Draft: January 13, 1999
Jupiter Marine International Holdings, Inc.
Senior Secured Note
Due __________, 20___
FOR VALUE RECEIVED, Jupiter Marine International Holdings, Inc., a corporation
duly organized and existing under the laws of the State of Florida (the
"Payor"), having its principal place of business at 0000 Xxxxxxxxx 00xx Xxxxxx,
Xxxx Xxxxxxxxxx, Xxxxxxx 00000, hereby promises to pay to Triton Holdings
International Corp. or its assignee, (the "Payee"), on ________, 20___ (the
"Maturity Date"), unless earlier converted or redeemed in accordance with the
terms of this Senior Secured Note, the principal sum of $350,000 together with
interest as set forth in Paragraph "1" hereof, in lawful money of the United
States. This Senior Secured Note is entered into pursuant to a Loan Agreement
dated as of the 14th day of January, 1999, by and between Payor and Payee,
providing for a loan of the principal amount of $350,000 (the "Loan") and has
been designated by the Payor as its Senior Secured Note (the "Note").
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1. Interest.
Interest on the unpaid balance (including any accrued and unpaid
interest) shall be calculated from the date which is set forth on the last page
of this Note at an interest rate equal to ten (10%) percent per annum. All such
interest shall, at the option of the Payee, by providing written notice to the
Payee pursuant to Paragraph "C" of Article "12" of this Note at least ten (10)
days prior to the payment date, be either (A) paid quarterly or (B) capitalized
quarterly by the addition of such accrued interest to the principal amount
outstanding pursuant to this Note and shall be due together with the principal
sum hereof on the Maturity Date. All future references to "Principal" in this
Note shall be deemed to include any interest which is capitalized pursuant to
the foregoing sentence. Such interest payments shall be paid or capitalized on
March 31, June 30, September 30, and December 31 (the "Due Dates") during each
year of the term of this Note. If Payor does not give written notice that
interest should be capitalized, the Payee shall be required to make the interest
payments on the Due Dates.
2. Method of Payment
(A) Payment of the Principal balance of this Note, together with
accrued interest thereon, shall be due and payable in full four (4) years from
the date hereof (the "Maturity Date"), unless earlier converted or redeemed in
accordance with the terms of this Note.
(B) Repayment of this Note by the Payor shall be made by check drawn to
the Payee at the Payee's address, which is located at 0000 Xxxxxx Xxxx, Xxxx
Xxxxx, Xxxxxxx 00000, or at such other place as may be designated in writing by
the Payee to Payor.
3. Conversion.
(A) The Payee of this Note has the right, at its option, by notifying
the Payor in writing, pursuant to Paragraph "C" of Article "12" of this Note, at
any time prior to the Maturity Date, to convert the Principal amount of this
Note into shares of the Payor's Common Stock, par value $0.001 (the "Common
Shares" or "Shares"), at a conversion price based upon the conversion schedule
set forth in Paragraph "(B)" of this Article "3" of this Note or if the
conversion price has been adjusted pursuant to Paragraph "(F)" of this Article
"3" of this Note then at such adjusted conversion price, upon surrender of this
Note at the office of the Payor, accompanied by a written instrument of
conversion which shall be in the form of the instrument annexed hereto and made
a part hereof, as Exhibit "1", and which shall be duly executed by the Payee or
its assigns.
(B) Conversion Schedule: Payee has the option to convert the Principal
amount of this Note into Shares in accordance with the following schedule. Year
1 commences on the date of the execution of this Note.
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Year Conversion Price per Share
---- --------------------------
1 $.50
2 $.375
3 $.25
The Payor agrees that if this Note has not been previously converted or paid in
full on or prior to the last day of Year 3, the Payor shall issue to the Payee
such number of Common Shares as shall be determined by dividing the then
Principal amount of this Note by twenty five ($0.25) cents. Notwithstanding the
issuance of such Shares, the outstanding balance of this Note shall remain due
and payable in full upon the Maturity Date. If, for example, on the last day of
Year 3, the total Principal is $25,000, the Payor shall issue 100,000 shares of
its Common Shares to the Payee and said $25,000 shall be due and payable upon
the Maturity Date.
(C) As promptly as practicable after any conversion, as herein
provided, of this Note by the Payee, the Payor shall:
(i) Deliver or cause to be delivered to or upon the written order
of the Payee, certificates representing the number of fully paid and
nonassessable Shares into which this Note is converted in accordance with the
provisions of this Note and;
(ii) Deliver to the holder of the shares of Common Stock which were
converted, pursuant to this Article "3", the whole number of shares rounded up
or down to the nearest whole number determined by rounding to the next greater
whole number if the fractional Share is 0.5 or greater and the next lower whole
number if the fractional share is less than 0.5.
