EXHIBIT 4.3
EXHIBIT D-1
CONVERTIBLE SUBORDINATED PROMISSORY NOTE
$1,000,000 December , 1998
FOR VALUE RECEIVED, Executive TeleCard, Ltd., a Delaware corporation
("Maker"), promises to pay to the order of Jeffey Gee ("Payee"), in his capacity
as Representative of and for the benefit of the Stockholders of IDX
International, Inc., a Virginia corporation (the "Company"), on December 31,
1998 (the "Maturity Date"), the principal amount of One Million Dollars
($1,000,000), together with interest on the unpaid principal balance, said
interest to be due and payable on the Maturity Date, at a rate per annum equal
to LIBOR plus 250 basis points, in the manner provided below. "LIBOR" shall mean
the offered rates on three-month Eurodollar deposits, which appear on the
display designated as page "LIBO" on the Reuters Monitor Money Rates Service or
such other page as may replace the LIBO page on that service for the purpose of
displaying London Interbank Eurodollar offered rates of major banks of the
highest credit rating as determined by Maker in its commercially reasonable
discretion. Interest shall be calculated on the basis of a year of 365 days, as
applicable, and charged for the actual number of days elapsed. All payments
hereunder shall be made in lawful money of the United States of America (except
to the extent paid in Common Stock of Maker, as provided below).
This Note is issued pursuant to and in accordance with the terms and
conditions of the Agreement and Plan of Merger, dated June 10, 1998, among
Maker, Extel Merger Sub No. 1, the Company and the Stockholders (as defined
therein), which was subsequently amended on August 27, 1998 pursuant to a
certain Consent and Extension and amended again on October , 1998 by Amendment
No. 2 to Agreement and Plan of Merger (the "Merger Agreement"), and is subject
to the terms and conditions of the Merger Agreement, which are, by this
reference, incorporated herein and made a part hereof, including particularly
the provisions regarding the authority of Payee as the Representative and the
allocation of the amounts payable (or stock issuable) hereunder among the
Stockholders. Capitalized terms used in this Note which are not otherwise
defined herein shall have the respective meanings set forth in the Merger
Agreement.
The outstanding principal amount of this Note, together with interest
accrued thereon as provided herein (the "Maturity Amount") shall be due and
payable in full on the Maturity Date, or such earlier date on which this Note
may become due following an Event of Default (as defined below).
All payments of principal and interest on this Note shall be made by
check or wire transfer of immediately available funds to an account specified by
Payee in written instructions to Maker at least three (3) business days prior to
the Maturity Date. If any payment of principal or interest on this Note is due
on a day which is not a Business Day, such payment shall be due on the next
succeeding Business Day, and such extension of time shall be taken into account
in calculating the amount of interest payable under this Note. "Business Day"
means any day other than Saturday, Sunday or a legal holiday in the Commonwealth
of Virginia.
Maker may, without premium or penalty, at any time and from time to
time, prepay all or any portion of the outstanding principal balance due under
this Note.
The occurrence of any one of more the following events with respect to
Maker shall constitute an event of default hereunder ("Event of Default"):
(a) If Maker shall fail to pay when due any payment of principal or
interest on this Note and such failure continues for ten Business Days after
Payee notifies Maker in writing of such Event of Default.
(b) If, pursuant to or within the meaning of the United States
Bankruptcy Code or any other federal or state law relating to insolvency or
relief of debtors (a "Bankruptcy Law"), Maker shall (i) commence a voluntary
case or proceeding; (ii) consent to the entry of an order for relief against it
in an involuntary case; (iii) consent to the appointment of a trustee, receiver,
assignee, liquidator or similar official; (iv) make an assignment for the
benefit of its creditors; or (v) admit in writing is inability to pay its debts
as they become due.
(c) If a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that (i) is for relief against Maker in an involuntary
case, (ii) appoints a trustee, receiver, assignee, liquidator or similar
official for Maker or substantially all of Maker's properties, or (iii) orders
the liquidation of Maker, and in each case the order or decree is not dismissed
within 120 days.
