UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT FOR THE
TRANSITION PERIOD FROM _________________ TO _________________
0-7349
------
Commission file number
eNote.com Inc.
--------------
(Exact name of small business issuer as specified in its charter)
Delaware 59-345315
-------- ---------
(State or other jurisdiction of incorporation or (IRS Employer Identification
organization) No.)
185 Allen Brook Lane, Williston, VT 05495
-----------------------------------------
(Address of principal executive offices)
(802) 288-9000
--------------
(Issuer's telephone number)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report) Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
As of November 30, 2000, the Issuer had 4,660,784 shares of Common Stock, $.01
par value, outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X ]
1
CONTENTS
PART I. FINANCIAL INFORMATION
Page
Item 1. Financial Statements
Consolidated Balance Sheets at September 30, 2000 (unaudited) and
December 31, 1999 3
Consolidated Statements of Operations for the
three and nine months ended September 30, 2000 and 1999 (unaudited) 4
Consolidated Statements of Cash Flows for the
nine months ended September 30, 2000 and 1999 (unaudited) 5
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis or Plan of Operations 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 22
Item 2. Changes in Securities 22
Item 3. Defaults Upon Senior Securities 23
Item 4. Submission of Matters to a Vote of Security Holders 23
Item 5. Other Information 23
Item 6. Exhibits and Reports on Form 8-K 23
SIGNATURES 30
2
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
eNote.com Inc.
Consolidated Balance Sheets
September December
30, 2000 31, 1999
ASSETS (unaudited)
------------------------
Current assets
Cash and cash equivalents $35,305 $324,392
Inventories, net of reserve of $950,000 and $0,
respectively 585,630 814,773
Prepaid expenses and other current assets 48,407 36,206
------------------------
Total current assets 669,342 1,175,371
Property and equipment, net 718,047 615,541
Intangibles, net 256,474 375,914
Investment in eNote International - a joint venture 166,979 -
Security deposits 9,689 124,242
------------------------
Total assets $1,820,531 $2,291,068
========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $1,066,375 $660,937
Notes payable-stockholder 7,045 7,045
Convertible debentures, net of unamortized discount
of $366,040 and $0, respectively 733,960 80,000
Capital lease obligation 100,616 -
Short-term notes 300,000
Other current liabilities 67,735 50,000
------------------------
Total current liabilities 2,275,731 797,982
------------------------
Stockholders' equity (deficit)
Convertible preferred stock, $1.00 par value,
5,000,000 shares authorized,
issued and outstanding 5,000,000 5,000,000
Common stock, $0.01 par value, 25,000,000 shares
authorized, 11,289,481 and 10,049,491 issued
at September 30, 2000 and December 31, 1999,
respectively 112,895 100,495
Common stock warrants 1,297,930 740,000
Treasury Stock (6,680,000 shares of common stock) (53,897) -
Due from related party (150,000) (150,000)
Unearned compensation - (109,263)
Additional paid-in capital 5,144,544 497,776
Accumulated deficit (11,806,672) (4,585,922)
------------------------
Total stockholders' equity (deficit) (455,200) 1,493,086
------------------------
Total liabilities and stockholders' equity (deficit) $1,820,531 $2,291,068
========================
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
eNote.com Inc.
Consolidated Statements of Operations
For the three and nine months ended September 30, 2000 and 1999
(Unaudited)
3 Months 3 Months 9 Months 9 Months
Ended Ended Ended Ended
September September September September
30, 2000 30, 1999 30, 2000 30,1999
----------------------------------------------------
Net revenue $---- $---- $---- $----
Operating expenses:
Sales and marketing 550,731 40,898 1,430,077 112,680
Product development 1,509,631 188,179 2,261,622 397,827
General and administrative 905,648 442,008 2,446,751 1,072,793
(including $172,176 and
$304,553 of stock based
compensation for the
three and nine months
ended September 30, 2000,
respectively, and none
in 1999.)
Depreciation and
amortization 288,151 18,965 519,675 25,333
Loss on sale of assets 40,247 - 40,247 -
----------------------------------------------------
Total operating expenses 3,294,408 690,050 6,698,372 1,608,633
----------------------------------------------------
Loss from operations (3,294,408) (690,050) (6,698,372) (1,608,633)
Minority interest in
SolutioNet (1,810)
Share of loss in eNote
International (33,021) - (333,021) -
Interest and other income,
net 2,194 32,723 36,055 73,184
Interest expense (including
$191,890 related to
amortization of discount
related to detachable
warrants issued with debt
in the three and nine
months ended September 30,
2000) (210,301) (4,685) (225,412) (63,010)
----------------------------------------------------
Net loss (3,537,346) $(662,012) $(7,220,750) $(1,598,459)
Preferred stock dividend - - - 740,000
----------------------------------------------------
Net loss applicable to
common shareholders $(3,537,346) $(662,012) $(7,220,750) $(2,338,459)
============ ========== =========== ============
Basic net loss per common
share $(0.32) $(0.07) $(0.68) $(0.25)
Weighted average common
shares outstanding 10,926,438 10,049,491 10,685,791 9,188,132
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
eNote.com Inc.
Consolidated Statements of Cash Flows
For the nine months ended September 30, 2000 and 1999
(Unaudited)
2000 1999
------------------------
Cash flows from operating activities:
Net loss $(7,220,750) $(1,598,459)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 519,675 25,333
Reserve for obsolete inventory 950,000 ----
Loss on disposal of fixed assets 40,246 ----
Share of loss in eNote International- a joint
venture 333,021 ----
Amortization of discount related to
detachable warrants issued with debt 191,890 ----
Stock-based compensation 304,553 ----
Changes in assets and liabilities:
Decrease in accounts receivable ---- 18,158
Increase in inventory (720,858) (826,448)
Increase in prepaid expenses and other
current assets (12,201) (101,420)
Due from related party ---- (150,000)
Decrease in security deposits 114,553 ----
Increase in accounts payable and accrued
expenses 405,439 274,229
Decrease in notes payable- stockholder ---- (71,036)
Increase in other current liabilities 17,735 ----
------------------------
Net cash used in operating activities (5,076,697) (2,429,643)
------------------------
Cash flows from investing activities:
Investment in joint venture (500,000) ----
Investment in SolutioNet ---- (250,000)
Investment in WebATM ---- (50,000)
Purchases of Intangibles (86,113) (118,611)
Purchases of property and equipment (410,155) (480,245)
------------------------
Net cash used in investing activities (996,268) (898,856)
------------------------
Cash flows from financing activities:
Proceeds from issuance of convertible
debentures 1,100,000 80,000
Proceeds from issuance of short-term notes 300,000 ----
Payment of convertible debenture (80,000) (121,036)
Proceeds from issuance of convertible
preferred stock and common stock warrants ---- 5,000,000
Proceeds from issuance of common stock and
warrants 4,463,878 ----
------------------------
Net cash provided by financing activities 5,783,878 4,958,964
------------------------
Net increase/(decrease) in cash and cash
equivalents (289,087) 1,630,465
Cash and cash equivalents at beginning of the
period 324,392 (56,382)
------------------------
Cash and cash equivalents at end of the period $ 35,305 $ 1,574,083
========================
5
Supplemental disclosure of noncash financing
activities
Conversion of convertible notes $ ---- $ 400,000
Stock issued to consultants ---- 1,460,000
------------------------
Total noncash financing activities $ ---- $1,860,000
========================
Preferred stock dividend $ ---- $740,000
========================
The accompanying notes are an integral part of these condensed consolidated
financial statements.
6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) Basis of Quarterly Presentation:
--------------------------------
The accompanying quarterly financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of America.
The financial statements of eNote.com Inc. (the "Company") included herein have
been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission and, in the opinion of management, reflect
all adjustments which are necessary to present fairly the results for the period
ended September 30, 2000.
Certain financial information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to such rules and regulations; however,
management believes that the disclosures are adequate to make the information
presented not misleading. This report should be read in conjunction with the
audited financial statements and footnotes therein included in the Company's
report on Form 10-KSB for the year ended December 31, 1999.
2) Principles of Consolidation:
----------------------------
The accompanying consolidated financial statements include accounts of the
Company and its wholly-owned subsidiaries. Upon consolidation, all significant
intercompany accounts are eliminated. The equity method of accounting is used
for companies and other investments in which the company has significant
influence, generally this represents common stock ownership or partnership
equity of at least 20 percent and not more than 50 percent.
3) Net Loss per Common Share:
--------------------------
Net loss per common share for the three and nine months ended September 30, 2000
and 1999 is based on the weighted average number of shares of Common Stock
outstanding during the periods. Potentially dilutive securities include options,
warrants and convertible preferred stock; however, such securities have not been
included in the calculations of loss per common share as their effect would be
antidilutive. Therefore, diluted net loss per share is not presented.
4) Reclassifications:
------------------
Certain reclassifications have been made to the financial statements for the
nine months ended September 30, 1999 to conform with the 2000 presentation.
5) Depreciation:
-------------
Beginning in January 2000, the Company changed its method of depreciation from
straight-line to double declining balance for all fixed assets. The impact of
this change is being accounted for prospectively.
7
6) Equity & Debt Transactions:
---------------------------
On March 13, 2000 the Company completed a private placement of a one year, 10%
Subordinated Convertible Debenture in the principal amount of $500,000. The
debenture is convertible into shares of Common Stock of the Company at the rate
of $7.00 per share and may be redeemed at any time by the Company by the payment
of all outstanding principal and accrued interest. The proceeds will be used for
general corporate purposes and funding ongoing product development.
In addition, during the first and second quarters of 2000 in connection with a
Common Stock offering, the Company received and accepted subscriptions to
purchase an aggregate of 826,660 shares of its Common Stock at $6.00 per share
(the "Shares"), with warrants attached which allowed for the purchase of 413,330
additional shares at an exercise price of $0.01 per share (the "Warrants"). The
Warrants are immediately exercisable. For the nine months ended September 30,
2000, the Company had received an aggregate of $4,963,878 in connection with
such placement as payment in full for 826,660 of the Shares and the exercise
price for 413,330 of the Warrants which were exercised at $0.01 per share upon
issuance. The Company paid a placement fee of $500,000 to its financial
consultants in relation to the offering.
On March 24, 2000, the Company entered into a joint venture agreement with an
investor to create an Australian corporation to distribute, market and sell a
localized version of the TVemail(TM) System in Australia and New Zealand. The
Company will have a 50% equity interest but will hold a majority representing
voting control. The terms of the agreement require a $250,000 investment in such
entity by the Company.
On May 18, 2000, the Company entered into a joint venture agreement with Sienna
Invest Limited to create a British Virgin Islands corporation to seek strategic
opportunities and enter into business relationships to market and distribute the
TVemail(TM) System throughout parts of Europe, the Middle East and North Africa.
Pursuant to the terms of the joint venture agreement each party contributed
$500,000 in consideration for a 50% ownership interest in the jointly owned
entity. The company uses the equity method of accounting (see note 2). The
Company's share of loss in eNote.com International, a joint venture, is based on
eNote International's financial statements for the period ended September 30,
2000.
On August 17, 2000, the Company borrowed $250,000 from Friedlander Capital
Management Corp. ("Friedlander") pursuant to an 8% Secured Convertible Note
originally due December 2, 2000 and subsequently extended to March 1, 2001 and
convertible into Common Stock at the ratio of $2.50 of principal for each share
of Common Stock. The Company also issued a Warrant to acquire 2,000,000 shares
of Common Stock at a price of $2.50 per share at any time on or prior to August
17, 2002, subsequently extended to August 17, 2003.
On August 31, 2000, the Company borrowed $250,000 from eNote International.com
Ltd. pursuant to an 8% Secured Convertible Note due December 2, 2000 and
convertible into Common Stock at the ratio of $2.50 of principal for each share
of Common Stock. The Company also issued a Warrant to acquire 2,000,000 shares
of Common Stock of the Company at a price of $2.50 per share at any time on or
prior to August 31, 2002.
8
On September 11 2000, the Company borrowed $100,000 from Friedlander pursuant to
an 8% Secured Convertible Note due originally due December 2, 2000 and
subsequently extended to March 1, 2001 and convertible into Common Stock at the
ratio of $2.50 of principal for each share of Common Stock. The Company also
issued a Warrant to acquire 800,000 shares of Common Stock at a price of $2.50
per share at any time on or prior to September 11, 2002, subsequently extended
to September 11, 2003.
The Warrants issued with the borrowings on August 17, August 31 and September
11, 2000, were valued in total at $557,930 which was determined by their
proportionate share of value based upon the ratio of the warrant value, as
determined by using Black-Scholes, to the aggregate value of the note and the
warrant multiplied by the total proceeds received. The valuation of the warrants
resulted in the recording of a debt discount which will be amortized over the
life of the debentures, and are included in the balance sheet under the caption
Common Stock Warrants.
On September 14, and on September 28, 2000, the Company borrowed an aggregate of
$300,000 from Friedlander in exchange for 8% Notes originally October 14, 2001,
subsequently extended to March 1, 2001. Payment of these Notes is secured by all
the inventory of the Company then owned or thereafter acquired pursuant to
Security Agreements dated as of September 14, and September 28, 2000
respectively. As of the date of this filing, $245,000 of these secured loans has
been repaid
On October 12, 2000, the Company borrowed $150,000 from Friedlander pursuant to
an 8% Secured Convertible Note due originally due December 2, 2000 and
subsequently extended to March 1, 2001 and convertible into Common Stock at the
ratio of $1.50 of principal for each share of Common Stock. The Company also
issued a Warrant to acquire 2,000,000 shares of Common Stock at a price of $1.50
per share at any time on or prior to October 12, 2002, subsequently extended to
October 12, 2003.
On October 26, 2000, the Company borrowed $150,000 from Friedlander pursuant to
an 8% Secured Convertible Note originally due December 2, 2000 and subsequently
extended to March 1, 2001 and convertible into Common Stock at the ratio of
$1.00 of principal for each share of Common Stock. The Company also issued a
Warrant to acquire 3,000,000 shares of Common Stock at a price of $1.00 per
share at any time on or prior to October 26, 2002, subsequently extended to
October 26, 2003.
On November 9, 2000, the Company borrowed $100,000 from Friedlander pursuant to
an 8% Secured Convertible Note originally due December 2, 2000 and subsequently
extended to March 1, 2001 and convertible into Common Stock at the ratio of
$0.75 of principal for each share of Common Stock. The Company also issued a
Warrant to acquire 2,666,667 shares of Common Stock at a price of $0.75 per
share at any time on or prior to November 9, 2002; subsequently extended to
November 9, 2003.
9
On November 22, 2000, the Company borrowed $120,000 from Friedlander pursuant to
an 8% Secured Convertible Note originally due December 2, 2001 and subsequently
extended to March 1, 2001 and convertible into Common Stock at the ratio of $.50
of principal for each share of Common Stock. The Company also issued a Warrant
to acquire 1,200,000 shares of Common Stock at a price of $.50 per share at any
time on or prior to November 22, 2002, subsequently extended to November 22,
2003.
On December 7, 2000, the Company borrowed $110,000 from Friedlander pursuant to
an 8% Secured Convertible Note due March 1, 2001 and convertible into Common
Stock at the ratio of $.375 of principal for each share of Common Stock. The
Company also issued a Warrant to acquire 825,000 shares of Common Stock at a
price of $.375 per share at any time on or prior to December 7, 2003.
On December 20, 2000, the Company borrowed $50,000 from Friedlander pursuant to
an 8% Secured Convertible Note due March 1, 2001 and convertible into Common
Stock at the ratio of $.18 of principal for each share of Common Stock. The
Company also issued a Warrant to acquire 5,555,556 shares of Common Stock at a
price of $.18 per share at any time on or prior to December 20, 2003.
7) Capital Leases:
---------------
During September 2000, the Company purchased computer equipment under a capital
lease expiring September 2003. The assets will be depreciated over the related
lease term. Lease payments began in October 2000. There has been no depreciation
recorded for the quarter ended September 30, 2000.
Minimum future lease payments under this capital lease as of December 31, 2000
are:
Year Ended December 31 Amount
2000 $ 9,480
2001 37,920
2002 37,920
2003 28,440
------
Total minimum lease payments 113,760
Less: Amount representing interest (13,144)
--------
Present value of net minimum lease payment $100,616
========
8) Treasury Stock:
---------------
On September 26, 2000, the Company entered into a transaction with John R.
Varsames ("Varsames"), its former President and Chief Executive Officer whereby
Varsames transferred 6,680,000 shares of Common Stock in exchange for (i) all of
the assets of the Company's wholly-owned subsidiary WebATM, Inc., and (ii)
subject to the rights of James D. Richards and Martine Richards, the Company's
55% equity interest in SolutioNet Ltd. The treasury stock was accounted for at
the recorded amount of the assets transferred to Mr. Varsames. In connection
with Item ii above, the Company is awaiting release from James D. and Martine
Richards. As such the Company's 55% equity interest in SolutioNet, Ltd., valued
at $166,799, has not been transferred to Mr. Varsames.
10
Item 2. Management's Discussion and Analysis or Plan of Operation.
Forward-Looking Statements
When used in this Report, press releases or elsewhere by eNote.com Inc.
(the "Company") and its management, the words "believes," "anticipates,"
"intends" and "expects" and similar expressions are intended to identify
forward-looking statements that involve a number of risks and uncertainties.
Additionally, statements contained in this discussion that are not historical
are forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Exchange Act,
including statements regarding expectations, beliefs, intentions or strategies
regarding the future. The Company intends that all forward-looking statements be
subject to the safe-harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements reflect the Company's views
as of the date they are made with respect to future events and financial
performance, but are subject to many risks and uncertainties, which could cause
the actual results of the Company to differ materially from any future results
expressed or implied by such forward-looking statements. Factors that could
cause actual results to differ materially or adversely include, without
limitation, the inability of the Company to complete development of and
commercially deploy the Company's TVemail(TM) System, including the in-home
TVemail(TM) terminals (the "Client Hardware"), the Company's proprietary
back-end server systems (the "Server Systems") and the graphical user interface
("GUI"), as well as the other risks described in this Report under the caption
"Management's Discussion and Analysis or Plan of Operation--Certain Trends and
Uncertainties." The Company does not undertake to update forward-looking
statements.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
OVERVIEW
We are a Delaware corporation that was formerly known as Webcor
Electronics, Inc. ("Webcor"). As a result of a bankruptcy proceeding, as of
March 31, 1999, Webcor had no assets, liabilities, or ongoing operations and had
not engaged in any business activities since February 1990. Webcor had no
operations during its fiscal year ended March 31, 1999.
Webcor acquired Navis Technologies, Ltd., a Vermont corporation ("Navis"),
in a business combination transaction on April 5, 1999, whereby Navis became a
wholly-owned subsidiary of the Company (the "Navis Transaction"). The Navis
Transaction was structured as a reverse takeover, or "RTO." In connection with
the Navis Transaction, the stockholders of Navis exchanged their Navis stock for
newly issued stock of Webcor. Before the Navis Transaction, Webcor had no
assets, liabilities or business operations and as of January 1, 1999, Navis was
exclusively dedicated to the development of the TVemail(TM) System. No
relationship existed between Webcor and Navis prior to the Navis Transaction and
no funds of Webcor were spent to acquire the stock of Navis. Navis had no
revenues in 1999 prior to the Navis Transaction and the Company had no revenue
generating operations in 1999 or in the three or nine months ended September 30,
2000. Since the Navis Transaction, the Company has been solely engaged in the
development of the TVemail(TM) System, including the Client Hardware and the
Server Systems and establishing strategic alliances.
11
To initially fund development activities for the TVemail(TM) System and
provide initial working capital, the Company raised $5 million as of April 6,
1999 from Friedlander International Limited (the "Friedlander Transaction"). The
Company has used this capital to continue its development of the Client
Hardware, to install Server Systems to run the TVemail(TM) System network, to
complete the GUI, to perform marketing studies, to produce the preliminary test
Client Hardware units, to identify and develop potential strategic relationships
and distribution opportunities and to fund legal and other administrative
expenses related to the Navis Transaction and the Friedlander Transaction.
RESULTS OF OPERATIONS : Three and Nine Months Ended September 30, 2000:
Our financial condition and results from operations were dramatically
different between the three and nine months ended September 30, 2000 and 1999.
The three and nine month periods ended September 30, 1999 reflect the operations
of Navis, prior to and immediately following the Navis Transaction and the
Friedlander Transaction.
Three Months Ended September 30, 2000
During the three months ended September 30, 1999, Navis had no revenues.
Operating expenses were $690,050, consisting of sales and marketing expenses of
$40,898, product development expenses of $188,179, general and administrative
expenses of $442,008 and depreciation and amortization of $18,965. Interest
expense was $4,685 resulting in a net loss before preferred stock dividend of
$662,012 or $0.07 per share.
The Company had no revenues in the three months ended September 30, 2000.
Operating expenses increased to $3,294,408 a 377% increase over the comparable
1999 period. Operating expenses included sales and marketing expenses of
$550,731, a 1,247% increase. The increase in sales and marketing expenses during
the current period is a direct result of the increased staff requirements and
related expenses.
Product development expenses increased to $1,509,631, or 702%, which
included a $950,000 reserve for obsolete inventory. The increase in product
development during the current period is a result of the Company's effort to
continue development and enhancement of its product. A significant portion of
this increase has resulted from additional staff and related expenses as well as
cost associated with outsourced specialized product development.
12
General and administrative expense increased to $905,648, a 105% increase.
The increase in general and administrative expenses during the current period is
a result of increased staff requirements and related expenses as well as
professional services.
Depreciation and amortization expense increased to $288,151, a 1,419%
increase. This increase during the current period is a result of acquisition of
equipment and related costs.
Interest expense on loans increased to $18,411, a 293% increase as a
result of additional debt. In addition, interest expense related to amortization
of discounts related to detachable warrants issued with debt instruments totaled
$191,890, and was only related to the current period.
Nine Months Ended September 30, 2000
During the nine months ended September 30, 1999, the Company had no
revenues. Operating expenses were $1,608,633, consisting of sales and marketing
expenses of $112,680, product development expenses of $397,827, general and
administrative expenses of $1,072,793 and depreciation and amortization of
$25,333. Interest expense was $63,010 resulting in a net loss before preferred
stock dividend of $1,598,459 or $0.25 per share.
The Company had no revenues in the nine months ended September 30, 2000.
Operating expenses increased to $6,698,372, a 316% increase over the comparable
1999 period. Operating expenses included sales and marketing expenses of
$1,430,077, a 1,169% increase. The increase in sales and marketing expenses
during the current period is a direct result of the increased staff requirements
and related expenses.
Product development expenses increased to $2,261,622, which included the
aforementioned $950,000 reserve for obsolete inventory. This resulted in a total
468% increase. The increase in product development during the current period is
a result of the Company's effort to continue development and enhancement of its
product. A significant portion of this increase has resulted from additional
staff and related expenses as well as cost associated with outsourced
specialized product development.
General and administrative expenses increased to $2,446,751, a 128%
increase which included $304,553 of stock based compensation. The increase in
general and administrative expenses during the current period is a result of
increased staff requirements and related expenses as well as professional
services.
Depreciation and amortization expenses increased to $519,675, an 1,951%
increase. This increase during the current period is a result of acquisition of
equipment and related costs.
Interest expense increased to $225,412, a 258% increase due to an increase
in debt and interest expense of $191,890 related to amortization of discount
related to detachable warrants issued with debt. The resulting a net loss is
$7,220,750 a 352% increase.
We had originally anticipated commencing full-scale commercial deployment
of the TVemail(TM) System in the United States during the second quarter of
2000; however, due to lack of capital resources, lack of management and other
personnel and unanticipated technological challenges with the System, the
Company is unable to predict when, if at all, the TVemail(TM) System will
deployed commercially. The Company will not be able to generate any revenue unit
the System is deployed. Additional risks and uncertainties are set forth in this
Report under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations -Certain Trends and Uncertainties." .
13
During the nine months ended September 30, 2000, the Company's product
development efforts were focused on the final development and investigating the
third party production of the TVemail(TM) device and further product development
for subsequent versions of the TVemail(TM) System and other ancillary products.
As of the date of this filing, due to lack of capital resources, lack of
management and other personnel, the Company has ceased its development efforts.
A significant amount of capital was spent of product development during
the nine months ended September 30, 2000. Due to lack of capital resources
subsequent to September 30, 2000, the Company has been unable to fund further
product development.
As of September 30, 2000, we employed 37 full time employees, a decrease
of 20 employees from the prior quarter. This reduction was primarily related to
a reduction of operating personnel which occurred on September 1, 2000.
Subsequent to September 1, 2000 six officers of the Company tendered their
resignations: Mark Boucher, Vice President of Finance, Erik Lundberg, Vice
President of Information Technology, Richard Schaaf, Vice President of Market
Deployment, John R. Varsames, President and Chief Executive Officer, and Michael
T. Grennan, Chief Financial Officer, and George Horton, President and Chief
Executive Officer. Additional employees resigned or were terminated subsequent
to September 30, 2000. As of December 28, 2000, the Company employed 9 full-time
and one part-time employee. Mr. Horton submitted his resignation as President
and Chief Executive Officer on December 8, 2000 leaving the Company with no
officers or management. The Board of Directors retained Messrs. Grennan and
Varsames on a short-term consulting basis to assess the business and operations
of the Company and provide a written report to the Board of Directors. On
December 26, 2000 Mr. Grennan was appointed Vice President and Chief Financial
Officer.
We do not anticipate generating any revenue until the TVemail(TM) System
is successfully launched in the United States or internationally through a joint
venture or a partially-owned subsidiary. Due to lack of capital resources, lack
of management and other personnel, and unanticipated technological difficulties
with the System, the Company is unable to predict when, if all, the System will
be launched in the United States or internationally. On March 24, 2000, we
entered into a Joint Venture Agreement with Seafont Pty. Ltd., an Australian
corporation, to create and jointly own an Australian corporation (the
"Australian Subsidiary") to market and distribute a TVemail(TM) System in
Australia and New Zealand. The Company has committed to contributing capital up
to $250,000 to the Australian Subsidiary in consideration for the Company's
fifty percent ownership interest. Due to lack of capital resources, the Company
is unable to fulfill that commitment. On May 18, 2000, we entered into a Joint
Venture Agreement with Sienna Invest Limited, a British Virgin Islands
corporation, to create and jointly own an entity to seek strategic opportunities
and enter into business relationships to market and distribute the TVemail(TM)
product throughout parts of Europe, the Middle East and North Africa. The
Company has contributed $500,000 of capital to the entity in consideration for
the Company's fifty percent ownership interest. As of December 27, 2000, this
entity, eNote International, has exhausted its capital resources. Due to lack of
capital resources, the Company is unable to pursue additional international
opportunities or strategic relationships to bring localized versions of the
TVemail(TM) System to market throughout the world's industrialized countries.
These plans are subject to many risks and uncertainties, including those set
forth in this Report under the caption "Certain Trends and Uncertainties".
14
The Company originally planned to purchase approximately $500,000 in
computer equipment, lab equipment and development tools in its fiscal year ended
December 31, 2000. For the nine months ended September 30, 2000, we spent
$410,155 on property and equipment, and entered into capital leases of $100,616.
The Company does not anticipate material outlays for property and equipment
subsequent to September 30, 2000 due to lack of capital resources.
Liquidity and Capital Resources
We have funded our business through the issuance of debt and equity. We
raised $5,000,000 through the Friedlander Transaction. On March 13, 2000, we
raised an additional $500,000 through the issuance of a one-year ten percent
subordinated convertible debenture in an offshore transaction to Seafont, Pty.
Ltd., an Australian corporation. This debenture is convertible into shares of
Common Stock at an initial conversion rate equal to one share for each $7 of
principal converted.
Also, during the first and second quarter of 2000, we received and
accepted subscriptions from various European entities to purchase in a
Regulation S offering an aggregate of 826,660 shares of the Company's Common
Stock (the "Shares") and approximately 413,330 Common Stock Purchase Warrants
with an exercise price of $0.01 per share (the "Warrants"). The Warrants are
immediately exercisable. For the nine months ended September 30, 2000 the
Company had received an aggregate of $4,963,878 in connection with such
placement as payment in full for 826,660 of the Shares and the exercise price
for 413,330 of the Warrants which were exercised at $0.01 per share upon
issuance. $500,000 of the proceeds received in connection with the placement was
paid to the Company's financial consultants.
During August 2000, the Company borrowed $250,000 from eNote.com
International, Ltd and $250,000 from Friedlander Capital Management Corp. as
described in Note 6 above.
On September 11, 2000, we borrowed $100,000 from Friedlander Capital
Management Corp. in exchange for an 8% Secured Convertible Note due March 1,
2001.
On September 14, 2000, we borrowed $150,000 from Friedlander Capital
Management Corp. in exchange for an 8% Note due March 1, 2001. Payment of this
Note is secured by all the inventory of the Company then owned or thereafter
acquired pursuant to Security Agreements dated as of September 14, 2000. As of
the date of this filing, $245,000 of these notes has been repaid.
15
In addition, on September 28, 2000, we borrowed $150,000 from
Friedlander Capital Management Corp. in exchange for an 8% Note due March 1,
2001. Payment of this Note is secured by all the inventory of the Company then
owned or thereafter acquired pursuant to Security Agreements dated as of
September 28, 2000.
As of September 30, 2000, the Company's balance of cash and cash
equivalents was $35,305. The Company's ability to meet its customary operating
expenses is dependent on its ability to obtain continuing short-term interim
financing from a related investor or other additional debt or equity capital.
However, there can be no assurance that interim financing or other debt or
equity capital will be available to the Company. The Company anticipates that it
will need to raise significant capital during the remainder of 2000 and into
2001 to carry out its plan through additional issuances of debt and equity.
However, there can be no assurance that the Company will raise any additional
capital. The Company is not generating cash from its operations and therefore
requires outside investors, which includes Friedlander, to fund its current
obligations, which are primarily payroll and rent. The Company is four months in
arrears in its rental obligations. The Company has not had cash available to pay
its payables, which are seriously overdue.
In addition, the Company's current capital resources are insufficient to
complete the development and finalization of the TVemail(TM) System and launch
the TVemail(TM) System in the United States. In order for the Company to
complete the development and finalization of the TVemail(TM) System, launch the
TVemail(TM) System in the United States, begin ongoing mass production of the
Client Hardware or to initiate sales and marketing efforts relating to the
TVemail(TM) System, the Company will have to raise substantial amounts of
additional capital through public or private debt or equity financing. No
efforts are currently underway to obtain such additional financing. When and if
such efforts are undertaken, there can be no assurance that the Company will be
able to raise such funds, and, if it cannot, its business may be materially and
adversely affected.
Certain Trends and Uncertainties
In addition to the other information contained in this Report on Form
10-QSB for the quarter ending September 30, 2000, the following factors should
be considered carefully.
RISKS RELATING TO THE COMPANY'S NEED FOR ADDITIONAL
FINANCIAL RESOURCES
Need for Additional Funds
The Company has no capital to finalize the development of the Client
Hardware, install the Server Systems to run the TVemail(TM) System network, to
complete the GUI, to complete pilot testing or to initially launch the
TVemail(TM) System. The Company will have to raise substantial additional
capital in order to complete such endeavors and if and when such endeavors are
completed, to initiate mass production of the Client Hardware and initiate
widespread sales and marketing efforts relating to the TVemail(TM) System
service. No efforts are currently underway to obtain additional funding. The
Company may seek additional funding through public or private financings, which
may include debt or equity financings. Adequate funds for these purposes,
whether obtained through financial markets or collaborative or other
arrangements with corporate partners or from other sources, may not be available
when needed or on terms acceptable to the Company. Insufficient funds may
require us to: delay, scale back or eliminate some or all of our research and
product development programs; license to third parties our technology to
commercialize products or technologies that the Company would otherwise seek to
develop itself; to sell ourselves to a third party; to cease operations; or to
declare bankruptcy.
