EXHIBIT 4.3A
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Note No. 1
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), NOR APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION ("THE COMMISSION"), OR BY THE SECURITIES REGULATORY AUTHORITY OF ANY
STATE. THIS NOTE MAY NOT BE SOLD IN THE ABSENCE OF A REGISTRATION STATEMENT OR
AN EXEMPTION FROM REGISTRATION. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
9% SUBORDINATED NON-CONVERTIBLE PROMISSORY NOTE DUE
JANUARY 31, 1999
$___________ U.S. April 18, 1997
UNIVERSAL TRADING TECHNOLOGIES CORPORATION, a Delaware corporation
(the "Company"), for value received, promises to pay to the order of
_______________ ________________________ at _________________________________ or
at the offices of the Company, the sum of $_________ U.S. on JANUARY 31, 1999
with interest from the date hereof on the unpaid principal hereof until maturity
(whether as stated or by acceleration), according to the tenor hereof, at a rate
of 9% per annum (and after such maturity or demand at a rate per annum equal to
9%) until such principal is paid in full. Interest shall be payable annually in
arrears on JANUARY 31, 1998 and on JANUARY 31, 1999 or upon the earlier of the
prepayment or due date of the note. Interest shall be calculated on the basis
of a 360-day year for actual days elapsed. This note is one of a series of 9%
subordinated non-convertible promissory notes that have been delivered to
investors in a Private Placement by the Company, all of which notes are
hereinafter referred to as the "Notes". The Notes are direct, unsecured
obligations of the Company.
The Company for itself, its successors and assigns, covenants and
agrees, and each holder of the Notes, by his acceptance hereof, likewise
covenants and agrees, that the payment of the principal of, premium (if any) and
interest on, the Notes is hereby expressly subordinated, to the extent and in
the manner hereinafter set forth, in right of payment to the prior payment in
full of all "Senior Indebtedness," as that term is herein defined.
In case of any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company, whether
in bankruptcy, insolvency, reorganization or receivership proceedings or upon an
assignment for the benefit of creditors or any other marshalling of the assets
and liabilities of the Company:
(a) the holders of all Senior Indebtedness shall first be entitled to
receive payment thereof in full, including all principal, premium, if any, and
interest, or provision shall be made for such payment before the holders of the
Notes receive any payment upon the principal of, premium, if any, or interest
on, indebtedness evidenced by the Notes;
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(b) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to which the holders of
the Notes would be entitled except for the subordination provisions hereof shall
be paid and/or delivered by the liquidating trustee or agent or other person
making such payment or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee or otherwise, directly to the holders of Senior
Indebtedness 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 their respective interests may
appear, for application to the payment of amounts remaining unpaid on account of
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
(c) in the event that notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by the holders of the Notes before all
Senior Indebtedness is paid in full or provision is made for such payment, such
payment or distribution shall be held in trust for the benefit of and promptly
paid over to the holders of such Senior Indebtedness 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 their respective interests may appear, for application to the payment of all
Senior Indebtedness remaining unpaid 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.
Upon the payment in full of all Senior Indebtedness, the holders of
the Notes shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of assets of the Company
applicable to the Senior Indebtedness until the unpaid principal of, premium, if
any, and interest on the Notes shall be paid in full. No such payments or
distributions applicable to the Senior Indebtedness shall, as between the
Company, its creditors other than the holders of Senior Indebtedness, and the
holders of the Notes, be deemed to be a payment by the Company to or on account
of the Notes. The subordination provisions of the Notes are intended solely for
the purpose of defining the relative rights of the holders of the Notes, on the
one hand, and the holders of the Senior Indebtedness, on the other hand.
Nothing contained herein is intended to or shall impair, as between
the Company, its creditors other than the holders of Senior Indebtedness, and
the holders of the Notes, the obligation of the Company, which is unconditional
and absolute, to pay to the holders of the Notes the principal of (and premium,
if any) and interest on the Notes as and when the same shall become due and
payable in accordance with its terms, or to affect the relative rights of the
holders of the Notes and creditors of the Company other than the holders of the
Senior Indebtedness, nor shall anything herein or therein prevent the holders of
the Notes from exercising all remedies otherwise permitted by applicable law
upon default under the Notes, subject to the rights, if any, under the
subordination provisions of the Notes of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
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Upon any payment or distribution of assets of the Company referred to
in the subordination provisions of the Notes, the holders of the Notes shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending or upon a certificate of the liquidating
trustee or agent or other person making any distribution to the holders of the
Notes for the purpose of ascertaining the persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to the
subordination provisions of the Notes.