Upon the occurrence of any such Event of Default, Maker, in its sole
and absolute option, may convert (the "Conversion") all or any part of the then
outstanding principal and accrued but unpaid interest under this Note into
shares of its Common Stock, par value $.001 ("Maker Common Stock"), as provided
below, which Conversion shall constitute payment in full of the amount being so
converted (the "Converted Amount"). Maker may effect such Conversion by written
notice to Payee (pursuant to the applicable notice provisions of the Merger
Agreement), at any time or from time to time until the outstanding principal and
accrued but unpaid interest under this Note has been paid in full, of the
Maker's election to
effect the Conversion and the portion of the outstanding principal and accrued
but unpaid interest being converted. Upon receipt of such notice by Payee, such
Conversion shall be deemed effective, and the Converted Amount shall be deemed
converted into the right to receive the number of shares of Maker Common Stock
equal to the Converted Amount divided by the Closing Price (as defined in
Exhibit A to the Merger Agreement) on the date of the occurrence of the Event of
Default.
Should an Event of Default exist and be continuing for ten Business
Days (unless Maker has paid the then outstanding principal and accrued but
unpaid interest under this Note or given notice of Conversion as provided herein
of the entire amount then due and payable), (x) simple interest shall accrue on
the outstanding principal balance of this Note from the date of such Event of
Default at the rate of LIBOR plus 400 basis points ("Default Interest") until
the outstanding principal and accrued but unpaid interest under this Note has
been paid (or Maker has given notice of Conversion as provided herein of the
entire amount then due and payable), and (y) (in the case of the first Event of
Default to exist and be continuing for such period) Maker shall issue Payee, as
Representative of the Stockholders, a warrant, substantially in the form
attached hereto as Appendix A ("Default Warrant"), to purchase such number of
shares of Common Stock as is equal to ten percent (10%) of the then outstanding
principal and accrued but unpaid interest under this Note divided by the
exercise price of the Default Warrants, which shall equal Closing Price (as
defined in Exhibit A to the Merger Agreement) on the date of the occurrence of
such Event of Default.
Presentment, demand, protest and all other notices of any kind from or
to be given by Payee are hereby expressly waived.
Amounts payable by Maker (including Maker Common Stock and Default
Warrants that may be issued) hereunder shall be received by Payee for the
benefit of the Stockholders solely in Payee's capacity as Representative of the
Stockholders, and shall be allocated among the Stockholders in accordance with
the Stockholder Percentages as provided in the Merger Agreement, to be
distributed to the Stockholders by the Representative in such proportions
following each payment or Conversion hereunder. Maker shall use all reasonable
efforts to assist Payee in making such allocations and distributions. Nothing
herein shall give rise to any liability on the part of Payee or Maker for any
mistakes that may occur in making such allocations and distributions so long as
Payee or Maker, respectively, has acted in good faith and without willful
misconduct or fraud.
Notwithstanding anything else to the contrary herein, Maker shall not
effect any Conversion or issue any Default Warrants to the extent, but only to
the extent (and notice of Conversion shall be deemed revised to the extent
necessary to permit Maker to comply with this sentence), that Shareholder
Approval (as defined in Exhibit A to the Merger Agreement) would be required for
such Conversion or such issuance (taken together with any issuance of Maker
stock under the Merger
Agreement or required hereby which would be considered under applicable rules
and regulations together with such Conversion or such issuance in determining
whether Shareholder Approval is required), unless and until such Shareholder
Approval has been obtained.
This Note shall be governed by, and construed in accordance with, the
laws of the State of Virginia, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law.
Whenever used herein, the words "Maker" and "Payee" shall be deemed to
include their respective successors and assigns.
IN WITNESS WHEREOF, the undersigned has duly executed this Note, or
has caused this Note to be duly executed on its behalf, as of the day and year
first hereinabove set forth.
[SEAL] EXECUTIVE TELECARD, LTD.
