Exhibit 4.2
THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO GLOBAL PAYMENT TECHNOLOGIES, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.
SECURED CONVERTIBLE TERM NOTE
FOR VALUE RECEIVED, GLOBAL PAYMENT TECHNOLOGIES, INC., a Delaware
corporation (the "BORROWER"), hereby promises to pay to LAURUS MASTER FUND,
LTD., c/o Ironshore Corporate Services Ltd., P.O. Box 1234 G.T., Queensgate
House, South Church Street, Grand Cayman, Cayman Islands, Fax: 000-000-0000 (the
"HOLDER") or its registered assigns or successors in interest, on order, the sum
of One Million Five Hundred Thousand Dollars ($1,500,000), together with any
accrued and unpaid interest hereon, on March 15, 2007 (the "MATURITY DATE") if
not sooner paid.
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in that certain Securities Purchase Agreement dated as of
the date hereof between the Borrower and the Holder (the "PURCHASE AGREEMENT").
The following terms shall apply to this Note:
ARTICLE I
INTEREST & AMORTIZATION
1.1 Interest Rate and Payment. Subject to Sections 4.10 and 5.6 hereof,
interest payable on this Note shall accrue at a rate per annum (the "Interest
Rate") equal to the "prime rate" published in The Wall Street Journal from time
to time, plus one and one half percent (1.5%). The prime rate shall be increased
or decreased as the case may be for each increase or decrease in the prime rate
in an amount equal to such increase or decrease in the prime rate; each change
to be effective as of the day of the change in such rate. The Interest Rate
shall not be less than six percent (6.00%). Interest shall be payable monthly in
arrears commencing on April 1, 2004, on the first day of each consecutive
calendar month thereafter (each, a "REPAYMENT DATE"), and on the Maturity Date,
whether by acceleration or otherwise.
1.2 Minimum Monthly Principal Payments. Amortizing payments of the
aggregate principal amount outstanding under this Note at any time (the
"PRINCIPAL AMOUNT") shall begin on July 1, 2004 and shall recur on the first
calendar day of each succeeding month thereafter until the Maturity Date (each,
an "AMORTIZATION DATE") as set forth in the table below:
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------------------------------- ---------------------------- ---------------------------- ----------------------------
Date Principal Amount Date Principal Amount
------------------------------- ---------------------------- ---------------------------- ----------------------------
7/1/04 $25,000 10/1/05 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
8/1/04 $25,000 11/1/05 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
9/1/04 $25,000 12/1/05 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
10/1/04 $25,000 1/1/06 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
11/1/04 $25,000 2/1/06 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
12/1/04 $25,000 3/1/06 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
1/1/05 $25,000 4/1/06 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
2/1/05 $25,000 5/1/06 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
3/1/05 $25,000 6/1/06 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
4/1/05 $45,000 7/1/06 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
5/1/05 $45,000 8/1/06 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
6/1/05 $45,000 9/1/06 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
7/1/05 $45,000 10/1/06 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
8/1/05 $45,000 11/1/06 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
9/1/05 $45,000 12/1/06 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
1/1/07 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
2/1/07 $55833.33
------------------------------- ---------------------------- ---------------------------- ----------------------------
3/1/07 $55833.39
------------------------------- ---------------------------- ---------------------------- ----------------------------
Subject to Section 3 below, beginning on the first Amortization Date, the
Borrower shall make monthly payments to the Holder on each Repayment Date, each
in the amount set forth above, together with any accrued and unpaid interest to
date on such portion of the Principal Amount plus any and all other amounts
which are then owing under this Note but have not been paid (collectively,
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the "MONTHLY AMOUNT")
ARTICLE II
CONVERSION REPAYMENT OPTION
2.1 (a) Payment of Monthly Amount in Cash or Common Stock. .. Each month by
the fifth (5th) business day prior to each Amortization Date (the "NOTICE
DATE"), the Holder shall deliver to Borrower a written notice in the form of
Exhibit B attached hereto converting the Monthly Amount payable on the next
Repayment Date in either cash or Common Stock, or a combination of both (each, a
"REPAYMENT NOTICE"). If a Repayment Notice is not delivered by the Holder on or
before the applicable Notice Date for such Repayment Date, then the Borrower
shall pay the Monthly Amount due on such Repayment Date in cash. Any portion of
the Monthly Amount paid in cash on a Repayment Date, shall be paid to the Holder
an amount equal to 102% of the principal portion of the Monthly Amount due and
owing to Holder on the Repayment Date. If the Holder converts all or a portion
of the Monthly Amount in shares of Common Stock, the number of such shares to be
issued by the Borrower to the Holder on such Repayment Date shall be the number
determined by dividing (x) the portion of the Monthly Amount to be paid in
shares of Common Stock, by (y) the then applicable Fixed Conversion Price. For
purposes hereof, the initial "FIXED CONVERSION PRICE" means $4.26 (which has
been determined on the date of this Note as an amount equal to 105% of the
average closing price for the ten (10) trading days immediately prior to the
date of this Note).
