Exhibit 4.3
DATED: _____________, 2006
NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
No. ______ $__________
MILE MARKER INTERNATIONAL, INC.
SUBORDINATED UNSECURED CONVERTIBLE NOTE
DUE DECEMBER ___, 2009
This Subordinated Unsecured Convertible Note (the "Note") is issued by
Mile Marker International, Inc., a Florida corporation (the "Obligor") to
_________________ (the "Holder"), pursuant to that certain Securities Purchase
Agreement (the "Securities Purchase Agreement") of even date herewith.
FOR VALUE RECEIVED, the Obligor hereby promises to pay to the Holder or
its successors and assigns the principal sum of _______________ Dollars
($__________) together with accrued but unpaid interest on or before December
____, 2009 (the "Maturity Date") in accordance with the following terms:
INTEREST. Interest shall accrue on the outstanding principal balance
hereof at an annual rate equal to ten percent (10%). Interest shall be
calculated on the basis of a 360-day year and the actual number of days elapsed,
to the extent permitted by applicable law. Interest hereunder will be paid to
the Holder or its assignee in whose name this Note is registered on the records
of the Obligor regarding registration and transfers of Notes (the "Note
Register"). Interest is payable quarterly in arrears commencing April 1, 2007
(which quarterly interest payment shall be adjusted to comply with the issuance
date of this Note), and on the first day of July, October, January and April
thereafter until the principal and interest of this Note are paid in full or the
Note is converted in accordance with its terms.
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RIGHT OF REDEMPTION. The Obligor at its option shall have the right,
with ten (10) business days advance written notice (the "Redemption Notice"), to
redeem a portion or all amounts outstanding under this Note prior to the
Maturity Date for an amount equal to the principal amount being redeemed plus a
redemption premium equal to five percent (5%) of the principal amount being
redeemed if the Note is redeemed before its first anniversary date, three
percent (3%) if between the first and second anniversary date, and one and
one-half (1 1/2%) if after the second anniversary date and before the Maturity
Date ("Redemption Premium"), together with accrued interest (collectively
referred to as the "Redemption Amount").
The Obligor shall deliver to the Holder the Redemption Amount on the
eleventh (11th) Business Day after the Redemption Notice.
Notwithstanding the foregoing, in the event that the Obligor has
elected to redeem all or a portion of the outstanding principal amount and
accrued interest under this Note the Holder shall be permitted to convert all or
any portion of this Note during such ten (10) Business Day period.
NOTE UNSECURED. This Note is not secured by any collateral of any
kind.
NOTE SERIES. The Note is one of a series of notes of like tenor and
terms having an authorized maximum principal amount of $1,000,000 (together
called the "10% Notes").
NO INDENTURE. No indenture, trust agreement, or like instrument governs
the terms of the 10% Notes, and no agent or trustee of any kind has been
appointed to act on behalf of the holders of the 10% Notes as a group.
NOTE SUBORDINATE. Payment of principal and interest on this Note is
subordinate to the Obligor's loan obligations to Xxxxxxx Xxxxx Business
Financial Services, Inc. and any successor or additional commercial lender, and
may be subordinated by the Obligor to any existing or future indebtedness of the
Obligor.
This Note is subject to the following additional provisions:
SECTION 1. EXCHANGE FOR OTHER DENOMINATIONS. This Note is exchangeable
for an equal aggregate principal amount of Notes of different authorized
denominations, as requested by the Holder surrendering the same. No service
charge will be made for such registration of transfer or exchange.
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SECTION 2. EVENTS OF DEFAULT.