By:______________________________
Name:____________________________
Title:___________________________
EXHIBIT D-2
CONVERTIBLE SUBORDINATED PROMISSORY NOTE
$1,500,000 December , 1998
FOR VALUE RECEIVED, Executive TeleCard, Ltd., a Delaware corporation
("Maker"), promises to pay to the order of Jeffey Gee ("Payee"), in his capacity
as Representative of and for the benefit of the Stockholders of IDX
International, Inc., a Virginia corporation (the "Company"), on June 30, 1999
(the "Maturity Date"), the principal amount of One Million Five Hundred Dollars
($1,500,000), together with interest on the unpaid principal balance, said
interest to be due and payable on the Maturity Date, at a rate per annum equal
to LIBOR plus 250 basis points, in the manner provided below. "LIBOR" shall mean
the offered rates on three-month Eurodollar deposits, which appear on the
display designated as page "LIBO" on the Reuters Monitor Money Rates Service or
such other page as may replace the LIBO page on that service for the purpose of
displaying London Interbank Eurodollar offered rates of major banks of the
highest credit rating as determined by Maker in its commercially reasonable
discretion. Interest shall be calculated on the basis of a year of 365 days, as
applicable, and charged for the actual number of days elapsed. All payments
hereunder shall be made in lawful money of the United States of America (except
to the extent paid in Common Stock of Maker, as provided below).
This Note is issued pursuant to and in accordance with the terms and
conditions of the Agreement and Plan of Merger, dated June 10, 1998, among
Maker, Extel Merger Sub No. 1, the Company and the Stockholders (as defined
therein), which was subsequently amended on August 27, 1998 pursuant to a
certain Consent and Extension and amended again on October , 1998 by Amendment
No. 2 to Agreement and Plan of Merger (the "Merger Agreement"), and is subject
to the terms and conditions of the Merger Agreement, which are, by this
reference, incorporated herein and made a part hereof, including particularly
the provisions regarding the authority of Payee as the Representative and the
allocation of the amounts payable (or stock issuable) hereunder among the
Stockholders. Capitalized terms used in this Note which are not otherwise
defined herein shall have the respective meanings set forth in the Merger
Agreement.
The outstanding principal amount of this Note, together with interest
accrued thereon as provided herein (the "Maturity Amount") shall be due and
payable in full on the Maturity Date, or such earlier date on which this Note
may become due following an Event of Default (as defined below).
All payments of principal and interest on this Note shall be made by
check or wire transfer of immediately available funds to an account specified by
Payee in written instructions to Maker at least three (3) business days prior to
the Maturity Date. If any payment of principal or interest on this Note is due
on a day which is not a Business Day, such payment shall be due on the next
succeeding Business Day, and such extension of time shall be taken into account
in calculating the amount of interest payable under this Note. "Business Day"
means any day other than Saturday, Sunday or a legal holiday in the Commonwealth
of Virginia.
Maker may, without premium or penalty, at any time and from time to
time, prepay all or any portion of the outstanding principal balance due under
this Note.
The occurrence of any one of more the following events with respect to
Maker shall constitute an event of default hereunder ("Event of Default"):
(a) If Maker shall fail to pay when due any payment of principal or
interest on this Note and such failure continues for ten Business Days after
Payee notifies Maker in writing of such Event of Default.
(b) If, pursuant to or within the meaning of the United States
Bankruptcy Code or any other federal or state law relating to insolvency or
relief of debtors (a "Bankruptcy Law"), Maker shall (i) commence a voluntary
case or proceeding; (ii) consent to the entry of an order for relief against it
in an involuntary case; (iii) consent to the appointment of a trustee, receiver,
assignee, liquidator or similar official; (iv) make an assignment for the
benefit of its creditors; or (v) admit in writing is inability to pay its debts
as they become due.
(c) If a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that (i) is for relief against Maker in an involuntary
case, (ii) appoints a trustee, receiver, assignee, liquidator or similar
official for Maker or substantially all of Maker's properties, or (iii) orders
the liquidation of Maker, and in each case the order or decree is not dismissed
within 120 days.