(b) Monthly Amount Conversion Guidelines. Subject to Sections 2.1(a), 2.2,
and 3.2 hereof, the Holder shall convert all or a portion of the Monthly Amount
due on each Repayment Date in shares of Common Stock if the closing price of the
Common Stock as reported by Bloomberg, L.P. on the Principal Market (as defined
in Section 4.7 hereof) for the five (5) trading days preceding such Repayment
Date was greater than 110% of the Fixed Conversion Price. Any part of the
Monthly Amount due on such Repayment Date which the Holder has converted into
shares of Common Stock but which must instead be paid in cash (as a result of
the closing price of the Common Stock on one or more of the five (5) trading
days preceding the applicable Repayment Date having been less than 110% of the
Fixed Conversion Price) shall be paid to Holder in cash at the rate of 102% of
the Monthly Amount otherwise due on the Repayment Date within three (3) business
days of the applicable Repayment Date.
2.2 No Effective Registration. Notwithstanding anything to the contrary
herein, none of the Borrower's obligations to the Holder may be converted into
Common Stock unless (i) an effective current Registration Statement (as defined
in the Registration Rights Agreement) covering the shares of Common Stock to be
issued in connection with satisfaction of such obligations exists, (ii) no Event
of Default hereunder exists and is continuing, unless such Event of Default is
cured within any applicable cure period or is otherwise waived in writing by the
Holder in whole or in part at the Holder's option, or (iii) an exemption from
registration of the Common Stock is available to
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pursuant to Rule 144 of the Securities Act.
Any amounts converted by the Holder pursuant to this Section 2.2 shall be
deemed to constitute payments of any outstanding fees, interest and principal
applying to Monthly Amounts for the remaining Repayment Dates in chronological
order.
2.3 Optional Redemption in Cash. The Borrower will have the option of
prepaying this Note ("OPTIONAL REDEMPTION") by paying to the Holder a sum of
money equal to: (a) one hundred fifteen percent (115%) (if the redemption occurs
before the first anniversary hereof), or (b) one hundred five percent (105%)(if
the redemption occurs after the first anniversary hereof, but before the second
anniversary hereof) or (c) one hundred three percent (103%)(if the redemption
occurs after the second anniversary hereof) of the principal amount of this Note
together with accrued but unpaid interest thereon and any and all other sums
due, accrued or payable to the Holder arising under this Note, the Security
Agreement, or any Ancillary Agreement (as defined in the Security Agreement)
(the "REDEMPTION AMOUNT") outstanding on the day written notice of redemption
(the "NOTICE OF REDEMPTION") is given to the Holder. The Notice of Redemption
shall specify the date for such Optional Redemption (the "REDEMPTION PAYMENT
DATE") which date shall be seven (7) days after the date of the Notice of
Redemption (the "REDEMPTION PERIOD"). A Notice of Redemption shall not be
effective with respect to any portion of this Note for which the Holder has a
pending conversion pursuant to Section 3.1, or for conversions made by the
Holder pursuant to Section 3.1 during the Redemption Period. The Redemption
Amount shall be determined as if such Xxxxxx's conversion elections had been
completed immediately prior to the date of the Notice of Redemption. On the
Redemption Payment Date, the Redemption Amount must be paid in good funds to the
Holder. In the event the Borrower fails to pay the Redemption Amount on the
Redemption Payment Date, then such Redemption Notice will be null and void.