16
If we raise additional funds through the issuance of debt securities, the
holders of the debt securities will have a claim to the Company's assets that
will be prior to any claim of the stockholders. Interest on any debt securities
could increase our costs and negatively impact our operating results. If we
raise additional funds through the issuance of preferred stock, the terms of
such preferred stock may provide that the holders of such preferred stock are
entitled to receive dividends and/or distributions upon liquidation prior to the
holders of Common Stock. Furthermore, any such preferred stock may have class
voting rights, conversion features and/or antidilution protections of which the
Common Stock does not have the benefit. If we raise additional funds through the
issuance of Common Stock or securities convertible into or exchangeable for
Common Stock, the percentage ownership of the Company's then-existing
stockholders will decrease. In addition, any such convertible or exchangeable
securities may have rights, preferences and privileges more favorable to the
holders than those of the Common Stock.
Subordination of Common Stock to Preferred Stock; Risk of Dilution;
Anti-Dilution Adjustments.
In the event of the liquidation, dissolution or winding up of the Company,
the Common Stock is expressly subordinate to the $5 million preference of the 5
million outstanding shares of Preferred Stock. The conversion rate of the
Preferred Stock is subject to adjustment, among other things, upon issuances of
Common Stock or securities convertible into Common Stock or rights to purchase
Common Stock that have not been expressly approved in writing by a majority in
interest of the holders of Preferred Stock or their elected representatives. As
of September 30, 2000, each share of Preferred Stock was convertible into 1
share of Common Stock.
Management Departures, Need for and Dependence on Qualified Personnel.
In addition to an overall reduction in employees, the Company's management
team has been significantly reduced by the departure of several key executives,
whom, with one exception, the Company has not replaced. These departures include
Daniel Peterson, Vice President of Business Development, John R. Varsames,
President and Chief Executive Officer (who was replaced by George Horton),
George Horton, President and Chief Executive Officer, Mark Boucher, Vice
President of Finance, Erik Lundberg, Vice President of Information Technology,
Richard Schaaf, Vice President of Market Deployment, and Michael T. Grennan,
Chief Financial Officer. Mr. Grennan rejoined the Company as Vice President and
Chief Financial Officer on December 26, 2000. Our success is highly dependenton
the hiring and retention of key personnel and technical staff. The loss of key
personnel or the failure to recruit necessary additional personnel or both could
impede the achievement of development objectives. There is intense competition
for qualified personnel in the areas of the Company's activities, and due to
financial constraints and other factors there can be no assurance that we will
be able to attract and retain the qualified personnel necessary for the
development of our business. Many of our competitors have significantly greater
financial and other resources than we do and may be able to offer more lucrative
compensation packages which include stock options and other stock-based
compensation and higher-profile employment opportunities.
17
Multiple Responsibilities, Potential Conflicts of Interest
George Horton, who was appointed President, Chief Executive Officer and a
director of the Company on August 30, 2000, resigned on December 8, 2000. He
is a director and Chief Executive Officer of eNote International.com, the
Company's 50% owned joint venture and is compensated by eNote International.com,
and during his tenure was unable to devote his full time and attention to the
Company's affairs. These multiple roles may have posed a conflict of interest
for Mr. Horton in discharging his duties as an officer and director of the
Company. Mr. Horton was not compensated by the Company for his services.
RISKS RELATING TO THE COMPANY'S OPERATIONS
AND TECHNOLOGIES
Limited Operating History; Recent Shift in Business Strategy.
Immediately prior to the acquisition of Navis on April 5, 1999, the
Company had no business operations. Navis was founded in June 1996 and until the
fourth quarter of 1998 supplied infra-red protocol and advanced input devices to
NC manufacturers and provided contract engineering and consulting services.
However, Navis' revenues from operations never exceeded $703,000 in any given
year. During 1998, Navis shifted its business emphasis to focus entirely on the
development of the TVemail(TM) System service. We have yet to launch the
TVemail(TM) System service commercially or to receive any revenue from such
service. As a result, we have only a limited operating history and there is
little historical information on which to evaluate our business and prospects.
Our revenue, if any, for the foreseeable future is entirely dependent on
successfully bringing the TVemail(TM) System service to market and on the number
of customers, if any, who subscribe to the TVemail(TM) System service after the
launch of the service. Due to lack of capital resources, lack of management and
other personnel, and unexpected technical challenges we are unable to predict,
when if at all, the TVemail(TM) System will be deployed commercially.
Once the basic TVemail(TM) System service is marketed, if ever, we intend
to expand our operations by developing and marketing new or complementary
services or systems. However, there can be no assurance that we will be able to
do so effectively due to lack of capital resources, lack of management and other
personnel and other factors. Although we believe that, in the future, we may be
able to use the TVemail(TM) System service as a platform to provide e-mail
related and other services, there can be no assurances that we will be able to
do so.
The Company Depends on its Intellectual Property, Which May Be Difficult and
Costly to Protect.
Our intellectual property includes proprietary and confidential
information that is not currently subject to patent, trademark or similar
protection. The Company has filed federal trademark applications to register the
trademarks "TVemail," "eNote.com," "eNote Europe," "eNote Europe.com," "eNote
Australia," "eNote Australia.com," "MyGizmo," "TVGizmo," "NetGizmo," "PCemail,"
"WebATM," "Browserless Internet," "BuyMail," "TVewriter," "EZ Color," "eNote
International.com," "Get Connected.. Simply," "Simply Communicate," and
"TVemail.. The Answering Machine for the Internet." However, the Company may not
be able to secure significant protection for these trademarks. If our
competitors or others adopt product or service names similar to the names listed
above that we anticipate using, it may impede our ability to build brand
identity and customer loyalty. We rely primarily on secrecy to protect
technology, especially where patent protection is not believed to be appropriate
or obtainable. No assurance can be given that others will not independently
develop substantially equivalent proprietary information and techniques or
otherwise gain access to our trade secrets, or that we can effectively protect
our rights to unpatented trade secrets.
18
The validity, enforceability and scope of protection of certain
proprietary rights in Internet-related businesses are uncertain and still
evolving. If unauthorized third parties are able to copy our service or our
business model or to use our confidential information to develop competing
services, we could lose customers and our business could be negatively impacted.
We may not be able to effectively police unauthorized use of our technology
because such policing is difficult and expensive. In particular, the global
nature of the Internet makes it difficult to control the ultimate destination or
security of software or other data transmitted. Furthermore, the laws of other
countries may not adequately protect our intellectual property.
Our business activities and the TVemail(TM) System service may infringe
upon the proprietary rights of others. In addition, other parties may assert
infringement claims against the Company. Any such claims and any resulting
litigation could subject us to significant liability for damages and could also
result in invalidation of our proprietary rights. We could be required to enter
into costly and burdensome royalty and licensing agreements. These agreements
may not be available on acceptable terms, or may not be available at all. We may
also need to file lawsuits to defend the validity of our intellectual property
rights and trade secrets, or to determine the validity and scope of the
proprietary rights of others. Litigation is expensive and time-consuming and
could divert management's attention away from our business.
Technology Licensed From Third Parties.
We have entered into agreements with, and have licensed certain technology
from, third parties. The Company has relied on scientific, technical, commercial
and other data supplied and disclosed by others in entering into these
agreements and will rely on such data in support of development of certain
products. Furthermore, we may license additional technologies from third parties
in the future. Although we have no reason to believe that this information
contains errors of omission or fact, there can be no assurance that there are no
errors of omission or fact that would materially affect the commercial viability
of these products.
Rapid Technological Change, Customer Demands and Intense Competition.
The e-mail service market is characterized by rapidly changing technology,
customer demands and intense competition. If we cannot keep pace with these
changes, our TVemail(TM) System service could become uncompetitive and its
business could suffer. If we are not successful in developing and marketing
enhancements to the TVemail(TM) System service or new services that respond to
technological change or customer demands, our business may be materially and
adversely effected.
19
The competitive market for e-mail and online service access may limit
demand or pricing for the TVemail(TM) System. We expect to experience intense
competition from established online service providers such as America Online,
Inc., Prodigy Communications Corporation and Microsoft Corporation's WebTV(TM)
as well as competition from Internet appliance manufactures. Many companies
provide e-mail and online service access and other services, which provide
functionality superior to those included in the TVemail(TM) System. As a result
of this competition, demand for the TVemail(TM) System may suffer, we may be
restricted in the service rates we can charge for the TVemail(TM) System and our
business, financial condition and results of operations may be adversely
affected. Many of our competitors have significantly greater financial,
technical, marketing, distribution, customer support and other resources than we
do. Furthermore, many of our competitors have significantly greater experience,
better name recognition, more compelling content and easier access to consumers,
advertisers and online service providers than we do. Business Plan; Management
of Growth
Due to lack of management and other personnel, the Company does not have a
viable business plan in place. Based on the written report of the consultants
retained by the Company, the Board of Directors in conjunction with Mr. Grennan
anticipates formulating a business plan. If the Company expands it existing
operations, the Company will need to hire management and other personnel.
Although we anticipate outsourcing manufacturing and procurement and limited
components of marketing and technical services, we may be forced to expand our
manufacturing, sales and marketing and technical support. We expect that we will
need to manage and broaden multiple relationships with customers, on line
providers and other third parties. We also expect that we will need to expand
our financial systems, procedures and controls and will need to augment, train
and manage our workforce, particularly our information technology staff. As a
result, our existing management and operating systems may be strained by any
growth and the Company may be unable to timely complete necessary improvements
to its operating systems, procedures and controls to support future operations.
Capacity Constraints May Impede Revenue Growth and Profitability.
When and if the TVemail(TM) System is launched commercially, the Company
believes that satisfactory performance, reliability and availability of our
TVemail(TM) System appliances and Server Systems infrastructure will be critical
to the Company's reputation and ability to attract customers and maintain
adequate customer service levels. Any significant or prolonged capacity
constraints could delay or prevent customers from sending or gaining access to
their documents or other data or services. Such constraints could decrease our
ability to acquire and retain customers and prevent us from achieving the
necessary growth in revenue to achieve profitability. If the amount of traffic
increases substantially and we experience capacity constraints, we may need to
spend significant amounts to expand and upgrade our technology and network
infrastructure. Furthermore, we may be unable to predict the rate or timing of
any increases in the use of its services in order to respond in a timely manner.
20
Systems Failures and Business InterruptionsWhich Would Harm our Business.
When and if the TVemail(TM) System is launched commercially, our success
will depend in part on the efficient and reliable operation of TVemail(TM)
System service sufficient to accommodate a large number of subscribers. For
deployment in the United States we intend to manage our own server systems with
redundant functions in order to reduce the risks of system failure, however, the
server systems are vulnerable to damage from fire, power loss,
telecommunications failures, break-ins and other events, which could lead to:
interruptions or delays in our service; loss of data; or the inability to
accept, transmit and confirm customer documents and data. Our business may be
materially adversely affected if its service is interrupted. Although we intend
to implement network security measures, our systems may be vulnerable to
computer viruses, electronic break-ins, attempts by third parties deliberately
to exceed the capacity of the systems and similar disruptions, any of which
could have a material adverse effect on our business.
RISKS RELATING TO THE INTERNET AND ONLINE COMMERCE
Privacy Concerns May Discourage Customers From Using The Company's Services.
Concerns over the security of online transactions and the privacy of
users may inhibit the growth of the Internet as a means of delivering documents
and data. We may need to incur significant expenses and use significant
resources to protect against the threat of security breaches or to alleviate
problems caused by such breaches. We plan to rely on encryption and
authentication technology to provide secure transmission of confidential
information. If our security measures do not prevent security breaches, we could
suffer operating losses, damage to our reputation, litigation and possible
liability. Advances in computer capabilities, new discoveries in the field of
cryptography or other developments may result in a compromise or breach of our
encryption and authentication technology and could enable an outside party to
steal proprietary information or interrupt its operations.
Government Regulation and Legal Uncertainties Relating to the Internet Could
Harm our Business.
Changes in the regulatory environment could negatively impact our ability
to generate revenues and increase our expenses. The Internet is largely
unregulated and the laws governing the Internet remain unsettled, even in areas
where there has been some legislative action. It may take years to determine
whether and how existing laws such as those governing intellectual property,
privacy and taxation apply to the Internet. In addition, because of increasing
popularity and use of the Internet, any number of laws and regulations may be
adopted with respect to the Internet or other online services covering issues
such as: user privacy; security; pricing; content; copyrights; distribution;
taxation; and characteristics and quality of services. Such regulations could
impose additional costs or interdicts on our activities, which could have a
material adverse effect.
If the Internet Infrastructure Fails, Our Business May Suffer.
We cannot be certain that the infrastructure or complementary services
necessary to maintain the Internet as a useful, convenient or secure means of
transferring documents and data will continue to develop. The Internet
infrastructure may not support the demands that growth may place on it, and the
performance and reliability of the Internet may decline, which could have a
material adverse effect on our business.
21
The Company Depends on Third-Party Providers of Internet and Telecommunications
Service.
Our operations depend on third parties for Internet access and
telecommunications. Frequent or prolonged interruptions of these services could
result in significant losses of revenues. These types of occurrences could also
cause users to perceive our products as not functioning properly and therefore
encourage them to use other methods to deliver and receive information. We have
limited control over these third parties and there can be no assurance that we
will be able to maintain relationships with them on acceptable commercial terms.
Nor can there be any assurance that the quality of services that they provide
will remain at the levels needed to enable us to conduct our business
effectively. Each of these third parties has likely experienced outages in the
past, and could experience outages, delays and other difficulties due to system
failures unrelated to the Company's systems.
Costs of Transmitting Documents and Data Could Increase.
The cost of transmitting documents and data over the Internet could
increase, and the Company may not be able to increase its prices to cover such
rising costs. Several telecommunications companies have petitioned the Federal
Communications Commission to regulate Internet and on-line service providers in
a manner similar to long distance telephone carriers and to impose access fees
on such providers. Also, foreign laws and state tax laws and regulations
relating to the provision of services over the Internet are still developing. If
individual states impose taxes on services provided over the Internet, our cost
of providing TVemail(TM) and other services may increase.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities.
During the nine months ended September 30, 2000, we have received and accepted
subscriptions for 826,660 shares of Common Stock at a purchase price of $6.00
per share and 413,330 Common Stock Purchase Warrants with an exercise price of
$0.01 per share. For the nine months ended September 30, 2000 the Company had
received an aggregate of $4,963,878 in connection with such placement.
The Common Stock and Common Stock Purchase Warrants were issued in transactions
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933,
as amended, and Regulation S promulgated thereunder.
22
On August 17, 2000, the Company borrowed $250,000 from Friedlander pursuant to
an 8% Secured Convertible Note originally due December 2, 2000 and subsequently
extended to March 1, 2001 and convertible into Common Stock at the ratio of
$2.50 of principal for each share of Common Stock. The Company also issued a
Warrant to acquire 2,000,000 shares of Common Stock of the Company at a price of
$2.50 per share at any time on or prior to August 17, 2002, subsequently
extended to August 17, 2003.
On August 31, 2000, the Company borrowed $250,000 from eNote International.com
Ltd. pursuant to an 8% Secured Convertible Note due December 2, 2000 and
convertible into Common Stock at the ratio of $2.50 of principal for each share
of Common Stock. The Company also issued a Warrant to acquire 2,000,000 shares
of Common Stock of the Company at a price of $2.50 per share at any time on or
prior to August 31, 2002.
On September 11, 2000, the Company borrowed $100,000 from Friedlander pursuant
to an 8% Secured Convertible Note originally due December 2, 2000 and
subsequently extended to March 1, 2001 and convertible into Common Stock at the
ratio of $2.50 of principal for each share of Common Stock. The Company also
issued a Warrant to acquire 800,000 shares of Common Stock at a price of $2.50
per share at any time on or prior to September 11, 2002, subsequently extended
to September 11, 2003.
On September 14, 2000, the Company borrowed $150,000 from Friedlander pursuant
to an 8% Secured Note originally due October 14, 2000 and subsequently extended
to March 1, 2001 and secured by all the Company's inventory.
On September 26, 2000, the Company entered into a transaction with John R.
Varsames, its former President and Chief Executive Officer whereby Varsames
transferred 6,680,000 shares of Company Common Stock in exchange for (i) all of
the assets of the Company's wholly-owned subsidiary WebATM, Inc., and (ii)
subject to the rights of James D. Richards and Martine Richards, the Company's
55% equity interest in SolutioNet, Ltd.
On September 28, 2000, the Company borrowed $150,000 from Friedlander pursuant
to an 8% Secured Note originally due October 14, 2000 and subsequently extended
to March 1, 2001 and secured by all the Company's inventory.
On October 12, 2000, the Company borrowed $150,000 from Friedlander pursuant to
an 8% Secured Convertible Note due originally due December 2, 2000 and
subsequently extended to March 1, 2001 and convertible into Common Stock at the
ratio of $1.50 of principal for each share of Common Stock. The Company also
issued a Warrant to acquire 2,000,000 shares of Common Stock at a price of $1.50
per share at any time on or prior to October 12, 2002, subsequently extended to
October 12, 2003.
On October 26, 2000, the Company borrowed $150,000 from Friedlander pursuant to
an 8% Secured Convertible Note originally due December 2, 2000 and subsequently
extended to March 1, 2001 and convertible into Common Stock at the ratio of
$1.00 of principal for each share of Common Stock. The Company also issued a
Warrant to acquire 3,000,000 shares of Common Stock at a price of $1.00 per
share at any time on or prior to October 26, 2002, subsequently extend ed to
October 26, 2003.
23
On November 9, 2000, the Company borrowed $100,000 from Friedlander pursuant to
an 8% Secured Convertible Note originally due December 2, 2000 and subsequently
extended to March 1, 2001 and convertible into Common Stock at the ratio of
$0.75 of principal for each share of Common Stock. The Company also issued a
Warrant to acquire 2,666,667 shares of Common Stock at a price of $0.75 per
share at any time on or prior to November 9, 2002, subsequently extended to
November 3, 2003.
On November 22, 2000, the Company borrowed $120,000 from Friedlander pursuant to
an 8% Secured Convertible Note originally due December 2, 2000 and subsequently
extended to March 1, 2001 and convertible into Common Stock at the ratio of $.50
of principal for each share of Common Stock. The Company also issued a Warrant
to acquire 1,200,000 shares of Common Stock at a price of $.50 per share at any
time on or prior to November 22, 2002, subsequently extended to November 22,
2003.
On December 7, 2000, the Company borrowed $110,000 from Friedlander pursuant to
an 8% Secured Convertible Note due March 1, 2001 and convertible into Common
Stock at the ratio of $.375 of principal for each share of Common Stock. The
Company also issued a Warrant to acquire 825,000 shares of Common Stock at a
price of $.375 per share at any time on or prior to December 7, 2003.
On December 20, 2000 the Company borrowed $50,000 from Friedlander pursuant to
an 8% Secured Convertible Note due March 1, 2001 and convertible into Common
Stock at the ratio of $.18 principal for each share of Common Stock. The Company
also issued a Warrant to acquire 5,555,556 shares of Common Stock at a price of
$.18 per share at any time on or prior to December 20, 2000.
The Notes and Warrants were issued in transactions exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended.
Item 3. Defaults Upon Senior Securities.
The Company is in default under its 8% Secured Convertible Note issued to eNote
International.com in the principal amount of $250,00 due December 2, 2000. As of
December 28, 2000 the principal amount of $250,000 and interest in the
approximate amount of $6,520.55 is in arrears.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
24
EXHIBIT TABLE
Exhibit No. Description
3(a) Amended and Restated Certificate of Incorporation **
3(b) Amended By-laws **
4.1 Certificate of Powers, Designations, Preferences and Rights of
the Convertible Preferred Stock, par value $.01 per share, of
the Company.*
4.2 Common Stock Purchase Warrant dated April 6, 1999
between the Company and Friedlander International
Limited. *
4.3 1-Year 18 Percent Convertible Debenture due May 3, 2000 of
Navis in principal amount of $200,000. **
4.4 1-Year 18 Percent Convertible Debenture due May 3, 2000 of
Navis in principal amount of $250,000. **
4.5 $50,000 Convertible promissory note of Navis, issued
January 8, 1999. **
4.6 1-Year 12 Percent Convertible Debenture due March 23, 2000 of
Navis in principal amount of $100,000. **
4.7 12% Promissory Note of Navis Technologies, Ltd. to John
R. Varsames, dated April 7, 1998 in principal amount of
$50,000, payable on demand. **
4.8 12% Promissory Note of Navis Technologies, Ltd. to John
R. Varsames, dated April 28, 1998 in principal amount
of $18,000, payable on demand. **
4.9 12% Promissory Note of Navis Technologies, Ltd. to John
R. Varsames, dated May 4, 1998 in principal amount of
$7,500, payable on demand. **
4.10 12% Promissory Note of Navis Technologies, Ltd. to John
R. Varsames, dated May 14, 1998 in principal amount of
$28,000, payable on demand. **
4.11 12% Promissory Note of Navis Technologies, Ltd. to John
R. Varsames, dated May 28, 1998 in principal amount of
$5,200, payable on demand. **
25
4.12 12% Promissory Note of Navis Technologies, Ltd. to John
R. Varsames, dated June 11, 1998 in principal amount of
$10,000, payable on demand. **
4.13 12% Promissory Note of Navis Technologies, Ltd. to John
R. Varsames, dated June 25, 1998 in principal amount of
$500, payable on demand. **
4.14 12% Promissory Note of Navis Technologies, Ltd. to John
R. Varsames, dated January 27, 1999 in principal amount
of $6,000, payable on demand. **
4.15 12% Promissory Note of Navis Technologies, Ltd. to John
R. Varsames, dated January 31, 1999 in principal amount
of $56,948, payable on demand. **
4.16 12% Promissory Note of Navis Technologies, Ltd. to John
R. Varsames, dated February 2, 1999 in principal amount
of $5,000, payable on demand. **
4.17 12% Promissory Note of Navis Technologies, Ltd. to John
R. Varsames, dated February 5, 1999 in principal amount
of $5,000, payable on demand. **
4.18 12% Promissory Note of Navis Technologies, Ltd. to John
R. Varsames, dated February 23, 1999 in principal
amount of $5,000, payable on demand. **
4.19 12% Promissory Note of Navis Technologies, Ltd. to John
R. Varsames, dated March 4, 1999 in principal amount of
$20,000, payable on demand. **
4.20 12% Promissory Note of Navis Technologies, Ltd. to John
R. Varsames, dated March 5, 1999 in principal amount of
$1,000, payable on demand. **
4.21 12% Promissory Note of Navis Technologies, Ltd. to John
R. Varsames, dated March 23, 1999 in principal amount
of $5,500, payable on demand.**
4.22 12% Convertible Debenture to Lance Murdock due May 3,
2000 in principal amount of $30,000.***
4.23 12% Convertible Debenture to Robert Francis Corvino due
May 3, 2000 in principal amount of $50,000.***
26
4.24 10% Subordinated Convertible Debenture to Seafont Pty.
Ltd., due March 13, 2001 in principal amount of
$500,000.***
4.25 Form of Common Stock Purchase Warrant for March/April
2000 European Stock Placement.***
4.26 $250,000 8% Subordinated Secured Convertible Note dated
August 17, 2000 due December 2, 2000 to Friedlander
Capital Management Corp.****
4.27 Warrant dated August 17, 2000 to acquire 2,000,000
shares of eNote.com Inc. Common Stock to Friedlander
Capital Management Corp.****
4.28 $250,000 8% Subordinated Secured Convertible Note dated
August 31, 2000 due December 2, 2000 to eNote
International.com Ltd.****
4.29 Warrant dated August 31, 2000 to acquire 2,000,000
shares of eNote.com Inc. Common Stock to eNote
International.com Ltd.****
4.30 $100,000 8% Subordinated Secured Convertible Note dated
September 11, 2000 due December 2, 2000 to Friedlander
Capital Management Corp.
4.31 Warrant dated September 11, 2000 to acquire 800,000
shares of eNote.com Inc. Common Stock to Friedlander
Capital Management Corp.
4.32 $150,000 8% Secured Note dated September 14, 2000 due
December 2, 2000 to Friedlander Capital Management
Corp.
4.33 $150,000 8% Secured Note dated September 28, 2000 due
December 2, 2000 to Friedlander Capital Management Corp.
4.34 $150,000 8% Subordinated Secured Convertible Note dated
October 12, 2000 due December 2, 2000 to Friedlander
Capital Management Corp.
4.35 Warrant dated October 12, 2000 to acquire 2,000,000
shares of eNote.com Inc. Common Stock to Friedlander
Capital Management Corp.
4.36 $150,000 8% Subordinated Secured Convertible Note dated
October 26, 2000 due December 2, 2000 to Friedlander
Capital Management Corp.
4.37 Warrant dated October 26, 2000 to acquire 3,000,000
shares of eNote.com Inc. Common Stock to Friedlander
Capital Management Corp.
27
4.38 $150,000 8% Subordinated Secured Convertible Note dated
November 9, 2000 due December 2, 2000 to Friedlander
Capital Management Corp.
4.39 Warrant dated November 9, 2000 to acquire 2,666,667
shares of eNote.com Inc. Common Stock to Friedlander
Capital Management Corp.
4.40 $120,000 8% Subordinated Secured Convertible Note dated
November 22, 2000 due December 2, 2000 to Friedlander
Capital Management Corp.
4.41 Warrant dated November 22, 2000 to acquire 1,200,000
shares of eNote.com Inc. Common Stock to Friedlander
Capital Management Corp.
4.42 Letter Agreement dated November 20, 2000 between the Company
and acknowledged and agreed to by Friedlander Capital
Management Corp. extending the maturity date of 8% Secured
Notes due October 14, 2000.
4.43 Letter Agreement dated December 2, 2000 between the Company and
acknowledged and agreed to by Friedlander Capital Management
Corp. extending the maturity date of 8% Secured Notes due
December 2, 2000.
4.44 $110,000 8% Subordinated Convertible Note dated
December 7, 2000 due March 1, 2001 to Friedlander
Capital Management Corp.
4.45 Warrant dated December 7, 2000 to acquire 825,00 shares
of eNote.com Inc. Common Stock to Friedlander Capital
Management Corp.
4.45 $50,000 8% Subordinated Convertible Note dated December
20, 2000 due March 1, 2000 to Friedlander Capital
Management Corp.
4.47 Warrant dated December 20, 2000 to acquire 5,555,556
shares of Enote.com Inc. Common Stock to Friedlander
Capital Management Corp.
4.48 Letter Agreement dated December 20, 2000 between the
Company and acknowledged and agreed to by Friedlander
Capital Management Corp. extending the termination date
of warrants.
10.13 Agreement dated December 30, 1999 between NaviSite and
the Company.***
10.14 1999 Non-Employee Directors' Stock Option Plan.***
10.15 Note (Debenture) Purchase Agreement dated March 13,
2000 by and between Seafont Pty. Ltd. and the
Company.***
28
10.16 Form of Common Stock Purchase Agreement for March/April
2000 European Stock Placement.***
10.17 2000 Stock Incentive Plan.***
10.18 Joint Venture Agreement dated as of March 24, 2000
between Seafont Pty. Ltd and the Company.***
10.19 Service and Private Label Agreement dated as of March 20, 2000
between the Company and CoolEmail.com, Inc.***
10.20 Memorandum of Understanding dated as of March 24, 2000
between the Company and Cesky Telecom a.s.***
10.21 Joint Venture Agreement dated as of May 18, 2000 between Sienna
Invest Limited and the Company.
10.22 Separation Agreement dated as of September 26, 2000
between the John R. Varsames and the Company.
27 Financial Data Schedule
* Previously filed with, and incorporated by reference to, the Company's Current
Report on Form 8-K filed April 20, 1999.
** Previously filed with, and incorporated by reference to, the Company's Form
10-KSB filed September 22, 1999.
*** Previously filed with, and incorporated by reference to, the Company's Form
10-KSB filed April 28, 2000. **** Previously filed with, and incorporated by
reference to, the Company's Current Report on Form 8-K filed September 1, 2000.
(b) Reports on Form 8-K.
(1) On September 1, 2000 the Company filed a Report on Form 8-K reporting
under Item 5, the resignation of John Varsames as its President and CEO, the
appointment of George Horton, as President and CEO, the resignation of a
director of the Company and the appointment of Mr. Horton to the Board of
Directors. The Company also announced that it had received $500,000 of financing
from an existing stockholder and from an affiliate in exchange for the issuance
of an aggregate principal amount of $500,000 of 8% Subordinated Secured
Convertible Notes due December 2, 2000 and Warrants to purchase an aggregate
amount of 4,000,000 shares of the Company's Common Stock for $2.50 per share.
29
The Company also announced that it had significantly reduced its operating
personnel and announced the departure of Daniel Peterson, Vice President of
Business Development.
(2) On October 11, 2000 the Company filed a Report on Form 8-K reporting
under Item 1 a change in control of the Company. On September 26, 2000 the
Company and John Varsames, a former President, CEO and director of the Company,
entered into a transaction (the "Transaction") in which Varsames transferred
6,680,000 shares of the Company's Common Stock to the Company in exchange for
(i) all of the assets of the Company's wholly-owned subsidiary WebATM, Inc and
(ii) subject to the rights of James D. Richards and Martine Richards, the
Company's 55% equity interest in SolutioNet Ltd. As a result of the Transaction,
Burton G. Friedlander, a significant stockholder of the Company, had his
percentage of voting control increased from approximately 34% to 57%.
Under Item 2 the Company reported the transfer of all assets of its
subsidiary WebATM, Inc. and, subject to the rights of James D. Richards and
Martine Richards, the transfer of all of its equity interests in SolutionNet
Ltd. to Varsames in consideration for the 6,680,000 shares of the Company's
Common Stock transferred to the Company as part of the aforementioned
Transaction. Under Item 5 the Company referred to its press release dated
September 28, 2000 which announced the appointment of Erik Lundberg as Vice
President of Information Technology, Rick Schaaf as Vice President of Market
Development and Mark Boucher as Vice President of Finance. In addition, the
press release announced the resignation of John Varsames from the Board of
Directors of the Company and described the aforementioned Transaction.
30
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
eNote.com Inc.
---------------
(Registrant)
December 29, 2000 /s/ Michael T. Grennan
------------------------------------------
Michael T. Grennan
Vice President
(Principal Executive Officer)
December 29, 2000 /s/ Michael T. Grennan
------------------------------------------
Michael T. Grennan
Vice President
(Principal Financial Office and Principal
Accounting Officer)
31
Exhibit 4.30
THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITY UNDER THE SECURITIES ACT OF 1933 UNLESS
PAYOR HAS RECEIVED THE WRITTEN OPINION OF COUNSEL SATISFACTORY TO PAYOR TO THE
EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER DOES NOT INVOLVE A TRANSACTION
REQUIRING REGISTRATION OF SUCH SECURITY UNDER THE SECURITIES ACT OF 1933.
B-3 $100,000
eNote.com Inc
185 Allen Brook Lane
Williston, Vermont 05495
September 11, 2000
8% Subordinated Secured Convertible Note
Due December 2, 2000
eNote.com Inc., a Delaware corporation, (the "Corporation"), for value received,
promises to pay FRIEDLANDER CAPITAL MANAGEMENT CORP. (the "Holder"), the sum of
ONE HUNDRED THOUSAND DOLLARS ($100,000) on December 2, 2000 (the "Maturity
Date"), together with interest accrued thereon at the rate of eight percent (8%)
per annum, computed from September 11, 2000 (the "Issue Date"). Payment of
principal and interest shall be made in lawful money of the United States of
America on the Maturity Date unless this Note is earlier converted as provided
for herein. This Note, is part of a series of 8% Subordinated Secured
Convertible Notes due December 2, 2000 being issued by the Corporation (each a
"Note" and together the "Notes").
