EXHIBIT 4.2
This Note has not been registered under the Securities Act of 1933, as amended
(the "Securities Act") or under the provisions of any applicable state
securities laws, but has been acquired by the registered holder hereof for
purposes of investment and in reliance on statutory exemptions under the
Securities Act, and under any applicable state securities laws. This Note may
not be sold, pledged, transferred or assigned except in a transaction which is
exempt under the provisions of the Securities Act and any applicable state
securities laws or pursuant to an effective registration statement; and in the
case of an exemption, only if the Company has received an opinion of counsel
satisfactory to the Company that such transaction does not require the
registration of this Note or any securities into which this Note may be
convertible.
AMBIENT CORPORATION
January ___, 2000 $________
10% PROMISSORY NOTE
Ambient Corporation, a Delaware corporation (the "Company"), for value
received, promises to pay to _________________ or registered assigns (the
"Holder") on the earlier of (i) the 10th business day following the consummation
by the Company of any form of financing as described in subparagraph 2b below or
(ii) twelve (12) months from the date hereof (the earlier of such dates referred
to herein as the "Maturity Date"), the principal sum of
_____________________________ ($_____________) Dollars and to pay simple
interest on the outstanding principal sum hereof at the rate of ten percent (10
%) per annum from the date of receipt of the principle by the Company until the
date of repayment (the "Note"). The Company will punctually pay or cause to be
paid the principal amount and interest on this Note. Any sums required to be
withheld from any payment of principal amount, or interest on this Note by
operation of Law or pursuant to any order, judgment, execution, treaty, rule or
regulation may be withheld by the Company and paid over in accordance therewith.
1. Transfer of Note to Comply with the Securities Act
The Holder agrees that this Note (the "Securities") may not be sold,
transferred, pledged, hypothecated or otherwise disposed of except as follows:
(1) to a person who, in the opinion of counsel to the Company, is a person to
whom the Note may legally be transferred without registration and without
delivery of a current prospectus under the Securities Act with respect thereto
and then only against receipt of an agreement of such person to comply with the
provisions of this Note, including this Section 1 with respect to any resale or
other disposition of any of the Note.
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2. Prepayment
a. The principal amount of this Note may be repaid by the Company, in
whole or in part without premium or penalty, at any time. Upon any prepayment of
the entire principal amount of this Note, or portion thereof, all accrued, but
unpaid, interest shall be paid to the Holder on the date of prepayment with
respect to the principal amount prepaid.
b. The entire principal amount of this Note and accrued interest shall be
repaid on the date that the Company receives proceeds from the consummation of
any form of public or private equity or debt financing in the aggregate amount
equal to or exceeding the principal amount set forth on the face of this Note.
3. Covenants of Company
a. The Company covenants and agrees that, so long as this Note shall be
outstanding, it will:
(i) Promptly pay and discharge all lawful taxes, assessments and
governmental charges or levies imposed upon the Company or upon its income and
profits, or upon any of its property, before the same shall become a lien upon
the Company's assets or property, as well as all lawful claims for labor,
materials and supplies which, if unpaid, would become a lien or charge upon such
properties or any part thereof; provided, however, that the Company shall not be
required to pay and discharge any such tax, assessment, charge, levy or claim so
long as the validity thereof shall be contested in good faith by appropriate
proceedings and the Company shall set aside on its books adequate reserves with
respect to any such tax, assessment, charge, levy or claim so contested;
(ii) Do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence, rights and franchises and
comply with all laws applicable to the Company as its counsel may advise;
(iii) At all times maintain, preserve, protect and keep its property
used and useful in the conduct of its business so that the business carried on
in connection therewith may be properly and advantageously conducted in the
ordinary course at all times;
(iv) At all times keep true and correct books, records and accounts.
b. Until repayment of this Note, the Company will not issue any dividends.