ARTICLE III
CONVERSION RIGHTS
3.1. Holder's Conversion Rights. The Holder shall have the right, but not
the obligation, to convert all or any portion of the then aggregate outstanding
principal amount of this Note, together with interest and fees due hereon, into
shares of Common Stock subject to the terms and conditions set forth in this
Article III. The Holder may exercise such right by delivery to the Borrower of a
written notice of conversion not less than one (1) day prior to the date upon
which such conversion shall occur. The date upon which such conversion shall
occur is (the "CONVERSION DATE").
3.2 Conversion Limitation. The Holder shall not be entitled to convert on a
Conversion Date, that amount of the Note that would be convertible into that
number of shares of Common Stock which would (a) be in excess of the sum of: (i)
the number of shares of Common Stock beneficially owned by the Holder on a
Conversion Date; and (ii) the number of shares of Common Stock issuable upon the
conversion of the Note with respect to which the determination of this proviso
is being made on a Conversion Date, which would result in beneficial ownership
by the
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Holder of more than 4.99% of the outstanding shares of Common Stock of
the Borrower on such Conversion Date or (b) (ii) exceed twenty five percent
(25%) of the aggregate dollar trading volume of the Common Stock for the ten
(10) day trading period immediately preceding delivery of a Notice of Conversion
to the Borrower. For the purposes of the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Exchange Act and Regulation 13d-3 thereunder. The Holder may waive the
conversion limitation described in this Section 3.2 upon (a) seventy-five (75)
days prior written notice to the Borrower or (b) without any notice requirement
upon an Event of Default; and upon such waiver, this conversion limitation shall
become null and void..
3.3 Mechanics of Xxxxxx's Conversion. (a) If the Holder converts this Note
into Common Stock, the Holder shall give notice of such conversion by delivering
an executed and completed notice of conversion ("NOTICE OF CONVERSION") to the
Borrower and such Notice of Conversion shall provide a breakdown in reasonable
detail of the Principal Amount, accrued interest and fees being converted. On
each Conversion Date (as hereinafter defined) and in accordance with its Notice
of Conversion, the Holder shall make the appropriate reduction to the Principal
Amount, accrued interest and fees as entered in its records and shall provide
written notice thereof to the Borrower within two (2) business days after the
Conversion Date. Each date on which a Notice of Conversion is delivered or
telecopied to the Borrower in accordance with the provisions hereof shall be
deemed a Conversion Date (the "CONVERSION DATE"). A form of Notice of Conversion
to be employed by the Holder is annexed hereto as Exhibit A.
(b) Pursuant to the terms of the Notice of Conversion, the Borrower will
issue instructions to the transfer agent accompanied by an opinion of counsel
within one (1) business day of the date of the delivery to Borrower of the
Notice of Conversion and shall cause the transfer agent to transmit the
certificates representing the Conversion Shares to the Holder upon resale by
crediting the account of the Holder's designated broker with the Depository
Trust Corporation ("DTC") through its Deposit Withdrawal Agent Commission
("DWAC") system within three (3) business days (plus any extensions available to
Holder from Holder's prime broker) after receipt by the Borrower of the Notice
of Conversion (the "DELIVERY DATE"). In the case of the exercise of the
conversion rights set forth herein the conversion privilege shall be deemed to
have been exercised and the Conversion Shares issuable upon such conversion
shall be deemed to have been issued upon the date of receipt by the Borrower of
the Notice of Conversion. The Holder shall be treated for all purposes as the
record holder of such Common Stock, unless the Holder provides the Borrower
written instructions to the contrary.
3.4 Conversion Mechanics.
(a) The number of shares of Common Stock to be issued upon each conversion
of this Note shall be determined by dividing that portion of the principal and
interest and fees to be
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converted, if any, by the then applicable Fixed Conversion Price. In the event
of any conversions of outstanding principal amount under this Note in part
pursuant to this Article III, such conversions shall be deemed to constitute
conversions of outstanding principal amount applying to Monthly Amounts for the
remaining Repayment Dates in chronological order. By way of example, if the
original principal amount of this Note is $1,500,000 and the Holder converted
$50,000 of such original principal amount prior to the first Repayment Date,
then (1) the principal amount of the Monthly Amount due on the first Repayment
Date would equal $0, (2) the principal amount of the Monthly Amount due on the
second Repayment Date would equal 0 and (3) the principal amount of the Monthly
Amount due on the third Repayment Date would be $25,000.