Payment of the Notes is secured by all tangible and intangible assets of the
Corporation pursuant to a Security Agreement dated as of August 17, 2000, as may
be amended from time to time.
1. Conversion.
(a) The holder of this Note may at time prior to the maturity
hereof, convert the principal amount hereof and interest accrued thereon into
shares of the Corporation's Common Stock. The conversion ratio shall be $2.50 of
principal converted per share of Common Stock (the "Conversion Rate"). To
convert this Note, the holder hereof must surrender the same at the office of
the Corporation, together with a written instrument of transfer in a form
satisfactory to the Corporation, properly completed and executed and with a
written notice of conversion. All rights of the holder of this Note shall, to
the extent of the principal and interest thereof converted, cease as of the date
of such conversion.
(b) In case the Corporation shall at any time subdivide its
outstanding shares of Common Stock into a greater number of shares, the
Conversion Rate in effect immediately prior to such subdivision shall be
proportionately reduced, i.e., the holder shall be entitled to purchase after
such subdivision, for the same consideration as applicable prior to such
subdivision, the same percentage of outstanding Common Stock that such holder
was entitled to purchase prior to such subdivision, and conversely, in case the
outstanding shares of Common Stock of the Corporation shall be combined into a
smaller number of shares, the Conversion Price in effect immediately prior to
such combination shall be proportionately increased. In case the Corporation
shall declare a dividend or make any other distribution upon any stock of the
Corporation payable in Common Stock, options or convertible securities
exercisable or convertible into shares of Common Stock, any Common Stock,
options or convertible securities, as the case may be, issuable in payment of
such dividend or distribution shall be deemed to have been issued in a
subdivision of outstanding shares as provided in the foregoing sentence.
(c) The Corporation will at all times reserve and keep available out
of its authorized Common Stock or its treasury shares, solely for the purpose of
issuance upon conversion of the Note as herein provided, such number of shares
of Common Stock as shall then be issuable upon conversion of this Note. The
Corporation covenants that all shares of Common Stock which shall be so issued
shall be duly and validly issued and fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof, and, without
limiting the generality of the foregoing, the Corporation covenants that it will
from time to time take all such action as may be requisite to assure that the
par value per share of the Common Stock is at all times equal to or less than
the effective Conversion Rate. The Corporation will take all such action as may
be necessary to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any requirements of
any national securities exchange upon which the Common Stock of the Corporation
may be listed. The Corporation will not take any action which results in any
adjustment of the Conversion Price if the total number of shares of Common Stock
issued and issuable after such action upon conversion of this Note would exceed
the total number of shares of Common Stock then authorized by the Corporation's
Certificate of Incorporation. The Corporation has not granted and will not grant
any right of first refusal with respect to shares issuable upon conversion of
this Note, and there are no preemptive rights associated with such shares.
2. Fractional shares. In lieu of issuing any fraction of a share upon the
conversion of this Note, the Corporation shall pay to the holder hereof for any
fraction of a share otherwise issuable upon the conversion, cash equal to the
same fraction of $2.50.
3. Prepayment. This Note may be prepaid without penalty. In the case of each
prepayment of less than all of the outstanding Notes, the principal amount to be
prepaid shall be allocated among the respective Notes and the holders thereof so
that the principal amount to be prepaid to each holder shall bear the same ratio
to the aggregate principal amount then to be prepaid as the principal amount of
Notes then held by such holder bears to the aggregate principal amount of Notes
then outstanding. Five (5) business days prior to any prepayment hereunder the
Corporation shall provide written notice to each Note holder indicating the date
and amount of such prepayment. The Note holder shall have the right to convert
the principal amount of any such prepayment prior to date of prepayment.
4. Subordination.
(a) The Corporation, for itself, its successors and assigns,
covenants and agrees, and each holder of this Note by his acceptance thereof
likewise covenants and agrees, that the payment of the principal of and interest
on each and all of this Note shall be subordinate and subject, to the extent and
in the manner hereinafter set forth, in right of payment to the prior payment in
full of all Senior Indebtedness.
(b) Upon any distribution of assets of the Corporation upon any
dissolution, winding up, liquidation, or reorganization of the Corporation,
whether in bankruptcy, insolvency, or receivership proceedings or upon an
assignment for the benefit of creditors of any other dissolution, winding up,
liquidation, or reorganization of the Corporation:
(i) All Senior Indebtedness shall first be paid in full, or
provision made for such payment in full of the principal thereof, and premium,
if any, and interest thereon, before any payment is made on account of the
principal of, or interest on, the Notes;
(ii) Any payment or distribution of assets of the Corporation
of any kind or character, whether in cash, property, or securities (other than
stock of the Corporation as reorganized or readjusted or securities of the
Corporation or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in this Section with respect to the Notes, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), to which the
holder of this Note would be entitled except for the provisions of this Section
shall be paid by the liquidating trustee or agent or other person making such
payment of distribution, whether a trustee in bankruptcy, receiver, or
liquidating trustee or other trustee or agent, directly to the holders of Senior
Indebtedness or their representative or representatives or the trustee or
trustees under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the principal of, and premium, if any,
and interest on, the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness; and
(iii) In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Corporation of any kind or character,
whether in cash, property, or securities (other than stock of the Corporation as
reorganized or readjusted or securities of the Corporation or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in this Section with
respect to the Note, to the payment of all Senior Indebtedness at the time
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), shall be received by the holder of this Note
before all Senior Indebtedness is paid in full, or provision made for its
payment, such payment or distribution shall be paid over to the holders of
Senior Indebtedness remaining unpaid or unprovided for or their representative
or representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may have been issued,
as provided in the foregoing subparagraph (2), for application to the payment of
such Senior Indebtedness until all such Senior Indebtedness shall have been paid
in full after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness.
(c) Subject to the payment in full of all Senior Indebtedness, the
holder of this Note shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property, or
securities of the Corporation applicable to the Senior Indebtedness until the
principal of and interest on this Note shall be paid in full, and no such
payments or distributions in respect of this Note of cash, property, or
securities distributable to the Senior Indebtedness under the provisions here
shall, as between the Corporation, its creditors other than the holders of
Senior Indebtedness, and the holder of this Notes, be deemed to be a payment by
the Corporation to or on account of this Note. It is understood that the
provisions of this Section are and are intended solely for the purpose of
defining the relative rights of the holder of this Note, on the one hand, and
the holders of the Senior Indebtedness on the other hand. Nothing contained in
this Section is intended to or shall impair, as between the Corporation, its
creditors other than the holders of Senior Indebtedness, and the holder of this
Note, the absolute and unconditional obligation of the Corporation to pay the
holder of this Note the principal of and interest on this Note as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the holder of this Note and creditors
of the Corporation other than the holders of the Senior Indebtedness; nor shall
anything herein or therein prevent the holder of this Note from exercising all
remedies otherwise permitted by applicable law upon default under this Note,
subject to the rights, if any, under this Section of the holders of Senior
Indebtedness in respect of cash, property or securities of the Corporation
received upon the exercise of any such remedy.
(d) Upon any distribution of assets of the Corporation referred to
in this Section, the holder of this Note shall be entitled to rely upon a
certificate of the liquidating trustee or agent or other person making any
distribution to such holder for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Corporation, the amount thereof or payable thereon,
and all other facts pertinent thereto or to this Section.
(e) If there shall have occurred a default in the payment of the
principal of (or premium, if any) or interest on any Senior Indebtedness, then,
unless and until such default shall have been cured or waived, no payment of
principal or interest shall be made by the Corporation on this Note, and no
holder of this Note shall be entitled to receive any such payment. Nothing
contained in this Section shall, however (1) affect the obligation of
Corporation to make or prevent the Corporation from making, at any time, except
during the pendency of any dissolution, winding up, liquidation, or
reorganization proceedings or except as provided in the first sentence of this
subsection, payments of principal of or interest on this Note, or (2) prevent
the application by any paying agent of any moneys deposited with it by the
Corporation to the payment of or on account of the principal of, or interest on,
this Note, if, at the time of such deposit, the paying agent did not have
written notice of any event prohibiting the making of such payment or deposit by
the Corporation; or (3) be construed as preventing the occurrence of any Event
of Default hereunder.
(f) No right of any present or future holder of any Senior
Indebtedness of the Corporation to enforce subordination as herein provided
shall at any time or in any way be prejudiced or impaired by any act or failure
to act on the part of the Corporation or by any act or failure to act, in good
faith, by any such holder, or by an noncompliance by the Corporation with the
terms, provisions, and covenants of this Note, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
(g) Any renewal or extension of the time of payment of any Senior
Indebtedness or the exercise by the holders of Senior Indebtedness of any of
their rights under the Senior Indebtedness, including without limitation the
waiver of default thereunder or the release of any security therefor, may be
made or done all without notice to or assent from the holder of this Note. No
compromise, alteration, amendment, modification, extension, renewal, or other
change of, or waiver, consent, or other action in respect of, any liability or
obligation under or respect of, or of any of the terms, covenants, or conditions
or any indenture or other instrument under which any Senior Indebtedness is
outstanding or of such Senior Indebtedness, and no release of property securing
any Senior Indebtedness, whether or not such release is in accordance with the
provisions of any applicable document, shall in any way alter or affect any of
the provisions of this Section.
(h) "Senior Indebtedness" for purposes of this Section shall mean
all indebtedness (principal and interest) now existing or hereafter incurred of
the Corporation for money borrowed from banks or other financial institutions:
(i) which is secured by the assets of the Corporation; and (ii) is not by its
express terms subordinate and junior to or on parity with this Note.
5. Default. If any of the following events occur ("Event of Default"), the
entire unpaid principal amount of, and accrued and unpaid interest on, this Note
shall immediately be due and payable, and the Corporation shall pay all costs of
collection including, but not limited to, reasonable attorneys' fees and
expenses incurred by the owner(s) or its assigns on account of such collection,
whether or not suit is brought:
(a) The Corporation fails to pay the principal of this Note at its
maturity;
(b) The Corporation commences any voluntary proceeding under any
bankruptcy,reorganization, arrangement, insolvency, readjustment of debt,
receivership, dissolution, or liquidation law or statute, of any jurisdiction,
whether now or subsequently in effect; or the Corporation is adjudicated as
bankrupt by a court of competent jurisdiction; or the Corporation petitions or
applies for, acquiesces in, or consents to, the appointment of any receiver or
trustee of the Corporation or for all or substantially all of its property or
assets; or the Corporation makes an assignment for the benefit of its creditors;
or the Corporation admits in writing its inability to pay its debts as they
mature; or
(c) There is commenced against the Corporation any proceeding
relating to the Corporation under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, receivership, dissolution, or liquidation law
or statute, of any jurisdiction, whether now or subsequently in effect, and the
proceeding remains undismissed for a period of 60 days or the Corporation by any
act indicates its consent to, approval of, or acquiescence in the proceeding; or
a receiver or trustee is appointed for the Corporation or for all or
substantially all of its property or assets, and the receivership or trusteeship
remains undischarged for a period of 60 days; or a warrant of attachment,
execution or similar process is issued against any substantial part of the
property or assets of the Corporation, and the warrant or similar process is not
dismissed or bonded within 60 days after the levy.
6. Registered owner. The Corporation shall treat the person or persons whose
name or names appear on this Note as the absolute owner or owners hereof for the
purpose of receiving payment of, or on account of, the principal and interest
due on this Note and for all other purposes, unless and until written notice
satisfactory to the Corporation is provided by the registered owner of
assignment hereof.
7. Assignment. The Corporation may assign its rights hereunder to any person or
entity. No assignment of rights or obligations shall be effective until delivery
of written notice of such assignment is made by the assigning party to the other
party hereto.
8. Release of shareholders, officers and directors. This Note is the obligation
of the Corporation only, and no recourse shall be had for the payment of any
principal or interest hereon against any shareholder, officer or director of the
Corporation, either directly or through the Corporation, by virtue of any
statute for the enforcement of any assessment or otherwise. The holder or
holders of this Note, by the acceptance hereof, and as part of the consideration
for this Note, release all claims and waive all liabilities against the
foregoing persons in connection with this Note.
9. Amendments. With the consent of the holders of a majority of the principal
amount of outstanding Notes, evidenced by a written instrument or instruments,
Payor may amend the Notes by executing and delivering to the holders an
amendment thereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Notes or of modifying in any
manner the rights of the holders; provided, however, that no such amendment
shall, without the consent of the holder of each outstanding Note affected
thereby:
(a) Change the stated maturity of the principal of any Note, or
reduce the principal amount thereof or the interest thereon, or the currency in
which any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the stated
maturity thereof (or, in the case of prepayment, or after the prepayment date);
(b) Reduce the percentage in principal amount of the outstanding
Notes, the consent of whose holders is required for any amendment, or the
consent of whose holders is required for any waiver of compliance with the
provisions hereof; or
(c) Modify any of the provisions of this Section, except to increase
any such percentage or to provide that other provisions of the Notes cannot be
modified or waived without the consent of the holder affected thereby.
Upon the execution and delivery of any amendment in accordance with this
Section, the Notes shall be modified in accordance therewith, and every holder
of Notes theretofore or thereafter executed and delivered shall be bound
thereby.
10. Governing Law. The Notes and all terms and conditions herein shall be
governed by and construed and in accordance with the laws of the State of
Vermont excluding the state's conflict of law provisions.
11. Exclusive Jurisdiction. With respect to actions and proceedings to enforce
the provisions of, arising from, or relating to this Note, the holder, by
acceptance of this Note, consents to personal jurisdiction in the state or
federal courts of the State of Vermont and irrevocably agrees that all such
actions and proceedings shall be litigated exclusively in such courts. Further,
each of the parties hereto waives any objection that it may have to the conduct
of any action or proceeding in any such court based on improper venue or forum
non conveniens. Each of the parties hereto waives personal service of any and
all process upon it and agrees that valid service of process may be made by mail
or courier service directed to it at the address set forth herein and that
service so made shall be deemed to be completed upon the earlier of actual
receipt or ten (10) days after the same shall have been posted.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Corporation has signed this Note this 11th day of
September 2000.
eNote.com Inc.
By:___________________
Name:
Title:
REGISTERED OWNER:
Friedlander Capital Management Corp.
By:___________________________
Name:
Title:
Exhibit 4.31
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR
ANY APPLICABLE STATE SECURITIES LAW, AND MAY NOT BE TRANSFERRED EXCEPT (i)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (ii) UPON FIRST
FURNISHING TO THE COMPANY AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH TRANSFER IS NOT IN VIOLATION OF THE REGISTRATION REQUIREMENTS OF THE ACT OR
ANY APPLICABLE STATE SECURITIES LAW.
To Subscribe for and Purchase Common Stock of
eNote.com Inc.
VOID AFTER SEPTEMBER 11, 2002
Warrant No. 3-A September 11, 2000
THIS CERTIFIES that, for value received, FRIEDLANDER CAPITAL MANGAGEMENT
CORP., or its registered assigns, is entitled, subject to the terms of Section 1
hereof, to subscribe for and purchase from eNote.com Inc., a Delaware
corporation (hereinafter called the "Company"), at the price of $2.50 per share
(such price, as from time to time to be adjusted as hereinafter provided, being
hereinafter called the "Warrant Price"), at any time on or prior to September
11, 2002 up to EIGHT HUNDRED THOUSAND (800,000) fully paid, nonassessable shares
of Common Stock, par value $.01 per share, of the Company ("Common Stock"),
subject, however, to the provisions and upon the terms and conditions
hereinafter set forth.
Section 1. Exercise of Warrant. This Warrant may be exercised by the
holder hereof, in whole or in part (but not as to a fractional share of Common
Stock), by the completion of the subscription form attached hereto and by the
surrender of this Warrant (properly endorsed) at the office of the Company in
Williston, Vermont (or at such other agency or office of the Company in the
United States as it may designate by notice in writing to the holder hereof at
the address of the holder hereof appearing on the books of the Company), and by
payment to the Company of the Warrant Price, in cash or by certified or official
bank check, for each share being purchased. In the event of any exercise of the
rights represented by this Warrant, a certificate or certificates for the shares
of Common Stock so purchased, registered in the name of the holder hereof, shall
be delivered to the holder hereof within a reasonable time, not exceeding
fifteen (15) business days, after the rights represented by this Warrant shall
have been so exercised; and, unless this Warrant has expired or been exercised
in full, a new Warrant representing the number of shares (except a remaining
fractional share), if any, with respect to which this Warrant shall not then
have been exercised shall also be issued to the holder hereof within such time.
With respect to any such exercise, the holder hereof shall for all purposes be
deemed to have become the holder of record of the number of shares of Common
Stock evidenced by such certificate or certificates from the date on which this
Warrant was surrendered and payment of the Warrant Price was made irrespective
of the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date on which the stock transfer books of the Company
are closed, such person shall be deemed to have become the holder of such shares
at the close of business on the next succeeding date on which the stock transfer
books are open. No fractional shares shall be issued upon exercise of this
Warrant. If any fractional interest in a share of Common Stock would, except for
the provisions of this Section 1, be delivered upon any such exercise, the
Company, in lieu of delivering the fractional share thereof, shall pay to the
holder hereof an amount in cash equal to the current market price of such
fractional interest as determined in good faith by the Board of Directors of the
Company.
Section 2. Adjustment of Number of Shares.
(a) Reclassification, Consolidation or Merger. In the event of any
reclassification or change of outstanding securities of the Common Stock, or in
the event of any consolidation or merger of the Company with or into another
corporation or entity, other than a consolidation or merger with another
corporation or entity in which the Company is the continuing corporation and
which does not result in any reclassification, conversion or change of
outstanding Common Stock, or in the event of any sale of all or substantially
all of the assets of the Company, the Company, or such successor or purchasing
corporation or entity, as the case may be, shall execute a new warrant
certificate (the "New Warrant Certificate"), providing that the Holder of this
Warrant shall have the right to exercise such new warrants and procure upon such
exercise, in lieu of each share of Common Stock issuable upon exercise of the
Warrants, the kind and amount of shares of stock, other securities, money and
property receivable upon such reclassification, conversion, change,
consolidation or merger by a holder of one share of Common Stock.
(b) Subdivisions, Combinations and Stock Dividends. If at any time while
this Warrant is outstanding and unexpired the Company shall subdivide or combine
its Common Stock, or shall pay a dividend with respect to Common Stock payable
in, or make any other distribution with respect to its Common Stock consisting
of, shares of Common Stock, then the number of Warrant Shares for which this
Warrant is exercisable shall be adjusted, from and after the date of
determination of stockholders entitled to receive such dividend or distribution,
to that number determined by multiplying the number of Warrant Shares for which
this Warrant is exercisable immediately prior to such date of determination by a
fraction (i) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately after such dividend or distribution and
(ii) the denominator of which shall be the total number of shares of Common
Stock outstanding immediately prior to such dividend or distribution.
(c) Notice of Adjustment. Upon any adjustment of the Warrant Price, then
and in each such case the Company shall give written notice thereof, by first
class mail, postage prepaid, addressed to the Warrant holder at the address of
such holder as shown on the books of the Company, which notice shall state the
Warrant Price resulting from such adjustment, setting forth in reasonable detail
the method of calculation and the facts upon which such calculation is based.
(d) Stock to Be Reserved. The Company will at all times reserve and keep
available out of its authorized Common Stock or its treasury shares, solely for
the purpose of issuance upon the exercise of this Warrant as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
exercise of this Warrant provided, however, that the Company has an insufficient
number of shares of authorized Common Stock available to reserve the requisite
number of shares issuable upon exercise of this warrant, the Company will
reserve an amount equal to the remaining number of authorized shares, allocated
pro-rata among Warrants 1-A and 2-A. In such case, the Company will use its best
efforts to seek shareholder approval to increase the Company's authorized Common
Stock and reserve the additional shares necessary for issuance upon exercise of
this Warrant.
(e) Definition of Common Stock. As used herein the term "Common Stock"
shall mean and include the 25,000,000 shares of Common Stock, par value $.01 per
share, as authorized on the date of this and any additional Common Stock, par
value $.01 hereinafter authorized.
Section 3. Notices of Record Dates.
In the event of:
(a) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution (other than cash dividends out of
earned surplus), or any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities or property, or to
receive any right to sell shares of stock of any class or any other right; or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other corporation or entity; or
(c) any voluntary or involuntary dissolution, liquidation or winding-up of
the Company,
then and in each such event the Company will give notice to the holder of this
Warrant specifying: (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right; and (ii) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least 10 days and not more than 90
days prior to the date therein specified, and such notice shall state that the
action in question or the record date is subject to (x) the effectiveness of a
registration statement under the Securities Act of 1933 and applicable state
securities laws, or (y) a favorable vote of stockholders, if either is required.
Section 4. No Stockholder Rights or Liabilities.
(a) Except as set forth in paragraph 4(b), this Warrant shall not entitle
the holder hereof to any voting rights or other rights as a stockholder of the
Company. No provision hereof, in the absence of affirmative action by the holder
hereof to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder hereof shall give rise to any liability of
such holder for the Warrant Price or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.
(b) At any time while this Warrant is outstanding, the Company shall,
prior to making any distribution of its property or assets to the holders of its
Common Stock as a dividend in liquidation or partial liquidation or by way of
return of capital or any dividend payable out of funds legally available for
dividends under the laws of the State of Delaware, give to the holder of this
Warrant, not less than 20 days prior written notice of any such distribution. If
such holder shall exercise this Warrant on or prior to the date of such
distribution set forth in such notice, such holder shall be entitled to receive,
upon such exercise: (i) the number of shares of Common Stock receivable pursuant
to such exercise; and (ii) without payment of any additional consideration, a
sum equal to the amount of such property or assets as would have been payable to
the holder hereof as an owner of the shares described in clause (i) of this
paragraph 4(b) had the holder hereof been the holder of record of such shares on
the record date for such distribution; and an appropriate provision with respect
to such payment to such holder as described in this paragraph 4(b) shall be made
a part of any such distribution.
Section 5. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant
is lost, stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may in its discretion reasonably impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
Section 6. Notices. Any notice to be given to either party under this
Warrant Certificate shall be in writing and shall be deemed to have been given
to the Company or the Holder hereof, as the case may be, when delivered in hand
or when sent by first class mail, postage prepaid, addressed, if to the Company,
at its principal office and, if to the Holder hereof, at its address as set
forth in the Company's books and records or at such other address as the Holder
hereof may have provided to the Company in writing.
Section 7. Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of Vermont, without giving effect to
such jurisdiction's principles of conflict of laws.
Section 8. Exclusive Jurisdiction. With respect to actions and proceedings
to enforce the provisions of, arising from, or relating to this Warrant or the
Warrant, the holder, by acceptance of this Warrant, consents to personal
jurisdiction in the state or federal courts of the State of Vermont and
irrevocably agrees that all such actions and proceedings shall be litigated
exclusively in such courts. Further, each of the parties hereto waives any
objection that it may have to the conduct of any action or proceeding in any
such court based on improper venue or forum non conveniens. Each of the parties
hereto waives personal service of any and all process upon it and agrees that
valid service of process may be made by mail or courier service directed to it
at the address set forth herein and that service so made shall be deemed to be
completed upon the earlier of actual receipt or ten (10) days after the same
shall have been posted.
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IN WITNESS WHEREOF, the duly authorized agent of eNote.com Inc. has
executed this Warrant as of the 11th day of September 2000.
ENOTE.COM INC.
By:_____________________________
Name:
Title:
[Corporate Seal]
Attest:
- -----------------------------------
Secretary
SUBSCRIPTION FORM TO BE EXECUTED
UPON EXERCISE OF THE WARRANT
Date:
----------------
To: eNote.com Inc.
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to subscribe for and purchase [__________] shares of
Common Stock covered by such Warrant, and herewith tenders $[____________] in
full payment of the purchase price for such shares as provided in the within
Warrant.
Name of Holder:
By: __________________________________
Address __________________________________
__________________________________
Exhibit 4.32
ENOTE.COM INC.
8% SECURED NOTE DUE OCTOBER 14, 2000
F-2 Williston, Vermont
$150,000 September 14, 2000
FOR VALUE RECEIVED, ENOTE.COM INC., a Delaware corporation (the
"Company"), hereby promises to pay to the order of FRIEDLANDER CAPITAL
MANAGEMENT CORP. (the "Payee") or its registered assigns, the principal sum of
ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000), with the interest from the date
hereof (computed daily on the basis of a 360-day year) on the balance of the
principal remaining unpaid from time to time, accruing at a rate equal to eight
percent (8%) per annum, compounded annually. Accrued interest and principal
shall be paid as follows:
(i) On October 14, 2000, (the "Maturity Date") the Company shall pay the
full amount of accrued interest and unpaid principal then
outstanding; and
(ii) Accrued interest shall be due and payable prior to the Maturity Date
on the satisfaction of this Note, as a result of prepayment.
This Note may be prepaid at any time or from time to time.
Principal and interest shall be payable in lawful money of the United
States of America, in immediately available funds, at the principal office of
the Payee or at such other place as the legal holder may designate from time to
time in writing to the Company.
Payment of the Note is secured by all inventory of the Corporation now
owned or hereafter acquired pursuant to a Security Agreement dated as of
September ___, 2000.
Section 1. Transfer and Exchange. The holder of this Note may, prior to
maturity thereof, surrender such Note at the principal office of the Company for
transfer or exchange. Within a reasonable time after notice to the Company from
such holder of its intention to make such exchange and without expense to such
holder, except for any transfer or similar tax which may be imposed on the
transfer or exchange, the Company shall issue in exchange therefore another Note
or Notes for the same aggregate principal amount as the unpaid principal amount
of the Note so surrendered, having the same maturity and rate of interest,
containing the same provisions and subject to the same terms and conditions as
the Note so surrendered. Each new Note shall be made payable to such person or
persons, or transferees, as the holder of such surrendered Note may designate,
and such transfer or exchange shall be made in such a manner that no gain or
loss of principal or interest shall result therefrom.
Section 2. New Note. Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of the Note, the
Company will issue a new Note, of like tenor and amount and dated the date to
which interest has been paid in lieu of such lost, stolen, destroyed or
mutilated Note and in such event the Payee agrees to indemnify and hold harmless
the Company in respect of any such lost, stolen, destroyed or mutilated Note.
Section 3. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Vermont, without giving effect to such
jurisdiction's principles of conflict of laws.
Section 4. Exclusive Jurisdiction. With respect to actions and proceedings
to enforce the provisions of, arising from, or relating to this Note, the
holder, by acceptance of this Note, consents to personal jurisdiction in the
state or federal courts of the State of Vermont and irrevocably agrees that all
such actions and proceedings shall be litigated exclusively in such courts.
Further, each of the parties hereto waives any objection that it may have to the
conduct of any action or proceeding in any such court based on improper venue or
forum non conveniens. Each of the parties hereto waives personal service of any
and all process upon it and agrees that valid service of process may be made by
mail or courier service directed to it at the address set forth herein and that
service so made shall be deemed to be completed upon the earlier of actual
receipt or ten (10) days after the same shall have been posted.
Section 5. Collection Expenses. No delay or omission on the part of the
holder of this Note in exercising any right hereunder shall operate as a waiver
of such right or of any other right of such holder nor shall any delay, omission
or waiver on any occasion be deemed a bar to or waiver of the same or any other
right on any future occasion. The undersigned and every endorser or guarantor of
this Note, regardless of the time, order or place of signing, waives
presentment, protest and notice of every kind and assets to any one or more
extensions or postponements of the time of payment or any other indulgences, to
any substitutions, exchanges or releases of collateral available to the holder,
if any, and to the additions or releases of any other parties or persons
primarily or secondarily liable. In addition to and not in limitation of the
foregoing, the Company further agrees, subject only to any limitation imposed by
applicable law, to pay all expenses, including reasonable attorneys' fees,
incurred by the holder of this Note in endeavoring to collect any amounts
payable hereunder which are not paid when due.
Section 6. Interest Rate After Default. Any amount not paid when due
hereunder, whether by acceleration or otherwise, shall thereafter bear interest
at an annual rate equal to the greater of (a) 14.5% or (b) the prime rate from
time to time in effect of Citibank, N.A., plus 3.5% on any overdue principal
amount and (to the extent permitted by applicable law) on any overdue interest;
provided however, that in no event shall this Note bear interest at a rate in
excess of that permitted by any applicable usury laws.
Section 7. Release of shareholders, officers and directors. This Note is
the obligation of the Company only, and no recourse shall be had for the payment
of any principal or interest hereon against any shareholder, officer or director
of the Company, either directly or through the Company, by virtue of any statute
for the enforcement of any assessment or otherwise. The holder or holders of
this Note, by the acceptance hereof, and as part of the consideration for this
Note, release all claims and waive all liabilities against the foregoing persons
in connection with this Note.
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IN WITNESS WHEREOF, the duly authorized agent of ENOTE.COM INC. has
executed this Note as of the 14th day of September 2000.
ENOTE.COM INC.
By:_____________________________
Name:
Title:
[Corporate Seal]
Attest:
By:_________________________
Secretary
Exhibit 4.33
ENOTE.COM INC.
8% SECURED NOTE DUE OCTOBER 14, 2000
F-3 Williston, Vermont
$150,000 September 28, 2000
FOR VALUE RECEIVED, ENOTE.COM INC., a Delaware corporation (the
"Company"), hereby promises to pay to the order of FRIEDLANDER CAPITAL
MANAGEMENT CORP. (the "Payee") or its registered assigns, the principal sum of
ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000), with the interest from the date
hereof (computed daily on the basis of a 360-day year) on the balance of the
principal remaining unpaid from time to time, accruing at a rate equal to eight
percent (8%) per annum, compounded annually. Accrued interest and principal
shall be paid as follows:
(i) On October 14, 2000, (the "Maturity Date") the Company shall pay the
full amount of accrued interest and unpaid principal then
outstanding; and
(ii) Accrued interest shall be due and payable prior to the Maturity Date
on the satisfaction of this Note, as a result of prepayment.
This Note may be prepaid at any time or from time to time.
Principal and interest shall be payable in lawful money of the United
States of America, in immediately available funds, at the principal office of
the Payee or at such other place as the legal holder may designate from time to
time in writing to the Company.
Payment of the Note is secured by all inventory of the Corporation now
owned or hereafter acquired pursuant to a Security Agreement dated as of
September 28, 2000.
Section 1. Transfer and Exchange. The holder of this Note may, prior to
maturity thereof, surrender such Note at the principal office of the Company for
transfer or exchange. Within a reasonable time after notice to the Company from
such holder of its intention to make such exchange and without expense to such
holder, except for any transfer or similar tax which may be imposed on the
transfer or exchange, the Company shall issue in exchange therefore another Note
or Notes for the same aggregate principal amount as the unpaid principal amount
of the Note so surrendered, having the same maturity and rate of interest,
containing the same provisions and subject to the same terms and conditions as
the Note so surrendered. Each new Note shall be made payable to such person or
persons, or transferees, as the holder of such surrendered Note may designate,
and such transfer or exchange shall be made in such a manner that no gain or
loss of principal or interest shall result therefrom.
Section 2. New Note. Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of the Note, the
Company will issue a new Note, of like tenor and amount and dated the date to
which interest has been paid in lieu of such lost, stolen, destroyed or
mutilated Note and in such event the Payee agrees to indemnify and hold harmless
the Company in respect of any such lost, stolen, destroyed or mutilated Note.
Section 3. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Vermont, without giving effect to such
jurisdiction's principles of conflict of laws.
Section 4. Exclusive Jurisdiction. With respect to actions and proceedings
to enforce the provisions of, arising from, or relating to this Note, the
holder, by acceptance of this Note, consents to personal jurisdiction in the
state or federal courts of the State of Vermont and irrevocably agrees that all
such actions and proceedings shall be litigated exclusively in such courts.