Subject to the following provisions of this Article "3" of this Note,
such conversion shall be deemed to have been made at the close of business on
the date that this Note has been surrendered for conversion, so that the rights
of the Payee of this Note with respect to the Principal amount of this Note so
converted shall cease at such time and the person or persons entitled to receive
the Shares upon conversion of this Note shall be treated, for all purposes, as
having become the record holder or holders of such Shares at the time of such
surrender for conversion; provided, however, that such surrender on any date
when the stock transfer books of the Payor are closed shall be effective to
constitute the person or persons entitled to receive the Shares upon such
conversion as the record holder or holders of such Shares on such date, but such
surrender shall be effective to constitute the person or persons entitled to
receive such Shares as the record holder or holders thereof for all purposes at
the close of business on the next succeeding day on which such stock transfer
books are open.
(D) If the last day for the exercise of the conversion right is a
Saturday, Sunday, or Holiday, such conversion right may be exercised until the
next succeeding day which is not a
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Saturday, Sunday, or Holiday. The term "Holidays" shall include New Year's Day,
Presidents' Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
the day after Thanksgiving Day, Christmas Day, and any other weekday upon which
banks are closed in the State of Florida.
(E) The Payee shall not be required to pay any costs or expenses in
connection with the issuance of certificates for Shares upon conversion of this
Note. Such certificates shall be issued in the name or names directed by the
Payee.
(F) In order to preserve the conversion rights of the Payee of this
Note, the conversion price is subject to adjustment if certain events occur,
including, but not limited to, any of the events which are set forth below:
(i) The issuance of any previously authorized or newly authorized
shares (common or any other securities convertible into common) of the Payor for
less than $0.33 per share.
(ii) A recapitalization of the outstanding shares of the Payor
which has the effect of changing the percentage of Shares which this Note may be
converted into in relation to the total number of outstanding shares;
(iii) The payment of any stock dividends;
(iv) The distribution to any holders of shares of the Payor's
securities, evidences of indebtedness of the Payor or assets (excluding cash
dividends paid from retained earnings); and
(v) The issuance after the date hereof of any stock options,
warrants or other rights to acquire shares in the Payor at a price less than
$0.33 per share.
(vi) Any capital reorganization by the Payor, any reclassification
or recapitalization of the Payor's capital stock, or any transfer of all or
substantially all the assets of the Payor to or consolidation or merger of the
Payor with or into any other Person.
Upon occurrence of any of the above events, or any other event which
might result in a change in the percentage of the number of shares of each class
of stock of the Payor which this Note may be converted into (any of such events
is hereinafter referred to as a "Dilution Event"), then, in such event, the
Payor will immediately take whatever measures are necessary to insure that the
percentage interest in the Payor which the Note may be converted into would not
be increased or reduced. Any adjustment which is required by this Paragraph "F"
of Article "3" of this Note shall be deemed effective retroactive to the date of
the
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Dilution Event. The provisions of this Paragraph "F" of Article "3" of this Note
shall be applicable to any Dilution Event which occurs at any time after the
date of this Note. In the event that any of the Dilution Events occur, the Payor
will mail or cause to be mailed a notice, pursuant to Paragraph "C" of Article
"12", to the Payee of this Note
(G) The Payor may not, without the prior written consent of the Payee,
issue any (i) Common Stock at less than thirty three ($0.33) cents per share or
(ii) securities convertible into Common Stock at less than thirty three ($0.33)
cents per share.
4. Prepayment
(A) The Payor may, at its option, upon giving 30 days written notice
(the "30 Day Period") to Payee pursuant to Paragraph "C" of Article "12", prepay
the outstanding balance hereunder, in whole or in part, without premium or
penalty.
(B) Notwithstanding the provisions of Paragraph "A" of this Article "4"
of this Note, in addition to any other rights which the Payee has pursuant to
this Note, Payee shall have the right to convert this Note into Common Shares
pursuant to Article "3" of this Note during the 30 Day Period.
5. Events of Default
The term "Event of Default" as used herein shall mean the occurrence
and continuation of any one or more of the following events:
(A) The failure of the Payor to promptly pay when due the Principal
which is due and payable under this Note, which failure continues for five (5)
days after its due date.