(b) The Fixed Conversion Price and number and kind of shares or other
securities to be issued upon conversion is subject to adjustment from time to
time upon the occurrence of certain events, as follows:
A. Stock Splits, Combinations and Dividends. If the shares of Common Stock
are subdivided or combined into a greater or smaller number of shares of Common
Stock, or if a dividend is paid on the Common Stock in shares of Common Stock,
the Fixed Conversion Price or the Conversion Price, as the case may be, shall be
proportionately reduced in case of subdivision of shares or stock dividend or
proportionately increased in the case of combination of shares, in each such
case by the ratio which the total number of shares of Common Stock outstanding
immediately after such event bears to the total number of shares of Common Stock
outstanding immediately prior to such event.
B. During the period the conversion right exists, the Borrower will reserve
from its authorized and unissued Common Stock a sufficient number of shares to
provide for the issuance of Common Stock upon the full conversion of this Note.
The Borrower represents that upon issuance, such shares will be duly and validly
issued, fully paid and non-assessable. The Borrower agrees that its issuance of
this Note shall constitute full authority to its officers, agents, and transfer
agents who are charged with the duty of executing and issuing stock certificates
to execute and issue the necessary certificates for shares of Common Stock upon
the conversion of this Note.
C. Share Issuances. Subject to the provisions of this Section 3.4, if the
Borrower shall at any time prior to the conversion or repayment in full of the
Principal Amount issue any shares of Common Stock or securities convertible into
Common Stock to a person other than the Holder (except (i) pursuant to
Subsections A or B above; (ii) pursuant to options, warrants, or other
obligations to issue shares outstanding on the date hereof as disclosed to
Holder in writing; or (iii) pursuant to options that may be issued under any
employee incentive stock option and/or any qualified stock option plan adopted
by the Borrower) for a consideration per share (the "Offer Price") less than the
Fixed Conversion Price in effect at the time of such issuance, then the Fixed
Conversion Price shall be immediately reset to an Offer Price determined
pursuant to the formula below. For purposes hereof, the issuance of any security
of the Borrower convertible into or exercisable or exchangeable for Common Stock
shall result in such adjustment to the Fixed Conversion Price at the time of
issuance of such securities.
6
If the Corporation issues any additional securities convertible into Common
Stock or shares of Common Stock pursuant to Section 3.4 above then, and
thereafter successively upon each such issue, the Fixed Conversion Price shall
be adjusted by multiplying the then applicable Fixed Conversion Price by the
following fraction:
----------------------------------------
A + B
----------------------------------------
(A + B) + [((C - D) x B) / C]
----------------------------------------
A = Actual shares outstanding prior to such offering
B = Actual shares sold in the offering
C = Fixed Conversion Price
D = Offering price .
D. Reclassification. If the Borrower at any time shall, by reclassification
or otherwise, change the Common Stock into the same or a different number of
securities of any class or classes, this Note, as to the unpaid Principal Amount
and accrued interest thereon, shall thereafter be deemed to evidence the right
to purchase an adjusted number of such securities and kind of securities as
would have been issuable as the result of such change with respect to the Common
Stock immediately prior to such reclassification or other change.
3.5 Issuance of New Note. Upon any partial conversion of this Note, a new
Note containing the same date and provisions of this Note shall, at the request
of the Holder, be issued by the Borrower to the Holder for the principal balance
of this Note and interest which shall not have been converted or paid. The
Borrower will pay no costs, fees or any other consideration to the Holder for
the production and issuance of a new Note.
ARTICLE IV
EVENTS OF DEFAULT
Upon the occurrence and continuance of an Event of Default beyond any
applicable grace period, the Holder may make all sums of principal, interest and
other fees then remaining unpaid hereon and all other amounts payable hereunder
immediately due and payable.. In the event of such an acceleration, within five
(5) days after written notice from Holder to Borrower (each occurrence being a
"DEFAULT NOTICE PERIOD") the amount due and owing to the Holder shall be one
hundred fifteen percent (115%) of the outstanding principal amount of the Note
(plus accrued and unpaid interest and fees, if any) (the "DEFAULT PAYMENT"). If,
with respect to any Event of Default other than a payment default described in
Section 4.1 below, within the Default Notice Period the Borrower cures the Event
of Default, the Event of Default will be deemed to no longer exist and any
7
rights and remedies of Holder pertaining to such Event of Default will be of no
further force or effect. The Default Payment shall be applied first to any fees
due and payable to Holder pursuant to the Note or the Related Agreements, then
to accrued and unpaid interest due on the Note and then to outstanding principal
balance of the Note.