Further, each of the parties hereto waives any objection that it may have to the
conduct of any action or proceeding in any such court based on improper venue or
forum non conveniens. Each of the parties hereto waives personal service of any
and all process upon it and agrees that valid service of process may be made by
mail or courier service directed to it at the address set forth herein and that
service so made shall be deemed to be completed upon the earlier of actual
receipt or ten (10) days after the same shall have been posted.
Section 5. Collection Expenses. No delay or omission on the part of the
holder of this Note in exercising any right hereunder shall operate as a waiver
of such right or of any other right of such holder nor shall any delay, omission
or waiver on any occasion be deemed a bar to or waiver of the same or any other
right on any future occasion. The undersigned and every endorser or guarantor of
this Note, regardless of the time, order or place of signing, waives
presentment, protest and notice of every kind and assets to any one or more
extensions or postponements of the time of payment or any other indulgences, to
any substitutions, exchanges or releases of collateral available to the holder,
if any, and to the additions or releases of any other parties or persons
primarily or secondarily liable. In addition to and not in limitation of the
foregoing, the Company further agrees, subject only to any limitation imposed by
applicable law, to pay all expenses, including reasonable attorneys' fees,
incurred by the holder of this Note in endeavoring to collect any amounts
payable hereunder which are not paid when due.
Section 6. Interest Rate After Default. Any amount not paid when due
hereunder, whether by acceleration or otherwise, shall thereafter bear interest
at an annual rate equal to the greater of (a) 14.5% or (b) the prime rate from
time to time in effect of Citibank, N.A., plus 3.5% on any overdue principal
amount and (to the extent permitted by applicable law) on any overdue interest;
provided however, that in no event shall this Note bear interest at a rate in
excess of that permitted by any applicable usury laws.
Section 7. Release of shareholders, officers and directors. This Note is
the obligation of the Company only, and no recourse shall be had for the payment
of any principal or interest hereon against any shareholder, officer or director
of the Company, either directly or through the Company, by virtue of any statute
for the enforcement of any assessment or otherwise. The holder or holders of
this Note, by the acceptance hereof, and as part of the consideration for this
Note, release all claims and waive all liabilities against the foregoing persons
in connection with this Note.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the duly authorized agent of ENOTE.COM INC. has executed
this Note as of the 28th day of September 2000.
ENOTE.COM INC.
By:___________________________
Name:
Title:
[Corporate Seal]
Attest:
By:_________________________
Secretary
Exhibit 4.34
THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITY UNDER THE SECURITIES ACT OF 1933 UNLESS
PAYOR HAS RECEIVED THE WRITTEN OPINION OF COUNSEL SATISFACTORY TO PAYOR TO THE
EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER DOES NOT INVOLVE A TRANSACTION
REQUIRING REGISTRATION OF SUCH SECURITY UNDER THE SECURITIES ACT OF 1933.
B-4 $150,000
eNote.com Inc
185 Allen Brook Lane
Williston, Vermont 05495
October 12, 2000
8% Subordinated Secured Convertible Note
Due December 2, 2000
eNote.com Inc., a Delaware corporation, (the "Corporation"), for value received,
promises to pay FRIEDLANDER CAPITAL MANAGEMENT CORP. (the "Holder"), the sum of
ONE HUNDRED FIFTY THOUSAND DOLLARS $150,000 on December 2, 2000 (the "Maturity
Date"), together with interest accrued thereon at the rate of eight percent (8%)
per annum, computed from October 12, 2000 (the "Issue Date"). Payment of
principal and interest shall be made in lawful money of the United States of
America on the Maturity Date unless this Note is earlier converted as provided
for herein. This Note, is part of a series of 8% Subordinated Secured
Convertible Notes due December 2, 2000 being issued by the Corporation (each a
"Note" and together the "Notes").
This Note is issued pursuant to a Subscription Agreement dated as of the Issue
Date (the "Subscription Agreement") by and between the Corporation and the
Holder. Payment of the Notes is secured by all tangible and intangible assets of
the Corporation pursuant to a Security Agreement dated as of October 12, 2000,
as may be amended from time to time.
1. Conversion.
(a) The holder of this Note may at time prior to the maturity
hereof, convert the principal amount hereof and interest accrued thereon into
shares of the Corporation's Common Stock. The conversion ratio shall be $1.50 of
principal converted per share of Common Stock (the "Conversion Rate"). To
convert this Note, the holder hereof must surrender the same at the office of
the Corporation, together with a written instrument of transfer in a form
satisfactory to the Corporation, properly completed and executed and with a
written notice of conversion. All rights of the holder of this Note shall, to
the extent of the principal and interest thereof converted, cease as of the date
of such conversion.
(b) In case the Corporation shall at any time subdivide its
outstanding shares of Common Stock into a greater number of shares, the
Conversion Rate in effect immediately prior to such subdivision shall be
proportionately reduced, i.e., the holder shall be entitled to purchase after
such subdivision, for the same consideration as applicable prior to such
subdivision, the same percentage of outstanding Common Stock that such holder
was entitled to purchase prior to such subdivision, and conversely, in case the
outstanding shares of Common Stock of the Corporation shall be combined into a
smaller number of shares, the Conversion Price in effect immediately prior to
such combination shall be proportionately increased. In case the Corporation
shall declare a dividend or make any other distribution upon any stock of the
Corporation payable in Common Stock, options or convertible securities
exercisable or convertible into shares of Common Stock, any Common Stock,
options or convertible securities, as the case may be, issuable in payment of
such dividend or distribution shall be deemed to have been issued in a
subdivision of outstanding shares as provided in the foregoing sentence.
(c) The Corporation will at all times reserve and keep available out
of its authorized Common Stock or its treasury shares, solely for the purpose of
issuance upon conversion of the Note as herein provided, such number of shares
of Common Stock as shall then be issuable upon conversion of this Note. The
Corporation covenants that all shares of Common Stock which shall be so issued
shall be duly and validly issued and fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof, and, without
limiting the generality of the foregoing, the Corporation covenants that it will
from time to time take all such action as may be requisite to assure that the
par value per share of the Common Stock is at all times equal to or less than
the effective Conversion Rate. The Corporation will take all such action as may
be necessary to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any requirements of
any national securities exchange upon which the Common Stock of the Corporation
may be listed. The Corporation will not take any action which results in any
adjustment of the Conversion Price if the total number of shares of Common Stock
issued and issuable after such action upon conversion of this Note would exceed
the total number of shares of Common Stock then authorized by the Corporation's
Certificate of Incorporation. The Corporation has not granted and will not grant
any right of first refusal with respect to shares issuable upon conversion of
this Note, and there are no preemptive rights associated with such shares.
2. Fractional shares. In lieu of issuing any fraction of a share upon the
conversion of this Note, the Corporation shall pay to the holder hereof for any
fraction of a share otherwise issuable upon the conversion, cash equal to the
same fraction of $1.50
3. Prepayment. This Note may be prepaid without penalty. In the case of each
prepayment of less than all of the outstanding Notes, the principal amount to be
prepaid shall be allocated among the respective Notes and the holders thereof so
that the principal amount to be prepaid to each holder shall bear the same ratio
to the aggregate principal amount then to be prepaid as the principal amount of
Notes then held by such holder bears to the aggregate principal amount of Notes
then outstanding. Five (5) business days prior to any prepayment hereunder the
Corporation shall provide written notice to each Note holder indicating the date
and amount of such prepayment. The Note holder shall have the right to convert
the principal amount of any such prepayment prior to date of prepayment.
4. Subordination.
(a) The Corporation, for itself, its successors and assigns,
covenants and agrees, and each holder of this Note by his acceptance thereof
likewise covenants and agrees, that the payment of the principal of and interest
on each and all of this Note shall be subordinate and subject, to the extent and
in the manner hereinafter set forth, in right of payment to the prior payment in
full of all Senior Indebtedness.
(b) Upon any distribution of assets of the Corporation upon any
dissolution, winding up, liquidation, or reorganization of the Corporation,
whether in bankruptcy, insolvency, or receivership proceedings or upon an
assignment for the benefit of creditors of any other dissolution, winding up,
liquidation, or reorganization of the Corporation:
(i) All Senior Indebtedness shall first be paid in full, or
provision made for such payment in full of the principal thereof, and premium,
if any, and interest thereon, before any payment is made on account of the
principal of, or interest on, the Notes;
(ii) Any payment or distribution of assets of the Corporation
of any kind or character, whether in cash, property, or securities (other than
stock of the Corporation as reorganized or readjusted or securities of the
Corporation or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in this Section with respect to the Notes, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), to which the
holder of this Note would be entitled except for the provisions of this Section
shall be paid by the liquidating trustee or agent or other person making such
payment of distribution, whether a trustee in bankruptcy, receiver, or
liquidating trustee or other trustee or agent, directly to the holders of Senior
Indebtedness or their representative or representatives or the trustee or
trustees under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the principal of, and premium, if any,
and interest on, the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness; and
(iii) In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Corporation of any kind or character,
whether in cash, property, or securities (other than stock of the Corporation as
reorganized or readjusted or securities of the Corporation or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in this Section with
respect to the Note, to the payment of all Senior Indebtedness at the time
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), shall be received by the holder of this Note
before all Senior Indebtedness is paid in full, or provision made for its
payment, such payment or distribution shall be paid over to the holders of
Senior Indebtedness remaining unpaid or unprovided for or their representative
or representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may have been issued,
as provided in the foregoing subparagraph (2), for application to the payment of
such Senior Indebtedness until all such Senior Indebtedness shall have been paid
in full after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness.
(c) Subject to the payment in full of all Senior Indebtedness, the
holder of this Note shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property, or
securities of the Corporation applicable to the Senior Indebtedness until the
principal of and interest on this Note shall be paid in full, and no such
payments or distributions in respect of this Note of cash, property, or
securities distributable to the Senior Indebtedness under the provisions here
shall, as between the Corporation, its creditors other than the holders of
Senior Indebtedness, and the holder of this Notes, be deemed to be a payment by
the Corporation to or on account of this Note. It is understood that the
provisions of this Section are and are intended solely for the purpose of
defining the relative rights of the holder of this Note, on the one hand, and
the holders of the Senior Indebtedness on the other hand. Nothing contained in
this Section is intended to or shall impair, as between the Corporation, its
creditors other than the holders of Senior Indebtedness, and the holder of this
Note, the absolute and unconditional obligation of the Corporation to pay the
holder of this Note the principal of and interest on this Note as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the holder of this Note and creditors
of the Corporation other than the holders of the Senior Indebtedness; nor shall
anything herein or therein prevent the holder of this Note from exercising all
remedies otherwise permitted by applicable law upon default under this Note,
subject to the rights, if any, under this Section of the holders of Senior
Indebtedness in respect of cash, property or securities of the Corporation
received upon the exercise of any such remedy.
(d) Upon any distribution of assets of the Corporation referred to
in this Section, the holder of this Note shall be entitled to rely upon a
certificate of the liquidating trustee or agent or other person making any
distribution to such holder for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Corporation, the amount thereof or payable thereon,
and all other facts pertinent thereto or to this Section.
(e) If there shall have occurred a default in the payment of the
principal of (or premium, if any) or interest on any Senior Indebtedness, then,
unless and until such default shall have been cured or waived, no payment of
principal or interest shall be made by the Corporation on this Note, and no
holder of this Note shall be entitled to receive any such payment. Nothing
contained in this Section shall, however (1) affect the obligation of
Corporation to make or prevent the Corporation from making, at any time, except
during the pendency of any dissolution, winding up, liquidation, or
reorganization proceedings or except as provided in the first sentence of this
subsection, payments of principal of or interest on this Note, or (2) prevent
the application by any paying agent of any moneys deposited with it by the
Corporation to the payment of or on account of the principal of, or interest on,
this Note, if, at the time of such deposit, the paying agent did not have
written notice of any event prohibiting the making of such payment or deposit by
the Corporation; or (3) be construed as preventing the occurrence of any Event
of Default hereunder.
(f) No right of any present or future holder of any Senior
Indebtedness of the Corporation to enforce subordination as herein provided
shall at any time or in any way be prejudiced or impaired by any act or failure
to act on the part of the Corporation or by any act or failure to act, in good
faith, by any such holder, or by an noncompliance by the Corporation with the
terms, provisions, and covenants of this Note, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
(g) Any renewal or extension of the time of payment of any Senior
Indebtedness or the exercise by the holders of Senior Indebtedness of any of
their rights under the Senior Indebtedness, including without limitation the
waiver of default thereunder or the release of any security therefor, may be
made or done all without notice to or assent from the holder of this Note. No
compromise, alteration, amendment, modification, extension, renewal, or other
change of, or waiver, consent, or other action in respect of, any liability or
obligation under or respect of, or of any of the terms, covenants, or conditions
or any indenture or other instrument under which any Senior Indebtedness is
outstanding or of such Senior Indebtedness, and no release of property securing
any Senior Indebtedness, whether or not such release is in accordance with the
provisions of any applicable document, shall in any way alter or affect any of
the provisions of this Section.
(h) "Senior Indebtedness" for purposes of this Section shall mean
all indebtedness (principal and interest) now existing or hereafter incurred of
the Corporation for money borrowed from banks or other financial institutions:
(i) which is secured by the assets of the Corporation; and (ii) is not by its
express terms subordinate and junior to or on parity with this Note.
5. Default. If any of the following events occur ("Event of Default"), the
entire unpaid principal amount of, and accrued and unpaid interest on, this Note
shall immediately be due and payable, and the Corporation shall pay all costs of
collection including, but not limited to, reasonable attorneys' fees and
expenses incurred by the owner(s) or its assigns on account of such collection,
whether or not suit is brought:
(a) The Corporation fails to pay the principal of this Note at its
maturity;
(b) The Corporation commences any voluntary proceeding under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
receivership, dissolution, or liquidation law or statute, of any jurisdiction,
whether now or subsequently in effect; or the Corporation is adjudicated as
bankrupt by a court of competent jurisdiction; or the Corporation petitions or
applies for, acquiesces in, or consents to, the appointment of any receiver or
trustee of the Corporation or for all or substantially all of its property or
assets; or the Corporation makes an assignment for the benefit of its creditors;
or the Corporation admits in writing its inability to pay its debts as they
mature; or
(c) There is commenced against the Corporation any proceeding
relating to the Corporation under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, receivership, dissolution, or liquidation law
or statute, of any jurisdiction, whether now or subsequently in effect, and the
proceeding remains undismissed for a period of 60 days or the Corporation by any
act indicates its consent to, approval of, or acquiescence in the proceeding; or
a receiver or trustee is appointed for the Corporation or for all or
substantially all of its property or assets, and the receivership or trusteeship
remains undischarged for a period of 60 days; or a warrant of attachment,
execution or similar process is issued against any substantial part of the
property or assets of the Corporation, and the warrant or similar process is not
dismissed or bonded within 60 days after the levy.
6. Registered owner. The Corporation shall treat the person or persons whose
name or names appear on this Note as the absolute owner or owners hereof for the
purpose of receiving payment of, or on account of, the principal and interest
due on this Note and for all other purposes, unless and until written notice
satisfactory to the Corporation is provided by the registered owner of
assignment hereof.
7. Assignment. The Corporation may assign its rights hereunder to any person or
entity. No assignment of rights or obligations shall be effective until delivery
of written notice of such assignment is made by the assigning party to the other
party hereto.
8. Release of shareholders, officers and directors. This Note is the obligation
of the Corporation only, and no recourse shall be had for the payment of any
principal or interest hereon against any shareholder, officer or director of the
Corporation, either directly or through the Corporation, by virtue of any
statute for the enforcement of any assessment or otherwise. The holder or
holders of this Note, by the acceptance hereof, and as part of the consideration
for this Note, release all claims and waive all liabilities against the
foregoing persons in connection with this Note.
9. Amendments. With the consent of the holders of a majority of the principal
amount of outstanding Notes, evidenced by a written instrument or instruments,
Payor may amend the Notes by executing and delivering to the holders an
amendment thereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Notes or of modifying in any
manner the rights of the holders; provided, however, that no such amendment
shall, without the consent of the holder of each outstanding Note affected
thereby:
(a) Change the stated maturity of the principal of any Note, or
reduce the principal amount thereof or the interest thereon, or the currency in
which any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the stated
maturity thereof (or, in the case of prepayment, or after the prepayment date);
(b) Reduce the percentage in principal amount of the outstanding
Notes, the consent of whose holders is required for any amendment, or the
consent of whose holders is required for any waiver of compliance with the
provisions hereof; or
(c) Modify any of the provisions of this Section, except to increase
any such percentage or to provide that other provisions of the Notes cannot be
modified or waived without the consent of the holder affected thereby.
Upon the execution and delivery of any amendment in accordance with this
Section, the Notes shall be modified in accordance therewith, and every holder
of Notes theretofore or thereafter executed and delivered shall be bound
thereby.
10. Governing Law. The Notes and all terms and conditions herein shall be
governed by and construed and in accordance with the laws of the State of
Vermont excluding the state's conflict of law provisions.
11. Exclusive Jurisdiction. With respect to actions and proceedings to enforce
the provisions of, arising from, or relating to this Note, the holder, by
acceptance of this Note, consents to personal jurisdiction in the state or
federal courts of the State of Vermont and irrevocably agrees that all such
actions and proceedings shall be litigated exclusively in such courts. Further,
each of the parties hereto waives any objection that it may have to the conduct
of any action or proceeding in any such court based on improper venue or forum
non conveniens. Each of the parties hereto waives personal service of any and
all process upon it and agrees that valid service of process may be made by mail
or courier service directed to it at the address set forth herein and that
service so made shall be deemed to be completed upon the earlier of actual
receipt or ten (10) days after the same shall have been posted.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Corporation has signed this Note this 12th day of
October 2000.
eNote.com Inc.
By:___________________
Name:
Title:
REGISTERED OWNER:
Friedlander Capital Management Corp.
By:___________________________
Name:
Title:
Exhibit 4.35
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR
ANY APPLICABLE STATE SECURITIES LAW, AND MAY NOT BE TRANSFERRED EXCEPT (i)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (ii) UPON FIRST
FURNISHING TO THE COMPANY AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH TRANSFER IS NOT IN VIOLATION OF THE REGISTRATION REQUIREMENTS OF THE ACT OR
ANY APPLICABLE STATE SECURITIES LAW.
To Subscribe for and Purchase Common Stock of
eNote.com Inc.
VOID AFTER OCTOBER 12, 2002
Warrant No. 4-A As of October 12, 2000
THIS CERTIFIES that, for value received, FRIEDLANDER CAPITAL MANGAGEMENT
CORP., or its registered assigns, is entitled, subject to the terms of Section 1
hereof, to subscribe for and purchase from eNote.com Inc., a Delaware
corporation (hereinafter called the "Company"), at the price of $1.50 per share
(such price, as from time to time to be adjusted as hereinafter provided, being
hereinafter called the "Warrant Price"), at any time on or prior to October 12,
2002 up to 2,000,000 fully paid, nonassessable shares of Common Stock, par value
$.01 per share, of the Company ("Common Stock"), subject, however, to the
provisions and upon the terms and conditions hereinafter set forth.
Section 1. Exercise of Warrant. This Warrant may be exercised by the
holder hereof, in whole or in part (but not as to a fractional share of Common
Stock), by the completion of the subscription form attached hereto and by the
surrender of this Warrant (properly endorsed) at the office of the Company in
Williston, Vermont (or at such other agency or office of the Company in the
United States as it may designate by notice in writing to the holder hereof at
the address of the holder hereof appearing on the books of the Company), and by
payment to the Company of the Warrant Price, in cash or by certified or official
bank check, for each share being purchased. In the event of any exercise of the
rights represented by this Warrant, a certificate or certificates for the shares
of Common Stock so purchased, registered in the name of the holder hereof, shall
be delivered to the holder hereof within a reasonable time, not exceeding
fifteen (15) business days, after the rights represented by this Warrant shall
have been so exercised; and, unless this Warrant has expired or been exercised
in full, a new Warrant representing the number of shares (except a remaining
fractional share), if any, with respect to which this Warrant shall not then
have been exercised shall also be issued to the holder hereof within such time.
With respect to any such exercise, the holder hereof shall for all purposes be
deemed to have become the holder of record of the number of shares of Common
Stock evidenced by such certificate or certificates from the date on which this
Warrant was surrendered and payment of the Warrant Price was made irrespective
of the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date on which the stock transfer books of the Company
are closed, such person shall be deemed to have become the holder of such shares
at the close of business on the next succeeding date on which the stock transfer
books are open. No fractional shares shall be issued upon exercise of this
Warrant. If any fractional interest in a share of Common Stock would, except for
the provisions of this Section 1, be delivered upon any such exercise, the
Company, in lieu of delivering the fractional share thereof, shall pay to the
holder hereof an amount in cash equal to the current market price of such
fractional interest as determined in good faith by the Board of Directors of the
Company.
Section 2. Adjustment of Number of Shares.
(a) Reclassification, Consolidation or Merger. In the event of any
reclassification or change of outstanding securities of the Common Stock, or in
the event of any consolidation or merger of the Company with or into another
corporation or entity, other than a consolidation or merger with another
corporation or entity in which the Company is the continuing corporation and
which does not result in any reclassification, conversion or change of
outstanding Common Stock, or in the event of any sale of all or substantially
all of the assets of the Company, the Company, or such successor or purchasing
corporation or entity, as the case may be, shall execute a new warrant
certificate (the "New Warrant Certificate"), providing that the Holder of this
Warrant shall have the right to exercise such new warrants and procure upon such
exercise, in lieu of each share of Common Stock issuable upon exercise of the
Warrants, the kind and amount of shares of stock, other securities, money and
property receivable upon such reclassification, conversion, change,
consolidation or merger by a holder of one share of Common Stock.
(b) Subdivisions, Combinations and Stock Dividends. If at any time while
this Warrant is outstanding and unexpired the Company shall subdivide or combine
its Common Stock, or shall pay a dividend with respect to Common Stock payable
in, or make any other distribution with respect to its Common Stock consisting
of, shares of Common Stock, then the number of Warrant Shares for which this
Warrant is exercisable shall be adjusted, from and after the date of
determination of stockholders entitled to receive such dividend or distribution,
to that number determined by multiplying the number of Warrant Shares for which
this Warrant is exercisable immediately prior to such date of determination by a
fraction (i) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately after such dividend or distribution and
(ii) the denominator of which shall be the total number of shares of Common
Stock outstanding immediately prior to such dividend or distribution.
(c) Notice of Adjustment. Upon any adjustment of the Warrant Price, then
and in each such case the Company shall give written notice thereof, by first
class mail, postage prepaid, addressed to the Warrant holder at the address of
such holder as shown on the books of the Company, which notice shall state the
Warrant Price resulting from such adjustment, setting forth in reasonable detail
the method of calculation and the facts upon which such calculation is based.
(d) Stock to Be Reserved. The Company will at all times reserve and keep
available out of its authorized Common Stock or its treasury shares, solely for
the purpose of issuance upon the exercise of this Warrant as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
exercise of this Warrant provided, however, that the Company has an insufficient
number of shares of authorized Common Stock available to reserve the requisite
number of shares issuable upon exercise of this warrant, the Company will
reserve an amount equal to the remaining number of authorized shares, allocated
pro-rata among Warrants 3-A and 4-A. In such case, the Company will use its best
efforts to seek shareholder approval to increase the Company's authorized Common
Stock and reserve the additional shares necessary for issuance upon exercise of
this Warrant.
(e) Definition of Common Stock. As used herein the term "Common Stock"
shall mean and include the 25,000,000 shares of Common Stock, par value $.01 per
share, as authorized on the date of this and any additional Common Stock, par
value $.01 hereinafter authorized.
Section 3. Notices of Record Dates.
In the event of:
(a) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution (other than cash dividends out of
earned surplus), or any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities or property, or to
receive any right to sell shares of stock of any class or any other right; or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other corporation or entity; or
(c) any voluntary or involuntary dissolution, liquidation or winding-up of
the Company,
then and in each such event the Company will give notice to the holder of this
Warrant specifying: (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right; and (ii) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least 10 days and not more than 90
days prior to the date therein specified, and such notice shall state that the
action in question or the record date is subject to (x) the effectiveness of a
registration statement under the Securities Act of 1933 and applicable state
securities laws, or (y) a favorable vote of stockholders, if either is required.
Section 4. No Stockholder Rights or Liabilities.
(a) Except as set forth in paragraph 4(b), this Warrant shall not entitle
the holder hereof to any voting rights or other rights as a stockholder of the
Company. No provision hereof, in the absence of affirmative action by the holder
hereof to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder hereof shall give rise to any liability of
such holder for the Warrant Price or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.
(b) At any time while this Warrant is outstanding, the Company shall,
prior to making any distribution of its property or assets to the holders of its
Common Stock as a dividend in liquidation or partial liquidation or by way of
return of capital or any dividend payable out of funds legally available for
dividends under the laws of the State of Delaware, give to the holder of this
Warrant, not less than 20 days prior written notice of any such distribution. If
such holder shall exercise this Warrant on or prior to the date of such
distribution set forth in such notice, such holder shall be entitled to receive,
upon such exercise: (i) the number of shares of Common Stock receivable pursuant
to such exercise; and (ii) without payment of any additional consideration, a
sum equal to the amount of such property or assets as would have been payable to
the holder hereof as an owner of the shares described in clause (i) of this
paragraph 4(b) had the holder hereof been the holder of record of such shares on
the record date for such distribution; and an appropriate provision with respect
to such payment to such holder as described in this paragraph 4(b) shall be made
a part of any such distribution.
Section 5. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant
is lost, stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may in its discretion reasonably impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
Section 6. Notices. Any notice to be given to either party under this
Warrant Certificate shall be in writing and shall be deemed to have been given
to the Company or the Holder hereof, as the case may be, when delivered in hand
or when sent by first class mail, postage prepaid, addressed, if to the Company,
at its principal office and, if to the Holder hereof, at its address as set
forth in the Company's books and records or at such other address as the Holder
hereof may have provided to the Company in writing.
Section 7. Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of Vermont, without giving effect to
such jurisdiction's principles of conflict of laws.
Section 8. Exclusive Jurisdiction. With respect to actions and proceedings
to enforce the provisions of, arising from, or relating to this Warrant or the
Warrant, the holder, by acceptance of this Warrant, consents to personal
jurisdiction in the state or federal courts of the State of Vermont and
irrevocably agrees that all such actions and proceedings shall be litigated
exclusively in such courts. Further, each of the parties hereto waives any
objection that it may have to the conduct of any action or proceeding in any
such court based on improper venue or forum non conveniens. Each of the parties
hereto waives personal service of any and all process upon it and agrees that
valid service of process may be made by mail or courier service directed to it
at the address set forth herein and that service so made shall be deemed to be
completed upon the earlier of actual receipt or ten (10) days after the same
shall have been posted.
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IN WITNESS WHEREOF, the duly authorized agent of eNote.com Inc. has
executed this Warrant as of the 12th day of October 2000.
ENOTE.COM INC.
By:___________________________
Name:
Title:
[Corporate Seal]
Attest:
- -----------------------------------
Secretary
SUBSCRIPTION FORM TO BE EXECUTED
UPON EXERCISE OF THE WARRANT
Date:
----------------
To: eNote.com Inc.
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to subscribe for and purchase [__________] shares of
Common Stock covered by such Warrant, and herewith tenders $[____________] in
full payment of the purchase price for such shares as provided in the within
Warrant.
Name of Holder:
By: __________________________________
Address __________________________________
__________________________________
Exhibit 4.36
THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITY UNDER THE SECURITIES ACT OF 1933 UNLESS
PAYOR HAS RECEIVED THE WRITTEN OPINION OF COUNSEL SATISFACTORY TO PAYOR TO THE
EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER DOES NOT INVOLVE A TRANSACTION
REQUIRING REGISTRATION OF SUCH SECURITY UNDER THE SECURITIES ACT OF 1933.
B-5 $150,000
eNote.com Inc
185 Allen Brook Lane
Williston, Vermont 05495
October 26, 2000
8% Subordinated Secured Convertible Note
Due December 2, 2000
eNote.com Inc., a Delaware corporation, (the "Corporation"), for value received,
promises to pay FRIEDLANDER CAPITAL MANAGEMENT CORP. (the "Holder"), the sum of
ONE HUNDRED FIFTY THOUSAND DOLLARS $150,000 on December 2, 2000 (the "Maturity
Date"), together with interest accrued thereon at the rate of eight percent (8%)
per annum, computed from October 26, 2000 (the "Issue Date"). Payment of
principal and interest shall be made in lawful money of the United States of
America on the Maturity Date unless this Note is earlier converted as provided
for herein. This Note, is part of a series of 8% Subordinated Secured
Convertible Notes due December 2, 2000 being issued by the Corporation (each a
"Note" and together the "Notes").
This Note is issued pursuant to a Subscription Agreement dated as of the Issue
Date (the "Subscription Agreement") by and between the Corporation and the
Holder. Payment of the Notes is secured by all tangible and intangible assets of
the Corporation pursuant to a Security Agreement dated as of October 26, 2000,
as may be amended from time to time.
1. Conversion.
(a) The holder of this Note may at time prior to the maturity
hereof, convert the principal amount hereof and interest accrued thereon into
shares of the Corporation's Common Stock. The conversion ratio shall be $1.00 of
principal converted per share of Common Stock (the "Conversion Rate"). To
convert this Note, the holder hereof must surrender the same at the office of
the Corporation, together with a written instrument of transfer in a form
satisfactory to the Corporation, properly completed and executed and with a
written notice of conversion. All rights of the holder of this Note shall, to
the extent of the principal and interest thereof converted, cease as of the date
of such conversion.
(b) In case the Corporation shall at any time subdivide its
outstanding shares of Common Stock into a greater number of shares, the
Conversion Rate in effect immediately prior to such subdivision shall be
proportionately reduced, i.e., the holder shall be entitled to purchase after
such subdivision, for the same consideration as applicable prior to such
subdivision, the same percentage of outstanding Common Stock that such holder
was entitled to purchase prior to such subdivision, and conversely, in case the
outstanding shares of Common Stock of the Corporation shall be combined into a
smaller number of shares, the Conversion Price in effect immediately prior to
such combination shall be proportionately increased. In case the Corporation
shall declare a dividend or make any other distribution upon any stock of the
Corporation payable in Common Stock, options or convertible securities
exercisable or convertible into shares of Common Stock, any Common Stock,
options or convertible securities, as the case may be, issuable in payment of
such dividend or distribution shall be deemed to have been issued in a
subdivision of outstanding shares as provided in the foregoing sentence.
(c) The Corporation will at all times reserve and keep available out
of its authorized Common Stock or its treasury shares, solely for the purpose of
issuance upon conversion of the Note as herein provided, such number of shares
of Common Stock as shall then be issuable upon conversion of this Note. The
Corporation covenants that all shares of Common Stock which shall be so issued
shall be duly and validly issued and fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof, and, without
limiting the generality of the foregoing, the Corporation covenants that it will
from time to time take all such action as may be requisite to assure that the
par value per share of the Common Stock is at all times equal to or less than
the effective Conversion Rate. The Corporation will take all such action as may
be necessary to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any requirements of
any national securities exchange upon which the Common Stock of the Corporation
may be listed. The Corporation will not take any action which results in any
adjustment of the Conversion Price if the total number of shares of Common Stock
issued and issuable after such action upon conversion of this Note would exceed
the total number of shares of Common Stock then authorized by the Corporation's
Certificate of Incorporation. The Corporation has not granted and will not grant
any right of first refusal with respect to shares issuable upon conversion of
this Note, and there are no preemptive rights associated with such shares.