(B) The failure of the Payor to promptly pay when due any payment of
interest which is due and payable under this Note, which failure continues for
five (5) days after the Payee gives the Payor written notice of such default;
provided however, that the Payee shall not be obligated to give to the Payor the
aforesaid written notice of its default with respect to its failure to pay
interest which is due and payable if written notice has been given to the Payor
on any two (2) prior occasions.
(C) If the Payor shall:
(i) The default (after the applicable time to cure) in the due
observance or performance of any material covenant, condition or agreement on
the part of the Payor to be observed or performed pursuant to the terms of this
Note, any other Senior Secured Note(s) issued pursuant to the Loan, any other
agreements entered into between the Payor and the Payee, or any agreement
entered into between the Payor and any third party;
(ii) The admission in writing by the Payor of its inability to pay
its debts as they mature;
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(iii) The filing by the Payor of a petition in bankruptcy, or a
petition to take advantage of any insolvency act;
(iv) The filing of a petition in bankruptcy against the Payor with
or without the consent of the Payor, and the failure to have such petition
dismissed within thirty (30) days from the date that such petition is filed;
(v) The filing of a petition or answer seeking reorganization or
relief under any bankruptcy or insolvency laws or any other law for the relief
of debtors or the filing of an answer admitting, or failing to deny, the
material allegations of a petition filed against the Payor for any such relief;
(vi) The entry by a court of competent jurisdiction of a final
non-appealable order, judgment or decree appointing, without the consent of the
Payor, of a receiver, trustee or custodian for the Payor or of all or
substantially all of the respective property or assets of Payor, and such order,
judgment or decree shall not be vacated or set aside or stayed within thirty
(30) days from the date of entry thereof;
(vii) The sale by the Payor of all or substantially all of its
assets, or the merger or consolidation by the Payor with or into another
corporation, except for mergers or consolidations where the Payor is the
surviving entity or where the surviving entity expressly accepts and assumes all
of the obligations of the Payor under this Note;
(viii) The commencement of a proceeding to foreclose the security
interest or lien in any property or assets to satisfy the security interest or
lien therein of any secured creditor of the Payor;
(ix) The entry of a final judgment for the payment of money by a
court of competent jurisdiction against the Payor which judgment the Payor shall
not discharge (or provide for such discharge) in accordance with its terms
within fifteen (15) days of the date of entry thereof, or procure a stay of
execution thereof within fifteen (15) days from the date of entry thereof and,
within such fifteen (15) day period, or such longer period during which
execution of such judgment shall have been stayed, appeal therefrom and cause
the execution thereof to be stayed during such appeal; or
(x) Any voluntary or involuntary dissolution, liquidation or
winding up of the Payor.
(B) In the event that any of the Events of Default occur, the Payor
will mail or cause to be mailed a notice, pursuant to Paragraph "C" of Article
"12" of this Note, to the Payee immediately upon the occurrence of any such
Event of Default.
6. Remedies Upon Default
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(A) Upon the occurrence of an Event of Default (as defined in Article
"4" of this Note), and any time thereafter while such Event of Default is
continuing, the entire unpaid Principal balance and all accrued and unpaid
interest which is due pursuant to this Note and all other amounts payable to the
Payee pursuant to this Note shall, at the Payee's option, be accelerated and
become and be immediately due and payable without presentment, demand, protest
or further notice of any kind, all of which are expressly waived by the Payor.
(B) The liability of the Payor hereunder shall be unconditional and
shall not be in any manner affected by any indulgence whatsoever granted or
consented to by the Payee including, but not limited to, any extension of time,
renewal, waiver or other modification.
(C) The Payor shall be liable for all costs of collections, including,
but not limited to, attorney's fees and expenses which Payee may incur as a
result of the exercise by Payee of any rights or remedies pursuant to this Note
or otherwise available, including, but not limited to, any remedy upon default
provided for in this Article "6" of this Note.
(D) No failure on the part of the Payee to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.
(E) The remedies which are provided herein are cumulative and not
exclusive of any remedies which are provided by law.
(F) Any provision of this Note which may prove to be unenforceable
under any law shall not affect the validity of any other provision of this Note.
If from any circumstances whatsoever, fulfillment of any provisions of this Note
or any other instrument evidencing or securing the indebtedness evidenced
hereby, at the time performance of such provision shall be due, shall involve
transcending the limit of validity presently prescribed by any applicable usury
statute or any other applicable law, with regard to obligations of like
character and amount, then ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity, so that in no event shall any exaction be
possible under this Note or under any other instrument evidencing or securing
the indebtedness evidenced hereby, that is in excess of the current limit of
such validity, but such obligation shall be fulfilled to the limit of such
validity.