The occurrence of any of the following events is an "EVENT OF DEFAULT":
4.1 Failure to Pay Principal, Interest or other Fees. The Borrower fails to
pay when due any installment of principal, interest or other fees hereon in
accordance herewith, or the Borrower fails to pay when due any amount due under
any other promissory note issued by Xxxxxxxx, and such failure continues for a
period of three (3) business days after the due date.
4.2 Breach of Covenant. The Borrower breaches any material covenant or
other term or condition of this Note or the Purchase Agreement in any material
respect and such breach, if subject to cure, continues for a period of thirty
(30) days after the occurrence thereof.
4.3 Breach of Representations and Warranties. Any material representation
or warranty of the Borrower made herein, in the Purchase Agreement, or in any
Related Document (as defined in the Purchase Agreement) shall be materially
false or misleading and shall not be cured for a period of ten (10) days after
the occurrence thereof.
4.4 Receiver or Trustee. The Borrower shall make an assignment for the
benefit of creditors, or apply for or consent to the appointment of a receiver
or trustee for it or for a substantial part of its property or business; or such
a receiver or trustee shall otherwise be appointed, provided, however, that if a
receiver or trustee shall otherwise be involuntarily appointed by a third party
without the consent of the Borrower, the Borrower shall have forty-five (45)
days to cure such default.
4.5 Judgments. Any money judgment, writ or similar final process shall be
entered or filed against the Borrower or any of its property or other assets for
more than $250,000, and shall remain unvacated, unbonded or unstayed for a
period of ninety (90) days.
4.6 Bankruptcy.
(a) Bankruptcy, insolvency, reorganization or liquidation proceedings
or other proceedings or relief under any bankruptcy law or any law for the
relief of debtors shall be instituted by the Borrower.
(b) Bankruptcy, insolvency, reorganization, liquidation proceedings or
other proceedings or relief under any bankruptcy law or any law for the relief
of debtors shall be instituted against the Borrower without the Borrower's
consent unless such proceedings are vacated, withdrawn or dismissed within
forty-five (45) days after the Borrower receives notice thereof.
8
4.7 Stop Trade. An SEC stop trade order or Principal Market trading
suspension of the Common Stock shall be in effect for 5 consecutive days or 5
days during a period of 10 consecutive days, excluding in all cases a suspension
of all trading on a Principal Market, provided that the Borrower shall not have
been able to cure such trading suspension within 30 days of the notice thereof
or list the Common Stock on another Principal Market within 60 days of such
notice. The "Principal Market" for the Common Stock shall include the NASD OTC
Bulletin Board, NASDAQ SmallCap Market, NASDAQ National Market System, American
Stock Exchange, or New York Stock Exchange (whichever of the foregoing is at the
time the principal trading exchange or market for the Common Stock, or any
securities exchange or other securities market on which the Common Stock is then
being listed or traded.
4.8 Failure to Deliver Common Stock or Replacement Note. The Borrower's
failure to timely deliver Common Stock to the Holder pursuant to and in the form
required by this Note, and Section 9 of the Purchase Agreement, if such failure
to timely deliver Common Stock shall not be cured within two (2) days. If
Borrower is required to issue a replacement Note to Holder and Borrower shall
fail to deliver such replacement Note within seven (7) Business Days.
4.9 Default Under Related Agreements. The occurrence and continuance of any
Event of Default as defined in the Related Agreements.
DEFAULT RELATED PROVISIONS
4.10 Payment Grace Period. The Borrower shall have a three (3) business day
grace period to pay any monetary amounts due under this Note or the Purchase
Agreement or any Related Agreement, after which grace period a default interest
rate of ten percent (10%) per annum shall apply to the monetary amounts due
hereunder until such Event of Default is cured.
4.11 Conversion Privileges. The conversion privileges set forth in Article
III shall remain in full force and effect immediately from the date hereof and
until this Note is paid in full.
