CONVERTIBLE PROMISSORY NOTE
$______ Miami Beach, Florida
January __, 1997
FOR VALUE RECEIVED, the undersigned, INTERNATIONAL FAST FOOD CORPORATION,
a Florida corporation (the "Company"), hereby unconditionally promises to pay to
the order of ______________________ (the "Lender") at the office of the Lender,
0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxx Xxxxx, Xxxxxxx in lawful money of the United
States of America the principal sum of
___________________________________($__________), together with interest on the
unpaid principal amount outstanding from time to time at a rate of eight percent
(8%) per annum, payable semi-annually on June 15 and December 15 of each year
during the term hereof commencing June 15, 1997. All outstanding principal and
interest accrued and unpaid on this Note shall be payable in full on January __,
1999, the maturity date.
This Note is subject to the following additional provisions:
1. The Lender is hereby assigned a security interest (the "Security
Interest"), to the extent possible, in the Company's entire equity interest in
International Fast Food Polska, a Polish limited liability corporation, and in
all proceeds thereof. The Security Interest is senior to the Convertible
Subordinated Debentures of the Company which mature in 2007 and provide for the
payment of interest at 9% semi-annually until maturity. The Lender is aware this
Security Interest will be subordinate to an existing security interest pursuant
to the Agreement to Assign Litigation Proceeds dated January 25, 1996 and all
Amendments thereto.
2. The Lender is hereby given the option, exercisable at any time after
the date hereof, to convert up to the entire unpaid principal balance
outstanding at the time of the exercise of this Note into duly authorized,
validly issued, fully paid and non-assessable shares of Common Stock, par value
$.01, of the Company at a rate, subject to such adjustment(s), if any, set forth
below, equal to $.10 per share of Common Stock. Lender shall exercise the option
to convert by sending written notice to such effect to the Company which notice
shall be accompanied with the original of this Note or suitable arrangements for
the delivery of this Note.
3. Upon conversion hereof into Common Stock ("Registrable Securities"),
the Lender shall have the right, exercisable by written notice to the Company
(the "Demand Registration Request"), to have the Company prepare and file with
the Securities and Exchange Commission, at the sole expense of the Company, in
respect of all holders of Registrable Securities, a Registration Statement so as
to permit a public offering and sale of the Registrable Securities. Once
effective, the Company will be required to maintain the effectiveness of the
Registration Statement until the earlier of (i) the date that all of the
Registrable Securities have been sold, or (ii) the date that all holders of
Registrable Securities receive an opinion of counsel to the Company that all of
the Registrable Securities may be freely traded without registration under the
Securities Act, under Rule 144 promulgated under the Securities Act or
otherwise.
4. In the event that the outstanding Common Stock of the Company hereafter
is restructured or revised by recapitalization, reclassification, combination or
shares, stock split or split-up or stock dividend, the aggregate number and kind
of common stock subject to this Note shall be adjusted appropriately, both as to
the number of shares of common stock and the conversion price. Upon dissolution
or liquidation of the Company, the Lender shall have the right, immediately
prior to such dissolution or liquidation, to exercise its conversion right in
whole or in part to the extent that it shall not have been exercised. No
fractional shares will be issued upon any conversion, but an adjustment therefor
in cash will be made with respect to any fraction of a share which would
otherwise be issuable based upon the market price as determined above.
5. In case of any sale, exchange, tender offer, redemption or buyout of
the Company's shares, or any consolidation of the Company with or merger of the
Company into another corporation, or in case of any sale, transfer or lease to
another corporation of all or substantially all the property of the Company, the
Company or such successor or purchasing corporation, as the case may be, shall
execute with the Lender an agreement that the Lender shall have the right
thereafter, upon payment of the per share conversion price in effect immediately
prior to such action, to convert on the same basis which it would have or have
been entitled to receive after the happening of such consolidation, merger,
sale, transfer or lease had such conversion been accomplished immediately prior
to such action. Such agreement shall provide for adjustments, which shall be as
nearly equivalent as may be practicable to the adjustments provided herein.
These provisions shall similarly apply to successive consolidations, mergers,
sales, transfers or leases.
6. The Company covenants and agrees that: (i) all shares of Common Stock
delivered upon conversion (in accordance with the terms and conditions set forth
herein) of this Note will, upon delivery, be duly and validly authorized and
issued, fully paid and non-assessable and free from all liens and charges with
respect to the purchase thereof; and (ii) it will at all times use its best
efforts to reserve and keep available an authorized number of shares of its
Common Stock sufficient to permit the exercise in full of all outstanding
options, warrants and rights, including the conversion rights under this Note.
7. The Company waives demand, presentment, protest and notice of any kind
and consents to the extension of time or payments, the release, surrender or
substitution of any and all security or guarantees for the obligations evidenced
hereby or other indulgence with respect to this Note, all without notice.
8. This Note may not be changed, modified or terminated orally, but only
by an agreement in writing, signed by the party to be charged. The Company
hereby authorizes the Lender to complete this Note and any particulars relating
thereto according to the terms of the indebtedness evidenced hereby.
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9. All rights and remedies available to the Lender pursuant to the
provisions of applicable laws and otherwise are cumulative, non-exclusive and
enforceable alternatively, successively and/or concurrently after default by the
Company pursuant to the provisions of this Note.
10. The Company shall have the option to prepay upon 10 days prior written
notice at any time. All optional prepayments of principal made pursuant to this
Note shall be accompanied by the payment of all accrued interest on such
principal through the date of payment.
11. If one or more of the following described "events of Default"
shall occur:
(a) The Company shall default in the payment of principal or
interest on this Note; or
(b) Any of the representations or warranties made by the Company
herein, in the Subscription Agreement dated as even date
herewith (the "Subscription Agreement"), or in any certificate
or financial or other written statements heretofore or
hereafter furnished by or on behalf of the Company in
connection with the execution and delivery of this Note or the
Subscription Agreement shall be false or misleading in any
material respect at the time made and such failure shall
remain uncured for a period of 7 days from receipt of written
notice from the Lender; or
(c) The Company shall fail to perform or observe, in any material
respect, any other covenant, term, provision, condition,
agreement or obligation of the Company under this Note and
such failure shall continue uncured for a period of seven (7)
days after notice from the Lender of such failure; or
(d) The Company shall (1) make an assignment for the benefit of
creditors or commence proceedings for its dissolution; or (2)
apply for or consent to the appointment of a trustee,
liquidator or receiver for its or for a substantial part of
its property or business; or
(e) A trustee, liquidator or receiver shall be appointed for the
Company or for a substantial part of its property or business
without its consent and shall not be discharged within thirty
(30) days after such appointment; or
(f) Any governmental agency or any court of competent jurisdiction
at the instance of any governmental agency shall assume
custody or control of the whole or any substantial portion of
the properties or assets of the Company and shall not be
dismissed within thirty (3) days thereafter, or
(g) The Company shall default in the payment when due of any
principal of or interest on any of its other indebtedness or
other obligation of the Company in an amount of $5,000 or
more; 3
Then, or at any time thereafter, and in each and every such case,
unless such Event of Default shall have been waived in writing by the Lender
(which waiver shall not be deemed to be a waiver of any subsequent default) at
the option of the Lender and in the Lender's sole discretion, the Lender may
consider this Note immediately due and payable, without presentment, demand,
protest or notice of any kinds, all of which are hereby expressly waived,
anything herein or in any note or other instruments contained to the contrary
notwithstanding, and the Lender may immediately, and without expiration of any
period of grace, enforce any and all of the Lender's rights and remedies
provided herein or any other rights or remedies afforded by law.
12. The Lender may assign its rights and obligations hereunder.
13. This Note shall be governed by and construed in accordance with the
laws of the State of Florida and shall be binding upon the successors, assigns,
heirs, administrators and executors of the Company and inure to the benefit of
the Lender, its successors, endorsees, assigns, heirs, administrators and
executors. If any term or provision of this Note shall be invalid, illegal or
unenforceable, the validity of all other terms and provisions hereof shall in no
way be affected thereby.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated January __, 1997
INTERNATIONAL FAST FOOD CORPORATION
By:_____________________________
Its:
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