No payments on account of principal, premium, if any, or interest on
the Notes, shall be made unless full payment of amounts then due for principal,
premium, if any, sinking funds and interest on Senior Indebtedness has been made
or duly provided for in money or money's worth. No payments on account of
principal, premium, if any, or interest on the Notes, shall be made if: (i) at
the time of such payment or immediately after giving effect thereto, there shall
exist under any Senior Indebtedness or any agreement pursuant to which any
Senior Indebtedness is issued, any default or any condition, event or act, which
with notice or lapse of time, or both, would constitute a default, or (ii) the
Company shall have received from any holder of Senior Indebtedness or the
representative of a holder of Senior Indebtedness written notice of the
existence of any default or any condition, event or act, which, with notice or
lapse of time, or both, would constitute a default, or which would preclude the
making of any payment by the Company with respect to the principal, premium, if
any, or interest on the Notes; in any such case unless and until such default
shall have been cured or waived or shall have ceased to exist.
Nothing contained in the subordination provisions of the Notes, shall
affect the obligation of the Company to make, or prevent the Company from
making, at any time except during the pendency of any such insolvency,
bankruptcy, dissolution, winding up, liquidation or reorganization proceedings,
and except during the continuance of any default specified in the immediately
preceding paragraph (not cured or waived), payments at any time of principal of,
and premium or interest on, the Notes.
The term "Senior Indebtedness" shall mean the principal of, and
premium (if any) on, and interest on all indebtedness of the Company (other than
the Notes), whether outstanding on the date of the Notes or hereafter created
for money borrowed by the Company or other monetary obligations of the Company
(whether the same be evidenced by debentures or notes (other than the Notes) or
evidenced by a letter of credit, loan agreement or an indenture or similar
instrument) from, owing to, or guaranteed to, banks, trust companies, leasing
companies, insurance companies or other institutional lenders and any renewal,
extension refunding, amendment or modifications of any such Senior Indebtedness,
including without limitation of the foregoing, purchase money mortgages,
mortgages made or given or guaranteed by the Company as mortgagor or guarantor,
and assumed or guaranteed mortgages, upon property, but excluding any
indebtedness to trade creditors
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or suppliers on open account for work, labor, services and materials and
excluding any indebtedness which by the terms of the instrument creating or
evidencing the same is stated to be not superior in right of payment to the
Notes. During the continuation of any default in the payment of principal or
interest on any Senior Indebtedness, no payment of principal or interest may be
made by the Company on the Notes. The Notes contain no limitation on the amount
of additional Senior Indebtedness or other indebtedness that may be issued or
incurred. However, the Company will not in the future until the Notes have been
repaid in full incur indebtedness that is senior to the Notes other than Senior
Indebtedness; provided, however, that nothing shall prohibit the Company from
incurring secured indebtedness.
The transferability of the Notes is restricted under the Federal and
state securities laws.
NO SALE, OFFER TO SELL OR TRANSFER OF THE NOTES SHALL BE MADE UNLESS A
REGISTRATION STATEMENT UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED,
WITH RESPECT TO SUCH SECURITIES IS THEN IN EFFECT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENT OF SUCH ACT IS THEN IN FACT APPLICABLE TO SUCH
TRANSFER.
THE NOTES ARE NOT CONVERTIBLE INTO OTHER SECURITIES OF THE COMPANY.
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ARTICLE I
REDEMPTION
1.1 Subject to the subordination provisions of the Notes, the Company
may, at its option, redeem the Notes in whole and not in part, at 100% of the
face value of the Notes plus accrued and unpaid interest to such date by giving
written notice to the holders of the Notes to that effect at least 30 calendar
days prior to the redemption date.
Notice of redemption to the holders of the Notes shall be mailed by
the Company by first class mail, postage prepaid, at least 30 and not more than
60 days prior to the redemption date, to the holders of Notes, at their last
addresses as they shall appear in the books of Registration, but failure of a
Note holder to receive such notice shall not affect the validity of the
proceedings for the redemption of any of the Notes.
1.2 Upon the giving of notice of redemption as above provided, the
Notes shall become due and payable on the date and at the place stated in such
notice at the applicable redemption price, together with interest accrued to the
date fixed for redemption, and on and after such date fixed for redemption
(unless the Company shall make default in the payment of such Notes at the
redemption), interest on the Notes so called for redemption shall cease to
accrue and such Notes shall be deemed not to be outstanding.
1.3 Upon the completion by the Company of a private placement or
public offering wherein the Company receives gross proceeds of at least
$10,000,000 U.S. in any one transaction, the Company will promptly notify its
noteholders that it will redeem the Notes at 100% of the face amount of the
Notes plus accrued and unpaid interest. Such notice will provide for the
redemption of the Notes six months after the completion of such offering.
