EXHIBIT 4 ( c )
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NEITHER THIS PROMISSORY NOTE NOR THE SECURITIES ISSUABLE UPON THE CONVERSION
THEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAW, AND MAY BE TRANSFERRED ONLY IF
REGISTERED PURSUANT TO THE PROVISIONS OF THAT ACT OR ANY APPLICABLE STATE
SECURITIES LAW OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE
PROMISSORY NOTE
No. NA-__________ $25,000
Dated: ____________, 1997 Wayne, New Jersey
FOR VALUE RECEIVED, CORNICHE GROUP INCORPORATED, a Delaware corporation
(hereinafter called the "Company), hereby promises to pay
______________________________________________
(Name)
______________________________________________
(Street and No.)
______________________________________________
(City, State and Zip Code)
______________________________________________
(Social Security No. or Federal Employer ID No.)
______________________________________________
(Date of Birth)
(herein called the "Holder"), or to his order, the sum of TWENTY-FIVE THOUSAND
DOLLARS ($25,000), together with interest thereon at the rate of eight percent
(8%) per annum from the date hereof on __________ ___, 1997. Interest shall
be payable at maturity, and shall be computed on the balance of principal
outstanding from time to time based on actual number of days elapsed.
Both principal hereof and interest thereon are payable in lawful money of
the United States of America at the Holder's address above or such other
address as the Holder shall designate in writing delivered to the Company from
time to time.
ARTICLE ONE
EVENTS OF DEFAULT
If any of the following events of default (each, an "Event of Default")
shall occur, the Holder hereof, at its option, may declare the sum of
principal then remaining unpaid hereon immediately due and payable.
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1.01 Event of Default
For purposes of this instrument, an Event of Default will be deemed to
have occurred if:
(a) the Company shall fail to pay the principal of or interest
due on this Promissory Note on the due date and such non-payment shall
continue for a period of five (5) days from the date due; or
(b) a receiver, liquidator or trustee of the Company or of any
property of the Company, shall be appointed by court order and such
appointment shall remain in effect for 60 days; or the Company shall be
adjudged bankrupt or insolvent; or any of the property of the Company shall be
sequestered by court order and such order shall remain in effect for more than
60 days; or a petition to reorganize the Company under any bankruptcy,
reorganization or insolvency law shall be filed against the Company and shall
not be dismissed within 60 days after such filing; or
(c) the Company shall file a petition in voluntary bankruptcy or
requesting reorganization under any provision of any bankruptcy,
reorganization or insolvency law or shall consent to the filing of any
petition against it under any such law; or
(d) the Company shall make a formal or informal assignment for
the benefit of its creditors or admit in writing its inability to pay its
debts generally when they become due or shall consent to the appointment of a
receiver, trustee or liquidator of the Company or of all or part of the
property of the Company after the date hereof.
1.02 Remedies on Default
If an Event of Default shall have occurred, in addition to its rights and
remedies under this Promissory Note, and any other instruments, the Holder may
at its option by written notice to the Company declare all indebtedness to the
Holder hereunder to be due and payable, together with all reasonable expenses
of enforcement of the Holder's rights including legal fees and related
disbursements, whereupon the same shall forthwith mature and become due and
payable without any further notice to and without presentment, demand, protest
or notice of protest, all of which are hereby waived.
The Holder may proceed to protect and enforce its rights by suit in
equity, action at law or other appropriate proceedings, including, without
limitation action for specific performance of any agreement contained herein
or in any other instrument, or for an injunction against a violation of any of
the terms hereof or thereof, or in aid of the exercise of any right, power or
remedy granted hereby or by law, equity or otherwise.
ARTICLE TWO
CONVERSION PRIVILEGE
The Company hereby grants to the Holder of this Promissory Note the right
to convert the principal and interest on this Promissory Note into fully paid
and non-assessable shares of the Company's Common Stock, $0.10 par value, at
the "Conversion Price" per share. The "Conversion Price,, is defined as ten
cents ($0.10). The right to convert may be exercised at any time after an
Event of Default up to and including ____________, 1997. The right to convert
may only be exercised with respect to the entire amount due on this Promissory
Note at the exercise date. The Company will reserve 300,000 (three hundred
thousand) shares of its Common Stock for the foregoing purpose.
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2.01 Exercise Procedure
(a) The Conversion privilege shall be deemed to have been
exercised (the "Exercise Time") when the Company shall have received all of
the following:
(i) a properly completed Exercise Agreement in the form set out
in Section 2.02 below executed by the Holder; and
(ii) this Promissory Note.