2. Fractional shares. In lieu of issuing any fraction of a share upon the
conversion of this Note, the Corporation shall pay to the holder hereof for any
fraction of a share otherwise issuable upon the conversion, cash equal to the
same fraction of $1.00
3. Prepayment. This Note may be prepaid without penalty. In the case of each
prepayment of less than all of the outstanding Notes, the principal amount to be
prepaid shall be allocated among the respective Notes and the holders thereof so
that the principal amount to be prepaid to each holder shall bear the same ratio
to the aggregate principal amount then to be prepaid as the principal amount of
Notes then held by such holder bears to the aggregate principal amount of Notes
then outstanding. Five (5) business days prior to any prepayment hereunder the
Corporation shall provide written notice to each Note holder indicating the date
and amount of such prepayment. The Note holder shall have the right to convert
the principal amount of any such prepayment prior to date of prepayment.
4. Subordination.
(a) The Corporation, for itself, its successors and assigns,
covenants and agrees, and each holder of this Note by his acceptance thereof
likewise covenants and agrees, that the payment of the principal of and interest
on each and all of this Note shall be subordinate and subject, to the extent and
in the manner hereinafter set forth, in right of payment to the prior payment in
full of all Senior Indebtedness.
(b) Upon any distribution of assets of the Corporation upon any
dissolution, winding up, liquidation, or reorganization of the Corporation,
whether in bankruptcy, insolvency, or receivership proceedings or upon an
assignment for the benefit of creditors of any other dissolution, winding up,
liquidation, or reorganization of the Corporation:
(i) All Senior Indebtedness shall first be paid in full, or
provision made for such payment in full of the principal thereof, and premium,
if any, and interest thereon, before any payment is made on account of the
principal of, or interest on, the Notes;
(ii) Any payment or distribution of assets of the Corporation
of any kind or character, whether in cash, property, or securities (other than
stock of the Corporation as reorganized or readjusted or securities of the
Corporation or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in this Section with respect to the Notes, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), to which the
holder of this Note would be entitled except for the provisions of this Section
shall be paid by the liquidating trustee or agent or other person making such
payment of distribution, whether a trustee in bankruptcy, receiver, or
liquidating trustee or other trustee or agent, directly to the holders of Senior
Indebtedness or their representative or representatives or the trustee or
trustees under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the principal of, and premium, if any,
and interest on, the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness; and
(iii) In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Corporation of any kind or character,
whether in cash, property, or securities (other than stock of the Corporation as
reorganized or readjusted or securities of the Corporation or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in this Section with
respect to the Note, to the payment of all Senior Indebtedness at the time
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), shall be received by the holder of this Note
before all Senior Indebtedness is paid in full, or provision made for its
payment, such payment or distribution shall be paid over to the holders of
Senior Indebtedness remaining unpaid or unprovided for or their representative
or representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may have been issued,
as provided in the foregoing subparagraph (2), for application to the payment of
such Senior Indebtedness until all such Senior Indebtedness shall have been paid
in full after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness.
(c) Subject to the payment in full of all Senior Indebtedness, the
holder of this Note shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property, or
securities of the Corporation applicable to the Senior Indebtedness until the
principal of and interest on this Note shall be paid in full, and no such
payments or distributions in respect of this Note of cash, property, or
securities distributable to the Senior Indebtedness under the provisions here
shall, as between the Corporation, its creditors other than the holders of
Senior Indebtedness, and the holder of this Notes, be deemed to be a payment by
the Corporation to or on account of this Note. It is understood that the
provisions of this Section are and are intended solely for the purpose of
defining the relative rights of the holder of this Note, on the one hand, and
the holders of the Senior Indebtedness on the other hand. Nothing contained in
this Section is intended to or shall impair, as between the Corporation, its
creditors other than the holders of Senior Indebtedness, and the holder of this
Note, the absolute and unconditional obligation of the Corporation to pay the
holder of this Note the principal of and interest on this Note as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the holder of this Note and creditors
of the Corporation other than the holders of the Senior Indebtedness; nor shall
anything herein or therein prevent the holder of this Note from exercising all
remedies otherwise permitted by applicable law upon default under this Note,
subject to the rights, if any, under this Section of the holders of Senior
Indebtedness in respect of cash, property or securities of the Corporation
received upon the exercise of any such remedy.
(d) Upon any distribution of assets of the Corporation referred to
in this Section, the holder of this Note shall be entitled to rely upon a
certificate of the liquidating trustee or agent or other person making any
distribution to such holder for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Corporation, the amount thereof or payable thereon,
and all other facts pertinent thereto or to this Section.
(e) If there shall have occurred a default in the payment of the
principal of (or premium, if any) or interest on any Senior Indebtedness, then,
unless and until such default shall have been cured or waived, no payment of
principal or interest shall be made by the Corporation on this Note, and no
holder of this Note shall be entitled to receive any such payment. Nothing
contained in this Section shall, however (1) affect the obligation of
Corporation to make or prevent the Corporation from making, at any time, except
during the pendency of any dissolution, winding up, liquidation, or
reorganization proceedings or except as provided in the first sentence of this
subsection, payments of principal of or interest on this Note, or (2) prevent
the application by any paying agent of any moneys deposited with it by the
Corporation to the payment of or on account of the principal of, or interest on,
this Note, if, at the time of such deposit, the paying agent did not have
written notice of any event prohibiting the making of such payment or deposit by
the Corporation; or (3) be construed as preventing the occurrence of any Event
of Default hereunder.
(f) No right of any present or future holder of any Senior
Indebtedness of the Corporation to enforce subordination as herein provided
shall at any time or in any way be prejudiced or impaired by any act or failure
to act on the part of the Corporation or by any act or failure to act, in good
faith, by any such holder, or by an noncompliance by the Corporation with the
terms, provisions, and covenants of this Note, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
(g) Any renewal or extension of the time of payment of any Senior
Indebtedness or the exercise by the holders of Senior Indebtedness of any of
their rights under the Senior Indebtedness, including without limitation the
waiver of default thereunder or the release of any security therefor, may be
made or done all without notice to or assent from the holder of this Note. No
compromise, alteration, amendment, modification, extension, renewal, or other
change of, or waiver, consent, or other action in respect of, any liability or
obligation under or respect of, or of any of the terms, covenants, or conditions
or any indenture or other instrument under which any Senior Indebtedness is
outstanding or of such Senior Indebtedness, and no release of property securing
any Senior Indebtedness, whether or not such release is in accordance with the
provisions of any applicable document, shall in any way alter or affect any of
the provisions of this Section.
(h) "Senior Indebtedness" for purposes of this Section shall mean
all indebtedness (principal and interest) now existing or hereafter incurred of
the Corporation for money borrowed from banks or other financial institutions:
(i) which is secured by the assets of the Corporation; and (ii) is not by its
express terms subordinate and junior to or on parity with this Note.
5. Default. If any of the following events occur ("Event of Default"), the
entire unpaid principal amount of, and accrued and unpaid interest on, this Note
shall immediately be due and payable, and the Corporation shall pay all costs of
collection including, but not limited to, reasonable attorneys' fees and
expenses incurred by the owner(s) or its assigns on account of such collection,
whether or not suit is brought:
(a) The Corporation fails to pay the principal of this Note at its
maturity;
(b) The Corporation commences any voluntary proceeding under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
receivership, dissolution, or liquidation law or statute, of any jurisdiction,
whether now or subsequently in effect; or the Corporation is adjudicated as
bankrupt by a court of competent jurisdiction; or the Corporation petitions or
applies for, acquiesces in, or consents to, the appointment of any receiver or
trustee of the Corporation or for all or substantially all of its property or
assets; or the Corporation makes an assignment for the benefit of its creditors;
or the Corporation admits in writing its inability to pay its debts as they
mature; or
(c) There is commenced against the Corporation any proceeding
relating to the Corporation under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, receivership, dissolution, or liquidation law
or statute, of any jurisdiction, whether now or subsequently in effect, and the
proceeding remains undismissed for a period of 60 days or the Corporation by any
act indicates its consent to, approval of, or acquiescence in the proceeding; or
a receiver or trustee is appointed for the Corporation or for all or
substantially all of its property or assets, and the receivership or trusteeship
remains undischarged for a period of 60 days; or a warrant of attachment,
execution or similar process is issued against any substantial part of the
property or assets of the Corporation, and the warrant or similar process is not
dismissed or bonded within 60 days after the levy.
6. Registered owner. The Corporation shall treat the person or persons whose
name or names appear on this Note as the absolute owner or owners hereof for the
purpose of receiving payment of, or on account of, the principal and interest
due on this Note and for all other purposes, unless and until written notice
satisfactory to the Corporation is provided by the registered owner of
assignment hereof.
7. Assignment. The Corporation may assign its rights hereunder to any person or
entity. No assignment of rights or obligations shall be effective until delivery
of written notice of such assignment is made by the assigning party to the other
party hereto.
8. Release of shareholders, officers and directors. This Note is the obligation
of the Corporation only, and no recourse shall be had for the payment of any
principal or interest hereon against any shareholder, officer or director of the
Corporation, either directly or through the Corporation, by virtue of any
statute for the enforcement of any assessment or otherwise. The holder or
holders of this Note, by the acceptance hereof, and as part of the consideration
for this Note, release all claims and waive all liabilities against the
foregoing persons in connection with this Note.
9. Amendments. With the consent of the holders of a majority of the principal
amount of outstanding Notes, evidenced by a written instrument or instruments,
Payor may amend the Notes by executing and delivering to the holders an
amendment thereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Notes or of modifying in any
manner the rights of the holders; provided, however, that no such amendment
shall, without the consent of the holder of each outstanding Note affected
thereby:
(a) Change the stated maturity of the principal of any Note, or
reduce the principal amount thereof or the interest thereon, or the currency in
which any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the stated
maturity thereof (or, in the case of prepayment, or after the prepayment date);
(b) Reduce the percentage in principal amount of the outstanding
Notes, the consent of whose holders is required for any amendment, or the
consent of whose holders is required for any waiver of compliance with the
provisions hereof; or
(c) Modify any of the provisions of this Section, except to increase
any such percentage or to provide that other provisions of the Notes cannot be
modified or waived without the consent of the holder affected thereby.
Upon the execution and delivery of any amendment in accordance with this
Section, the Notes shall be modified in accordance therewith, and every holder
of Notes theretofore or thereafter executed and delivered shall be bound
thereby.
10. Governing Law. The Notes and all terms and conditions herein shall be
governed by and construed and in accordance with the laws of the State of
Vermont excluding the state's conflict of law provisions.
11. Exclusive Jurisdiction. With respect to actions and proceedings to enforce
the provisions of, arising from, or relating to this Note, the holder, by
acceptance of this Note, consents to personal jurisdiction in the state or
federal courts of the State of Vermont and irrevocably agrees that all such
actions and proceedings shall be litigated exclusively in such courts. Further,
each of the parties hereto waives any objection that it may have to the conduct
of any action or proceeding in any such court based on improper venue or forum
non conveniens. Each of the parties hereto waives personal service of any and
all process upon it and agrees that valid service of process may be made by mail
or courier service directed to it at the address set forth herein and that
service so made shall be deemed to be completed upon the earlier of actual
receipt or ten (10) days after the same shall have been posted.
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IN WITNESS WHEREOF, the Corporation has signed this Note this 26th day of
October 2000.
eNote.com Inc.
By:___________________
Name:
Title:
REGISTERED OWNER:
Friedlander Capital Management Corp.
By:___________________________
Name:
Title:
Exhibit 4.37
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR
ANY APPLICABLE STATE SECURITIES LAW, AND MAY NOT BE TRANSFERRED EXCEPT (i)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (ii) UPON FIRST
FURNISHING TO THE COMPANY AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH TRANSFER IS NOT IN VIOLATION OF THE REGISTRATION REQUIREMENTS OF THE ACT OR
ANY APPLICABLE STATE SECURITIES LAW.
To Subscribe for and Purchase Common Stock of
eNote.com Inc.
VOID AFTER OCTOBER 26, 2002
Warrant No. 5-A As of October 26, 2000
THIS CERTIFIES that, for value received, FRIEDLANDER CAPITAL MANGAGEMENT
CORP., or its registered assigns, is entitled, subject to the terms of Section 1
hereof, to subscribe for and purchase from eNote.com Inc., a Delaware
corporation (hereinafter called the "Company"), at the price of $1.00 per share
(such price, as from time to time to be adjusted as hereinafter provided, being
hereinafter called the "Warrant Price"), at any time on or prior to October 12,
2002 up to 3,000,000 fully paid, nonassessable shares of Common Stock, par value
$.01 per share, of the Company ("Common Stock"), subject, however, to the
provisions and upon the terms and conditions hereinafter set forth.
Section 1. Exercise of Warrant. This Warrant may be exercised by the
holder hereof, in whole or in part (but not as to a fractional share of Common
Stock), by the completion of the subscription form attached hereto and by the
surrender of this Warrant (properly endorsed) at the office of the Company in
Williston, Vermont (or at such other agency or office of the Company in the
United States as it may designate by notice in writing to the holder hereof at
the address of the holder hereof appearing on the books of the Company), and by
payment to the Company of the Warrant Price, in cash or by certified or official
bank check, for each share being purchased. In the event of any exercise of the
rights represented by this Warrant, a certificate or certificates for the shares
of Common Stock so purchased, registered in the name of the holder hereof, shall
be delivered to the holder hereof within a reasonable time, not exceeding
fifteen (15) business days, after the rights represented by this Warrant shall
have been so exercised; and, unless this Warrant has expired or been exercised
in full, a new Warrant representing the number of shares (except a remaining
fractional share), if any, with respect to which this Warrant shall not then
have been exercised shall also be issued to the holder hereof within such time.
With respect to any such exercise, the holder hereof shall for all purposes be
deemed to have become the holder of record of the number of shares of Common
Stock evidenced by such certificate or certificates from the date on which this
Warrant was surrendered and payment of the Warrant Price was made irrespective
of the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date on which the stock transfer books of the Company
are closed, such person shall be deemed to have become the holder of such shares
at the close of business on the next succeeding date on which the stock transfer
books are open. No fractional shares shall be issued upon exercise of this
Warrant. If any fractional interest in a share of Common Stock would, except for
the provisions of this Section 1, be delivered upon any such exercise, the
Company, in lieu of delivering the fractional share thereof, shall pay to the
holder hereof an amount in cash equal to the current market price of such
fractional interest as determined in good faith by the Board of Directors of the
Company.
Section 2. Adjustment of Number of Shares.
(a) Reclassification, Consolidation or Merger. In the event of any
reclassification or change of outstanding securities of the Common Stock, or in
the event of any consolidation or merger of the Company with or into another
corporation or entity, other than a consolidation or merger with another
corporation or entity in which the Company is the continuing corporation and
which does not result in any reclassification, conversion or change of
outstanding Common Stock, or in the event of any sale of all or substantially
all of the assets of the Company, the Company, or such successor or purchasing
corporation or entity, as the case may be, shall execute a new warrant
certificate (the "New Warrant Certificate"), providing that the Holder of this
Warrant shall have the right to exercise such new warrants and procure upon such
exercise, in lieu of each share of Common Stock issuable upon exercise of the
Warrants, the kind and amount of shares of stock, other securities, money and
property receivable upon such reclassification, conversion, change,
consolidation or merger by a holder of one share of Common Stock.
(b) Subdivisions, Combinations and Stock Dividends. If at any time while
this Warrant is outstanding and unexpired the Company shall subdivide or combine
its Common Stock, or shall pay a dividend with respect to Common Stock payable
in, or make any other distribution with respect to its Common Stock consisting
of, shares of Common Stock, then the number of Warrant Shares for which this
Warrant is exercisable shall be adjusted, from and after the date of
determination of stockholders entitled to receive such dividend or distribution,
to that number determined by multiplying the number of Warrant Shares for which
this Warrant is exercisable immediately prior to such date of determination by a
fraction (i) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately after such dividend or distribution and
(ii) the denominator of which shall be the total number of shares of Common
Stock outstanding immediately prior to such dividend or distribution.
(c) Notice of Adjustment. Upon any adjustment of the Warrant Price, then
and in each such case the Company shall give written notice thereof, by first
class mail, postage prepaid, addressed to the Warrant holder at the address of
such holder as shown on the books of the Company, which notice shall state the
Warrant Price resulting from such adjustment, setting forth in reasonable detail
the method of calculation and the facts upon which such calculation is based.
(d) Stock to Be Reserved. The Company will at all times reserve and keep
available out of its authorized Common Stock or its treasury shares, solely for
the purpose of issuance upon the exercise of this Warrant as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
exercise of this Warrant provided, however, that the Company has an insufficient
number of shares of authorized Common Stock available to reserve the requisite
number of shares issuable upon exercise of this warrant, the Company will
reserve an amount equal to the remaining number of authorized shares, allocated
pro-rata among Warrants 3-A and 4-A. In such case, the Company will use its best
efforts to seek shareholder approval to increase the Company's authorized Common
Stock and reserve the additional shares necessary for issuance upon exercise of
this Warrant.
(e) Definition of Common Stock. As used herein the term "Common Stock"
shall mean and include the 25,000,000 shares of Common Stock, par value $.01 per
share, as authorized on the date of this and any additional Common Stock, par
value $.01 hereinafter authorized.
Section 3. Notices of Record Dates.
In the event of:
(a) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution (other than cash dividends out of
earned surplus), or any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities or property, or to
receive any right to sell shares of stock of any class or any other right; or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other corporation or entity; or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company,
then and in each such event the Company will give notice to the holder of this
Warrant specifying: (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right; and (ii) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least 10 days and not more than 90
days prior to the date therein specified, and such notice shall state that the
action in question or the record date is subject to (x) the effectiveness of a
registration statement under the Securities Act of 1933 and applicable state
securities laws, or (y) a favorable vote of stockholders, if either is required.
Section 4. No Stockholder Rights or Liabilities.
(a) Except as set forth in paragraph 4(b), this Warrant shall not entitle
the holder hereof to any voting rights or other rights as a stockholder of the
Company. No provision hereof, in the absence of affirmative action by the holder
hereof to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder hereof shall give rise to any liability of
such holder for the Warrant Price or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.
(b) At any time while this Warrant is outstanding, the Company shall,
prior to making any distribution of its property or assets to the holders of its
Common Stock as a dividend in liquidation or partial liquidation or by way of
return of capital or any dividend payable out of funds legally available for
dividends under the laws of the State of Delaware, give to the holder of this
Warrant, not less than 20 days prior written notice of any such distribution. If
such holder shall exercise this Warrant on or prior to the date of such
distribution set forth in such notice, such holder shall be entitled to receive,
upon such exercise: (i) the number of shares of Common Stock receivable pursuant
to such exercise; and (ii) without payment of any additional consideration, a
sum equal to the amount of such property or assets as would have been payable to
the holder hereof as an owner of the shares described in clause (i) of this
paragraph 4(b) had the holder hereof been the holder of record of such shares on
the record date for such distribution; and an appropriate provision with respect
to such payment to such holder as described in this paragraph 4(b) shall be made
a part of any such distribution.
Section 5. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant
is lost, stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may in its discretion reasonably impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
Section 6. Notices. Any notice to be given to either party under this
Warrant Certificate shall be in writing and shall be deemed to have been given
to the Company or the Holder hereof, as the case may be, when delivered in hand
or when sent by first class mail, postage prepaid, addressed, if to the Company,
at its principal office and, if to the Holder hereof, at its address as set
forth in the Company's books and records or at such other address as the Holder
hereof may have provided to the Company in writing.
Section 7. Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of Vermont, without giving effect to
such jurisdiction's principles of conflict of laws.
Section 8. Exclusive Jurisdiction. With respect to actions and proceedings
to enforce the provisions of, arising from, or relating to this Warrant or the
Warrant, the holder, by acceptance of this Warrant, consents to personal
jurisdiction in the state or federal courts of the State of Vermont and
irrevocably agrees that all such actions and proceedings shall be litigated
exclusively in such courts. Further, each of the parties hereto waives any
objection that it may have to the conduct of any action or proceeding in any
such court based on improper venue or forum non conveniens. Each of the parties
hereto waives personal service of any and all process upon it and agrees that
valid service of process may be made by mail or courier service directed to it
at the address set forth herein and that service so made shall be deemed to be
completed upon the earlier of actual receipt or ten (10) days after the same
shall have been posted.
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IN WITNESS WHEREOF, the duly authorized agent of eNote.com Inc. has
executed this Warrant as of the 26th day of October 2000.
ENOTE.COM INC.
By:_____________________________
Name:
Title:
[Corporate Seal]
Attest:
- -----------------------------------
Secretary
SUBSCRIPTION FORM TO BE EXECUTED
UPON EXERCISE OF THE WARRANT
Date:
----------------
To: eNote.com Inc.
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to subscribe for and purchase [__________] shares of
Common Stock covered by such Warrant, and herewith tenders $[____________] in
full payment of the purchase price for such shares as provided in the within
Warrant.
Name of Holder:
By: ___________________________________
Address ___________________________________
___________________________________
Exhibit 4.38
THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITY UNDER THE SECURITIES ACT OF 1933 UNLESS
PAYOR HAS RECEIVED THE WRITTEN OPINION OF COUNSEL SATISFACTORY TO PAYOR TO THE
EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER DOES NOT INVOLVE A TRANSACTION
REQUIRING REGISTRATION OF SUCH SECURITY UNDER THE SECURITIES ACT OF 1933.
B-6 $100,000
eNote.com Inc
185 Allen Brook Lane
Williston, Vermont 05495
November 9, 2000
8% Subordinated Secured Convertible Note
Due December 2, 2000
eNote.com Inc., a Delaware corporation, (the "Corporation"), for value received,
promises to pay FRIEDLANDER CAPITAL MANAGEMENT CORP. (the "Holder"), the sum of
ONE HUNDRED THOUSAND DOLLARS $100,000 on December 2, 2000 (the "Maturity
Date"), together with interest accrued thereon at the rate of eight percent (8%)
per annum, computed from November 9, 2000 (the "Issue Date"). Payment of
principal and interest shall be made in lawful money of the United States of
America on the Maturity Date unless this Note is earlier converted as provided
for herein. This Note, is part of a series of 8% Subordinated Secured
Convertible Notes due December 2, 2000 being issued by the Corporation (each a
"Note" and together the "Notes").
This Note is issued pursuant to a Subscription Agreement dated as of the Issue
Date (the "Subscription Agreement") by and between the Corporation and the
Holder. Payment of the Notes is secured by all tangible and intangible assets of
the Corporation pursuant to a Security Agreement dated as of October 26, 2000,
as may be amended from time to time.
1. Conversion.
(a) The holder of this Note may at time prior to the maturity
hereof, convert the principal amount hereof and interest accrued thereon into
shares of the Corporation's Common Stock. The conversion ratio shall be $1.00 of
principal converted per share of Common Stock (the "Conversion Rate"). To
convert this Note, the holder hereof must surrender the same at the office of
the Corporation, together with a written instrument of transfer in a form
satisfactory to the Corporation, properly completed and executed and with a
written notice of conversion. All rights of the holder of this Note shall, to
the extent of the principal and interest thereof converted, cease as of the date
of such conversion.
(b) In case the Corporation shall at any time subdivide its
outstanding shares of Common Stock into a greater number of shares, the
Conversion Rate in effect immediately prior to such subdivision shall be
proportionately reduced, i.e., the holder shall be entitled to purchase after
such subdivision, for the same consideration as applicable prior to such
subdivision, the same percentage of outstanding Common Stock that such holder
was entitled to purchase prior to such subdivision, and conversely, in case the
outstanding shares of Common Stock of the Corporation shall be combined into a
smaller number of shares, the Conversion Price in effect immediately prior to
such combination shall be proportionately increased. In case the Corporation
shall declare a dividend or make any other distribution upon any stock of the
Corporation payable in Common Stock, options or convertible securities
exercisable or convertible into shares of Common Stock, any Common Stock,
options or convertible securities, as the case may be, issuable in payment of
such dividend or distribution shall be deemed to have been issued in a
subdivision of outstanding shares as provided in the foregoing sentence.
(c) The Corporation will at all times reserve and keep available out
of its authorized Common Stock or its treasury shares, solely for the purpose of
issuance upon conversion of the Note as herein provided, such number of shares
of Common Stock as shall then be issuable upon conversion of this Note. The
Corporation covenants that all shares of Common Stock which shall be so issued
shall be duly and validly issued and fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof, and, without
limiting the generality of the foregoing, the Corporation covenants that it will
from time to time take all such action as may be requisite to assure that the
par value per share of the Common Stock is at all times equal to or less than
the effective Conversion Rate. The Corporation will take all such action as may
be necessary to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any requirements of
any national securities exchange upon which the Common Stock of the Corporation
may be listed. The Corporation will not take any action which results in any
adjustment of the Conversion Price if the total number of shares of Common Stock
issued and issuable after such action upon conversion of this Note would exceed
the total number of shares of Common Stock then authorized by the Corporation's
Certificate of Incorporation. The Corporation has not granted and will not grant
any right of first refusal with respect to shares issuable upon conversion of
this Note, and there are no preemptive rights associated with such shares.
2. Fractional shares. In lieu of issuing any fraction of a share upon the
conversion of this Note, the Corporation shall pay to the holder hereof for any
fraction of a share otherwise issuable upon the conversion, cash equal to the
same fraction of $1.00.
3. Prepayment. This Note may be prepaid without penalty. In the case of each
prepayment of less than all of the outstanding Notes, the principal amount to be
prepaid shall be allocated among the respective Notes and the holders thereof so
that the principal amount to be prepaid to each holder shall bear the same ratio
to the aggregate principal amount then to be prepaid as the principal amount of
Notes then held by such holder bears to the aggregate principal amount of Notes
then outstanding. Five (5) business days prior to any prepayment hereunder the
Corporation shall provide written notice to each Note holder indicating the date
and amount of such prepayment. The Note holder shall have the right to convert
the principal amount of any such prepayment prior to date of prepayment.
4. Subordination.
(a) The Corporation, for itself, its successors and assigns,
covenants and agrees, and each holder of this Note by his acceptance thereof
likewise covenants and agrees, that the payment of the principal of and interest
on each and all of this Note shall be subordinate and subject, to the extent and
in the manner hereinafter set forth, in right of payment to the prior payment in
full of all Senior Indebtedness.
(b) Upon any distribution of assets of the Corporation upon any
dissolution, winding up, liquidation, or reorganization of the Corporation,
whether in bankruptcy, insolvency, or receivership proceedings or upon an
assignment for the benefit of creditors of any other dissolution, winding up,
liquidation, or reorganization of the Corporation:
(i) All Senior Indebtedness shall first be paid in full, or
provision made for such payment in full of the principal thereof, and premium,
if any, and interest thereon, before any payment is made on account of the
principal of, or interest on, the Notes;
(ii) Any payment or distribution of assets of the Corporation
of any kind or character, whether in cash, property, or securities (other than
stock of the Corporation as reorganized or readjusted or securities of the
Corporation or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in this Section with respect to the Notes, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), to which the
holder of this Note would be entitled except for the provisions of this Section
shall be paid by the liquidating trustee or agent or other person making such
payment of distribution, whether a trustee in bankruptcy, receiver, or
liquidating trustee or other trustee or agent, directly to the holders of Senior
Indebtedness or their representative or representatives or the trustee or
trustees under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the principal of, and premium, if any,
and interest on, the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness; and
(iii) In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Corporation of any kind or character,
whether in cash, property, or securities (other than stock of the Corporation as
reorganized or readjusted or securities of the Corporation or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in this Section with
respect to the Note, to the payment of all Senior Indebtedness at the time
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), shall be received by the holder of this Note
before all Senior Indebtedness is paid in full, or provision made for its
payment, such payment or distribution shall be paid over to the holders of
Senior Indebtedness remaining unpaid or unprovided for or their representative
or representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may have been issued,
as provided in the foregoing subparagraph (2), for application to the payment of
such Senior Indebtedness until all such Senior Indebtedness shall have been paid
in full after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness.
(c) Subject to the payment in full of all Senior Indebtedness, the
holder of this Note shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property, or
securities of the Corporation applicable to the Senior Indebtedness until the
principal of and interest on this Note shall be paid in full, and no such
payments or distributions in respect of this Note of cash, property, or
securities distributable to the Senior Indebtedness under the provisions here
shall, as between the Corporation, its creditors other than the holders of
Senior Indebtedness, and the holder of this Notes, be deemed to be a payment by
the Corporation to or on account of this Note. It is understood that the
provisions of this Section are and are intended solely for the purpose of
defining the relative rights of the holder of this Note, on the one hand, and
the holders of the Senior Indebtedness on the other hand. Nothing contained in
this Section is intended to or shall impair, as between the Corporation, its
creditors other than the holders of Senior Indebtedness, and the holder of this
Note, the absolute and unconditional obligation of the Corporation to pay the
holder of this Note the principal of and interest on this Note as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the holder of this Note and creditors
of the Corporation other than the holders of the Senior Indebtedness; nor shall
anything herein or therein prevent the holder of this Note from exercising all
remedies otherwise permitted by applicable law upon default under this Note,
subject to the rights, if any, under this Section of the holders of Senior
Indebtedness in respect of cash, property or securities of the Corporation
received upon the exercise of any such remedy.
(d) Upon any distribution of assets of the Corporation referred to
in this Section, the holder of this Note shall be entitled to rely upon a
certificate of the liquidating trustee or agent or other person making any
distribution to such holder for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Corporation, the amount thereof or payable thereon,
and all other facts pertinent thereto or to this Section.
(e) If there shall have occurred a default in the payment of the
principal of (or premium, if any) or interest on any Senior Indebtedness, then,
unless and until such default shall have been cured or waived, no payment of
principal or interest shall be made by the Corporation on this Note, and no
holder of this Note shall be entitled to receive any such payment. Nothing
contained in this Section shall, however (1) affect the obligation of
Corporation to make or prevent the Corporation from making, at any time, except
during the pendency of any dissolution, winding up, liquidation, or
reorganization proceedings or except as provided in the first sentence of this
subsection, payments of principal of or interest on this Note, or (2) prevent
the application by any paying agent of any moneys deposited with it by the
Corporation to the payment of or on account of the principal of, or interest on,
this Note, if, at the time of such deposit, the paying agent did not have
written notice of any event prohibiting the making of such payment or deposit by
the Corporation; or (3) be construed as preventing the occurrence of any Event
of Default hereunder.
(f) No right of any present or future holder of any Senior
Indebtedness of the Corporation to enforce subordination as herein provided
shall at any time or in any way be prejudiced or impaired by any act or failure
to act on the part of the Corporation or by any act or failure to act, in good
faith, by any such holder, or by an noncompliance by the Corporation with the
terms, provisions, and covenants of this Note, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
(g) Any renewal or extension of the time of payment of any Senior
Indebtedness or the exercise by the holders of Senior Indebtedness of any of
their rights under the Senior Indebtedness, including without limitation the
waiver of default thereunder or the release of any security therefor, may be
made or done all without notice to or assent from the holder of this Note. No
compromise, alteration, amendment, modification, extension, renewal, or other
change of, or waiver, consent, or other action in respect of, any liability or
obligation under or respect of, or of any of the terms, covenants, or conditions
or any indenture or other instrument under which any Senior Indebtedness is
outstanding or of such Senior Indebtedness, and no release of property securing
any Senior Indebtedness, whether or not such release is in accordance with the
provisions of any applicable document, shall in any way alter or affect any of
the provisions of this Section.
(h) "Senior Indebtedness" for purposes of this Section shall mean
all indebtedness (principal and interest) now existing or hereafter incurred of
the Corporation for money borrowed from banks or other financial institutions:
(i) which is secured by the assets of the Corporation; and (ii) is not by its
express terms subordinate and junior to or on parity with this Note.
