Act of 1934, the Rules and Regulations promulgated by the
Commission thereunder, and any applicable state securities laws. Payee further
understands and agrees that no transfer of this Note shall be valid unless made
in compliance with the restrictions set forth on the front of this Note,
effected on Maker's books by the registered holder hereof, in person or by an
attorney duly authorized in writing, and similarly noted hereon. Maker may
charge Payee a reasonable fee for any re- registration, transfer or exchange of
this Note.
13. LIMITATION OF LIABILITY.
A director, officer, employee or stockholder, as such, of Maker shall not have
any liability for any obligations of Maker under this Note or for any claim
based on, in respect or by reason of such obligations or their creation. Payee,
by accepting this Note, waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of this Note.
14. MISCELLANEOUS.
(a) Effect of Forbearance. No forbearance, indulgence, delay or failure to
exercise any right or remedy by Payee with respect to this Note shall operate as
a waiver or as an acquiescence in any default.
(b) Effect of Single or Partial Exercise of Right. No single or partial exercise
of any right or remedy by Payee shall preclude any other or further exercise
thereof or any exercise of any other right or remedy by Payee.
(c) Governing Law. This Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the internal laws of the
State of Florida applicable to contracts made and to be performed entirely
within such State.
(d) Headings. The headings and captions of the various paragraphs herein are for
convenience of reference only and shall in no way modify any of the terms or
provisions of this Note.
(e) Loss, Theft, Destruction or Mutilation. Upon receipt by Maker of evidence
reasonably satisfactory to it of loss, theft, destruction or mutilation of this
Note, Maker shall make and deliver or caused to be made and delivered to Payee a
new Note of like tenor in lieu of this Note.
(f) Modification of Note or Waiver of Terms Thereof Relating to Payee. No
modification or waiver of any of the provisions of this Note shall be effective
unless in writing and signed by Payee and then only to the extent set forth in
such writing, nor shall any such modification or waiver be applicable except in
the specific instance for which it is given. This Note may not be discharged
orally but only in writing duly executed by Payee.
Page 10 of 11 Pages
Belmac Corporation
12% Convertible Subordinated
Promissory Note
(g) Notice. All offers, acceptances, notices, requests, demands and other
communications under this Note shall be in writing and, except as otherwise
provided herein, shall be deemed to have been given only when delivered in
person, via facsimile transmission if receipt thereof is confirmed by the
recipient, or, if mailed, when mailed by certified or registered mail prepaid,
to the parties at their respective addresses first set forth above, or at such
other address as may be given in writing in future by either party to the other.
(h) Successors and Assigns. This Note shall be binding upon Maker, its
successors, assigns and transferees, and shall inure to the benefit of and be
enforceable by Payee and its successors and assigns.
IN WITNESS WHEREOF, Maker has caused this Note to be executed on its behalf by
an officer thereunto duly authorized as of the date set forth above.
BELMAC CORPORATION, a Florida corporation
[SEAL]
By: ___________________________________
ATTEST: _______________________________
__________________Assistant Secretary
Page 11 of 11 Pages