(b) Certificates for the underlying shares acquired shall be
delivered to the purchaser within 20 days after the Exercise Time.
2.02 Exercise Agreement
Upon exercise, the undersigned shall execute an agreement stating as
follows: "An event of default has occurred which has not been cured and
therefore the undersigned irrevocably elects to subscribe for and purchase
shares of the Company's Common Stock as provided in the Promissory Note, and
makes payment in full therefor by conversion. The undersigned hereby
represents and warrants that the shares of Common Stock to be acquired upon
exercise are being acquired for its own account, without any present intention
of reoffering, reselling or distributing such Common Stock, except to the
extent permitted under the Securities Act of 1993, as amended".
2.03 Changes in Capital Structure
(a) In the event that the outstanding shares of Common Stock of
the Company are hereafter increased or decreased, or changed into or exchanged
for a different number or kind of shares or other securities of the Company,
or of any other corporation, by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split-up, combination
of shares, or dividends payable in capital stock of the Company, appropriate
adjustments shall be made by the Company in the number and kind of shares to
be purchased upon exercise of this conversion right to the end that the
Holder's proportionate interest shall not be altered. All such adjustments
made by the Board of Directors of the Company shall be conclusive, absent
manifest error.
(b) Until this Promissory Note has been paid in full or the
conversion privilege has been exercised, the Company will not issue any shares
of its Common Stock for a price less than the then fair market value of the
stock.
ARTICLE THREE
RESTRICTIONS ON TRANSFER
The Holder, by execution of the acknowledgment at the end of this
Promissory Note, acknowledges that it understands that the Company will rely
upon the representations set forth herein in issuing the Promissory Note and
the Underlying Shares, if any, without registration under the Securities Act
of 1933, as amended, the New Jersey Uniform Securities Law, or any other state
securities law.
Accordingly, the Holder, by acceptance of the Promissory Note, represents
and warrants that this offering is being made pursuant to the exemption from
registration with the Securities and Exchange Commission ("SEC") afforded by
Sections 3(b) and/or 4(2) of the Securities Act of 1933, as amended ("Act")
relating to transactions by an issuer not involving any public offering. The
Holder understands that the
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Company has no present intention, and is under no obligation to, register the
Promissory Note or the Underlying Shares under the Act, or any applicable
state law.
The Holder understands that due to lack of registration, the Promissory
Note and the Underlying Shares will be restricted securities, that the holder
must bear the economic risk of the investment for an indefinite period, that
the Promissory Note and the Underlying Shares may not be sold, pledged or
otherwise disposed of unless they are registered under the Act and any
applicable state securities law, or an exemption from such laws is available
and the Company is supplied with an opinion of counsel to the Holder,
satisfactory to the Company, that registration is not required under any of
such laws, and in the opinion of counsel for the Company, such sale, transfer,
or pledge will not cause the Company to fail to be in compliance with the
exemption provisions under which the Promissory Note or the Underlying Shares
were issued.
The Holder has such knowledge and experience in financial and business
affairs that it is capable of evaluating the merits and risks of the
prospective investment.
The Holder is able to bear the economic risk of this investment. An
investment in the Promissory Note and the Underlying Shares is suitable for
the Holder in light of its financial position and investment objectives, with
full knowledge that this investment could result in a complete loss. The
Holder recognizes that the Promissory Note represents a HIGH-RISK, SPECULATIVE
INVESTMENT and that there is no assurance that any return will be received
thereon. The Holder can afford a total loss of this investment.
The Holder is an Accredited Investor" as that term is defined in Regulation D
under the Securities Act of 1933 as amended.
The Promissory Note is being, and the Underlying Shares will be,
purchased for the Holder's own account for investment purposes and not with a
view to the resale or distribution thereof by the Holder.
The Holder has reviewed the Company's Annual Report on Form 10-K for the
year ended March 25, 1995; its quarterly reports on Form 10-Q for the quarters
ended June 17, October 6, and December 30, 1995; its proxy statement for an
annual meeting held on September 28, 1995; and all current reports on Form 8-K
filed on or after March 25, 1995, including but not limited to, the Form 8-K
filed on February 12, 1996. The Holder has also been informed that the
proceeds of this investment shall be used for general corporate purposes,
including the settlement of accrued past due liabilities due to the Company's
professional advisors, suppliers of goods and corporate services, director and
officer liability insurance premiums and director and officer fees and
expenses. Prior to the date hereof, the Holder has had ample opportunity to
ask questions of and receive answers from the officers and directors of the
Company, concerning the Company, the Promissory Note and the Company's
business and to obtain any additional information which was considered
necessary to verify the information supplied by those individuals.