Upon the occurrence of any such Event of Default, Maker, in its sole
and absolute option, may convert (the "Conversion") all or any part of the then
outstanding principal and accrued but unpaid interest under this Note into
shares of its Common Stock, par value $.001 ("Maker Common Stock"), as provided
below, which Conversion shall constitute payment in full of the amount being so
converted (the "Converted Amount"). Maker may effect such Conversion by written
notice to Payee (pursuant to the applicable notice provisions of the Merger
Agreement), at any time or from time to time until the outstanding principal and
accrued but unpaid interest under this Note has been paid in full, of the
Maker's election to effect the Conversion and the portion of the outstanding
principal and accrued but unpaid interest being converted. Upon receipt of such
notice by Payee, such Conversion shall be deemed effective, and the Converted
Amount shall be deemed
converted into the right to receive the number of shares of Maker Common Stock
equal to the Converted Amount divided by the Closing Price (as defined in
Exhibit A to the Merger Agreement) on the date of the occurrence of the Event of
Default.
Should an Event of Default exist and be continuing for ten
Business Days (unless Maker has paid the then outstanding principal and accrued
but unpaid interest under this Note or given notice of Conversion as provided
herein of the entire amount then due and payable), (x) simple interest shall
accrue on the outstanding principal balance of this Note from the date of such
Event of Default at the rate of LIBOR plus 400 basis points ("Default Interest")
until the outstanding principal and accrued but unpaid interest under this Note
has been paid (or Maker has given notice of Conversion as provided herein of the
entire amount then due and payable), and (y) (in the case of the first Event of
Default to exist and be continuing for such period) Maker shall issue Payee, as
Representative of the Stockholders, a warrant, substantially in the form
attached hereto as Appendix A ("Default Warrant"), to purchase such number of
shares of Common Stock as is equal to ten percent (10%) of the then outstanding
principal and accrued but unpaid interest under this Note divided by the
exercise price of the Default Warrants, which shall equal Closing Price (as
defined in Exhibit A to the Merger Agreement) on the date of the occurrence of
such Event of Default.
Presentment, demand, protest and all other notices of any kind from or
to be given by Payee are hereby expressly waived.
Amounts payable by Maker (including Maker Common Stock and Default
Warrants that may be issued) hereunder shall be received by Payee for the
benefit of the Stockholders solely in Payee's capacity as Representative of the
Stockholders, and shall be allocated among the Stockholders in accordance with
the Stockholder Percentages as provided in the Merger Agreement, to be
distributed to the Stockholders by the Representative in such proportions
following each payment or Conversion hereunder. Maker shall use all reasonable
efforts to assist Payee in making such allocations and distributions. Nothing
herein shall give rise to any liability on the part of Payee or Maker for any
mistakes that may occur in making such allocations and distributions so long as
Payee or Maker, respectively, has acted in good faith and without willful
misconduct or fraud.
Notwithstanding anything else to the contrary herein, Maker shall not
effect any Conversion or issue any Default Warrants to the extent, but only to
the extent (and notice of Conversion shall be deemed revised to the extent
necessary to permit Maker to comply with this sentence), that Shareholder
Approval (as defined in Exhibit A to the Merger Agreement) would be required for
such Conversion or such issuance (taken together with any issuance of Maker
stock under the Merger Agreement or required hereby which would be considered
under applicable rules and regulations together with such Conversion or such
issuance in determining
whether Shareholder Approval is required), unless and until such Shareholder
Approval has been obtained.
This Note shall be governed by, and construed in accordance with, the
laws of the State of Virginia, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law.
Whenever used herein, the words "Maker" and "Payee" shall be deemed to
include their respective successors and assigns.
IN WITNESS WHEREOF, the undersigned has duly executed this Note, or
has caused this Note to be duly executed on its behalf, as of the day and year
first hereinabove set forth.
[SEAL] EXECUTIVE TELECARD, LTD.