7. Priority
The indebtedness which is evidenced by this Note, including Principal
and interest, shall be senior in priority with respect to payment of all other
debt of the Payor
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8. Security Interest
The indebtedness which is evidenced by this Note, including Principal
and interest, is secured by all assets of the Payor, pursuant to the Security
Agreement dated as of the 14th day of January, 1999 by and between the Payee and
the Payor.
9. Full Recourse
Anything in this Note to the contrary notwithstanding, the Payor
hereunder shall be liable on this Note for the full amount of the interest and
Principal due under this Note.
10. Transferability
This Note shall be registered in the Payee's name on the books of the
Payor at the office of the Payor, after which no transfer hereof shall be valid
unless transfer instructions are received by the Payor from the registered Payee
hereof or by his attorney duly authorized in writing. The following legend is
applicable to this Note and shall appear on this Note, any substitute Note and
on any certificate evidencing any Shares which the Payee of this Note will
receive upon the conversion of the Note. "The Note [Shares] which is [are]
represented by this Certificate has not been registered under the Securities Act
of 1933, as amended. These securities have been acquired for investment purposes
only and not with a view to distribution or resale, and may not be sold,
transferred, made subject to a security interest, pledged, hypothecated or
otherwise disposed of unless and until registered under the Securities Act of
1933, as amended, or on an opinion of counsel for the Payor, that registration
is not required under such Act."
11. Payee Deemed Owner
The Payor, any paying agent, any conversion agent and any Note
registrar shall deem and treat the registered Payee hereof as the absolute owner
of this Note (whether or not this Note shall be overdue and notwithstanding any
notice of ownership or writing hereon or thereon made by anyone other than the
Payor or any Note registrar), for the purpose of receiving payment hereof or
thereof or on account hereof or thereof and for all other purposes, and neither
the Payor nor any paying agent nor any conversion agent nor any Note registrar
shall be affected by any notice to the contrary.
12. Miscellaneous
(A) Headings. Headings contained in this Note are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Note.
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(B) Enforceability. If any provision which is contained in this Note
should, for any reason, be held to be invalid or unenforceable in any respect
under the laws of any state or of the United States, such invalidity or
unenforceability shall not affect any other provision of this Note. Instead,
this Note shall be construed as if such invalid or unenforceable provisions had
not been contained herein.
(C) Notices. Any notice or other communication required or permitted
hereunder must be in writing and sent by either (i) registered or certified
mail, postage prepaid, return receipt requested, (ii) overnight delivery with
confirmation of delivery or (iii) facsimile transmission with an original mailed
by first class mail, postage prepaid, in each case addressed as follows:
If to Payee: Triton Holdings International Corp.
0000 Xxxxxxxx Xxxx
Xxxxxx Xxxxxx, Xxxxxxx 000000
Facsimile No.: (000) 000-0000
with a copy to: Xxxxx & Xxxxxx, P.C.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. Xxxxx
Xxxxxxxxx No.: (000) 000-0000
If to the Payor: Jupiter Marine International Holdings, Inc.
0000 Xxxxxxxxx 00xx Xxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Facsimile No.: (000)000-0000
with a copy to: Atlas, Xxxxxxxx, Trop and Borkson
000 Xxxx Xxx Xxxx Xxxx., Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Facsimile No.:(000) 000-0000
or in each case to such other address and facsimile number as shall have last
been furnished by like notice. If mailing by registered or certified mail is
impossible due to an absence of postal service, and if the other methods of
sending notice set forth in this Paragraph "C" of this Article "12" of this Note
are not otherwise available, notice shall be in writing and personally delivered
to the aforesaid address. Each notice or communication shall be deemed to have
been given as of the date so mailed or delivered, as the case may be; provided,
however that any notice sent by facsimile shall be deemed to have been given as
of the date sent by facsimile if a copy of such notice is also mailed by first
class mail on the date sent by facsimile; if the date of mailing differs from
the date of sending by facsimile, then the date of mailing by first class mail
shall be deemed to be the date upon which notice was given.