(a) An "Event of Default," wherever used herein, means any one of the
following events (whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):
(i) Any default in the payment of the principal of, interest
on or other charges in respect of this Note which remains uncured for ten (10)
consecutive Business Days after the same shall have become due and payable;
(ii) The Obligor shall fail to observe or perform any other
covenant, agreement or warranty contained in, or otherwise commit any breach or
default of any provision of this Note in any material respect which is not cured
within the time prescribed;
(iii) The Obligor shall commence, or there shall be commenced
against the Obligor under any applicable bankruptcy or insolvency laws as now or
hereafter in effect or any successor thereto, or the Obligor commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Obligor or there
is commenced against the Obligor any such bankruptcy, insolvency or other
proceeding which remains undismissed for a period of 61 days; or the Obligor is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the Obligor suffers any
appointment of any custodian, private or court appointed receiver or the like
for it or any substantial part of its property which continues undischarged or
unstayed for a period of sixty one (61) days; or the Obligor makes a general
assignment for the benefit of creditors; or the Obligor shall fail to pay, or
shall state that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; or the Obligor shall call a meeting of its
creditors with a view to arranging a composition, adjustment or restructuring of
its debts; or the Obligor shall by any act or failure to act expressly indicate
its consent to, approval of or acquiescence in any of the foregoing; or any
corporate or other action is taken by the Obligor for the purpose of effecting
any of the foregoing;
(iv) The Obligor shall default in any of its obligations under
any other note, or any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be
issued, or by which there may be secured or evidenced any indebtedness for
borrowed money or money due under any long term leasing or factoring arrangement
of the Obligor in an amount exceeding $1,000,000, whether such indebtedness now
exists or shall hereafter be created and such default shall result in such
indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise become due and payable;
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(v) The Obligor shall be a party to any Change of Control
Transaction (as defined in Section 5); or
(vi) The Obligor shall fail, due to actions of the Obligor, to
deliver Common Stock certificates to a Holder prior to the tenth (10th) business
day after a Conversion Date or the Obligor shall provide notice to the Holder,
including by way of public announcement, at any time, of its intention not to
comply with requests for conversions of this Note in accordance with the terms
hereof.
(b) During the time that any portion of this Note is outstanding, if
any Event of Default has occurred, the full principal amount of this Note,
together with interest and other amounts owing in respect thereof, to the date
of acceleration shall become, at the Holder's election, immediately due and
payable in cash, PROVIDED HOWEVER, the Holder may request (but shall have no
obligation to request) payment of such amounts in Common Stock of the Obligor.
In addition to any other remedies, the Holder shall have the right (but not the
obligation) to convert this Note at the Conversion Price at any time after (x)
an Event of default or (y) the Maturity Date at the Conversion Price then in
effect. The Holder need not provide and the Obligor hereby waives any
presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under
applicable law. Such declaration may be rescinded and annulled by Xxxxxx at any
time prior to payment hereunder. No such rescission or annulment shall affect
any subsequent Event of Default or impair any right consequent thereon.
SECTION 3. CONVERSION.
(a) CONVERSION AT OPTION OF HOLDER.
(i) This Note shall be convertible into shares of Common Stock
at the option of the Holder, in whole or in part at any time and from time to
time, after the Original Issue Date (as defined in Section 5). The number of
shares of Common Stock issuable upon a conversion hereunder ("the Conversion
Shares") shall equal fifty percent (50%) of the outstanding amount of principal
and accrued interest on this Note at the Conversion Date. The Obligor shall use
its best efforts to deliver Common Stock certificates to the Holder prior to the
tenth (10th) business day after a Conversion Date.
(ii) The Holder shall effect conversions by delivering to the
Obligor a completed notice in the form attached hereto as Exhibit A ("Conversion
Notice"). The date on which a Conversion Notice is delivered is the "Conversion
Date." The Holder is required to physically surrender this Note to the Obligor
in order to effect conversions. Conversions hereunder shall have the effect of
lowering the outstanding principal amount of this Note plus all accrued and
unpaid interest thereon in an amount equal to the applicable conversion. The
Holder and the Obligor shall maintain records showing the principal amount
converted and the date of such conversions.
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(b) CONVERSION PRICE AND ADJUSTMENTS TO CONVERSION PRICE.
(i) The Holder shall be entitled to convert, at its sole
option, at any time a portion or all amounts of principal and interest due and
outstanding under this Note into that number of Conversion Shares to which the
Holder is entitled under Section 3(a)(i) at a price of $2.50 per share of common
stock (the "Conversion Price"). The Conversion Price may be adjusted pursuant to
the other terms of this Note. In the event that the outstanding principal and
interest on the Note on the Conversion Date are less than the product of the
Conversion Price times the Conversion Shares purchasable by the Holder, the
Holder shall have the right to pay the difference to the company in cash on the
Conversion Date.
(ii) If the Obligor, at any time while this Note is
outstanding, shall (a) pay a stock dividend or otherwise make a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock, (b) subdivide
outstanding shares of Common Stock into a larger number of shares, (c) combine
(including by way of reverse stock split) outstanding shares of Common Stock
into a smaller number of shares, or (d) issue by reclassification of shares of
the Common Stock any shares of capital stock of the Obligor, then the Conversion
Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock (excluding treasury shares, if any) outstanding
before such event and of which the denominator shall be the number of shares of
Common Stock outstanding after such event. Any adjustment made pursuant to this
Section shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.
(iii) If the Obligor, at any time while this Note is
outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to the Holder) entitling them to subscribe for or purchase shares
of Common Stock, at a price per share less than the Conversion Price, then the
Conversion Price shall be multiplied by a fraction of which the denominator
shall be the number of shares of the Common Stock (excluding treasury shares, if
any) outstanding on the date of issuance of such rights or warrants (plus the
number of additional shares of Common Stock offered for subscription or
purchase), and of which the numerator shall be the number of shares of the
Common Stock (excluding treasury shares, if any) outstanding on the date of
issuance of such rights or warrants, plus the number of shares which the
aggregate offering price of the total number of shares so offered would purchase
at the Conversion Price. Such adjustment shall be made whenever such rights or
warrants are issued, and shall become effective immediately after the record
date for the determination of stockholders entitled to receive such rights,
options or warrants. However, upon the expiration of any such right, option or
warrant to purchase shares of the Common Stock the issuance of which resulted in
an adjustment in the Conversion Price pursuant to this Section, if any such
right, option or warrant shall expire and shall not have been exercised, the
Conversion Price shall immediately upon such expiration be recomputed and
effective immediately upon such expiration be increased to the price which it
would have been (but reflecting any other adjustments in the Conversion Price
made pursuant to the provisions of this Section after the issuance of such
rights or warrants) had the adjustment of the Conversion Price made upon the
issuance of such rights, options or warrants been made on the basis of offering
for subscription or purchase only that number of shares of the Common Stock
actually purchased upon the exercise of such rights, options or warrants
actually exercised.
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(iv) If the Obligor at any time while this Note is outstanding
shall issue shares of Common Stock or rights, warrants, options or other
securities or debt that are convertible into or exchangeable for shares of
Common Stock ("Common Stock Equivalents") entitling any Person to acquire shares
of Common Stock at a price per share less than the Conversion Price, then, at
the sole option of the Holder, the Conversion Price shall be adjusted to mirror
the conversion, exchange or purchase price for such Common Stock or Common Stock
Equivalents (including any reset provisions thereof) at issue. Such adjustment
shall be made whenever such Common Stock or Common Stock Equivalents are issued.
The Obligor shall notify the Holder in writing, no later than two (2) Business
Days following the issuance of any Common Stock or Common Stock Equivalent
subject to this Section, indicating therein the applicable issuance price, or of
applicable reset price, exchange price, conversion price and other pricing
terms. No adjustment under this Section shall be made as a result of issuances
and exercises of options, warrants or stock grants to purchase shares of Common
Stock issued for compensatory purposes pursuant to any of the Obligor's stock
option or stock purchase plans.
(v) In case of any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is converted into
other securities, cash or property at any time while this Note is outstanding,
the Holder shall have the right thereafter to, at its option, (A) convert the
then outstanding principal amount, together with all accrued but unpaid interest
and any other amounts then owing hereunder in respect of this Note, into the
shares of stock and other securities, cash and property receivable upon or
deemed to be held by holders of the Common Stock following such reclassification
or share exchange, and the Holder of this Note shall be entitled upon such event
to receive such amount of securities, cash or property as the shares of the
Common Stock of the Obligor into which the then outstanding principal amount,
together with all accrued but unpaid interest and any other amounts then owing
hereunder in respect of this Note could have been converted immediately prior to
such reclassification or share exchange would have been entitled, or (B) require
the Obligor to prepay the outstanding principal amount of this Note, plus all
interest and other amounts due and payable thereon. The entire prepayment price
shall be paid in cash. This provision shall similarly apply to successive
reclassifications or share exchanges.
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(vi) The Obligor shall maintain a share reserve of not less
than one hundred percent (100%) of the shares of Common Stock issuable upon
conversion of this Note; and within three (3) Business Days following the
receipt by the Obligor of a Holder's notice that such minimum number of
Underlying Shares is not so reserved, the Obligor shall promptly reserve a
sufficient number of shares of Common Stock to comply with such requirement.
(vii) All calculations under this Section 3 shall be
rounded up to the nearest $0.001 or whole share.
(viii) Whenever the Conversion Price is adjusted pursuant to
Section 3 hereof, the Obligor shall promptly mail to the Holder a notice setting
forth the Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.
(ix) If at any time while this Note is outstanding (A) the
Obligor shall declare a dividend (or any other distribution) on the Common
Stock; (B) the Obligor shall declare a special nonrecurring cash dividend on or
a redemption of the Common Stock; (C) the Obligor shall authorize the granting
to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights except
pursuant to the Rights Plan; (D) the approval of any stockholders of the Obligor
shall be required in connection with any reclassification of the Common Stock,
any consolidation or merger to which the Obligor is a party, any sale or
transfer of all or substantially all of the assets of the Obligor, or any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; or (E) the Obligor shall authorize the voluntary
or involuntary dissolution, liquidation or winding up of the affairs of the
Obligor; then, in each case, the Obligor shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Note, and shall cause
to be mailed to the Holder at its last address as it shall appear upon the stock
books of the Obligor, at least twenty (20) calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange, provided, that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of
the corporate action required to be specified in such notice. The Holder is
entitled to convert this Note during the 20-day calendar period commencing the
date of such notice to the effective date of the event triggering such notice.
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(x) In case of any (1) merger or consolidation of the Obligor or any
subsidiary of the Obligor with or into another Person, or (2) sale by the
Obligor of more than one-half of the assets of the Obligor in one or a series of
related transactions, at any time while this Note is outstanding, a Holder shall
have the right to (A) convert the aggregate amount of this Note then outstanding
into the shares of stock and other securities, cash and property receivable upon
or deemed to be held by holders of Common Stock following such merger,
consolidation or sale, and such Holder shall be entitled upon such event or
series of related events to receive such amount of securities, cash and property
as the shares of Common Stock into which such aggregate principal amount of this
Note could have been converted immediately prior to such merger, consolidation
or sales would have been entitled, or (B) in the case of a merger or
consolidation, require the surviving entity to issue to the Holder a convertible
Note with a principal amount equal to the aggregate principal amount of this
Note then held by such Holder, plus all accrued and unpaid interest and other
amounts owing thereon, which such newly issued convertible Note shall have terms
identical (including with respect to conversion) to the terms of this Note, and
shall be entitled to all of the rights and privileges of the Holder of this Note
set forth herein and the agreements pursuant to which this Notes were issued. In
the case of clause (B), the conversion price applicable for the newly issued
shares of convertible preferred stock or convertible Notes shall be based upon
the amount of securities, cash and property that each share of Common Stock
would receive in such transaction and the Conversion Price in effect immediately
prior to the effectiveness or closing date for such transaction. The terms of
any such merger, sale or consolidation shall include such terms so as to
continue to give the Holder the right to receive the securities, cash and
property set forth in this Section upon any conversion or redemption following
such event. This provision shall similarly apply to successive such events.
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(c) OTHER PROVISIONS.
(i) The Obligor covenants that it will at all times reserve
and keep available out of its authorized and unissued shares of Common Stock
solely for the purpose of issuance upon conversion of this Note and payment of
interest on this Note, each as herein provided, free from preemptive rights or
any other actual contingent purchase rights of persons other than the Holder,
not less than such number of shares of the Common Stock as shall (subject to any
additional requirements of the Obligor as to reservation of such shares set
forth in this Note) be issuable (taking into account the adjustments and
restrictions of Section 3(c) upon the conversion of the outstanding principal
amount of this Note and payment of interest hereunder. The Obligor covenants
that all shares of Common Stock that shall be so issuable shall, upon issue, be
duly and validly authorized, issued and fully paid, nonassessable.
(ii) Upon a conversion hereunder the Obligor shall not be
required to issue stock certificates representing fractions of shares of the
Common Stock, but may if otherwise permitted, make a cash payment in respect of
any final fraction of a share based on the Conversion Price. If the Obligor
elects not, or is unable, to make such a cash payment, the Holder shall be
entitled to receive, in lieu of the final fraction of a share, one whole share
of Common Stock.
(iii) The issuance of certificates for shares of the Common
Stock on conversion of this Note shall be made without charge to the Holder
thereof for any documentary stamp or similar taxes that may be payable in
respect of the issue or delivery of such certificate, provided that the Obligor
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate upon
conversion in a name other than that of the Holder of such Note so converted and
the Obligor shall not be required to issue or deliver such certificates unless
or until the person or persons requesting the issuance thereof shall have paid
to the Obligor the amount of such tax or shall have established to the
satisfaction of the Obligor that such tax has been paid.
(iv) Nothing herein shall limit a Holder's right to pursue
actual damages or declare an Event of Default pursuant to Section 2 herein for
the Obligor 's failure to deliver certificates representing shares of Common
Stock upon conversion within the period specified herein and the Holder shall
have the right to pursue all remedies available to it at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief. The exercise of any such rights shall not prohibit the Holder
from seeking to enforce damages pursuant to any other Section hereof or under
applicable law.
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(v) In addition to any other rights available to the Holder,
if the Obligor fails to deliver to the Holder such certificate or certificates
pursuant to Section 3(a)(i), and if after such tenth (10th) Business Day the
Holder purchases (in an open market transaction or otherwise) Common Stock to
deliver in satisfaction of a sale by such Holder of the Underlying Shares which
the Holder anticipated receiving upon such conversion (a "Buy-In"), then the
Obligor shall (A) pay in cash to the Holder (in addition to any remedies
available to or elected by the Holder) the amount by which (x) the Holder's
total purchase price (including brokerage commissions, if any) for the Common
Stock so purchased exceeds (y) the product of (1) the aggregate number of shares
of Common Stock that such Holder anticipated receiving from the conversion at
issue multiplied by (2) the market price of the Common Stock at the time of the
sale giving rise to such purchase obligation and (B) at the option of the
Holder, either reissue a Note in the principal amount equal to the principal
amount of the attempted conversion or deliver to the Holder the number of shares
of Common Stock that would have been issued had the Obligor timely complied with
its delivery requirements. For example, if the Holder purchases Common Stock
having a total purchase price of $11,000 to cover a Buy-In with respect to an
attempted conversion of Notes with respect to which the market price of the
Underlying Shares on the date of conversion was a total of $10,000 under clause
(A) of the immediately preceding sentence, the Obligor shall be required to pay
the Holder $1,000. The Holder shall provide the Obligor written notice
indicating the amounts payable to the Holder in respect of the Buy-In.
SECTION 4. NOTICES. Any notices, consents, waivers or other
communications required or permitted to be given under the terms hereof must be
in writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) Business Day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to the Company, to: Mile Marker International, Inc.
0000 Xxxxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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With a copy to: Xxxxxx, Xxxxxx, Xxxxx & Xxxxxxx, LLP
0000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esquire
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Holder: __________________
__________________
__________________
With a copy to: __________________
__________________
__________________
or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three (3) Business days prior to the effectiveness of such
change. Written confirmation of receipt (i) given by the recipient of such
notice, consent, waiver or other communication, (ii) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (iii) provided by a nationally recognized overnight delivery
service, shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
SECTION 5. DEFINITIONS. For the purposes hereof, the following terms
shall have the following meanings:
"BUSINESS DAY" means any day except Saturday, Sunday and any day which
shall be a federal legal holiday in the United States or a day on which banking
institutions are authorized or required by law or other government action to
close.
"CHANGE OF CONTROL TRANSACTION" means the occurrence of (a) an acquisition
after the date hereof by an individual or legal entity or "group" (as described
in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control
(whether through legal or beneficial ownership of capital stock of the Obligor,
by contract or otherwise) of in excess of fifty percent (50%) of the voting
securities of the Obligor (except that the acquisition of voting securities by
the Holder shall not constitute a Change of Control Transaction for purposes
hereof), (b) a replacement at one time or over time of more than one-half of the
members of the board of directors of the Obligor which is not approved by a
majority of those individuals who are members of the board of directors on the
date hereof (or by those individuals who are serving as members of the board of
directors on any date whose nomination to the board of directors was approved by
a majority of the members of the board of directors who are members on the date
hereof), or (c) the merger, consolidation or sale of fifty percent (50%) or more
of the assets of the Obligor in one or a series of related transactions with or
into another entity.
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"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the common stock, par value $0.001, of the Obligor
and stock of any other class into which such shares may hereafter be changed or
reclassified.
"CONVERSION DATE" shall mean the date upon which the Holder gives the
Obligor notice of their intention to effectuate a conversion of this Note into
shares of the Company's Common Stock as outlined herein.
"CONVERSION SHARES" shall mean the number of shares into which the Note
is convertible.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"ORIGINAL ISSUE DATE" shall mean the date of the first issuance of this
Note regardless of the number of transfers and regardless of the number of
instruments, which may be issued to evidence such Note.
"PERSON" means a corporation, a limited liability company, an
association, a partnership, organization, a business, an individual, a
government or political subdivision thereof or a governmental agency.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"UNDERLYING SHARES" means the shares of Common Stock issuable upon
conversion of this Note or as payment of interest in accordance with the terms
hereof.
SECTION 6. OBLIGATIONS UNCONDITIONAL. Except as expressly provided
herein, no provision of this Note shall alter or impair the obligations of the
Obligor, which are absolute and unconditional, to pay the principal of, interest
and other charges (if any) on, this Note at the time, place, and rate, and in
the coin or currency, herein prescribed. This Note is a direct obligation of the
Obligor. This Note ranks pari passu with all other Notes now or hereafter issued
under the terms set forth herein. As long as this Note is outstanding, the
Obligor shall not, without the consent of the Holder, amend its articles of
incorporation, bylaws or other charter documents so as to adversely affect any
rights of the Holder.
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SECTION 7. NO VOTING ON OTHER RIGHTS. This Note shall not entitle the
Holder to any of the rights of a stockholder of the Obligor, including without
limitation, the right to vote, to receive dividends and other distributions, or
to receive any notice of, or to attend, meetings of stockholders or any other
proceedings of the Obligor, unless and to the extent converted into shares of
Common Stock in accordance with the terms hereof.
SECTION 8. SUBSITUTE NOTE. If this Note is mutilated, lost, stolen or
destroyed, the Obligor shall execute and deliver, in exchange and substitution
for and upon cancellation of the mutilated Note, or in lieu of or in
substitution for a lost, stolen or destroyed Note, a new Note for the principal
amount of this Note so mutilated, lost, stolen or destroyed but only upon
receipt of evidence of such loss, theft or destruction of such Note, and of the
ownership hereof, and indemnity, if requested, all reasonably satisfactory to
the Obligor.
SECTION 9. NOTE SUBORDINATE. This Note is subordinate to the Company's
obligations to Xxxxxxx Xxxxx Business Financial Services, Inc. or any successor
Xxxxxx and may be subordinated without the Holder's consent by the Obligor to
other indebtedness of the Obligor, whether now or hereafter outstanding. Without
the Holder's consent, the Obligor may, directly or indirectly, enter into,
create, incur, assume or suffer to exist any indebtedness of any kind, on or
with respect to any of its property or assets now owned or hereafter acquired or
any interest therein or any income or profits therefrom that is senior in any
respect to the obligations of the Obligor under this Note.
SECTION 10. GOVERNING LAW, JURISDICTION. This Note shall be governed by
and construed in accordance with the laws of the State of Florida, without
giving effect to conflicts of laws thereof. Each of the parties consents to the
jurisdiction of the Broward County, Florida, Circuit Court, and the U.S.
District Court for the District of Florida sitting in Ft. Lauderdale, Florida,
in connection with any dispute arising under this Note and hereby waives, to the
maximum extent permitted by law, any objection, including any objection based on
inconvenient forum to the bringing of any such proceeding in such jurisdictions.
SECTION 11. COSTS AND FEES. If the Obligor fails to strictly comply
with the terms of this Note, then the Obligor shall reimburse the Holder
promptly for all fees, costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses reasonably incurred by the Holder in any
action in connection with this Note, including, without limitation, those
incurred: (i) during any workout, attempted workout, and/or in connection with
the rendering of legal advice as to the Holder's rights, remedies and
obligations, (ii) collecting any sums which become due to the Holder, (iii)
defending or prosecuting any proceeding or any counterclaim to any proceeding or
appeal; or (iv) the protection, preservation or enforcement of any rights or
remedies of the Holder.
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SECTION 12. WAIVERS LIMITED. Any waiver by the Holder of a breach of
any provision of this Note shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Note. The failure of the Holder to insist upon strict adherence to any term
of this Note on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Note. Any waiver must be in writing.
SECTION 13. SAVINGS PROVISIONS. If any provision of this Note is
invalid, illegal or unenforceable, the balance of this Note shall remain in
effect, and if any provision is inapplicable to any person or circumstance, it
shall nevertheless remain applicable to all other persons and circumstances. If
it shall be found that any interest or other amount deemed interest due
hereunder shall violate applicable laws governing usury, the applicable rate of
interest due hereunder shall automatically be lowered to equal the maximum
permitted rate of interest. The Obligor covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law or other law which would prohibit or forgive the Obligor from
paying all or any portion of the principal of or interest on this Note as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this indenture, and the
Obligor (to the extent it may lawfully do so) hereby expressly waives all
benefits or advantage of any such law, and covenants that it will not, by resort
to any such law, hinder, delay or impeded the execution of any power herein
granted to the Holder, but will suffer and permit the execution of every such as
though no such law has been enacted.
SECTION 14. BUSINESS DAY. Whenever any payment or other obligation
hereunder shall be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day.
SECTION 15. CERTAIN WAIVERS. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES' ACCEPTANCE OF THIS
AGREEMENT.
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IN WITNESS WHEREOF, the Obligor has caused this Subordinated Unsecured
Convertible Note to be duly executed by a duly authorized officer as of the date
set forth above.
MILE MARKER INTERNATIONAL, INC.
BY: __________________________________
Xxxxxxx X. Xxx, President and
Chief Executive Officer
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EXHIBIT "A"
NOTICE OF CONVERSION
(TO BE EXECUTED BY THE HOLDER IN ORDER TO CONVERT THE NOTE)
TO:
The undersigned hereby irrevocably elects to convert $
__________________ of the principal amount of the above Note into Shares of
Common Stock of Mile Marker International, Inc., according to the conditions
stated therein, as of the Conversion Date written below.
CONVERSION DATE: _________________________________
APPLICABLE CONVERSION PRICE: _________________________________
SIGNATURE: _________________________________
NAME: _________________________________
ADDRESS: _________________________________
AMOUNT TO BE CONVERTED: $________________________________
AMOUNT OF NOTE UNCONVERTED: $________________________________
CONVERSION PRICE PER SHARE: $________________________________
ADDITIONAL AMOUNT DUE ON
CONVERSION $________________________________
NUMBER OF SHARES OF COMMON
STOCK TO BE ISSUED: _________________________________
PLEASE ISSUE THE SHARES OF COMMON
STOCK IN THE FOLLOWING NAME AND
TO THE FOLLOWINGADDRESS: _________________________________
ISSUE TO: _________________________________
AUTHORIZED SIGNATURE: _________________________________
NAME: _________________________________
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TITLE: _________________________________
PHONE NUMBER: _________________________________
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