By:_____________________________
Name:___________________________
Title:__________________________
EXHIBIT D-3
CONVERTIBLE SUBORDINATED PROMISSORY NOTE
$2,500,000 December , 1998
FOR VALUE RECEIVED, Executive TeleCard, Ltd., a Delaware corporation
("Maker"), promises to pay to the order of Jeffey Gee ("Payee"), in his capacity
as Representative of and for the benefit of the Stockholders of IDX
International, Inc., a Virginia corporation (the "Company"), on October 31, 1999
(the "Maturity Date"), the principal amount of Two Million Five Hundred Dollars
($2,500,000), together with interest on the unpaid principal balance, said
interest to be due and payable on the Maturity Date, at a rate per annum equal
to LIBOR plus 250 basis points, in the manner provided below. "LIBOR" shall mean
the offered rates on three-month Eurodollar deposits, which appear on the
display designated as page "LIBO" on the Reuters Monitor Money Rates Service or
such other page as may replace the LIBO page on that service for the purpose of
displaying London Interbank Eurodollar offered rates of major banks of the
highest credit rating as determined by Maker in its commercially reasonable
discretion. Interest shall be calculated on the basis of a year of 365 days, as
applicable, and charged for the actual number of days elapsed. All payments
hereunder shall be made in lawful money of the United States of America (except
to the extent paid in Common Stock of Maker, as provided below).
This Note is issued pursuant to and in accordance with the terms and
conditions of the Agreement and Plan of Merger, dated June 10, 1998, among
Maker, Extel Merger Sub No. 1, the Company and the Stockholders (as defined
therein), which was subsequently amended on August 27, 1998 pursuant to a
certain Consent and Extension and amended again on October , 1998 by Amendment
No. 2 to Agreement and Plan of Merger (the "Merger Agreement"), and is subject
to the terms and conditions of the Merger Agreement, which are, by this
reference, incorporated herein and made a part hereof, including particularly
the provisions regarding the authority of Payee as the Representative and the
allocation of the amounts payable (or stock issuable) hereunder among the
Stockholders. Capitalized terms used in this Note which are not otherwise
defined herein shall have the respective meanings set forth in the Merger
Agreement.
The outstanding principal amount of this Note, together with interest
accrued thereon as provided herein (the "Maturity Amount") shall be due and
payable in full on the Maturity Date, or such earlier date on which this Note
may become due following an Event of Default (as defined below).
All payments of principal and interest on this Note shall be made by
check or wire transfer of immediately available funds to an account specified by
Payee in written instructions to Maker at least three (3) business days prior to
the Maturity Date. If any payment of principal or interest on this Note is due
on a day which is not a Business Day, such payment shall be due on the next
succeeding Business Day, and such extension of time shall be taken into account
in calculating the amount of interest payable under this Note. "Business Day"
means any day other than Saturday, Sunday or a legal holiday in the Commonwealth
of Virginia.
Maker may, without premium or penalty, at any time and from time to
time, prepay all or any portion of the outstanding principal balance due under
this Note.
The occurrence of any one of more the following events with respect to
Maker shall constitute an event of default hereunder ("Event of Default"):
(a) If Maker shall fail to pay when due any payment of principal or
interest on this Note and such failure continues for ten Business Days after
Payee notifies Maker in writing of such Event of Default.
(b) If, pursuant to or within the meaning of the United States
Bankruptcy Code or any other federal or state law relating to insolvency or
relief of debtors (a "Bankruptcy Law"), Maker shall (i) commence a voluntary
case or proceeding; (ii) consent to the entry of an order for relief against it
in an involuntary case; (iii) consent to the appointment of a trustee, receiver,
assignee, liquidator or similar official; (iv) make an assignment for the
benefit of its creditors; or (v) admit in writing is inability to pay its debts
as they become due.
(c) If a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that (i) is for relief against Maker in an involuntary
case, (ii) appoints a trustee, receiver, assignee, liquidator or similar
official for Maker or substantially all of Maker's properties, or (iii) orders
the liquidation of Maker, and in each case the order or decree is not dismissed
within 120 days.