(D) Governing Law; Disputes. This Note shall in all respects be
construed, governed, applied and enforced under with the internal laws of the
State of Delaware without giving effect to the principles of conflicts of laws
and be deemed to be an agreement entered into in the State of Delaware and made
pursuant to the laws of the State of Delaware. The parties agree that they shall
be deemed to have agreed to binding arbitration in Boca Raton, Florida, with
respect to the entire subject matter of any and all disputes relating to or
arising under this Note including, but not limited to, the specific matters or
disputes as to which arbitration has been expressly provided for by other
provisions of this Note. Any such arbitration shall be by a panel of three
arbitrators and pursuant to the commercial rules then existing of the American
Arbitration Association in the State of Florida, County of Palm Beach. In all
arbitrations, judgment upon the arbitration award may be entered in any court
having jurisdiction. The parties agree, further, that the prevailing party in
any such arbitration as determined by the arbitrators shall be entitled to
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such costs and attorney's fees, if any, in connection with such arbitration as
may be awarded by the arbitrators. In connection with the arbitrators'
determination for the purpose of which party, if any, is the prevailing party,
they shall take into account all of the factors and circumstances including,
without limitation, the relief sought, and by whom, and the relief, if any,
awarded, and to whom. In addition, and notwithstanding the foregoing sentence, a
party shall not be deemed to be the prevailing party in a claim seeking monetary
damages, unless the amount of the arbitration award exceeds the amount offered
in a legally binding writing by the other party by fifteen percent (15%) or
more. For example, if the party initiating arbitration ("A") seeks an award of
$100,000 plus costs and expenses, the other party ("B") has offered A $50,000 in
a legally binding written offer prior to the commencement of the arbitration
proceeding, and the arbitration panel awards any amount less than $57,500 to A,
the panel should determine that B has "prevailed". The parties specifically
designate the Courts in the City of Boca Raton, State of Florida as properly
having jurisdiction for any proceeding to confirm and enter judgment upon any
such arbitration award. The parties hereby consent to and submit to personal
jurisdiction over each of them by the Courts of the State of Florida in any
action or proceeding, waive personal service of any and all process and
specifically consent that in any such action or proceeding, any service of
process may be effectuated upon any of them by certified mail, return receipt
requested, in accordance with Paragraph "C" of this Article "12" of this Note.
(E) Entire Agreement. The parties have not made any representations,
warranties, or covenants with respect to the subject matter hereof which is not
set forth herein, and this Note, together with any instruments or other
agreements executed simultaneously herewith, constitutes the entire agreement
between them with respect to the subject matter hereof. All understandings and
agreements heretofore had between the parties with respect to the subject matter
hereof are merged in this Note and any such instrument, which alone fully and
completely expresses their agreement. This Note may not be changed, modified,
extended, terminated or discharged orally, but only by an agreement in writing,
which is signed by all of the parties to this Note.
(F) Further Assurances. The Parties agree to execute any and all such
other and further instruments and documents, and to take any and all such
further actions, which are reasonably required to effectuate this Note and the
intents and purposes hereof.
(G) Binding. This Note shall be binding upon and inure to the benefit
of the parties hereto and their heirs, executors, administrators, personal
representatives, successors and assigns.
(H) Waiver. Except as otherwise expressly provided herein, no waiver of
any covenant, condition, or provision of this Note shall be deemed to have been
made unless expressly in writing and signed by the party against whom such
waiver is charged; and (i) the failure of any party to insist in any one or more
cases upon the performance of any of the provisions, covenants, or
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conditions of this Note or to exercise any option herein contained shall not be
construed as a waiver or relinquishment for the future of any such provisions,
covenants, or conditions, (ii) the acceptance of performance of anything
required by this Note to be performed with knowledge of the breach or failure of
a covenant, condition, or provision hereof shall not be deemed a waiver of such
breach or failure, and (iii) no waiver by any party of one breach by another
party shall be construed as a waiver with respect to any other or subsequent
breach.
(I) Expenses. Each party hereto shall pay its own expenses incident to
the negotiation and preparation of this Note and all other documents necessary
or appropriate to consummate the transactions provided for herein, and shall
bear its own costs and expenses incurred in closing and carrying out the
transactions provided for by this Note.
(J) Counterparts. This Note may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(K) Exhibits All Exhibits annexed or attached to this Note are
incorporated into this Note by reference thereto and constitute an integral part
of this Note.
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IN WITNESS WHEREOF, Jupiter Marine International Holdings, Inc. has
caused this Note to be signed in its name by the signature of its President.
Dated: __________________
Attest: Jupiter Marine
International Holdings, Inc
By:________________________________
Secretary Xxxx Xxxxxxx,
President
Corporate
Seal:
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