5. Default. If any of the following events occur ("Event of Default"), the
entire unpaid principal amount of, and accrued and unpaid interest on, this Note
shall immediately be due and payable, and the Corporation shall pay all costs of
collection including, but not limited to, reasonable attorneys' fees and
expenses incurred by the owner(s) or its assigns on account of such collection,
whether or not suit is brought:
(a) The Corporation fails to pay the principal of this Note at its
maturity;
(b) The Corporation commences any voluntary proceeding under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
receivership, dissolution, or liquidation law or statute, of any jurisdiction,
whether now or subsequently in effect; or the Corporation is adjudicated as
bankrupt by a court of competent jurisdiction; or the Corporation petitions or
applies for, acquiesces in, or consents to, the appointment of any receiver or
trustee of the Corporation or for all or substantially all of its property or
assets; or the Corporation makes an assignment for the benefit of its creditors;
or the Corporation admits in writing its inability to pay its debts as they
mature; or
(c) There is commenced against the Corporation any proceeding
relating to the Corporation under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, receivership, dissolution, or liquidation law
or statute, of any jurisdiction, whether now or subsequently in effect, and the
proceeding remains undismissed for a period of 60 days or the Corporation by any
act indicates its consent to, approval of, or acquiescence in the proceeding; or
a receiver or trustee is appointed for the Corporation or for all or
substantially all of its property or assets, and the receivership or trusteeship
remains undischarged for a period of 60 days; or a warrant of attachment,
execution or similar process is issued against any substantial part of the
property or assets of the Corporation, and the warrant or similar process is not
dismissed or bonded within 60 days after the levy.
6. Registered owner. The Corporation shall treat the person or persons whose
name or names appear on this Note as the absolute owner or owners hereof for the
purpose of receiving payment of, or on account of, the principal and interest
due on this Note and for all other purposes, unless and until written notice
satisfactory to the Corporation is provided by the registered owner of
assignment hereof.
7. Assignment. The Corporation may assign its rights hereunder to any person or
entity. No assignment of rights or obligations shall be effective until delivery
of written notice of such assignment is made by the assigning party to the other
party hereto.
8. Release of shareholders, officers and directors. This Note is the obligation
of the Corporation only, and no recourse shall be had for the payment of any
principal or interest hereon against any shareholder, officer or director of the
Corporation, either directly or through the Corporation, by virtue of any
statute for the enforcement of any assessment or otherwise. The holder or
holders of this Note, by the acceptance hereof, and as part of the consideration
for this Note, release all claims and waive all liabilities against the
foregoing persons in connection with this Note.
9. Amendments. With the consent of the holders of a majority of the principal
amount of outstanding Notes, evidenced by a written instrument or instruments,
Payor may amend the Notes by executing and delivering to the holders an
amendment thereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Notes or of modifying in any
manner the rights of the holders; provided, however, that no such amendment
shall, without the consent of the holder of each outstanding Note affected
thereby:
(a) Change the stated maturity of the principal of any Note, or
reduce the principal amount thereof or the interest thereon, or the currency in
which any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the stated
maturity thereof (or, in the case of prepayment, or after the prepayment date);
(b) Reduce the percentage in principal amount of the outstanding
Notes, the consent of whose holders is required for any amendment, or the
consent of whose holders is required for any waiver of compliance with the
provisions hereof; or
(c) Modify any of the provisions of this Section, except to increase
any such percentage or to provide that other provisions of the Notes cannot be
modified or waived without the consent of the holder affected thereby.
Upon the execution and delivery of any amendment in accordance with this
Section, the Notes shall be modified in accordance therewith, and every holder
of Notes theretofore or thereafter executed and delivered shall be bound
thereby.
10. Governing Law. The Notes and all terms and conditions herein shall be
governed by and construed and in accordance with the laws of the State of
Vermont excluding the state's conflict of law provisions.
11. Exclusive Jurisdiction. With respect to actions and proceedings to enforce
the provisions of, arising from, or relating to this Note, the holder, by
acceptance of this Note, consents to personal jurisdiction in the state or
federal courts of the State of Vermont and irrevocably agrees that all such
actions and proceedings shall be litigated exclusively in such courts. Further,
each of the parties hereto waives any objection that it may have to the conduct
of any action or proceeding in any such court based on improper venue or forum
non conveniens. Each of the parties hereto waives personal service of any and
all process upon it and agrees that valid service of process may be made by mail
or courier service directed to it at the address set forth herein and that
service so made shall be deemed to be completed upon the earlier of actual
receipt or ten (10) days after the same shall have been posted.
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IN WITNESS WHEREOF, the Corporation has signed this Note this 9th day of
November 2000.
eNote.com Inc.
By:___________________
Name:
Title:
REGISTERED OWNER:
Friedlander Capital Management Corp.
By:___________________________
Name:
Title:
Exhibit 4.39
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR
ANY APPLICABLE STATE SECURITIES LAW, AND MAY NOT BE TRANSFERRED EXCEPT (i)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (ii) UPON FIRST
FURNISHING TO THE COMPANY AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH TRANSFER IS NOT IN VIOLATION OF THE REGISTRATION REQUIREMENTS OF THE ACT OR
ANY APPLICABLE STATE SECURITIES LAW.
To Subscribe for and Purchase Common Stock of
eNote.com Inc.
VOID AFTER NOVEMBER 9, 2002
Warrant No. 6-A As of November 9, 2000
THIS CERTIFIES that, for value received, FRIEDLANDER CAPITAL MANGAGEMENT
CORP., or its registered assigns, is entitled, subject to the terms of Section 1
hereof, to subscribe for and purchase from eNote.com Inc., a Delaware
corporation (hereinafter called the "Company"), at the price of $0.75 per share
(such price, as from time to time to be adjusted as hereinafter provided, being
hereinafter called the "Warrant Price"), at any time on or prior to November 9,
2002 up to 2,666,667 fully paid, nonassessable shares of Common Stock, par value
$.01 per share, of the Company ("Common Stock"), subject, however, to the
provisions and upon the terms and conditions hereinafter set forth.
Section 1. Exercise of Warrant. This Warrant may be exercised by the
holder hereof, in whole or in part (but not as to a fractional share of Common
Stock), by the completion of the subscription form attached hereto and by the
surrender of this Warrant (properly endorsed) at the office of the Company in
Williston, Vermont (or at such other agency or office of the Company in the
United States as it may designate by notice in writing to the holder hereof at
the address of the holder hereof appearing on the books of the Company), and by
payment to the Company of the Warrant Price, in cash or by certified or official
bank check, for each share being purchased. In the event of any exercise of the
rights represented by this Warrant, a certificate or certificates for the shares
of Common Stock so purchased, registered in the name of the holder hereof, shall
be delivered to the holder hereof within a reasonable time, not exceeding
fifteen (15) business days, after the rights represented by this Warrant shall
have been so exercised; and, unless this Warrant has expired or been exercised
in full, a new Warrant representing the number of shares (except a remaining
fractional share), if any, with respect to which this Warrant shall not then
have been exercised shall also be issued to the holder hereof within such time.
With respect to any such exercise, the holder hereof shall for all purposes be
deemed to have become the holder of record of the number of shares of Common
Stock evidenced by such certificate or certificates from the date on which this
Warrant was surrendered and payment of the Warrant Price was made irrespective
of the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date on which the stock transfer books of the Company
are closed, such person shall be deemed to have become the holder of such shares
at the close of business on the next succeeding date on which the stock transfer
books are open. No fractional shares shall be issued upon exercise of this
Warrant. If any fractional interest in a share of Common Stock would, except for
the provisions of this Section 1, be delivered upon any such exercise, the
Company, in lieu of delivering the fractional share thereof, shall pay to the
holder hereof an amount in cash equal to the current market price of such
fractional interest as determined in good faith by the Board of Directors of the
Company.
Section 2. Adjustment of Number of Shares.
(a) Reclassification, Consolidation or Merger. In the event of any
reclassification or change of outstanding securities of the Common Stock, or in
the event of any consolidation or merger of the Company with or into another
corporation or entity, other than a consolidation or merger with another
corporation or entity in which the Company is the continuing corporation and
which does not result in any reclassification, conversion or change of
outstanding Common Stock, or in the event of any sale of all or substantially
all of the assets of the Company, the Company, or such successor or purchasing
corporation or entity, as the case may be, shall execute a new warrant
certificate (the "New Warrant Certificate"), providing that the Holder of this
Warrant shall have the right to exercise such new warrants and procure upon such
exercise, in lieu of each share of Common Stock issuable upon exercise of the
Warrants, the kind and amount of shares of stock, other securities, money and
property receivable upon such reclassification, conversion, change,
consolidation or merger by a holder of one share of Common Stock.
(b) Subdivisions, Combinations and Stock Dividends. If at any time while
this Warrant is outstanding and unexpired the Company shall subdivide or combine
its Common Stock, or shall pay a dividend with respect to Common Stock payable
in, or make any other distribution with respect to its Common Stock consisting
of, shares of Common Stock, then the number of Warrant Shares for which this
Warrant is exercisable shall be adjusted, from and after the date of
determination of stockholders entitled to receive such dividend or distribution,
to that number determined by multiplying the number of Warrant Shares for which
this Warrant is exercisable immediately prior to such date of determination by a
fraction (i) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately after such dividend or distribution and
(ii) the denominator of which shall be the total number of shares of Common
Stock outstanding immediately prior to such dividend or distribution.
(c) Notice of Adjustment. Upon any adjustment of the Warrant Price, then
and in each such case the Company shall give written notice thereof, by first
class mail, postage prepaid, addressed to the Warrant holder at the address of
such holder as shown on the books of the Company, which notice shall state the
Warrant Price resulting from such adjustment, setting forth in reasonable detail
the method of calculation and the facts upon which such calculation is based.
(d) Stock to Be Reserved. The Company will at all times reserve and keep
available out of its authorized Common Stock or its treasury shares, solely for
the purpose of issuance upon the exercise of this Warrant as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
exercise of this Warrant provided, however, that the Company has an insufficient
number of shares of authorized Common Stock available to reserve the requisite
number of shares issuable upon exercise of this warrant, the Company will
reserve an amount equal to the remaining number of authorized shares, allocated
pro-rata among Warrants 3-A and 4-A. In such case, the Company will use its best
efforts to seek shareholder approval to increase the Company's authorized Common
Stock and reserve the additional shares necessary for issuance upon exercise of
this Warrant.
(e) Definition of Common Stock. As used herein the term "Common Stock"
shall mean and include the 25,000,000 shares of Common Stock, par value $.01 per
share, as authorized on the date of this and any additional Common Stock, par
value $.01 hereinafter authorized.
Section 3. Notices of Record Dates.
In the event of:
(a) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution (other than cash dividends out of
earned surplus), or any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities or property, or to
receive any right to sell shares of stock of any class or any other right; or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other corporation or entity; or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company,
then and in each such event the Company will give notice to the holder of this
Warrant specifying: (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right; and (ii) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least 10 days and not more than 90
days prior to the date therein specified, and such notice shall state that the
action in question or the record date is subject to (x) the effectiveness of a
registration statement under the Securities Act of 1933 and applicable state
securities laws, or (y) a favorable vote of stockholders, if either is required.
Section 4. No Stockholder Rights or Liabilities.
(a) Except as set forth in paragraph 4(b), this Warrant shall not entitle
the holder hereof to any voting rights or other rights as a stockholder of the
Company. No provision hereof, in the absence of affirmative action by the holder
hereof to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder hereof shall give rise to any liability of
such holder for the Warrant Price or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.
(b) At any time while this Warrant is outstanding, the Company shall,
prior to making any distribution of its property or assets to the holders of its
Common Stock as a dividend in liquidation or partial liquidation or by way of
return of capital or any dividend payable out of funds legally available for
dividends under the laws of the State of Delaware, give to the holder of this
Warrant, not less than 20 days prior written notice of any such distribution. If
such holder shall exercise this Warrant on or prior to the date of such
distribution set forth in such notice, such holder shall be entitled to receive,
upon such exercise: (i) the number of shares of Common Stock receivable pursuant
to such exercise; and (ii) without payment of any additional consideration, a
sum equal to the amount of such property or assets as would have been payable to
the holder hereof as an owner of the shares described in clause (i) of this
paragraph 4(b) had the holder hereof been the holder of record of such shares on
the record date for such distribution; and an appropriate provision with respect
to such payment to such holder as described in this paragraph 4(b) shall be made
a part of any such distribution.
Section 5. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant
is lost, stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may in its discretion reasonably impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
Section 6. Notices. Any notice to be given to either party under this
Warrant Certificate shall be in writing and shall be deemed to have been given
to the Company or the Holder hereof, as the case may be, when delivered in hand
or when sent by first class mail, postage prepaid, addressed, if to the Company,
at its principal office and, if to the Holder hereof, at its address as set
forth in the Company's books and records or at such other address as the Holder
hereof may have provided to the Company in writing.
Section 7. Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of Vermont, without giving effect to
such jurisdiction's principles of conflict of laws.
Section 8. Exclusive Jurisdiction. With respect to actions and proceedings
to enforce the provisions of, arising from, or relating to this Warrant or the
Warrant, the holder, by acceptance of this Warrant, consents to personal
jurisdiction in the state or federal courts of the State of Vermont and
irrevocably agrees that all such actions and proceedings shall be litigated
exclusively in such courts. Further, each of the parties hereto waives any
objection that it may have to the conduct of any action or proceeding in any
such court based on improper venue or forum non conveniens. Each of the parties
hereto waives personal service of any and all process upon it and agrees that
valid service of process may be made by mail or courier service directed to it
at the address set forth herein and that service so made shall be deemed to be
completed upon the earlier of actual receipt or ten (10) days after the same
shall have been posted.
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IN WITNESS WHEREOF, the duly authorized agent of eNote.com Inc. has
executed this Warrant as of the 9th day of November 2000.
ENOTE.COM INC.
By:___________________________
Name:
Title:
[Corporate Seal]
Attest:
__________________________
Secretary
SUBSCRIPTION FORM TO BE EXECUTED
UPON EXERCISE OF THE WARRANT
Date:
----------------
To: eNote.com Inc.
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to subscribe for and purchase [__________] shares of
Common Stock covered by such Warrant, and herewith tenders $[____________] in
full payment of the purchase price for such shares as provided in the within
Warrant.
Name of Holder:
By: __________________________________
Address __________________________________
__________________________________
Exhibit 4.40
THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITY UNDER THE SECURITIES ACT OF 1933 UNLESS
PAYOR HAS RECEIVED THE WRITTEN OPINION OF COUNSEL SATISFACTORY TO PAYOR TO THE
EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER DOES NOT INVOLVE A TRANSACTION
REQUIRING REGISTRATION OF SUCH SECURITY UNDER THE SECURITIES ACT OF 1933.
B-7 $120,000
eNote.com Inc
185 Allen Brook Lane
Williston, Vermont 05495
November 22, 2000
8% Subordinated Secured Convertible Note
Due December 2, 2000
eNote.com Inc., a Delaware corporation, (the "Corporation"), for value received,
promises to pay FRIEDLANDER CAPITAL MANAGEMENT CORP. (the "Holder"), the sum of
ONE HUNDRED TWENTY THOUSAND DOLLARS $120,000 on December 2, 2000 (the "Maturity
Date"), together with interest accrued thereon at the rate of eight percent (8%)
per annum, computed from November 22, 2000 (the "Issue Date"). Payment of
principal and interest shall be made in lawful money of the United States of
America on the Maturity Date unless this Note is earlier converted as provided
for herein. This Note, is part of a series of 8% Subordinated Secured
Convertible Notes due December 2, 2000 being issued by the Corporation (each a
"Note" and together the "Notes").
This Note is issued pursuant to a Subscription Agreement dated as of the Issue
Date (the "Subscription Agreement") by and between the Corporation and the
Holder. Payment of the Notes is secured by all tangible and intangible assets of
the Corporation pursuant to a Security Agreement dated as of October 26, 2000,
as may be amended from time to time.
1. Conversion.
(a) The holder of this Note may at time prior to the maturity
hereof, convert the principal amount hereof and interest accrued thereon into
shares of the Corporation's Common Stock. The conversion ratio shall be $1.00 of
principal converted per share of Common Stock (the "Conversion Rate"). To
convert this Note, the holder hereof must surrender the same at the office of
the Corporation, together with a written instrument of transfer in a form
satisfactory to the Corporation, properly completed and executed and with a
written notice of conversion. All rights of the holder of this Note shall, to
the extent of the principal and interest thereof converted, cease as of the date
of such conversion.
(b) In case the Corporation shall at any time subdivide its
outstanding shares of Common Stock into a greater number of shares, the
Conversion Rate in effect immediately prior to such subdivision shall be
proportionately reduced, i.e., the holder shall be entitled to purchase after
such subdivision, for the same consideration as applicable prior to such
subdivision, the same percentage of outstanding Common Stock that such holder
was entitled to purchase prior to such subdivision, and conversely, in case the
outstanding shares of Common Stock of the Corporation shall be combined into a
smaller number of shares, the Conversion Price in effect immediately prior to
such combination shall be proportionately increased. In case the Corporation
shall declare a dividend or make any other distribution upon any stock of the
Corporation payable in Common Stock, options or convertible securities
exercisable or convertible into shares of Common Stock, any Common Stock,
options or convertible securities, as the case may be, issuable in payment of
such dividend or distribution shall be deemed to have been issued in a
subdivision of outstanding shares as provided in the foregoing sentence.
(c) The Corporation will at all times reserve and keep available out
of its authorized Common Stock or its treasury shares, solely for the purpose of
issuance upon conversion of the Note as herein provided, such number of shares
of Common Stock as shall then be issuable upon conversion of this Note. The
Corporation covenants that all shares of Common Stock which shall be so issued
shall be duly and validly issued and fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof, and, without
limiting the generality of the foregoing, the Corporation covenants that it will
from time to time take all such action as may be requisite to assure that the
par value per share of the Common Stock is at all times equal to or less than
the effective Conversion Rate. The Corporation will take all such action as may
be necessary to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any requirements of
any national securities exchange upon which the Common Stock of the Corporation
may be listed. The Corporation will not take any action which results in any
adjustment of the Conversion Price if the total number of shares of Common Stock
issued and issuable after such action upon conversion of this Note would exceed
the total number of shares of Common Stock then authorized by the Corporation's
Certificate of Incorporation. The Corporation has not granted and will not grant
any right of first refusal with respect to shares issuable upon conversion of
this Note, and there are no preemptive rights associated with such shares.
2. Fractional shares. In lieu of issuing any fraction of a share upon the
conversion of this Note, the Corporation shall pay to the holder hereof for any
fraction of a share otherwise issuable upon the conversion, cash equal to the
same fraction of $1.00.
3. Prepayment. This Note may be prepaid without penalty. In the case of each
prepayment of less than all of the outstanding Notes, the principal amount to be
prepaid shall be allocated among the respective Notes and the holders thereof so
that the principal amount to be prepaid to each holder shall bear the same ratio
to the aggregate principal amount then to be prepaid as the principal amount of
Notes then held by such holder bears to the aggregate principal amount of Notes
then outstanding. Five (5) business days prior to any prepayment hereunder the
Corporation shall provide written notice to each Note holder indicating the date
and amount of such prepayment. The Note holder shall have the right to convert
the principal amount of any such prepayment prior to date of prepayment.
4. Subordination.
(a) The Corporation, for itself, its successors and assigns,
covenants and agrees, and each holder of this Note by his acceptance thereof
likewise covenants and agrees, that the payment of the principal of and interest
on each and all of this Note shall be subordinate and subject, to the extent and
in the manner hereinafter set forth, in right of payment to the prior payment in
full of all Senior Indebtedness.
(b) Upon any distribution of assets of the Corporation upon any
dissolution, winding up, liquidation, or reorganization of the Corporation,
whether in bankruptcy, insolvency, or receivership proceedings or upon an
assignment for the benefit of creditors of any other dissolution, winding up,
liquidation, or reorganization of the Corporation:
(i) All Senior Indebtedness shall first be paid in full, or
provision made for such payment in full of the principal thereof, and premium,
if any, and interest thereon, before any payment is made on account of the
principal of, or interest on, the Notes;
(ii) Any payment or distribution of assets of the Corporation
of any kind or character, whether in cash, property, or securities (other than
stock of the Corporation as reorganized or readjusted or securities of the
Corporation or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in this Section with respect to the Notes, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), to which the
holder of this Note would be entitled except for the provisions of this Section
shall be paid by the liquidating trustee or agent or other person making such
payment of distribution, whether a trustee in bankruptcy, receiver, or
liquidating trustee or other trustee or agent, directly to the holders of Senior
Indebtedness or their representative or representatives or the trustee or
trustees under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the principal of, and premium, if any,
and interest on, the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness; and
(iii) In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Corporation of any kind or character,
whether in cash, property, or securities (other than stock of the Corporation as
reorganized or readjusted or securities of the Corporation or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in this Section with
respect to the Note, to the payment of all Senior Indebtedness at the time
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), shall be received by the holder of this Note
before all Senior Indebtedness is paid in full, or provision made for its
payment, such payment or distribution shall be paid over to the holders of
Senior Indebtedness remaining unpaid or unprovided for or their representative
or representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may have been issued,
as provided in the foregoing subparagraph (2), for application to the payment of
such Senior Indebtedness until all such Senior Indebtedness shall have been paid
in full after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness.
(c) Subject to the payment in full of all Senior Indebtedness, the
holder of this Note shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property, or
securities of the Corporation applicable to the Senior Indebtedness until the
principal of and interest on this Note shall be paid in full, and no such
payments or distributions in respect of this Note of cash, property, or
securities distributable to the Senior Indebtedness under the provisions here
shall, as between the Corporation, its creditors other than the holders of
Senior Indebtedness, and the holder of this Notes, be deemed to be a payment by
the Corporation to or on account of this Note. It is understood that the
provisions of this Section are and are intended solely for the purpose of
defining the relative rights of the holder of this Note, on the one hand, and
the holders of the Senior Indebtedness on the other hand. Nothing contained in
this Section is intended to or shall impair, as between the Corporation, its
creditors other than the holders of Senior Indebtedness, and the holder of this
Note, the absolute and unconditional obligation of the Corporation to pay the
holder of this Note the principal of and interest on this Note as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the holder of this Note and creditors
of the Corporation other than the holders of the Senior Indebtedness; nor shall
anything herein or therein prevent the holder of this Note from exercising all
remedies otherwise permitted by applicable law upon default under this Note,
subject to the rights, if any, under this Section of the holders of Senior
Indebtedness in respect of cash, property or securities of the Corporation
received upon the exercise of any such remedy.
(d) Upon any distribution of assets of the Corporation referred to
in this Section, the holder of this Note shall be entitled to rely upon a
certificate of the liquidating trustee or agent or other person making any
distribution to such holder for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Corporation, the amount thereof or payable thereon,
and all other facts pertinent thereto or to this Section.
(e) If there shall have occurred a default in the payment of the
principal of (or premium, if any) or interest on any Senior Indebtedness, then,
unless and until such default shall have been cured or waived, no payment of
principal or interest shall be made by the Corporation on this Note, and no
holder of this Note shall be entitled to receive any such payment. Nothing
contained in this Section shall, however (1) affect the obligation of
Corporation to make or prevent the Corporation from making, at any time, except
during the pendency of any dissolution, winding up, liquidation, or
reorganization proceedings or except as provided in the first sentence of this
subsection, payments of principal of or interest on this Note, or (2) prevent
the application by any paying agent of any moneys deposited with it by the
Corporation to the payment of or on account of the principal of, or interest on,
this Note, if, at the time of such deposit, the paying agent did not have
written notice of any event prohibiting the making of such payment or deposit by
the Corporation; or (3) be construed as preventing the occurrence of any Event
of Default hereunder.
(f) No right of any present or future holder of any Senior
Indebtedness of the Corporation to enforce subordination as herein provided
shall at any time or in any way be prejudiced or impaired by any act or failure
to act on the part of the Corporation or by any act or failure to act, in good
faith, by any such holder, or by an noncompliance by the Corporation with the
terms, provisions, and covenants of this Note, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
(g) Any renewal or extension of the time of payment of any Senior
Indebtedness or the exercise by the holders of Senior Indebtedness of any of
their rights under the Senior Indebtedness, including without limitation the
waiver of default thereunder or the release of any security therefor, may be
made or done all without notice to or assent from the holder of this Note. No
compromise, alteration, amendment, modification, extension, renewal, or other
change of, or waiver, consent, or other action in respect of, any liability or
obligation under or respect of, or of any of the terms, covenants, or conditions
or any indenture or other instrument under which any Senior Indebtedness is
outstanding or of such Senior Indebtedness, and no release of property securing
any Senior Indebtedness, whether or not such release is in accordance with the
provisions of any applicable document, shall in any way alter or affect any of
the provisions of this Section.
(h) "Senior Indebtedness" for purposes of this Section shall mean
all indebtedness (principal and interest) now existing or hereafter incurred of
the Corporation for money borrowed from banks or other financial institutions:
(i) which is secured by the assets of the Corporation; and (ii) is not by its
express terms subordinate and junior to or on parity with this Note.
5. Default. If any of the following events occur ("Event of Default"), the
entire unpaid principal amount of, and accrued and unpaid interest on, this Note
shall immediately be due and payable, and the Corporation shall pay all costs of
collection including, but not limited to, reasonable attorneys' fees and
expenses incurred by the owner(s) or its assigns on account of such collection,
whether or not suit is brought:
(a) The Corporation fails to pay the principal of this Note at its
maturity;
(b) The Corporation commences any voluntary proceeding under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
receivership, dissolution, or liquidation law or statute, of any jurisdiction,
whether now or subsequently in effect; or the Corporation is adjudicated as
bankrupt by a court of competent jurisdiction; or the Corporation petitions or
applies for, acquiesces in, or consents to, the appointment of any receiver or
trustee of the Corporation or for all or substantially all of its property or
assets; or the Corporation makes an assignment for the benefit of its creditors;
or the Corporation admits in writing its inability to pay its debts as they
mature; or
(c) There is commenced against the Corporation any proceeding
relating to the Corporation under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, receivership, dissolution, or liquidation law
or statute, of any jurisdiction, whether now or subsequently in effect, and the
proceeding remains undismissed for a period of 60 days or the Corporation by any
act indicates its consent to, approval of, or acquiescence in the proceeding; or
a receiver or trustee is appointed for the Corporation or for all or
substantially all of its property or assets, and the receivership or trusteeship
remains undischarged for a period of 60 days; or a warrant of attachment,
execution or similar process is issued against any substantial part of the
property or assets of the Corporation, and the warrant or similar process is not
dismissed or bonded within 60 days after the levy.
6. Registered owner. The Corporation shall treat the person or persons whose
name or names appear on this Note as the absolute owner or owners hereof for the
purpose of receiving payment of, or on account of, the principal and interest
due on this Note and for all other purposes, unless and until written notice
satisfactory to the Corporation is provided by the registered owner of
assignment hereof.
7. Assignment. The Corporation may assign its rights hereunder to any person or
entity. No assignment of rights or obligations shall be effective until delivery
of written notice of such assignment is made by the assigning party to the other
party hereto.
8. Release of shareholders, officers and directors. This Note is the obligation
of the Corporation only, and no recourse shall be had for the payment of any
principal or interest hereon against any shareholder, officer or director of the
Corporation, either directly or through the Corporation, by virtue of any
statute for the enforcement of any assessment or otherwise. The holder or
holders of this Note, by the acceptance hereof, and as part of the consideration
for this Note, release all claims and waive all liabilities against the
foregoing persons in connection with this Note.
9. Amendments. With the consent of the holders of a majority of the principal
amount of outstanding Notes, evidenced by a written instrument or instruments,
Payor may amend the Notes by executing and delivering to the holders an
amendment thereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Notes or of modifying in any
manner the rights of the holders; provided, however, that no such amendment
shall, without the consent of the holder of each outstanding Note affected
thereby:
(a) Change the stated maturity of the principal of any Note, or
reduce the principal amount thereof or the interest thereon, or the currency in
which any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the stated
maturity thereof (or, in the case of prepayment, or after the prepayment date);
(b) Reduce the percentage in principal amount of the outstanding
Notes, the consent of whose holders is required for any amendment, or the
consent of whose holders is required for any waiver of compliance with the
provisions hereof; or
(c) Modify any of the provisions of this Section, except to increase
any such percentage or to provide that other provisions of the Notes cannot be
modified or waived without the consent of the holder affected thereby.
Upon the execution and delivery of any amendment in accordance with this
Section, the Notes shall be modified in accordance therewith, and every holder
of Notes theretofore or thereafter executed and delivered shall be bound
thereby.
10. Governing Law. The Notes and all terms and conditions herein shall be
governed by and construed and in accordance with the laws of the State of
Vermont excluding the state's conflict of law provisions.
11. Exclusive Jurisdiction. With respect to actions and proceedings to enforce
the provisions of, arising from, or relating to this Note, the holder, by
acceptance of this Note, consents to personal jurisdiction in the state or
federal courts of the State of Vermont and irrevocably agrees that all such
actions and proceedings shall be litigated exclusively in such courts. Further,
each of the parties hereto waives any objection that it may have to the conduct
of any action or proceeding in any such court based on improper venue or forum
non conveniens. Each of the parties hereto waives personal service of any and
all process upon it and agrees that valid service of process may be made by mail
or courier service directed to it at the address set forth herein and that
service so made shall be deemed to be completed upon the earlier of actual
receipt or ten (10) days after the same shall have been posted.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Corporation has signed this Note this 22nd day of
November 2000.
eNote.com Inc.
By:___________________
Name:
Title:
REGISTERED OWNER:
Friedlander Capital Management Corp.
By:___________________________
Name:
Title:
Exhibit 4.41
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR
ANY APPLICABLE STATE SECURITIES LAW, AND MAY NOT BE TRANSFERRED EXCEPT (i)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (ii) UPON FIRST
FURNISHING TO THE COMPANY AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH TRANSFER IS NOT IN VIOLATION OF THE REGISTRATION REQUIREMENTS OF THE ACT OR
ANY APPLICABLE STATE SECURITIES LAW.
To Subscribe for and Purchase Common Stock of
eNote.com Inc.
VOID AFTER NOVEMBER 22, 2002
Warrant No. 7-A As of November 22, 2000
THIS CERTIFIES that, for value received, FRIEDLANDER CAPITAL MANGAGEMENT
CORP., or its registered assigns, is entitled, subject to the terms of Section 1
hereof, to subscribe for and purchase from eNote.com Inc., a Delaware
corporation (hereinafter called the "Company"), at the price of $.50 per share
(such price, as from time to time to be adjusted as hereinafter provided, being
hereinafter called the "Warrant Price"), at any time on or prior to November 22,
2002 up to 1,200,000 fully paid, nonassessable shares of Common Stock, par value
$.01 per share, of the Company ("Common Stock"), subject, however, to the
provisions and upon the terms and conditions hereinafter set forth.
Section 1. Exercise of Warrant. This Warrant may be exercised by the
holder hereof, in whole or in part (but not as to a fractional share of Common
Stock), by the completion of the subscription form attached hereto and by the
surrender of this Warrant (properly endorsed) at the office of the Company in
Williston, Vermont (or at such other agency or office of the Company in the
United States as it may designate by notice in writing to the holder hereof at
the address of the holder hereof appearing on the books of the Company), and by
payment to the Company of the Warrant Price, in cash or by certified or official
bank check, for each share being purchased. In the event of any exercise of the
rights represented by this Warrant, a certificate or certificates for the shares
of Common Stock so purchased, registered in the name of the holder hereof, shall
be delivered to the holder hereof within a reasonable time, not exceeding
fifteen (15) business days, after the rights represented by this Warrant shall
have been so exercised; and, unless this Warrant has expired or been exercised
in full, a new Warrant representing the number of shares (except a remaining
fractional share), if any, with respect to which this Warrant shall not then
have been exercised shall also be issued to the holder hereof within such time.