4.12 Cumulative Remedies. The remedies under this Note shall be cumulative.
ARTICLE V
MISCELLANEOUS
5.1 Failure or Indulgence Not Waiver. No failure or delay on the part of
the Holder hereof in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
5.2 Notices. Any notice herein required or permitted to be given shall be
in writing and shall be deemed effectively given: (a) upon personal delivery to
the party notified, (b) when sent by
9
confirmed telex or facsimile if sent during normal business hours of the
recipient, if not, then on the next business day, (c) five days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid, or (d) one day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt. All
communications shall be sent to the Borrower at the address provided in the
Purchase Agreement executed in connection herewith, with a copy to Xxxxxxx X.
Xxxx, Esq., Xxxxxxx & Xxxxxxxxx Xxxxxx Xxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000, facsimile number (000) 000-0000, and to the Holder at the
address provided in the Purchase Agreement for such Holder, with a copy to Xxxx
X. Xxxxxx, Esq., 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
xxxxxxxxx number (000) 000-0000, or at such other address as the Borrower or the
Holder may designate by ten days advance written notice to the other parties
hereto. A Notice of Conversion shall be deemed given when made to the Borrower
pursuant to the Purchase Agreement.
5.3 Amendment Provision. The term "Note" and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented, then as so amended or supplemented, and any
successor instrument issued pursuant to Section 3.5 hereof, as it may be amended
or supplemented.
5.4 Assignability. This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns.
5.5 Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in the state of
New York. Both parties and the individual signing this Note on behalf of the
Borrower agree to submit to the jurisdiction of such courts. Each party shall be
responsible for its own attorney's fees and costs. In the event that any
provision of this Note is invalid or unenforceable under any applicable statute
or rule of law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or unenforceability of
any other provision of this Note. Nothing contained herein shall be deemed or
operate to preclude the Holder from bringing suit or taking other legal action
against the Borrower in any other jurisdiction to collect on the Borrower's
obligations to Holder, to realize on any collateral or any other security for
such obligations, or to enforce a judgment or other court in favor of the
Holder.
5.6 Maximum Payments. Nothing contained herein shall be deemed to establish
or require the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law. In the event that the rate of interest
required to be paid or other charges hereunder exceed the maximum permitted by
such law, any payments in excess of such maximum shall be credited against
amounts owed by the Borrower to the Holder and thus refunded to the Borrower.
10
5.7 Security Interest. The holder of this Note has been granted a security
interest in certain assets of the Borrower more fully described in a Security
Agreement dated as of [Month] __, 2004.
5.8 Construction. Each party acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.
5.9 Cost of Collection. If default is made in the payment of this Note, the
Borrower shall pay to Holder reasonable costs of collection, including
reasonable attorney's fees.
[Balance of page intentionally left blank; signature page follows.]
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IN WITNESS WHEREOF, Xxxxxxxx has caused this Convertible Term Note to be
signed in its name effective as of this 15th day of March, 2004.
GLOBAL PAYMENT TECHNOLOGIES, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
WITNESS:
-------------------------------
12
EXHIBIT A
NOTICE OF CONVERSION
(To be executed by the Holder in order to convert all or part of the Note into
Common Stock
[Name and Address of Holder]
The Undersigned hereby converts $_________ of the principal due on [specify
applicable Repayment Date] under the Convertible Term Note issued by GLOBAL
PAYMENT TECHNOLOGIES, INC. dated [Month] __, 2004 by delivery of Shares of
Common Stock of GLOBAL PAYMENT TECHNOLOGIES, INC. on and subject to the
conditions set forth in Article III of such Note.
1. Date of Conversion _______________________
2. Shares To Be Delivered: _______________________
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
13
EXHIBIT B
CONVERSION NOTICE
(To be executed by the Holder in order to convert all or part of a Monthly
Amount into Common Stock)
[Name and Address of Holder]
Holder hereby converts $_________ of the Monthly Amount due on [specify
applicable Repayment Date] under the Convertible Term Note issued by GLOBAL
PAYMENT TECHNOLOGIES, INC. dated March ___, 2004 by delivery of Shares of Common
Stock of GLOBAL PAYMENT TECHNOLOGIES, INC. on and subject to the conditions set
forth in Article II and/or Article III of such Note.
1. Fixed Conversion Price: $_______________________
2. Amount to be paid: $_______________________
3. Shares To Be Delivered (2 divided by 1): __________________
4. Cash payment to be made by Borrower : $_____________________
Date: ____________ LAURUS MASTER FUND, LTD.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
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