Upon the occurrence of any such Event of Default, Maker, in its sole
and absolute option, may convert (the "Conversion") all or any part of the then
outstanding principal and accrued but unpaid interest under this Note into
shares of its Common Stock, par value $.001 ("Maker Common Stock"), as provided
below, which Conversion shall constitute payment in full of the amount being so
converted (the "Converted Amount"). Maker may effect such Conversion by written
notice to Payee (pursuant to the applicable notice provisions of the Merger
Agreement), at any time or from time to time until the outstanding principal and
accrued but unpaid interest under this Note has been paid in full, of the
Maker's election to effect the Conversion and the portion of the outstanding
principal and accrued but unpaid interest being converted. Upon receipt of such
notice by Payee, such Conversion shall be deemed effective, and the Converted
Amount shall be deemed
converted into the right to receive the number of shares of Maker Common Stock
equal to the Converted Amount divided by the Closing Price (as defined in
Exhibit A to the Merger Agreement) on the date of the occurrence of the Event of
Default.
Should an Event of Default exist and be continuing for ten Business
Days (unless Maker has paid the then outstanding principal and accrued but
unpaid interest under this Note or given notice of Conversion as provided herein
of the entire amount then due and payable), (x) simple interest shall accrue on
the outstanding principal balance of this Note from the date of such Event of
Default at the rate of LIBOR plus 400 basis points ("Default Interest") until
the outstanding principal and accrued but unpaid interest under this Note has
been paid (or Maker has given notice of Conversion as provided herein of the
entire amount then due and payable), and (y) (in the case of the first Event of
Default to exist and be continuing for such period) Maker shall issue Payee, as
Representative of the Stockholders, a warrant, substantially in the form
attached hereto as Appendix A ("Default Warrant"), to purchase such number of
shares of Common Stock as is equal to ten percent (10%) of the then outstanding
principal and accrued but unpaid interest under this Note divided by the
exercise price of the Default Warrants, which shall equal Closing Price (as
defined in Exhibit A to the Merger Agreement) on the date of the occurrence of
such Event of Default.
Presentment, demand, protest and all other notices of any kind from or
to be given by Payee are hereby expressly waived.
Amounts payable by Maker (including Maker Common Stock and Default
Warrants that may be issued) hereunder shall be received by Payee for the
benefit of the Stockholders solely in Payee's capacity as Representative of the
Stockholders, and shall be allocated among the Stockholders in accordance with
the Stockholder Percentages as provided in the Merger Agreement, to be
distributed to the Stockholders by the Representative in such proportions
following each payment or Conversion hereunder. Maker shall use all reasonable
efforts to assist Payee in making such allocations and distributions. Nothing
herein shall give rise to any liability on the part of Payee or Maker for any
mistakes that may occur in making such allocations and distributions so long as
Payee or Maker, respectively, has acted in good faith and without willful
misconduct or fraud.
Notwithstanding anything else to the contrary herein, Maker shall not
effect any Conversion or issue any Default Warrants to the extent, but only to
the extent (and notice of Conversion shall be deemed revised to the extent
necessary to permit Maker to comply with this sentence), that Shareholder
Approval (as defined in Exhibit A to the Merger Agreement) would be required for
such Conversion or such issuance (taken together with any issuance of Maker
stock under the Merger Agreement or required hereby which would be considered
under applicable rules and regulations together with such Conversion or such
issuance in determining
whether Shareholder Approval is required), unless and until such Shareholder
Approval has been obtained.
This Note shall be governed by, and construed in accordance with, the
laws of the State of Virginia, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law.
Whenever used herein, the words "Maker" and "Payee" shall be deemed to
include their respective successors and assigns.
IN WITNESS WHEREOF, the undersigned has duly executed this Note, or
has caused this Note to be duly executed on its behalf, as of the day and year
first hereinabove set forth.
[SEAL] EXECUTIVE TELECARD, LTD.
By:______________________________
Name:____________________________
Title:___________________________