EXHIBIT 10.21
FORM OF 8% CONVERTIBLE NOTE ISSUED BY RCI IN JANUARY 1996
RCIN-____________
CONVERTIBLE PROMISSORY NOTE
$___________ January __, 1996
For value received, the undersigned, RAPID CAST, INC., a Delaware
corporation ("Maker"), promises to pay to ____________________ ("Holder") on
December 31, 1999, at such place as Holder may designate the principal sum of
_________________________ ($______), together with any accrued and unpaid
interest thereon. Interest shall accrue beginning as of the date hereof at
the rate of eight percent (8%) per annum and shall be payable on each March
31, June 30, September 30 and December 31 on which this Note is outstanding.
Interest shall be computed on the basis of a Three Hundred Sixty Five (365)
day year.
Maker agrees that upon the occurrence of an Event of Default (as
defined below) and 15 days (the "Period") following the receipt by Maker of
written notice of Holder's determination to accelerate this Note, the entire
indebtedness with accrued interest thereon due under this Note shall, at the
option of the Holder, become immediately due and payable; provided, however,
if Maker has cured the Event of Default during the Period, such Event of
Default shall be deemed waived. Failure to exercise such option by Holder
shall not, except as expressly set forth in the preceding sentence,
constitute a waiver of the right to exercise the same in the event of any
subsequent Event of Default. If the entire principal amount outstanding under
this Note and all accrued interest are not paid on or before December 31,
1999, all amounts outstanding under this Note shall bear interest at the rate
of sixteen percent (16%) per annum computed on the basis of a Three Hundred
Sixty Five (365) day year until all such amounts are paid in full.
The occurrence at any time of any one or more of the following
events shall constitute an Event of Default under this Note: (a) Maker's
failure to pay any interest or principal or other amount when due under this
Note; (b) the dissolution, liquidation, termination of legal existence, or
insolvency of Maker; (c) the appointment of a receiver, trustee or similar
judicial officer or agent to take charge of or liquidate any property of
assets of Maker, or action by any court to take jurisdiction of all or
substantially all of the property or assets of Maker; (d) the sale of all or
substantially all of Maker's property or assets; (e) the commencement of any
proceeding under any provision of the Bankruptcy Code of the United States,
as now in existence or hereafter amended, or of any other proceeding under
any federal or state law, now existing or hereafter in effect, relating to
bankruptcy, reorganization, insolvency, liquidation or otherwise, for the
relief of debtors or readjustment of indebtedness, by or against Maker.
Notwithstanding any provisions of this Note, it is the
understanding and agreement of the Maker and Holder that the maximum rate of
interest to be paid by Maker to Holder shall not exceed the highest or the
maximum rate of interest permissible to be charged by a lender such as Holder
to a borrower such as Maker under the laws of the State of New York. Any
amount paid in excess of such rate shall be considered to have been payments
in reduction of principal.
Any amount, outstanding under this Note may be prepaid, in whole or
in part, by Maker at any time. Prepayment shall be deemed to occur at the
time any such prepayment is placed in the mail or delivered to a messenger or
overnight carrier for delivery to Holder; provided, however, that in lieu of
accepting such prepayment Holder may, withing five days of receipt of any
such prepayment amount, elect to convert this Note in the manner set forth
ion the next paragraph hereof. Any prepayments shall be applied to reduce
the outstanding principal balance of this Note and shall not relieve Maker of
its obligations hereunder to (a) make regularly scheduled interest payments
and (b) to repay the remaining
principal amount when due. If only a portion of the principal is repaid at
any time, Holder shall have the obligation to deliver this Note to Maker and
Maker shall have the obligation to deliver a substitute note to Holder
reflecting the principal amount outstanding upon such repayment. Maker (x)
acknowledges that this Note is one of a series of such notes issued on the
date hereof and (y) covenants that any prepayment will only be made pro rata
among the holders of such series of notes.
All, but not less than all, of the principal amount due and owing
under this Note may be converted by Holder into such number of shares (the
"Conversion Stock") of common stock, par value $.001 per share, of Maker
("Common Stock") as is determined by dividing the principal amount
outstanding under this Note by Eighty ($0.80) Cents (the "Conversion Price"),
subject to the provisions of the next paragraph hereof. Cash will be paid in
lieu of fractional shares of the Conversion Stock. If Holder desires to
convert, it shall give written notice thereof (the "Conversion Notice") to
Maker and include this Note with the Conversion Notice. Maker shall as
promptly as practicable deliver to Holder certificates representing the
Conversion Stock and a valid check in the amount of accrued and unpaid
interest through the date on which Maker first receives the Conversion
Notice. Any such conversion shall not relieve Maker of its obligation to
make payments of all interest accrued through the date of conversion.
The Conversion Price in effect at any time and the number of shares
of Conversion Stock to be received by the Holder upon the conversion of this
Note shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(a) In case Maker shall (i) declare a dividend or make a distribution
on its outstanding shares of Common Stock in shares of Common Stock,
(ii) subdivide or reclassify its outstanding shares of Common Stock into
a greater number of shares, or (iii) combine or reclassify its outstanding
shares of Common Stock into a smaller number of shares, the Conversion
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 adjusted so that it shall equal the price
determined by multiplying the Conversion Price by a fraction, the
denominator of which shall be the number of shares of Common Stock
outstanding after giving effect to such action, and the numerator of which
shall be the number of shares of Common Stock outstanding immediately prior
to such action. Such adjustment shall be made successively whenever any
event listed above shall occur.
(b) Whenever the Conversion Price is adjusted pursuant to subparagraph (a)
above, the number of shares of Conversion Stock to be received by the
Holder upon the conversion of this Note shall simultaneously be adjusted by
multiplying the number of Conversion Shares issuable immediately prior to
such event by the Conversion Price in effect immediately prior to such
event and dividing the product so obtained by the Conversion Price, as
adjusted.
Failure by the Holder to insist upon the strict performance by
Maker of any terms and provisions herein shall not be deemed to be a waiver
of any terms and provisions herein, and the Holder shall retain the right
thereafter to insist upon strict performance by the Maker of any and all
terms and provisions of this Note or any document securing the repayment of
this Note.
Maker waives diligence, demand, presentment for payment, notice of
nonpayment, protest and notice of protest, and notice of any renewals or
extensions of this Note.
This Note shall be governed by and construed in accordance with the
laws of the State of New York (without regard to principles of conflicts of
laws).
RAPID CAST, INC.
By: ____________________________________
Jeff Rubin, Executive Vice President