(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 Deed Poll 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 prior 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 computations of interest due with respect to
this Note shall be made based upon the actual number of days (e.g., 365 or
366) in the applicable year.
This Note is being issued pursuant to a Deed Poll Indenture ("Indenture")
dated as of ____________ 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, if any) 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 Holder'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 to 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. Optional Extension. At least seven days prior to a Note's stated
Maturity Date, the Company will notify the registered Holder (existing as of
the applicable Maturity Record Dated) by mail of such pending Maturity Date.
The notice will be accompanied by a renewal form, a Prospectus, and a
Prospectus Supplement specifying the current rates being paid by the Company
on unsold Notes. Such notice shall also state that payment of principal of a
Note shall be made upon presentation and surrender of such Note and shall
specify the place where such Note may be presented and surrendered for the
making of such payment. The Holder, at its sole option, may renew such Note by
completing the renewal form or by letter or telephone to the Company
indicating the Holder's intention to renew such Note, and by delivering such
communication to the Company within seven days after the original Maturity
Date. The extension of any Note shall constitute a new investment decision by
the Holder thereof.
Interest shall continue to accrue at then current rates from the first day of
such renewed term. Such Note, as renewed, will continue in all its
provisions, including provisions relating to payment; except that the interest
rate payable during any renewed term shall be the interest rate which is then
being offered by the Company on similar Investment Notes being offered as of
the renewal date. If the Company does not receive proper communication of the
holder's intent to renew such Note with seven days of the original maturity
date, interest will accrue after the Maturity Date until the date of payment
at the rate being paid on such Security immediately prior to its Maturity
Date.
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
Telephone: 000-000-0000
Attention: President