4. Events of Default
EXHIBIT A
a. This Note become due and payable immediately upon any of the following
events, herein called "Events of Default":
(i) Default in the payment of the principal or accrued interest on
this Note, when and as the same shall become due and payable, whether by
acceleration or otherwise, and the same shall continue for 5 days thereafter
following written notice by the Holder;
(ii) Default in the due observance or performance of any covenant,
condition or agreement on the part of the Company to be observed or performed
pursuant to the terms hereof, if such default shall continue uncured for 10 days
after written notice, specifying such default, shall have been given to the
Company by the Holder;
(iii) Default in the payment of any principal or interest due in
connection with any secured or institutional indebtedness now or hereafter due
and owing by the Company;
(iv) Application for, or consent to, the appointment of a receiver,
trustee or liquidator for the Company or of its property;
(v) Admission in writing of the Company's inability to pay its debts
as they mature;
(vi) General assignment by the Company for the benefit of creditors;
(vii) Filing by the Company of a voluntary petition in bankruptcy or
a petition or an answer seeking reorganization, or an arrangement with
creditors; or
(viii) Entering against the Company of a court order approving a
petition filed against it under the federal bankruptcy laws, which order shall
not have been vacated or set aside or otherwise terminated within 60 days.
b. The Company agrees that it shall give notice to the Holder at his or
her registered address by certified mail, of the occurrence of any Event of
Default within five (5) days after such Event of Default shall have occurred.
c. In the case any one or more of the Events of Default specified above
shall happen or be continuing, the Holder may proceed to protect and enforce his
or her right by suit in the specific performance of any covenant or agreement
contained in this Note or in aid of the exercise of any power granted in this
Note or may proceed to enforce the payment of this Note or to enforce any other
legal or equitable rights as such Holder may have.
5. Miscellaneous
a. This Note has been issued by Company pursuant to authorization of the
Board of Directors of the Company.
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b. The Company may consider and treat the person in whose name this note
shall be registered as the absolute owner thereof for all purposes whatsoever
(whether or not this Note shall be overdue) and the Company shall not be
affected by any notice to the contrary. Subject to the limitations herein
stated, the registered owner of this Note shall have the right to transfer this
Note by assignment, and the transferee thereof shall, upon his registration as
owner of this Note, become vested with all the powers and rights of the
transferor. Registration of any new owner shall take place upon presentation of
this Note to the Company at its principal officer, together with a duly
authenticated assignment. In case of transfer by operation of law, the
transferee agrees to notify the Company of such transfer and of his address, and
to submit appropriate evidence regarding the transfer so that this Note may
registered in the name of the transferee. This Note is transferable only on the
books of the Company by the Holder hereof in person or by attorney, on the
surrender hereof, duly endorsed. Communications sent to any registered owner
shall be effective as against all holders or transferees of the Note not
registered at the time of sending the Communication.
c. The Holder shall not, by virtue hereof, be entitled to any rights of a
shareholder in the Company, whether at law or in equity, and the rights of the
Holder are limited to those expressed.
d. Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Note, and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Note, if mutilated, the Company shall execute
and deliver a new Note of like tenor and date. Any such new Note executed and
delivered shall constitute and additional contractual obligation on the part of
the Company, whether or not this Note so lost, stolen, destroyed or mutilated
shall be art any time enforceable by anyone.
e. This Note shall be construed and enforce in accordance with the laws of
the State of New York. The Company and the Holder hereby consent to the
jurisdiction of the courts of the State of New York and the United States
District Courts situated therein in connection with any action concerning the
provisions of this Note instituted by the Holder against the Company.
f. No recourse shall be had for the payment of principal or interest on
this Note against any incorporator or any past, present, or future stockholder,
officer, director, agent or attorney of the Company, or of any successor
corporation, either directly or through the Company or any successor
corporation, otherwise, all such liability of the incorporators, stockholders,
officers, directors, attorneys and agents being waived, released and surrendered
by the Holder hereof by the acceptance of this Note.
IN WITNESS WHEREOF, the Company has caused this Note to be signed as of
the date first written above.
AMBIENT CORPORATION
EXHIBIT A
By: ____________
Title:
