(Face of Security)
__% SUBORDINATED INVESTMENT NOTE
No.______ $ _________
RIVERBANK FACTORS, INC.
promises to pay to
or registered, permitted assigns,
the principal sum of________________________________________________ Dollars
on___________
Payment Dates : commencing
Regular Dates
Dated:
RIVERBANK FACTORS, INC.
By:____________________________________
Officer of the Company
Attest ___________________
Officer of the Company
(SEAL)
RIVERBANK FACTORS, INC.
UNSECURED, SUBORDINATED INVESTMENT NOTE
Due__________________
$___________ Ft Lauderdale, Fl.
[issue date]
RIVERBANK FACTORS, INC., a Florida corporation, herein called the Company, for
value received, hereby promises to pay to ___________ , or registered
permitted assigns ("Holder"), the sum of $______ on __________ and to pay
interest on such principal sum at the rate at_______ % per annum computed from
the Interest Accrual Date, payable [monthly, quarterly, semi-annually,
annually, at maturity]. Payment of the principal of and interest on this Note
will be made in accordance with the terms of the Indenture (as herein
defined):
Interest payments shall be made by check delivered by mail to the address of
the Holder appearing on the Note register maintained by the Registrar (which
address may be changed from time to time by notice given by holder in writing
to the Registrar) on the Regular Record Date preceding the subject Payment
Date; principal and interest payment at the end of the term hereof shall be
made [in person to Holder at the offices or agency of the Paying Agent in
exchange for this Note] Holder shall be notified prior to such payment or the
address at which such payment shall occur. Initially, the Company will act as
Paying Agent and Registrar The Company may change any Registrar or Paying
Agent without notice to Holder.
All payments hereunder shall be made in such coin or currency of the United
States of America as at the time of payment is legal tender for payment or
public and private debts. [All interest on the Investment Notes will be
compounded daily and computed on the basis of a 360 Day year of twelve 30-day
months.]
This Note is being issued pursuant to a Dewed Poll Indenture ("Indenture")
dated as of ____________ ("Indenture") between the Company and the Holders of
the Notes in connection with an offering by the Company of an aggregate of
$4,900,000 U.S. principal amount Unsecured, Subordinated Investment Notes as
described in the Company's Registration Statement on Form SB-2, dated _______
and a current interest rate supplement thereto (the "Offering"), The term's of
the Notes include those stated in the Indenture. The notes are subject to all
such terms, and Holder is referred to the Indenture for a statement of such
terms. All capitalized terms not otherwise defined herein shall have the
meaning given to such term's in the Indenture.
1. Subordination. The indebtedness evidenced by this Note shall be postponed
and subordinated - is subject in right of payment, to the extent and in the
manner set forth In the Indenture, to the prior payment in full of all "Senior
Debt" of the Company. "Senior Debt" means any indebtedness (whether
outstanding on the date of issuance of this note or thereafter created)
incurred by the Company in connection with borrowings by the Company
(including its subsidiaries from a bank, trust company, insurance company, or
from any other institutional lender whether such Indebtedness is or is not
specifically designated by the Company as being "Senior Debt" in its defining
instruments. The Company agrees, and Holder by accepting this Note consents
and agrees to the subordination provided for in the Indenture.
2. Subrogation. As more fully set forth in the Indenture. subject to the
payment in full of all Senior Debt of the Company, Holder shall be subrogated
to the rights of the holders of Senior Debt of the Company to receive payments
or distributions of assets of the Company made on the Senior Debt of the
Company until the principal of and interest on this Note shall be paid in
full, and for purposes of such subrogation, no such payments or distributions
to the holders of Senior Debt of the Company of cash, property or securities,
which otherwise would be payable or distributable to Holder, shall as between
the Company, its creditors other than the holders of Senior Debt of the
Company, and Holder, be deemed to be a payment by the Company to or on
account of this Note, it being understood that the provisions of this
paragraph are intended solely for the purpose of defining the relative rights
of Holder, on the one hand, and the holders of Senior Debt of the Company, on
the other hand.
3. Nonimpairment. Nothing contained in this Note in intended to or shall
impair, as between the Company, the Company's creditors other than the holders
of Senior Debt of the Company, and Holder, the obligation of the Company,
which is absolute and unconditional, to pay to Holder the principal of and
interest on this Note, as and when the same shall become due and payable in
accordance with its terms, and which, subject to the rights under Article 10
of the Indenture of the holders of Senior Debt of the Company, is intended to
rank equally with all other general obligations of the Company. In addition,
nothing contained in this Note is intended to or shall affect the relative
rights of Holder and creditors of the Company other than the holders of Senior
Debt of the Company, nor shall anything herein or therein prevent the Holder
of this Note from exercising all remedies otherwise permitted by the Indenture
and applicable law upon the occurrence of an Event of Default, subject to the
rights if any, under Article 10 of the Indenture of the holders of Senior Debt
of the Company in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
4. Mandatory Redemption. Except as provided in Article 3 of the Indenture
with respect to the Company's obligation to redeem Notes at the request of a
Holder in the event of Xxxxxx's Total Permanent Disability), the estate of a
Holder (in the event of Xxxxxx's death) or a jointholder (in the event this
Note is held jointly by a husband and wife and one spouse suffers a Total
Permanent Disability or dies), the Company has no mandatory redemption or
sinking fund obligations with respect to this Note.
5. Events of Default. An event of Default is:
(a) Default in the payment of any interest upon this Note when it becomes due
and payable and continuance of such default for a period of 30 days; or
(b) Default in the payment of principal of this Note when it becomes due and
payable at maturity, upon redemption or otherwise; or
(c) Failure by the Company to comply with any of its agreements upon a
liquidation, consolidation, merger or transfer of substantially all of the
Company's assets; or
(d) Failure by the Company for 60 days after notice the comply with any of
its other agreements in the Indenture or this Note; or
(e) Certain events of bankruptcy or insolvency.
If an Event of Default occurs and is continuing, the holders of at least
twenty five percent [25%] in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable immediately except that in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes become due and payable immediately without
further action or notice. Holders of Notes may not enforce the Indenture or
the Notes except as provided in the Indenture.
6. Transfer and Exchange. The transfer of Notes may be registered and
Notes may be exchanged as provided in the Indenture. This Note may not be
assigned, transferred or otherwise alienated without prior written consent of
the Company (which consent shall not be unreasonably withheld), subject to the
Company's right to demand and receive an opinion of Xxxxxx's legal counsel
(which counsel shall be reasonably acceptable to the Company) that the
transfer does not violate any applicable securities laws.
7. Automatic Extension. At least seven (7) days prior to this Note's
Maturity Date, the Company will notify the Holder whether, subject to the
Holders demand for repayment within seven (7) days after the Maturity Date of
the Note, the Company intends to extend the term of this Note. In the event
that the Holder has not demanded repayment and the Company has notified the
Holder in accordance with this paragraph 7, this Note shall automatically be
extended for a term identical to the original term of this Note. This Note
will continue to renew as described in this paragraph 7 absent some action
permitted under the Indenture by the Holder or the Company. This Note, as
renewed, will continue in all its provisions, including provisions relating to
payment, provided, however, that the interest rate payable during any such
renewal term shall be the interest rate then being offered by the Company on
similar Notes being offered as of the renewal date. If similar Notes are not
then being offered, the interest rate shall be the rate specified by the
Company on or before the Maturity Date, or the original rate of this Note if
no such rate is specified.
8. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
9. Amendments and Waivers. Subject to certain exceptions, the Indenture or
the Notes may be amended or supplemented and any existing Default under, or
compliance with any provision of, the Indenture may be waived with the written
consent of the Holders of at least a majority in principal amount of the Notes
then outstanding. Without the consent of any Holder, the Company may amend or
supplement the Indenture or the Notes to cure any ambiguity, defect or
inconsistency; to provide for uncertificated Securities in addition to or in
place of certificated Securities; to comply with Section 5.01 of the
Indenture; to change the elective redemption provisions applicable upon the
death or Total Permanent Disability of a Holder (but only to the extent such
change does not alter such rights with respect to any outstanding Note); to
make any change that would provide any additional rights or benefits to the
Holder; or to comply with requirements of the SEC.
10. No Trustee. The Deed Poll Indenture does not contain any provision for
the appointment of a trustee for the equal and ratable benefit of the Holders.
11. No Recourse Against Others. A director, officer, employee, incorporator
or stockholder, of the Company, as such, shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the
Notes.
The Company will furnish to any Holder upon written request and without charge
a copy of the Indenture. Requests may be made to:
RIVERBANK FACTORS, INC.
000 Xxxx Xxxxxxx Xxxx Xxxx.
Suite 100
Ft. Lauderdale, Florida 33311
Attention: President