ARTICLE II
VOTING RIGHTS
2.1 The holders of the Notes shall not be entitled to notice of any
stockholders' meetings or possess any right to vote upon the election of
directors or upon any other matter.
ARTICLE III
DEFAULT
3.1 Except as expressly provided herein, the Company waives protest,
demand for payment and notice of default for non-payment.
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3.2. The holders of not less than 50% by amount of the Notes may
consent to change any terms covering the Notes except those terms relating to
interest rate, payment dates and maturity date which may be changed only by
unanimous consent of the Note holders.
The holders of not less than fifty (50%) percent of the principal
amount of the Notes by notice in writing sent by registered mail to the Company
may declare the principal amount of all the Notes to be forthwith due and
payable, and upon any such declaration the same shall become immediately due and
payable, in the following events:
(a) If default shall be made in the payment of any installment of
interest on any of the Notes when and as the same shall become due and payable,
as herein provided, after allowance for a grace period of fifteen (15) days and
such default shall continue for a period of an additional fifteen (15) days
after written notice is received by the Company from the Note holders; or
(b) If default shall be made in the payment of the principal of any
of the Notes when and as the same shall become due and payable; or
(c) If the Company shall institute proceedings for voluntary
bankruptcy, or shall apply for or consent to the appointment of a receiver for
itself or any of its property, or shall make an assignment for the benefit of
its creditors, or shall go into voluntary liquidation or be dissolved, or shall
admit in writing its inability to pay its debts generally as they mature, or
shall institute proceedings for reorganization, readjustment, arrangement,
composition or similar relief under any bankruptcy, insolvency or other
applicable law, or shall file an answer in any such proceedings against it
joining in seeking such relief or not objecting thereto; or
(d) If an order, judgment or decree shall have been made for the
appointment of a receiver of the Company or of a substantial part of its
property, or approving a petition seeking reorganization, readjustment,
arrangement, composition or similar relief for the Company under any bankruptcy,
insolvency or other applicable law, or adjudging the Company to be bankrupt or
insolvent, and such order, judgment or decree shall remain in force for sixty
(60) days without any stay thereof; or
(e) If one or more judgments, decrees or orders for the payment of
money in excess of $100,000 U.S. in the aggregate shall be rendered against the
Company and/or its subsidiaries, and such judgments, decrees, or orders shall
continue unsatisfied and in effect for a period of 30 consecutive days without
being vacated, discharged, satisfied or stayed or bonded pending appeal.
ARTICLE IV
MISCELLANEOUS
4.1 Time for payment extended by law shall be included in computation
of interest.
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4.2 The Notes shall be governed by and construed in accordance with
laws of the State of New York.
4.3 No recourse shall be had for the payment of the principal of, or
interest on, the Notes, or for any claim based hereon, or otherwise in respect
hereof, against any incorporator, or against any past, present or future
stockholder, officer or director, as such, of the Company or of any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
4.4 The Company is prohibited from declaring any cash dividends prior
to payment in full of the Notes.
4.5 Notwithstanding anything contained herein to the contrary, the
Notes may not be disposed of except in compliance with all applicable federal
and state securities laws. In this respect, before selling or otherwise
disposing of any Notes, the holder of such Notes shall give five business days
prior written notice to the Company of his intention to do so. The notice by the
holder shall specify the Notes proposed to be sold or otherwise disposed of and
describe in reasonable detail the amount of the proposed sale or other
disposition and shall be accompanied by an opinion (in form and substance
reasonably satisfactory to the Company's counsel) of the holder's securities
counsel addressed to the Company as to whether the proposed sale or other
disposition may be effected without the filing of a Registration Statement under
the Securities Act of 1933, as amended (the "Act"), covering the Notes proposed
to be sold or otherwise disposed of. If in the opinion of such counsel, and of
counsel for the Company, no such registration action is necessary, the holder
may sell or otherwise of dispose of such Notes in the manner described by him in
the notice given to the Company. (Copies of any documents which the holder or
his counsel files with the Securities and Exchange Commission regarding the sale
or other disposition will immediately be provided by him or his counsel to the
Company.) If, in the opinion of counsel for the Company registration of such
Notes under the Act is necessary, no such sale or other disposition may be
effected.
The holder of the Notes may not sell or otherwise transfer the Notes
without the transferee agreeing to be bound by the provisions of the
Subscription Agreement pursuant to which the holder of the Notes is bound. A
copy of such Subscription Agreement may be obtained from the Company at its
principal executive offices.
UNIVERSAL TRADING TECHNOLOGIES
CORPORATION
By:_____________________________
Xxxxxx X. Xxxxxx, President
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