This Note and any securities into which it may be convertible have not been
registered under the Securities Act of 1933, as amended (the "Securities Act")
or under the provisions of any applicable state securities laws, but have been
acquired by the registered holder hereof for purposes of investment and in
reliance on statutory exemptions under the Securities Act, and under any
applicable state securities laws. Neither this Note nor any securities into
which it may be convertible, may be sold, pledged, transferred or assigned
except in a transaction which is exempt under the provisions of the Securities
Act and any applicable state securities laws or pursuant to an effective
registration statement; and in the case of an exemption, only if the Company has
received an opinion of counsel satisfactory to the Company that such transaction
does not require the registration of this Note or any securities into which this
Note may be convertible.
TTR INC.
December 31, 1998 $30,000
8% PROMISSORY NOTE
TTR Inc., a Delaware corporation (the "Company"), for value received,
promises to pay to _______________ or registered assigns at 000 Xxxxxxx Xxxxx,
Xxx Xxxxxxxx, XX 00000(the "Holder") upon the earlier of (i) the 5th day
following the receipt by the Company, or any subsidiary, of aggregate net
proceeds (gross proceeds less commissions and non-accountable expense
allowances) exceeding $800,000 from the consummation of any equity or debt
financings whether or not such financings are done in one or more unrelated
transactions ("Financings"); provided, however, that the Company shall only
apply an amount equal to 30% of the proceeds over $800,0000 from Financings for
repayment, on a pro rata basis, of all Notes issued pursuant to the Confidential
Memorandum, (ii) the sale of all or substantially all of the Company's assets
and (iii) December 31, 2000 (the "Maturity Date"), the principal sum of Thirty
Thousand ($30,000.00) Dollars and to pay simple interest on the outstanding
principal sum hereof at the rate of six percent (8 %) per annum, both before and
after the Maturity Date. This Note is a part of units being sold by the Company
in a private offering, pursuant to a Confidential Memorandum, which units
include notes in the aggregate principal maximum amount of $1,500,000. Interest
shall be payable on the Maturity Date and shall accrue and be payable in like
coin or currency to the Holder hereof at the office of the Company as
hereinafter set forth. The Company will punctually pay or cause to be paid the
principal amount and interest on this Note. Any sums required to be withheld
from any payment of principal amount, or interest on this Note by operation of
Law or pursuant to any order, judgment, execution, treaty, rule or regulation
may be withheld by the Company and paid over in accordance therewith.
All capital terms used herein shall have the meaning set forth in the
confidential private placement memorandum of the Company dated December 1, 1998
with Roan Capital Partners LP as placement agent.
Nothing in this Note or in any other agreement between the Holder and
the Company shall require the Company to pay, or the Holder to accept, interest
in an amount which would subject the Holder to any penalty or forfeiture under
applicable law. In the event that the payment of any charges, fees or other sums
due under this Note, or in any other agreement between the Company and the
Holder are or could be held to be in the nature of interest and would subject
the Holder to any penalty or forfeiture under applicable law, then ipso facto
the obligations of the Company to make such payment to the Holder shall be
reduced to the highest rate authorized under the applicable law.
1. Transfer of Note to Comply with the Securities Act
The Holder agrees that this Note (the "Securities") may not be sold,
transferred, pledged, hypothecated or otherwise disposed of except as follows:
(1) to a person who, in the opinion of counsel to the Company, is a person to
whom the any of the Securities may legally be transferred without registration
and without delivery of a current prospectus under the Securities Act with
respect thereto and then only against receipt of an agreement of such person to
comply with the provisions of this Section 1 with respect to any resale or other
disposition of any of the Securities; or (2) to any person who complies with the
provisions of this Section 1 with respect to any resale or other disposition of
any of the Securities; or (3) to any person upon delivery of a prospectus then
meeting the requirements of the Securities Act relating to such securities and
the offering thereof for such sale or disposition, and thereafter to all
successive assignees.
2. Prepayment
The principal amount of this Note may be prepaid by the Company, in
whole or in part without premium or penalty, at any time. Upon any prepayment of
the entire principal amount of this Note, or portion thereof, all accrued, but
unpaid, interest shall be paid to the Holder on the date of prepayment with
respect to the principal amount prepaid.
3. Covenants of Company
a. The Company covenants and agrees that, so long as this Note shall be
outstanding, it will:
(i) Do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence, rights and franchises and
comply with all laws applicable to the Company as its counsel may advise;
(ii) At all times maintain, preserve, protect and keep its property
used and useful in the conduct of its business so that the business carried
on in connection therewith may be properly and advantageously conducted in
the ordinary course at all times;
(iii) Keep adequately insured by financially sound insurers, all
property of a character usually insured by corporations in the same
industry as the Company and carry such other insurance as is usually
carried by corporations in the same industry; and
(iv) The Company, during the term of the Note, cannot issue dividends.
4. Events of Default
a. This Note become due and payable immediately upon any of the
following events, herein called "Events of Default":
(i) Default in the payment of the principal or accrued interest on
this Note, when and as the same shall become due and payable, whether by
acceleration or otherwise;
(ii) Default in the payment of any principal or interest due in
connection with any indebtedness, now or hereafter due and owing by the
Company above the amount of $50,000, provided, that non-payment shall not
be considered an event of default if the Company claims that such amount is
not owing and is taking appropriate procedures to defend itself from any
claim filed with respect to such amount;
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(iii) Application for, or consent to, the appointment of a receiver,
trustee or liquidator for the Company or of its property;
(iv) Admission in writing of the Company's inability to pay its debts
as they mature;
(v) General assignment by the Company for the benefit of creditors;
(vi) Filing by the Company of a voluntary petition in bankruptcy or a
petition or an answer seeking reorganization, or an arrangement with
creditors; or
(vii) Entering against the Company of a court order approving a
petition filed against it under the federal bankruptcy laws, which order
shall not have been vacated or set aside or otherwise terminated within 60
days; or
(viii) The finding against the Company of any judgment of at least
$150,000 provided that that such finding shall not be considered an event
of default if the Company is taking appropriate procedures to appeal such
judgement, provided further, that default shall be deemed to occur upon
Company loosing the final appeal with respect to such judgment
b. In the case any one or more of the Events of Default specified above
shall happen or be continuing, the Holder may proceed to protect and enforce his
or her right by suit in the specific performance of any covenant or agreement
contained in this Note or in aid of the exercise of any power granted in this
Note or may proceed to enforce the payment of this Note or to enforce any other
legal or equitable rights as such Holder may have.
5. Miscellaneous
a. This Note has been issued by Company pursuant to authorization of
the Board of Directors of the Company.
b. The Company may consider and treat the person in whose name this
note shall be registered as the absolute owner thereof for all purposes
whatsoever (whether or not this Note shall be overdue) and the Company shall not
be affected by any notice to the contrary. Subject to the limitations herein
stated, the registered owner of this Note shall have the right to transfer this
Note by assignment, and the transferee thereof shall, upon his registration as
owner of this Note, become vested with all the powers and rights of the
transferor. Registration of any new owner shall take place upon presentation of
this Note to the Company at its principal officer, together with a duly
authenticated assignment. In case of transfer by operation of law, the
transferee agrees to notify the Company of such transfer and of his address, and
to submit appropriate evidence regarding the transfer so that this Note may
registered in the name of the transferee. This Note is transferable only on the
books of the Company by the Holder hereof in person or by attorney, on the
surrender hereof, duly endorsed. Communications sent to any registered owner
shall be effective as against all holders or transferees of the Note not
registered at the time of sending the Communication.
c. The Holder shall not, by virtue hereof, be entitled to any rights of
a shareholder in the Company, whether at law or in equity, and the rights of the
Holder are limited to those expressed.
d. Upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Note, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Note, if mutilated, the Company shall
execute and deliver a new Note of like tenor and date. Any
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such new Note executed and delivered shall constitute and additional contractual
obligation on the part of the Company, whether or not this Note so lost, stolen,
destroyed or mutilated shall be art any time enforceable by anyone.
e. This Note shall be construed and enforce in accordance with the laws
of the State of New York. The Company and the Holder hereby consent to the
jurisdiction of the courts of the State of New York and the United States
District Courts situated therein in connection with any action concerning the
provisions of this Note instituted by the Holder against the Company.
f. No recourse shall be had for the payment of principal or interest on
this Note against any incorporator or any past, present, or future stockholder,
officer, director, agent or attorney of the Company, or of any successor
corporation, either directly or through the Company or any successor
corporation, otherwise, all such liability of the incorporators, stockholders,
officers, directors, attorneys and agents being waived, released and surrendered
by the Holder hereof by the acceptance of this Note.
g. The Company shall pay all costs and expenses incurred by the Holder
to enforce any of the provisions of this Note, including attorneys fees and
other expenses of collection.
IN WITNESS WHEREOF, the Company has caused this Note to be signed as of
the date first written above.
TTR Inc.
By: ____________
Title:
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