With respect to any such exercise, the holder hereof shall for all purposes be
deemed to have become the holder of record of the number of shares of Common
Stock evidenced by such certificate or certificates from the date on which this
Warrant was surrendered and payment of the Warrant Price was made irrespective
of the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date on which the stock transfer books of the Company
are closed, such person shall be deemed to have become the holder of such shares
at the close of business on the next succeeding date on which the stock transfer
books are open. No fractional shares shall be issued upon exercise of this
Warrant. If any fractional interest in a share of Common Stock would, except for
the provisions of this Section 1, be delivered upon any such exercise, the
Company, in lieu of delivering the fractional share thereof, shall pay to the
holder hereof an amount in cash equal to the current market price of such
fractional interest as determined in good faith by the Board of Directors of the
Company.
Section 2. Adjustment of Number of Shares.
(a) Reclassification, Consolidation or Merger. In the event of any
reclassification or change of outstanding securities of the Common Stock, or in
the event of any consolidation or merger of the Company with or into another
corporation or entity, other than a consolidation or merger with another
corporation or entity in which the Company is the continuing corporation and
which does not result in any reclassification, conversion or change of
outstanding Common Stock, or in the event of any sale of all or substantially
all of the assets of the Company, the Company, or such successor or purchasing
corporation or entity, as the case may be, shall execute a new warrant
certificate (the "New Warrant Certificate"), providing that the Holder of this
Warrant shall have the right to exercise such new warrants and procure upon such
exercise, in lieu of each share of Common Stock issuable upon exercise of the
Warrants, the kind and amount of shares of stock, other securities, money and
property receivable upon such reclassification, conversion, change,
consolidation or merger by a holder of one share of Common Stock.
(b) Subdivisions, Combinations and Stock Dividends. If at any time while
this Warrant is outstanding and unexpired the Company shall subdivide or combine
its Common Stock, or shall pay a dividend with respect to Common Stock payable
in, or make any other distribution with respect to its Common Stock consisting
of, shares of Common Stock, then the number of Warrant Shares for which this
Warrant is exercisable shall be adjusted, from and after the date of
determination of stockholders entitled to receive such dividend or distribution,
to that number determined by multiplying the number of Warrant Shares for which
this Warrant is exercisable immediately prior to such date of determination by a
fraction (i) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately after such dividend or distribution and
(ii) the denominator of which shall be the total number of shares of Common
Stock outstanding immediately prior to such dividend or distribution.
(c) Notice of Adjustment. Upon any adjustment of the Warrant Price, then
and in each such case the Company shall give written notice thereof, by first
class mail, postage prepaid, addressed to the Warrant holder at the address of
such holder as shown on the books of the Company, which notice shall state the
Warrant Price resulting from such adjustment, setting forth in reasonable detail
the method of calculation and the facts upon which such calculation is based.
(d) Stock to Be Reserved. The Company will at all times reserve and keep
available out of its authorized Common Stock or its treasury shares, solely for
the purpose of issuance upon the exercise of this Warrant as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
exercise of this Warrant provided, however, that the Company has an insufficient
number of shares of authorized Common Stock available to reserve the requisite
number of shares issuable upon exercise of this warrant, the Company will
reserve an amount equal to the remaining number of authorized shares, allocated
pro-rata among Warrants 3-A and 4-A. In such case, the Company will use its best
efforts to seek shareholder approval to increase the Company's authorized Common
Stock and reserve the additional shares necessary for issuance upon exercise of
this Warrant.
(e) Definition of Common Stock. As used herein the term "Common Stock"
shall mean and include the 25,000,000 shares of Common Stock, par value $.01 per
share, as authorized on the date of this and any additional Common Stock, par
value $.01 hereinafter authorized.
Section 3. Notices of Record Dates.
In the event of:
(a) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution (other than cash dividends out of
earned surplus), or any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities or property, or to
receive any right to sell shares of stock of any class or any other right; or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other corporation or entity; or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company,
then and in each such event the Company will give notice to the holder of this
Warrant specifying: (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right; and (ii) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least 10 days and not more than 90
days prior to the date therein specified, and such notice shall state that the
action in question or the record date is subject to (x) the effectiveness of a
registration statement under the Securities Act of 1933 and applicable state
securities laws, or (y) a favorable vote of stockholders, if either is required.
Section 4. No Stockholder Rights or Liabilities.
(a) Except as set forth in paragraph 4(b), this Warrant shall not entitle
the holder hereof to any voting rights or other rights as a stockholder of the
Company. No provision hereof, in the absence of affirmative action by the holder
hereof to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder hereof shall give rise to any liability of
such holder for the Warrant Price or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.
(b) At any time while this Warrant is outstanding, the Company shall,
prior to making any distribution of its property or assets to the holders of its
Common Stock as a dividend in liquidation or partial liquidation or by way of
return of capital or any dividend payable out of funds legally available for
dividends under the laws of the State of Delaware, give to the holder of this
Warrant, not less than 20 days prior written notice of any such distribution. If
such holder shall exercise this Warrant on or prior to the date of such
distribution set forth in such notice, such holder shall be entitled to receive,
upon such exercise: (i) the number of shares of Common Stock receivable pursuant
to such exercise; and (ii) without payment of any additional consideration, a
sum equal to the amount of such property or assets as would have been payable to
the holder hereof as an owner of the shares described in clause (i) of this
paragraph 4(b) had the holder hereof been the holder of record of such shares on
the record date for such distribution; and an appropriate provision with respect
to such payment to such holder as described in this paragraph 4(b) shall be made
a part of any such distribution.
Section 5. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant
is lost, stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may in its discretion reasonably impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
Section 6. Notices. Any notice to be given to either party under this
Warrant Certificate shall be in writing and shall be deemed to have been given
to the Company or the Holder hereof, as the case may be, when delivered in hand
or when sent by first class mail, postage prepaid, addressed, if to the Company,
at its principal office and, if to the Holder hereof, at its address as set
forth in the Company's books and records or at such other address as the Holder
hereof may have provided to the Company in writing.
Section 7. Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of Vermont, without giving effect to
such jurisdiction's principles of conflict of laws.
Section 8. Exclusive Jurisdiction. With respect to actions and proceedings
to enforce the provisions of, arising from, or relating to this Warrant or the
Warrant, the holder, by acceptance of this Warrant, consents to personal
jurisdiction in the state or federal courts of the State of Vermont and
irrevocably agrees that all such actions and proceedings shall be litigated
exclusively in such courts. Further, each of the parties hereto waives any
objection that it may have to the conduct of any action or proceeding in any
such court based on improper venue or forum non conveniens. Each of the parties
hereto waives personal service of any and all process upon it and agrees that
valid service of process may be made by mail or courier service directed to it
at the address set forth herein and that service so made shall be deemed to be
completed upon the earlier of actual receipt or ten (10) days after the same
shall have been posted.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the duly authorized agent of eNote.com Inc. has
executed this Warrant as of the 22nd day of November 2000.
ENOTE.COM INC.
By:___________________________
Name:
Title:
[Corporate Seal]
Attest:
____________________________
Secretary
SUBSCRIPTION FORM TO BE EXECUTED
UPON EXERCISE OF THE WARRANT
Date:
----------------
To: eNote.com Inc.
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to subscribe for and purchase [__________] shares of
Common Stock covered by such Warrant, and herewith tenders $[____________] in
full payment of the purchase price for such shares as provided in the within
Warrant.
Name of Holder:
By: ___________________________________
Address ___________________________________
___________________________________
Exhibit 4.42
November 20, 2000
Mr. Burton G. Friedlander
Friedlander Capital Management Corp.
Re: eNote.com Inc.
Dear Burt:
The purpose of this letter is to confirm the agreement of Friedlander
Capital Management Corp. to extend the maturity date of the $150,000 8% Secured
Note due October 14, 2000 and the maturity date of the 8% Secured Note dated
September 28, 2000 due October 14, 2000 to December 2, 2000.
Very truly yours,
eNote.com Inc.
By:_______________________
Acknowledged and Agreed
Friedlander Capital Management Corp.
By:_____________________________________
Exhibit 4.43
As of December 2, 2000
Mr. Burton G. Friedlander
Friedlander Capital Management Corp.
104 Field Point Rd.
Greenwich, CT 06830
Re: eNote.com Inc.
Dear Burt:
The purpose of this letter is to confirm the agreement of Friedlander
Capital Management Corp. to extend the maturity date of the following Notes
until March 1, 2001:
$250,000 8% Secured Convertible Note dated August 17, 2000 due
December 2, 2000.
$100,000 8% Secured Convertible Note dated September 11, 2000 due
December 2, 2000.
$150,000 8% Secured Note dated September 14, 2000 due December 2, 2000
$150,000 8% Secured Note dated September 28, 2000 due December 2, 2000.
$150,000 8% Secured Convertible Note dated October 12, 2000 due
December 2, 2000.
$150,000 8% Secured Convertible Note dated October 26, 2000 due
December 2, 2000.
$100,000 8% Secured Convertible Note dated November 9, 2000 due
December 2, 2000.
$120,000 8% Secured Convertible Note dated November 22, 2000 due
December 2, 2000.
Very truly yours,
ENOTE.COM INC.
By:_______________________
Acknowledged and Agreed
FRIEDLANDER CAPITAL MANAGEMENT CORP.
By:_____________________________________
Exhibit 4.44
THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITY UNDER THE SECURITIES ACT OF 1933 UNLESS
PAYOR HAS RECEIVED THE WRITTEN OPINION OF COUNSEL SATISFACTORY TO PAYOR TO THE
EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER DOES NOT INVOLVE A TRANSACTION
REQUIRING REGISTRATION OF SUCH SECURITY UNDER THE SECURITIES ACT OF 1933.
B-8 $110,000
eNote.com Inc
185 Allen Brook Lane
Williston, Vermont 05495
December 7, 2000
8% Subordinated Secured Convertible Note
Due March 1, 2001
eNote.com Inc., a Delaware corporation, (the "Corporation"), for value received,
promises to pay FRIEDLANDER CAPITAL MANAGEMENT CORP. (the "Holder"), the sum of
ONE HUNDRED TEN THOUSAND DOLLARS $110,000 on March 1, 2001 (the "Maturity
Date"), together with interest accrued thereon at the rate of eight percent (8%)
per annum, computed from December 7, 2000 (the "Issue Date"). Payment of
principal and interest shall be made in lawful money of the United States of
America on the Maturity Date unless this Note is earlier converted as provided
for herein. This Note, is part of a series of 8% Subordinated Secured
Convertible Notes due March 1, 2001 being issued by the Corporation (each a
"Note" and together the "Notes").
This Note is issued pursuant to a Subscription Agreement dated as of the Issue
Date (the "Subscription Agreement") by and between the Corporation and the
Holder. Payment of the Notes is secured by all tangible and intangible assets of
the Corporation pursuant to a Security Agreement dated as of December 20, 2000,
as may be amended from time to time.
1. Conversion.
(a) The holder of this Note may at time prior to the maturity
hereof, convert the principal amount hereof and interest accrued thereon into
shares of the Corporation's Common Stock. The conversion ratio shall be $0.18 of
principal converted per share of Common Stock (the "Conversion Rate"). To
convert this Note, the holder hereof must surrender the same at the office of
the Corporation, together with a written instrument of transfer in a form
satisfactory to the Corporation, properly completed and executed and with a
written notice of conversion. All rights of the holder of this Note shall, to
the extent of the principal and interest thereof converted, cease as of the date
of such conversion.
(b) In case the Corporation shall at any time subdivide its
outstanding shares of Common Stock into a greater number of shares, the
Conversion Rate in effect immediately prior to such subdivision shall be
proportionately reduced, i.e., the holder shall be entitled to purchase after
such subdivision, for the same consideration as applicable prior to such
subdivision, the same percentage of outstanding Common Stock that such holder
was entitled to purchase prior to such subdivision, and conversely, in case the
outstanding shares of Common Stock of the Corporation shall be combined into a
smaller number of shares, the Conversion Price in effect immediately prior to
such combination shall be proportionately increased. In case the Corporation
shall declare a dividend or make any other distribution upon any stock of the
Corporation payable in Common Stock, options or convertible securities
exercisable or convertible into shares of Common Stock, any Common Stock,
options or convertible securities, as the case may be, issuable in payment of
such dividend or distribution shall be deemed to have been issued in a
subdivision of outstanding shares as provided in the foregoing sentence.
(c) The Corporation will at all times reserve and keep available out
of its authorized Common Stock or its treasury shares, solely for the purpose of
issuance upon conversion of the Note as herein provided, such number of shares
of Common Stock as shall then be issuable upon conversion of this Note. The
Corporation covenants that all shares of Common Stock which shall be so issued
shall be duly and validly issued and fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof, and, without
limiting the generality of the foregoing, the Corporation covenants that it will
from time to time take all such action as may be requisite to assure that the
par value per share of the Common Stock is at all times equal to or less than
the effective Conversion Rate. The Corporation will take all such action as may
be necessary to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any requirements of
any national securities exchange upon which the Common Stock of the Corporation
may be listed. The Corporation will not take any action which results in any
adjustment of the Conversion Price if the total number of shares of Common Stock
issued and issuable after such action upon conversion of this Note would exceed
the total number of shares of Common Stock then authorized by the Corporation's
Certificate of Incorporation. The Corporation has not granted and will not grant
any right of first refusal with respect to shares issuable upon conversion of
this Note, and there are no preemptive rights associated with such shares.
2. Fractional shares. In lieu of issuing any fraction of a share upon the
conversion of this Note, the Corporation shall pay to the holder hereof for any
fraction of a share otherwise issuable upon the conversion, cash equal to the
same fraction of $0.18.
3. Prepayment. This Note may be prepaid without penalty. In the case of each
prepayment of less than all of the outstanding Notes, the principal amount to be
prepaid shall be allocated among the respective Notes and the holders thereof so
that the principal amount to be prepaid to each holder shall bear the same ratio
to the aggregate principal amount then to be prepaid as the principal amount of
Notes then held by such holder bears to the aggregate principal amount of Notes
then outstanding. Five (5) business days prior to any prepayment hereunder the
Corporation shall provide written notice to each Note holder indicating the date
and amount of such prepayment. The Note holder shall have the right to convert
the principal amount of any such prepayment prior to date of prepayment.
4. Subordination.
(a) The Corporation, for itself, its successors and assigns,
covenants and agrees, and each holder of this Note by his acceptance thereof
likewise covenants and agrees, that the payment of the principal of and interest
on each and all of this Note shall be subordinate and subject, to the extent and
in the manner hereinafter set forth, in right of payment to the prior payment in
full of all Senior Indebtedness.
(b) Upon any distribution of assets of the Corporation upon any
dissolution, winding up, liquidation, or reorganization of the Corporation,
whether in bankruptcy, insolvency, or receivership proceedings or upon an
assignment for the benefit of creditors of any other dissolution, winding up,
liquidation, or reorganization of the Corporation:
(i) All Senior Indebtedness shall first be paid in full, or
provision made for such payment in full of the principal thereof, and premium,
if any, and interest thereon, before any payment is made on account of the
principal of, or interest on, the Notes;
(ii) Any payment or distribution of assets of the Corporation
of any kind or character, whether in cash, property, or securities (other than
stock of the Corporation as reorganized or readjusted or securities of the
Corporation or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in this Section with respect to the Notes, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), to which the
holder of this Note would be entitled except for the provisions of this Section
shall be paid by the liquidating trustee or agent or other person making such
payment of distribution, whether a trustee in bankruptcy, receiver, or
liquidating trustee or other trustee or agent, directly to the holders of Senior
Indebtedness or their representative or representatives or the trustee or
trustees under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the principal of, and premium, if any,
and interest on, the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness; and
(iii) In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Corporation of any kind or character,
whether in cash, property, or securities (other than stock of the Corporation as
reorganized or readjusted or securities of the Corporation or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in this Section with
respect to the Note, to the payment of all Senior Indebtedness at the time
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), shall be received by the holder of this Note
before all Senior Indebtedness is paid in full, or provision made for its
payment, such payment or distribution shall be paid over to the holders of
Senior Indebtedness remaining unpaid or unprovided for or their representative
or representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may have been issued,
as provided in the foregoing subparagraph (2), for application to the payment of
such Senior Indebtedness until all such Senior Indebtedness shall have been paid
in full after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness.
(c) Subject to the payment in full of all Senior Indebtedness, the
holder of this Note shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property, or
securities of the Corporation applicable to the Senior Indebtedness until the
principal of and interest on this Note shall be paid in full, and no such
payments or distributions in respect of this Note of cash, property, or
securities distributable to the Senior Indebtedness under the provisions here
shall, as between the Corporation, its creditors other than the holders of
Senior Indebtedness, and the holder of this Notes, be deemed to be a payment by
the Corporation to or on account of this Note. It is understood that the
provisions of this Section are and are intended solely for the purpose of
defining the relative rights of the holder of this Note, on the one hand, and
the holders of the Senior Indebtedness on the other hand. Nothing contained in
this Section is intended to or shall impair, as between the Corporation, its
creditors other than the holders of Senior Indebtedness, and the holder of this
Note, the absolute and unconditional obligation of the Corporation to pay the
holder of this Note the principal of and interest on this Note as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the holder of this Note and creditors
of the Corporation other than the holders of the Senior Indebtedness; nor shall
anything herein or therein prevent the holder of this Note from exercising all
remedies otherwise permitted by applicable law upon default under this Note,
subject to the rights, if any, under this Section of the holders of Senior
Indebtedness in respect of cash, property or securities of the Corporation
received upon the exercise of any such remedy.
(d) Upon any distribution of assets of the Corporation referred to
in this Section, the holder of this Note shall be entitled to rely upon a
certificate of the liquidating trustee or agent or other person making any
distribution to such holder for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Corporation, the amount thereof or payable thereon,
and all other facts pertinent thereto or to this Section.
(e) If there shall have occurred a default in the payment of the
principal of (or premium, if any) or interest on any Senior Indebtedness, then,
unless and until such default shall have been cured or waived, no payment of
principal or interest shall be made by the Corporation on this Note, and no
holder of this Note shall be entitled to receive any such payment. Nothing
contained in this Section shall, however (1) affect the obligation of
Corporation to make or prevent the Corporation from making, at any time, except
during the pendency of any dissolution, winding up, liquidation, or
reorganization proceedings or except as provided in the first sentence of this
subsection, payments of principal of or interest on this Note, or (2) prevent
the application by any paying agent of any moneys deposited with it by the
Corporation to the payment of or on account of the principal of, or interest on,
this Note, if, at the time of such deposit, the paying agent did not have
written notice of any event prohibiting the making of such payment or deposit by
the Corporation; or (3) be construed as preventing the occurrence of any Event
of Default hereunder.
(f) No right of any present or future holder of any Senior
Indebtedness of the Corporation to enforce subordination as herein provided
shall at any time or in any way be prejudiced or impaired by any act or failure
to act on the part of the Corporation or by any act or failure to act, in good
faith, by any such holder, or by an noncompliance by the Corporation with the
terms, provisions, and covenants of this Note, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
(g) Any renewal or extension of the time of payment of any Senior
Indebtedness or the exercise by the holders of Senior Indebtedness of any of
their rights under the Senior Indebtedness, including without limitation the
waiver of default thereunder or the release of any security therefor, may be
made or done all without notice to or assent from the holder of this Note. No
compromise, alteration, amendment, modification, extension, renewal, or other
change of, or waiver, consent, or other action in respect of, any liability or
obligation under or respect of, or of any of the terms, covenants, or conditions
or any indenture or other instrument under which any Senior Indebtedness is
outstanding or of such Senior Indebtedness, and no release of property securing
any Senior Indebtedness, whether or not such release is in accordance with the
provisions of any applicable document, shall in any way alter or affect any of
the provisions of this Section.
(h) "Senior Indebtedness" for purposes of this Section shall mean
all indebtedness (principal and interest) now existing or hereafter incurred of
the Corporation for money borrowed from banks or other financial institutions:
(i) which is secured by the assets of the Corporation; and (ii) is not by its
express terms subordinate and junior to or on parity with this Note.
5. Default. If any of the following events occur ("Event of Default"), the
entire unpaid principal amount of, and accrued and unpaid interest on, this Note
shall immediately be due and payable, and the Corporation shall pay all costs of
collection including, but not limited to, reasonable attorneys' fees and
expenses incurred by the owner(s) or its assigns on account of such collection,
whether or not suit is brought:
(a) The Corporation fails to pay the principal of this Note at its
maturity;
(b) The Corporation commences any voluntary proceeding under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
receivership, dissolution, or liquidation law or statute, of any jurisdiction,
whether now or subsequently in effect; or the Corporation is adjudicated as
bankrupt by a court of competent jurisdiction; or the Corporation petitions or
applies for, acquiesces in, or consents to, the appointment of any receiver or
trustee of the Corporation or for all or substantially all of its property or
assets; or the Corporation makes an assignment for the benefit of its creditors;
or the Corporation admits in writing its inability to pay its debts as they
mature; or
(c) There is commenced against the Corporation any proceeding
relating to the Corporation under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, receivership, dissolution, or liquidation law
or statute, of any jurisdiction, whether now or subsequently in effect, and the
proceeding remains undismissed for a period of 60 days or the Corporation by any
act indicates its consent to, approval of, or acquiescence in the proceeding; or
a receiver or trustee is appointed for the Corporation or for all or
substantially all of its property or assets, and the receivership or trusteeship
remains undischarged for a period of 60 days; or a warrant of attachment,
execution or similar process is issued against any substantial part of the
property or assets of the Corporation, and the warrant or similar process is not
dismissed or bonded within 60 days after the levy.
6. Registered owner. The Corporation shall treat the person or persons
whose name or names appear on this Note as the absolute owner or owners hereof
for the purpose of receiving payment of, or on account of, the principal and
interest due on this Note and for all other purposes, unless and until written
notice satisfactory to the Corporation is provided by the registered owner of
assignment hereof.
7. Assignment. The Corporation may assign its rights hereunder to any person or
entity. No assignment of rights or obligations shall be effective until delivery
of written notice of such assignment is made by the assigning party to the other
party hereto.
8. Release of shareholders, officers and directors. This Note is the obligation
of the Corporation only, and no recourse shall be had for the payment of any
principal or interest hereon against any shareholder, officer or director of the
Corporation, either directly or through the Corporation, by virtue of any
statute for the enforcement of any assessment or otherwise. The holder or
holders of this Note, by the acceptance hereof, and as part of the consideration
for this Note, release all claims and waive all liabilities against the
foregoing persons in connection with this Note.
9. Amendments. With the consent of the holders of a majority of the principal
amount of outstanding Notes, evidenced by a written instrument or instruments,
Payor may amend the Notes by executing and delivering to the holders an
amendment thereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Notes or of modifying in any
manner the rights of the holders; provided, however, that no such amendment
shall, without the consent of the holder of each outstanding Note affected
thereby:
(a) Change the stated maturity of the principal of any Note, or
reduce the principal amount thereof or the interest thereon, or the currency in
which any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the stated
maturity thereof (or, in the case of prepayment, or after the prepayment date);
(b) Reduce the percentage in principal amount of the outstanding
Notes, the consent of whose holders is required for any amendment, or the
consent of whose holders is required for any waiver of compliance with the
provisions hereof; or
(c) Modify any of the provisions of this Section, except to increase
any such percentage or to provide that other provisions of the Notes cannot be
modified or waived without the consent of the holder affected thereby.
Upon the execution and delivery of any amendment in accordance with this
Section, the Notes shall be modified in accordance therewith, and every holder
of Notes theretofore or thereafter executed and delivered shall be bound
thereby.
10. Governing Law. The Notes and all terms and conditions herein shall be
governed by and construed and in accordance with the laws of the State of
Vermont excluding the state's conflict of law provisions.
11. Exclusive Jurisdiction. With respect to actions and proceedings to enforce
the provisions of, arising from, or relating to this Note, the holder, by
acceptance of this Note, consents to personal jurisdiction in the state or
federal courts of the State of Vermont and irrevocably agrees that all such
actions and proceedings shall be litigated exclusively in such courts. Further,
each of the parties hereto waives any objection that it may have to the conduct
of any action or proceeding in any such court based on improper venue or forum
non conveniens. Each of the parties hereto waives personal service of any and
all process upon it and agrees that valid service of process may be made by mail
or courier service directed to it at the address set forth herein and that
service so made shall be deemed to be completed upon the earlier of actual
receipt or ten (10) days after the same shall have been posted.
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IN WITNESS WHEREOF, the Corporation has signed this Note this 7th day of
December 2000.
eNote.com Inc.
By:________________
Name:
Title:
REGISTERED OWNER:
Friedlander Capital Management Corp.
By:___________________________
Name:
Title:
Exhibit 4.45
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR
ANY APPLICABLE STATE SECURITIES LAW, AND MAY NOT BE TRANSFERRED EXCEPT (i)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (ii) UPON FIRST
FURNISHING TO THE COMPANY AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH TRANSFER IS NOT IN VIOLATION OF THE REGISTRATION REQUIREMENTS OF THE ACT OR
ANY APPLICABLE STATE SECURITIES LAW.
To Subscribe for and Purchase Common Stock of
eNote.com Inc.
VOID AFTER December 7, 2003
Warrant No. 8-A As of December 7, 2000
THIS CERTIFIES that, for value received, FRIEDLANDER CAPITAL MANGAGEMENT
CORP., or its registered assigns, is entitled, subject to the terms of Section 1
hereof, to subscribe for and purchase from eNote.com Inc., a Delaware
corporation (hereinafter called the "Company"), at the price of $0.375 per share
(such price, as from time to time to be adjusted as hereinafter provided, being
hereinafter called the "Warrant Price"), at any time on or prior to December 7,
2003 up to 825,000 fully paid, nonassessable shares of Common Stock, par value
$.01 per share, of the Company ("Common Stock"), subject, however, to the
provisions and upon the terms and conditions hereinafter set forth.
Section 1. Exercise of Warrant. This Warrant may be exercised by the
holder hereof, in whole or in part (but not as to a fractional share of Common
Stock), by the completion of the subscription form attached hereto and by the
surrender of this Warrant (properly endorsed) at the office of the Company in
Williston, Vermont (or at such other agency or office of the Company in the
United States as it may designate by notice in writing to the holder hereof at
the address of the holder hereof appearing on the books of the Company), and by
payment to the Company of the Warrant Price, in cash or by certified or official
bank check, for each share being purchased. In the event of any exercise of the
rights represented by this Warrant, a certificate or certificates for the shares
of Common Stock so purchased, registered in the name of the holder hereof, shall
be delivered to the holder hereof within a reasonable time, not exceeding
fifteen (15) business days, after the rights represented by this Warrant shall
have been so exercised; and, unless this Warrant has expired or been exercised
in full, a new Warrant representing the number of shares (except a remaining
fractional share), if any, with respect to which this Warrant shall not then
have been exercised shall also be issued to the holder hereof within such time.
With respect to any such exercise, the holder hereof shall for all purposes be
deemed to have become the holder of record of the number of shares of Common
Stock evidenced by such certificate or certificates from the date on which this
Warrant was surrendered and payment of the Warrant Price was made irrespective
of the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date on which the stock transfer books of the Company
are closed, such person shall be deemed to have become the holder of such shares
at the close of business on the next succeeding date on which the stock transfer
books are open. No fractional shares shall be issued upon exercise of this
Warrant. If any fractional interest in a share of Common Stock would, except for
the provisions of this Section 1, be delivered upon any such exercise, the
Company, in lieu of delivering the fractional share thereof, shall pay to the
holder hereof an amount in cash equal to the current market price of such
fractional interest as determined in good faith by the Board of Directors of the
Company.
Section 2. Adjustment of Number of Shares.
(a) Reclassification, Consolidation or Merger. In the event of any
reclassification or change of outstanding securities of the Common Stock, or in
the event of any consolidation or merger of the Company with or into another
corporation or entity, other than a consolidation or merger with another
corporation or entity in which the Company is the continuing corporation and
which does not result in any reclassification, conversion or change of
outstanding Common Stock, or in the event of any sale of all or substantially
all of the assets of the Company, the Company, or such successor or purchasing
corporation or entity, as the case may be, shall execute a new warrant
certificate (the "New Warrant Certificate"), providing that the Holder of this
Warrant shall have the right to exercise such new warrants and procure upon such
exercise, in lieu of each share of Common Stock issuable upon exercise of the
Warrants, the kind and amount of shares of stock, other securities, money and
property receivable upon such reclassification, conversion, change,
consolidation or merger by a holder of one share of Common Stock.
(b) Subdivisions, Combinations and Stock Dividends. If at any time while
this Warrant is outstanding and unexpired the Company shall subdivide or combine
its Common Stock, or shall pay a dividend with respect to Common Stock payable
in, or make any other distribution with respect to its Common Stock consisting
of, shares of Common Stock, then the number of Warrant Shares for which this
Warrant is exercisable shall be adjusted, from and after the date of
determination of stockholders entitled to receive such dividend or distribution,
to that number determined by multiplying the number of Warrant Shares for which
this Warrant is exercisable immediately prior to such date of determination by a
fraction (i) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately after such dividend or distribution and
(ii) the denominator of which shall be the total number of shares of Common
Stock outstanding immediately prior to such dividend or distribution.
(c) Notice of Adjustment. Upon any adjustment of the Warrant Price, then
and in each such case the Company shall give written notice thereof, by first
class mail, postage prepaid, addressed to the Warrant holder at the address of
such holder as shown on the books of the Company, which notice shall state the
Warrant Price resulting from such adjustment, setting forth in reasonable detail
the method of calculation and the facts upon which such calculation is based.
(d) Stock to Be Reserved. The Company will at all times reserve and keep
available out of its authorized Common Stock or its treasury shares, solely for
the purpose of issuance upon the exercise of this Warrant as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
exercise of this Warrant provided, however, that the Company has an insufficient
number of shares of authorized Common Stock available to reserve the requisite
number of shares issuable upon exercise of this warrant, the Company will
reserve an amount equal to the remaining number of authorized shares, allocated
pro-rata among Warrants 3-A and 4-A. In such case, the Company will use its best
efforts to seek shareholder approval to increase the Company's authorized Common
Stock and reserve the additional shares necessary for issuance upon exercise of
this Warrant.
(e) Definition of Common Stock. As used herein the term "Common Stock"
shall mean and include the 25,000,000 shares of Common Stock, par value $.01 per
share, as authorized on the date of this and any additional Common Stock, par
value $.01 hereinafter authorized.
Section 3. Notices of Record Dates.
In the event of:
(a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution (other than cash
dividends out of earned surplus), or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any right to sell shares of stock of any class or any
other right; or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other corporation or entity; or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company,
then and in each such event the Company will give notice to the holder of this
Warrant specifying: (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right; and (ii) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least 10 days and not more than 90
days prior to the date therein specified, and such notice shall state that the
action in question or the record date is subject to (x) the effectiveness of a
registration statement under the Securities Act of 1933 and applicable state
securities laws, or (y) a favorable vote of stockholders, if either is required.
Section 4. No Stockholder Rights or Liabilities.
(a) Except as set forth in paragraph 4(b), this Warrant shall not
entitle the holder hereof to any voting rights or other rights as a stockholder
of the Company. No provision hereof, in the absence of affirmative action by the
holder hereof to purchase shares of Common Stock, and no mere enumeration herein
of the rights or privileges of the holder hereof shall give rise to any
liability of such holder for the Warrant Price or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
(b) At any time while this Warrant is outstanding, the Company shall,
prior to making any distribution of its property or assets to the holders of its
Common Stock as a dividend in liquidation or partial liquidation or by way of
return of capital or any dividend payable out of funds legally available for
dividends under the laws of the State of Delaware, give to the holder of this
Warrant, not less than 20 days prior written notice of any such distribution. If
such holder shall exercise this Warrant on or prior to the date of such
distribution set forth in such notice, such holder shall be entitled to receive,
upon such exercise: (i) the number of shares of Common Stock receivable pursuant
to such exercise; and (ii) without payment of any additional consideration, a
sum equal to the amount of such property or assets as would have been payable to
the holder hereof as an owner of the shares described in clause (i) of this
paragraph 4(b) had the holder hereof been the holder of record of such shares on
the record date for such distribution; and an appropriate provision with respect
to such payment to such holder as described in this paragraph 4(b) shall be made
a part of any such distribution.
Section 5. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant
is lost, stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may in its discretion reasonably impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
Section 6. Notices. Any notice to be given to either party under this
Warrant Certificate shall be in writing and shall be deemed to have been given
to the Company or the Holder hereof, as the case may be, when delivered in hand
or when sent by first class mail, postage prepaid, addressed, if to the Company,
at its principal office and, if to the Holder hereof, at its address as set
forth in the Company's books and records or at such other address as the Holder
hereof may have provided to the Company in writing.
Section 7. Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of Vermont, without giving effect to
such jurisdiction's principles of conflict of laws.
Section 8. Exclusive Jurisdiction. With respect to actions and proceedings
to enforce the provisions of, arising from, or relating to this Warrant or the
Warrant, the holder, by acceptance of this Warrant, consents to personal
jurisdiction in the state or federal courts of the State of Vermont and
irrevocably agrees that all such actions and proceedings shall be litigated
exclusively in such courts. Further, each of the parties hereto waives any
objection that it may have to the conduct of any action or proceeding in any
such court based on improper venue or forum non conveniens. Each of the parties
hereto waives personal service of any and all process upon it and agrees that
valid service of process may be made by mail or courier service directed to it
at the address set forth herein and that service so made shall be deemed to be
completed upon the earlier of actual receipt or ten (10) days after the same
shall have been posted.
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IN WITNESS WHEREOF, the duly authorized agent of eNote.com Inc. has
executed this Warrant as of the 7th day of December, 2000.
ENOTE.COM INC.
By:_____________________________
Name:
Title:
[Corporate Seal]
Attest:
__________________________
Secretary
SUBSCRIPTION FORM TO BE EXECUTED
UPON EXERCISE OF THE WARRANT
Date:
----------------
To: eNote.com Inc.
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to subscribe for and purchase [__________] shares of
Common Stock covered by such Warrant, and herewith tenders $[____________] in
full payment of the purchase price for such shares as provided in the within
Warrant.
Name of Holder:
By: __________________________________
Address __________________________________
__________________________________
Exhibit 4.46
THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITY UNDER THE SECURITIES ACT OF 1933 UNLESS
PAYOR HAS RECEIVED THE WRITTEN OPINION OF COUNSEL SATISFACTORY TO PAYOR TO THE
EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER DOES NOT INVOLVE A TRANSACTION
REQUIRING REGISTRATION OF SUCH SECURITY UNDER THE SECURITIES ACT OF 1933.
B-9 $50,000
eNote.com Inc
185 Allen Brook Lane
Williston, Vermont 05495
December 20, 2000
8% Subordinated Secured Convertible Note
Due March 1, 2001
eNote.com Inc., a Delaware corporation, (the "Corporation"), for value received,
promises to pay FRIEDLANDER CAPITAL MANAGEMENT CORP. (the "Holder"), the sum of
FIFTY THOUSAND DOLLARS $50,000 on March 1, 2001 (the "Maturity Date"), together
with interest accrued thereon at the rate of eight percent (8%) per annum,
computed from December 20, 2000 (the "Issue Date"). Payment of principal and
interest shall be made in lawful money of the United States of America on the
Maturity Date unless this Note is earlier converted as provided for herein. This
Note, is part of a series of 8% Subordinated Secured Convertible Notes due March
1, 2001 being issued by the Corporation (each a "Note" and together the
"Notes").
This Note is issued pursuant to a Subscription Agreement dated as of the Issue
Date (the "Subscription Agreement") by and between the Corporation and the
Holder. Payment of the Notes is secured by all tangible and intangible assets of
the Corporation pursuant to a Security Agreement dated as of December 20, 2000,
as may be amended from time to time.
1. Conversion.
(a) The holder of this Note may at time prior to the maturity
hereof, convert the principal amount hereof and interest accrued thereon into
shares of the Corporation's Common Stock. The conversion ratio shall be $0.18 of
principal converted per share of Common Stock (the "Conversion Rate"). To
convert this Note, the holder hereof must surrender the same at the office of
the Corporation, together with a written instrument of transfer in a form
satisfactory to the Corporation, properly completed and executed and with a
written notice of conversion. All rights of the holder of this Note shall, to
the extent of the principal and interest thereof converted, cease as of the date
of such conversion.
(b) In case the Corporation shall at any time subdivide its
outstanding shares of Common Stock into a greater number of shares, the
Conversion Rate in effect immediately prior to such subdivision shall be
proportionately reduced, i.e., the holder shall be entitled to purchase after
such subdivision, for the same consideration as applicable prior to such
subdivision, the same percentage of outstanding Common Stock that such holder
was entitled to purchase prior to such subdivision, and conversely, in case the
outstanding shares of Common Stock of the Corporation shall be combined into a
smaller number of shares, the Conversion Price in effect immediately prior to
such combination shall be proportionately increased. In case the Corporation
shall declare a dividend or make any other distribution upon any stock of the
Corporation payable in Common Stock, options or convertible securities
exercisable or convertible into shares of Common Stock, any Common Stock,
options or convertible securities, as the case may be, issuable in payment of
such dividend or distribution shall be deemed to have been issued in a
subdivision of outstanding shares as provided in the foregoing sentence.
(c) The Corporation will at all times reserve and keep available out
of its authorized Common Stock or its treasury shares, solely for the purpose of
issuance upon conversion of the Note as herein provided, such number of shares
of Common Stock as shall then be issuable upon conversion of this Note. The
Corporation covenants that all shares of Common Stock which shall be so issued
shall be duly and validly issued and fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof, and, without
limiting the generality of the foregoing, the Corporation covenants that it will
from time to time take all such action as may be requisite to assure that the
par value per share of the Common Stock is at all times equal to or less than
the effective Conversion Rate. The Corporation will take all such action as may
be necessary to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any requirements of
any national securities exchange upon which the Common Stock of the Corporation
may be listed. The Corporation will not take any action which results in any
adjustment of the Conversion Price if the total number of shares of Common Stock
issued and issuable after such action upon conversion of this Note would exceed
the total number of shares of Common Stock then authorized by the Corporation's
Certificate of Incorporation. The Corporation has not granted and will not grant
any right of first refusal with respect to shares issuable upon conversion of
this Note, and there are no preemptive rights associated with such shares.
2. Fractional shares. In lieu of issuing any fraction of a share upon the
conversion of this Note, the Corporation shall pay to the holder hereof for any
fraction of a share otherwise issuable upon the conversion, cash equal to the
same fraction of $0.18.
3. Prepayment. This Note may be prepaid without penalty. In the case of each
prepayment of less than all of the outstanding Notes, the principal amount to be
prepaid shall be allocated among the respective Notes and the holders thereof so
that the principal amount to be prepaid to each holder shall bear the same ratio
to the aggregate principal amount then to be prepaid as the principal amount of
Notes then held by such holder bears to the aggregate principal amount of Notes
then outstanding. Five (5) business days prior to any prepayment hereunder the
Corporation shall provide written notice to each Note holder indicating the date
and amount of such prepayment. The Note holder shall have the right to convert
the principal amount of any such prepayment prior to date of prepayment.
4. Subordination.
(a) The Corporation, for itself, its successors and assigns,
covenants and agrees, and each holder of this Note by his acceptance thereof
likewise covenants and agrees, that the payment of the principal of and interest
on each and all of this Note shall be subordinate and subject, to the extent and
in the manner hereinafter set forth, in right of payment to the prior payment in
full of all Senior Indebtedness.
(b) Upon any distribution of assets of the Corporation upon any
dissolution, winding up, liquidation, or reorganization of the Corporation,
whether in bankruptcy, insolvency, or receivership proceedings or upon an
assignment for the benefit of creditors of any other dissolution, winding up,
liquidation, or reorganization of the Corporation:
(i) All Senior Indebtedness shall first be paid in full, or
provision made for such payment in full of the principal thereof, and premium,
if any, and interest thereon, before any payment is made on account of the
principal of, or interest on, the Notes;
(ii) Any payment or distribution of assets of the Corporation
of any kind or character, whether in cash, property, or securities (other than
stock of the Corporation as reorganized or readjusted or securities of the
Corporation or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in this Section with respect to the Notes, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), to which the
holder of this Note would be entitled except for the provisions of this Section
shall be paid by the liquidating trustee or agent or other person making such
payment of distribution, whether a trustee in bankruptcy, receiver, or
liquidating trustee or other trustee or agent, directly to the holders of Senior
Indebtedness or their representative or representatives or the trustee or
trustees under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the principal of, and premium, if any,
and interest on, the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness; and
(iii) In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Corporation of any kind or character,
whether in cash, property, or securities (other than stock of the Corporation as
reorganized or readjusted or securities of the Corporation or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in this Section with
respect to the Note, to the payment of all Senior Indebtedness at the time
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), shall be received by the holder of this Note
before all Senior Indebtedness is paid in full, or provision made for its
payment, such payment or distribution shall be paid over to the holders of
Senior Indebtedness remaining unpaid or unprovided for or their representative
or representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may have been issued,
as provided in the foregoing subparagraph (2), for application to the payment of
such Senior Indebtedness until all such Senior Indebtedness shall have been paid
in full after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness.
(c) Subject to the payment in full of all Senior Indebtedness, the
holder of this Note shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property, or
securities of the Corporation applicable to the Senior Indebtedness until the
principal of and interest on this Note shall be paid in full, and no such
payments or distributions in respect of this Note of cash, property, or
securities distributable to the Senior Indebtedness under the provisions here
shall, as between the Corporation, its creditors other than the holders of
Senior Indebtedness, and the holder of this Notes, be deemed to be a payment by
the Corporation to or on account of this Note. It is understood that the
provisions of this Section are and are intended solely for the purpose of
defining the relative rights of the holder of this Note, on the one hand, and
the holders of the Senior Indebtedness on the other hand. Nothing contained in
this Section is intended to or shall impair, as between the Corporation, its
creditors other than the holders of Senior Indebtedness, and the holder of this
Note, the absolute and unconditional obligation of the Corporation to pay the
holder of this Note the principal of and interest on this Note as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the holder of this Note and creditors
of the Corporation other than the holders of the Senior Indebtedness; nor shall
anything herein or therein prevent the holder of this Note from exercising all
remedies otherwise permitted by applicable law upon default under this Note,
subject to the rights, if any, under this Section of the holders of Senior
Indebtedness in respect of cash, property or securities of the Corporation
received upon the exercise of any such remedy.
(d) Upon any distribution of assets of the Corporation referred to
in this Section, the holder of this Note shall be entitled to rely upon a
certificate of the liquidating trustee or agent or other person making any
distribution to such holder for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Corporation, the amount thereof or payable thereon,
and all other facts pertinent thereto or to this Section.
(e) If there shall have occurred a default in the payment of the
principal of (or premium, if any) or interest on any Senior Indebtedness, then,
unless and until such default shall have been cured or waived, no payment of
principal or interest shall be made by the Corporation on this Note, and no
holder of this Note shall be entitled to receive any such payment. Nothing
contained in this Section shall, however (1) affect the obligation of
Corporation to make or prevent the Corporation from making, at any time, except
during the pendency of any dissolution, winding up, liquidation, or
reorganization proceedings or except as provided in the first sentence of this
subsection, payments of principal of or interest on this Note, or (2) prevent
the application by any paying agent of any moneys deposited with it by the
Corporation to the payment of or on account of the principal of, or interest on,
this Note, if, at the time of such deposit, the paying agent did not have
written notice of any event prohibiting the making of such payment or deposit by
the Corporation; or (3) be construed as preventing the occurrence of any Event
of Default hereunder.
(f) No right of any present or future holder of any Senior
Indebtedness of the Corporation to enforce subordination as herein provided
shall at any time or in any way be prejudiced or impaired by any act or failure
to act on the part of the Corporation or by any act or failure to act, in good
faith, by any such holder, or by an noncompliance by the Corporation with the
terms, provisions, and covenants of this Note, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
(g) Any renewal or extension of the time of payment of any Senior
Indebtedness or the exercise by the holders of Senior Indebtedness of any of
their rights under the Senior Indebtedness, including without limitation the
waiver of default thereunder or the release of any security therefor, may be
made or done all without notice to or assent from the holder of this Note. No
compromise, alteration, amendment, modification, extension, renewal, or other
change of, or waiver, consent, or other action in respect of, any liability or
obligation under or respect of, or of any of the terms, covenants, or conditions
or any indenture or other instrument under which any Senior Indebtedness is
outstanding or of such Senior Indebtedness, and no release of property securing
any Senior Indebtedness, whether or not such release is in accordance with the
provisions of any applicable document, shall in any way alter or affect any of
the provisions of this Section.
(h) "Senior Indebtedness" for purposes of this Section shall mean
all indebtedness (principal and interest) now existing or hereafter incurred of
the Corporation for money borrowed from banks or other financial institutions:
(i) which is secured by the assets of the Corporation; and (ii) is not by its
express terms subordinate and junior to or on parity with this Note.
5. Default. If any of the following events occur ("Event of Default"), the
entire unpaid principal amount of, and accrued and unpaid interest on, this Note
shall immediately be due and payable, and the Corporation shall pay all costs of
collection including, but not limited to, reasonable attorneys' fees and
expenses incurred by the owner(s) or its assigns on account of such collection,
whether or not suit is brought:
(a) The Corporation fails to pay the principal of this Note at its
maturity;
(b) The Corporation commences any voluntary proceeding under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
receivership, dissolution, or liquidation law or statute, of any jurisdiction,
whether now or subsequently in effect; or the Corporation is adjudicated as
bankrupt by a court of competent jurisdiction; or the Corporation petitions or
applies for, acquiesces in, or consents to, the appointment of any receiver or
trustee of the Corporation or for all or substantially all of its property or
assets; or the Corporation makes an assignment for the benefit of its creditors;
or the Corporation admits in writing its inability to pay its debts as they
mature; or
(c) There is commenced against the Corporation any proceeding
relating to the Corporation under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, receivership, dissolution, or liquidation law
or statute, of any jurisdiction, whether now or subsequently in effect, and the
proceeding remains undismissed for a period of 60 days or the Corporation by any
act indicates its consent to, approval of, or acquiescence in the proceeding; or
a receiver or trustee is appointed for the Corporation or for all or
substantially all of its property or assets, and the receivership or trusteeship
remains undischarged for a period of 60 days; or a warrant of attachment,
execution or similar process is issued against any substantial part of the
property or assets of the Corporation, and the warrant or similar process is not
dismissed or bonded within 60 days after the levy.
6. Registered owner. The Corporation shall treat the person or persons whose
name or names appear on this Note as the absolute owner or owners hereof for the
purpose of receiving payment of, or on account of, the principal and interest
due on this Note and for all other purposes, unless and until written notice
satisfactory to the Corporation is provided by the registered owner of
assignment hereof.
7. Assignment. The Corporation may assign its rights hereunder to any person or
entity. No assignment of rights or obligations shall be effective until delivery
of written notice of such assignment is made by the assigning party to the other
party hereto.
8. Release of shareholders, officers and directors. This Note is the obligation
of the Corporation only, and no recourse shall be had for the payment of any
principal or interest hereon against any shareholder, officer or director of the
Corporation, either directly or through the Corporation, by virtue of any
statute for the enforcement of any assessment or otherwise. The holder or
holders of this Note, by the acceptance hereof, and as part of the consideration
for this Note, release all claims and waive all liabilities against the
foregoing persons in connection with this Note.
9. Amendments. With the consent of the holders of a majority of the principal
amount of outstanding Notes, evidenced by a written instrument or instruments,
Payor may amend the Notes by executing and delivering to the holders an
amendment thereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Notes or of modifying in any
manner the rights of the holders; provided, however, that no such amendment
shall, without the consent of the holder of each outstanding Note affected
thereby:
(a) Change the stated maturity of the principal of any Note, or
reduce the principal amount thereof or the interest thereon, or the currency in
which any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the stated
maturity thereof (or, in the case of prepayment, or after the prepayment date);
(b) Reduce the percentage in principal amount of the outstanding
Notes, the consent of whose holders is required for any amendment, or the
consent of whose holders is required for any waiver of compliance with the
provisions hereof; or
(c) Modify any of the provisions of this Section, except to increase
any such percentage or to provide that other provisions of the Notes cannot be
modified or waived without the consent of the holder affected thereby.
Upon the execution and delivery of any amendment in accordance with this
Section, the Notes shall be modified in accordance therewith, and every holder
of Notes theretofore or thereafter executed and delivered shall be bound
thereby.
10. Governing Law. The Notes and all terms and conditions herein shall be
governed by and construed and in accordance with the laws of the State of
Vermont excluding the state's conflict of law provisions.
11. Exclusive Jurisdiction. With respect to actions and proceedings to enforce
the provisions of, arising from, or relating to this Note, the holder, by
acceptance of this Note, consents to personal jurisdiction in the state or
federal courts of the State of Vermont and irrevocably agrees that all such
actions and proceedings shall be litigated exclusively in such courts. Further,
each of the parties hereto waives any objection that it may have to the conduct
of any action or proceeding in any such court based on improper venue or forum
non conveniens. Each of the parties hereto waives personal service of any and
all process upon it and agrees that valid service of process may be made by mail
or courier service directed to it at the address set forth herein and that
service so made shall be deemed to be completed upon the earlier of actual
receipt or ten (10) days after the same shall have been posted.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Corporation has signed this Note this 20th day of
December 2000.
eNote.com Inc.
By:__________________
Name:
Title:
REGISTERED OWNER:
Friedlander Capital Management Corp.
By:___________________________
Name:
Title:
Exhibit 4.47
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR
ANY APPLICABLE STATE SECURITIES LAW, AND MAY NOT BE TRANSFERRED EXCEPT (i)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (ii) UPON FIRST
FURNISHING TO THE COMPANY AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH TRANSFER IS NOT IN VIOLATION OF THE REGISTRATION REQUIREMENTS OF THE ACT OR
ANY APPLICABLE STATE SECURITIES LAW.
To Subscribe for and Purchase Common Stock of
eNote.com Inc.
VOID AFTER December 20, 2003
Warrant No. 9-A As of December 20, 2000
THIS CERTIFIES that, for value received, FRIEDLANDER CAPITAL MANGAGEMENT
CORP., or its registered assigns, is entitled, subject to the terms of Section 1
hereof, to subscribe for and purchase from eNote.com Inc., a Delaware
corporation (hereinafter called the "Company"), at the price of $0.18 per share
(such price, as from time to time to be adjusted as hereinafter provided, being
hereinafter called the "Warrant Price"), at any time on or prior to December 20,
2003 up to 5,555,556 fully paid, nonassessable shares of Common Stock, par value
$.01 per share, of the Company ("Common Stock"), subject, however, to the
provisions and upon the terms and conditions hereinafter set forth.
Section 1. Exercise of Warrant. This Warrant may be exercised by the
holder hereof, in whole or in part (but not as to a fractional share of Common
Stock), by the completion of the subscription form attached hereto and by the
surrender of this Warrant (properly endorsed) at the office of the Company in
Williston, Vermont (or at such other agency or office of the Company in the
United States as it may designate by notice in writing to the holder hereof at
the address of the holder hereof appearing on the books of the Company), and by
payment to the Company of the Warrant Price, in cash or by certified or official
bank check, for each share being purchased. In the event of any exercise of the
rights represented by this Warrant, a certificate or certificates for the shares
of Common Stock so purchased, registered in the name of the holder hereof, shall
be delivered to the holder hereof within a reasonable time, not exceeding
fifteen (15) business days, after the rights represented by this Warrant shall
have been so exercised; and, unless this Warrant has expired or been exercised
in full, a new Warrant representing the number of shares (except a remaining
fractional share), if any, with respect to which this Warrant shall not then
have been exercised shall also be issued to the holder hereof within such time.
With respect to any such exercise, the holder hereof shall for all purposes be
deemed to have become the holder of record of the number of shares of Common
Stock evidenced by such certificate or certificates from the date on which this
Warrant was surrendered and payment of the Warrant Price was made irrespective
of the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date on which the stock transfer books of the Company
are closed, such person shall be deemed to have become the holder of such shares
at the close of business on the next succeeding date on which the stock transfer
books are open. No fractional shares shall be issued upon exercise of this
Warrant. If any fractional interest in a share of Common Stock would, except for
the provisions of this Section 1, be delivered upon any such exercise, the
Company, in lieu of delivering the fractional share thereof, shall pay to the
holder hereof an amount in cash equal to the current market price of such
fractional interest as determined in good faith by the Board of Directors of the
Company.
Section 2. Adjustment of Number of Shares.
(a) Reclassification, Consolidation or Merger. In the event of any
reclassification or change of outstanding securities of the Common Stock, or in
the event of any consolidation or merger of the Company with or into another
corporation or entity, other than a consolidation or merger with another
corporation or entity in which the Company is the continuing corporation and
which does not result in any reclassification, conversion or change of
outstanding Common Stock, or in the event of any sale of all or substantially
all of the assets of the Company, the Company, or such successor or purchasing
corporation or entity, as the case may be, shall execute a new warrant
certificate (the "New Warrant Certificate"), providing that the Holder of this
Warrant shall have the right to exercise such new warrants and procure upon such
exercise, in lieu of each share of Common Stock issuable upon exercise of the
Warrants, the kind and amount of shares of stock, other securities, money and
property receivable upon such reclassification, conversion, change,
consolidation or merger by a holder of one share of Common Stock.
(b) Subdivisions, Combinations and Stock Dividends. If at any time while
this Warrant is outstanding and unexpired the Company shall subdivide or combine
its Common Stock, or shall pay a dividend with respect to Common Stock payable
in, or make any other distribution with respect to its Common Stock consisting
of, shares of Common Stock, then the number of Warrant Shares for which this
Warrant is exercisable shall be adjusted, from and after the date of
determination of stockholders entitled to receive such dividend or distribution,
to that number determined by multiplying the number of Warrant Shares for which
this Warrant is exercisable immediately prior to such date of determination by a
fraction (i) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately after such dividend or distribution and
(ii) the denominator of which shall be the total number of shares of Common
Stock outstanding immediately prior to such dividend or distribution.
(c) Notice of Adjustment. Upon any adjustment of the Warrant Price, then
and in each such case the Company shall give written notice thereof, by first
class mail, postage prepaid, addressed to the Warrant holder at the address of
such holder as shown on the books of the Company, which notice shall state the
Warrant Price resulting from such adjustment, setting forth in reasonable detail
the method of calculation and the facts upon which such calculation is based.
(d) Stock to Be Reserved. The Company will at all times reserve and keep
available out of its authorized Common Stock or its treasury shares, solely for
the purpose of issuance upon the exercise of this Warrant as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
exercise of this Warrant provided, however, that the Company has an insufficient
number of shares of authorized Common Stock available to reserve the requisite
number of shares issuable upon exercise of this warrant, the Company will
reserve an amount equal to the remaining number of authorized shares, allocated
pro-rata among Warrants 3-A and 4-A. In such case, the Company will use its best
efforts to seek shareholder approval to increase the Company's authorized Common
Stock and reserve the additional shares necessary for issuance upon exercise of
this Warrant.
(e) Definition of Common Stock. As used herein the term "Common Stock"
shall mean and include the 25,000,000 shares of Common Stock, par value $.01 per
share, as authorized on the date of this and any additional Common Stock, par
value $.01 hereinafter authorized.
Section 3. Notices of Record Dates. In the event of:
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution (other than cash
dividends out of earned surplus), or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any right to sell shares of stock of any class or any
other right; or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other corporation or entity; or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company,
then and in each such event the Company will give notice to the holder of this
Warrant specifying: (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right; and (ii) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least 10 days and not more than 90
days prior to the date therein specified, and such notice shall state that the
action in question or the record date is subject to (x) the effectiveness of a
registration statement under the Securities Act of 1933 and applicable state
securities laws, or (y) a favorable vote of stockholders, if either is required.
Section 4. No Stockholder Rights or Liabilities.
(a) Except as set forth in paragraph 4(b), this Warrant shall not entitle
the holder hereof to any voting rights or other rights as a stockholder of the
Company. No provision hereof, in the absence of affirmative action by the holder
hereof to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder hereof shall give rise to any liability of
such holder for the Warrant Price or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.
(b) At any time while this Warrant is outstanding, the Company shall,prior
to making any distribution of its property or assets to the holders of its
Common Stock as a dividend in liquidation or partial liquidation or by way of
return of capital or any dividend payable out of funds legally available for
dividends under the laws of the State of Delaware, give to the holder of this
Warrant, not less than 20 days prior written notice of any such distribution. If
such holder shall exercise this Warrant on or prior to the date of such
distribution set forth in such notice, such holder shall be entitled to receive,
upon such exercise: (i) the number of shares of Common Stock receivable pursuant
to such exercise; and (ii) without payment of any additional consideration, a
sum equal to the amount of such property or assets as would have been payable to
the holder hereof as an owner of the shares described in clause (i) of this
paragraph 4(b) had the holder hereof been the holder of record of such shares on
the record date for such distribution; and an appropriate provision with respect
to such payment to such holder as described in this paragraph 4(b) shall be made
a part of any such distribution.
Section 5. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant
is lost, stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may in its discretion reasonably impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
Section 6. Notices. Any notice to be given to either party under this
Warrant Certificate shall be in writing and shall be deemed to have been given
to the Company or the Holder hereof, as the case may be, when delivered in hand
or when sent by first class mail, postage prepaid, addressed, if to the Company,
at its principal office and, if to the Holder hereof, at its address as set
forth in the Company's books and records or at such other address as the Holder
hereof may have provided to the Company in writing.
Section 7. Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of Vermont, without giving effect to
such jurisdiction's principles of conflict of laws.
Section 8. Exclusive Jurisdiction. With respect to actions and proceedings
to enforce the provisions of, arising from, or relating to this Warrant or the
Warrant, the holder, by acceptance of this Warrant, consents to personal
jurisdiction in the state or federal courts of the State of Vermont and
irrevocably agrees that all such actions and proceedings shall be litigated
exclusively in such courts. Further, each of the parties hereto waives any
objection that it may have to the conduct of any action or proceeding in any
such court based on improper venue or forum non conveniens. Each of the parties
hereto waives personal service of any and all process upon it and agrees that
valid service of process may be made by mail or courier service directed to it
at the address set forth herein and that service so made shall be deemed to be
completed upon the earlier of actual receipt or ten (10) days after the same
shall have been posted.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the duly authorized agent of eNote.com Inc. has
executed this Warrant as of the 20th day of December, 2000.
ENOTE.COM INC.
By:_____________________________
Name:
Title:
[Corporate Seal]
Attest:
__________________________
Secretary
SUBSCRIPTION FORM TO BE EXECUTED
UPON EXERCISE OF THE WARRANT
Date:
----------------
To: eNote.com Inc.
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to subscribe for and purchase [__________] shares of
Common Stock covered by such Warrant, and herewith tenders $[____________] in
full payment of the purchase price for such shares as provided in the within
Warrant.
Name of Holder:
By: ___________________________________
Address ___________________________________
___________________________________
Exhibit 4.48
As of December 20, 2000
Mr. Burton G. Friedlander
Friedlander Capital Management Corp.
104 Field Point Rd.
Greenwich, CT 06830
Re: eNote.com Inc. (the "Company")
Dear Burt:
The purpose of this letter is to confirm the agreement of the Company to
extend the termination date of the Warrants listed below as indicated:
Warrant No. 1-A dated August 17, 2000 termination date - August 17, 2003.
Warrant No. 3-A dated September 11, 2000 termination date - September 11, 2003.
Warrant No. 4-A dated October 12, 2000 termination date - October 12, 2003.
Warrant No. 5-A dated October 26, 2000 termination date - October 26, 2003.
Warrant No. 6-A dated November 9, 2000 termination date - November 9, 2003.
Warrant No. 7-A dated November 22, 2000 termination date - November 22, 2003.
Very truly yours,
ENOTE.COM INC.
By:_______________________
Acknowledged and Agreed
FRIEDLANDER CAPITAL MANAGEMENT CORP.
By:_____________________________________
Exhibit 10.22
September 26, 2000
Mr. John R. Varsames
10 Fairholt
Burlington, VT 05401
Re: Separation Agreement
Dear Mr. Varsames:
This Letter Agreement dated as of September 26, 2000 is by and between
John R. Varsames ("Varsames") and eNote.com Inc., a Delaware corporation (the
"Company"). This Letter sets forth the agreements of the parties hereto in
connection with separation of Varsames as a director, officer and majority
shareholder of the Company as more fully set forth herein.
1. Varsames shall immediately transfer all right, title and interest
in 6,700,000 shares of Company Common Stock, par value $.01 per
share, to the Company and shall execute a stock power, in blank,
in a form acceptable to the Company and its transfer agent to
fully complete such transfer.
2. For a period of time not to exceed one year from the date hereof,
the Company shall pay all insurance premiums related to health
insurance covering Varsames and his family and continued by the
Company in compliance with the Consolidated Omnibus Reconciliation
Act of 1985 (COBRA).
3. Varsames for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, by these presents
does for himself, his assigns, heirs,executors and administrators,
hereby remise, release and forever discharge the Company, and its
successors and assigns of and from all, and all manner of action
and actions, cause and causes of action, suits, debts, dues,
sums of money, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, extent, executions,
claims and demands whatsoever, in law or in equity, he has ever
had, now has, or which his assigns, heirs, executors or
administrators hereafter, can, shall or may have for, upon, or
by reason of any matter, cause or thing whatsoever from the
beginning of Company's existence to the day of the date of
these presents, except as may arise under the terms and conditions
of this Letter Agreement. Any claim by Varsames pursuant to
any other agreement between Varsames and the Company, its
subsidiaries or its affiliates related to the acquisition of the
assets of, or the equity interests in, WebATM, Inc., a Delaware
corporation, or SolutioNet Ltd, a Delaware corporation shall be
independent of this release.
4. The Company for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged,by these presents does
for itself, its assigns, and successors, hereby remise, release
and forever discharge Varsames, and his assigns, heirs, executors
and administrators, of and from all, and all manner of action and
actions, cause and causes of action, suits, debts, dues, sums of
money, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances,
trespasses, damages, judgments, extent, executions, claims and
demands whatsoever, in law or in equity, it has ever had, now has,
or which its assigns or successors hereafter, can, shall or may
have for, upon, or by reason of any matter, cause or thing
whatsoever from the beginning of Company's existence to the day of
the date of these presents, if such matters have previously been
disclosed by Varsames to the Company,except as may arise under the
terms and conditions of this Letter Agreement . Any claim by the
Company pursuant to any other agreement between Varsames and the
Company, its subsidiaries or its affiliates related to the
acquisition of the assets of, or the equity interests in, WebATM,
Inc., a Delaware corporation, or SolutioNet Ltd, a Delaware
corporation, shall be independent of this release.
5. Varsames hereby resigns as a member of the Board of Directors of
the Company, effective immediately, and the Company hereby accepts
such resignation.
6. The parties hereto acknowledge and agree that this is an
irrevocable binding agreement enforceable in accordance with its
terms and that performance hereunder is not subject to or
otherwise conditioned upon the performance or enforceability of
any other agreement, express or implied.
7. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Vermont. The parties hereto agree
that any suit for the enforcement of this Agreement may be brought
in the courts of the State of Vermont or any federal court sitting
therein and each party consents to the exclusive jurisdiction of
such courts. The parties hereby waive any objection that either of
them may now or hereafter have to the venue of any such suit or
any such court or that such suit was brought in an inconvenient
court.
Please acknowledge your agreement with the foregoing by signing where
indicated below.
ENOTE.COM INC.
By:_______________________________
Name:
Title:
_______________________________
John R. Varsames