The Holder understands that a restrictive legend in substantially the
following form shall be placed on the certificates representing the Underlying
Shares:
"The shares represented by this certificate have not been registered under the
Securities Act of 1933, as amended ("Act"). Such shares have been acquired
for investment and may not be publicly offered or sold in the absence of (1)
an effective registration for such shares under the Act; (2) opinions of
counsel to the Company and to the holder hereof and presented to the Company
prior to any proposed transfer to the effect that registration is not required
under the Act; or (3) a letter presented to the Company, prior to any proposed
transfer, from the staff of the Securities and Exchange Commission, to the
effect that it will not take enforcement action if the proposed transfer is
made without registration under the Act"
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Except as set forth in the documents which the Holder has reviewed, no
representations or warranties have been made to the Holder by the Company. In
entering into this transaction, the Holder is not relying upon any
information, other than the results of its own independent investigation.
ARTICLE FOUR
PIGGY-BACK REGISTRATION RIGHTS
If this Promissory Note has been converted to Common Stock, and if the
Company proposes to file a registration statement under the Securities Act
with respect to an offering by the Company of Company Common Stock (other than
a registration statement on Form S-4 or S-8 or any form substituting therefor)
the Company shall in each such case give written notice of such proposed
filing and the proposed method of distribution of securities covered by such
proposed filing to the Holder of shares issued upon conversion of this
Promissory Note at least ten (10) days before the anticipated filing date.
The Company will use its best efforts to include in the registration statement
proposed to be filed by the Company all shares issued upon conversion hereof
and other Promissory Notes in this series with respect to which the Company
has received written requests for inclusion therein prior to the anticipated
filing date. Notwithstanding the foregoing, if the managing underwriter or
underwriters of such offering deliver a written opinion to the holders of
securities to be included therein to the effect that .the total amount of
securities intended to be included in such offering would materially and
adversely affect the success of such offering, then the amount of securities
to be offered for the account of the participating holders shall be reduced
(pro rata among the participating holders) to the extent necessary to reduce
the total amount of securities to be included in such offering to the amount
recommended by such managing underwriter or underwriters. The Holder shall
provide the Company and any underwriters with any further documents and
assurances reasonably required to effect such registration. Notwithstanding
anything to the contrary herein, if the Company determines, in its business
judgment, that there are business reasons to delay the effectiveness of, or to
withdraw, a registration statement prior to it becoming effective under the
Securities Act, the Company shall not be deemed to have breached any of its
obligations hereunder.
ARTICLE FIVE
MISCELLANEOUS
5.01 Failure or Delay Not Waiver
No failure or delay on the part of the Holder hereof in the exercise of
any power, right or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or privilege
preclude, other or further exercise thereof or of any other right, power or priv
ilege. All rights and remedies existing hereunder are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
5.02 Notices
Any notice herein required or permitted to be given shall be given by
federal express or similar overnight courier or by same day courier service or
by certified mail, return receipt requested, if to the Holder, at the address
set forth on the first page hereof, or, if to the Company:
Corniche Group Incorporated, Wayne Interchange Plaza 1, 145 Route 46
West, Wayne, New Jersey 07470.
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5.03 Amendments
The term "Promissory Note" or "this Promissory Note" and all reference
thereto, as used through this instrument, shall mean this instrument as
originally executed or, if later amended or supplemented, then, as so amended
or supplemented
5.04 Assignability
This Promissory Note shall be binding on the Company, its successors and
assigns, and shall inure to the benefit of the Holder, its successors and
assigns.
5.05 Governing Law and Jurisdiction
This Promissory Note has been executed in and shall be governed by the
laws of the State of New Jersey and any proceeding brought to enforce its
terms shall be brought in a federal or state court located in the State of New
Jersey.
5.06 No Personal Liability
No officer, director, shareholder, employee, consultant or agent of the
Company shall be personally liable for repayment of this Promissory Note.
IN WITNESS WHEREOF, the Company has caused this Promissory Note to be
signed in its name by its duly authorized officer and its-corporate seal to be
affixed hereto.
CORNICHE GROUP INCORPORATED
_________________________________
James J. Fyfe
Director and Vice President
I acknowledge the accuracy of the representations in Article Three of
this Promissory Note.
By:______________________________
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