Contract
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 NEWMARKET TECHNOLOGY, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.
THIS
NOTE IS REGISTERED WITH THE PARENT PURSUANT TO SECTION 24(B) OF THE SECURITY
AGREEMENT (AS DEFINED BELOW). TRANSFER OF ALL OR ANY PORTION OF THIS
NOTE IS PERMITTED SUBJECT TO THE PROVISIONS SET FORTH IN SUCH SECTION 24(B)
WHICH REQUIRE, AMONG OTHER THINGS, THAT NO TRANSFER IS EFFECTIVE UNTIL THE
TRANSFEREE IS REFLECTED AS SUCH ON THE REGISTRY MAINTAINED WITH THE AGENT
PURSUANT TO SUCH SECTION 24(B).
SECURED
CONVERTIBLE TERM NOTE
FOR
VALUE
RECEIVED, each of NEWMARKET TECHNOLOGY, INC., a Nevada corporation (the
“Parent”), and the other companies listed on Exhibit A attached
hereto (such other companies together with the Parent, each a “Company” and
collectively, the “Companies”), hereby, jointly and severally, promises
to pay to Valens Offshore SPV II, Corp. (the “Holder”) or its registered
assigns or successors in interest, the sum of Two Million Two Hundred Thousand
Dollars ($2,200,000), together with any accrued and unpaid interest hereon,
on
November 30, 2010 (the “Maturity Date”) if not sooner indefeasibly paid
in full.
Capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in that certain Security Agreement dated as of the date hereof (as
amended, restated, modified and/or supplemented from time to time, the
“Security Agreement”) among the Companies, the Holder, each other Lender
and LV Administrative Services, Inc., as administrative and collateral agent
for
the Lenders (the “Agent” together with the Lenders, collectively, the
“Creditor Parties”).
The
following terms shall apply to this Secured Convertible Term Note (this
“Note”):
ARTICLE
I
CONTRACT
RATE AND AMORTIZATION
1.1 Contract
Rate. Subject to Sections 4.2 and 5.10, interest payable on the
outstanding principal amount of this Note (the “Principal Amount”) shall
accrue at a rate per annum equal to the “prime rate” published in The Wall
Street Journal from time to time (the “Prime Rate”), plus two percent
(2%) (the “Contract Rate”). The Contract 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 the Prime
Rate. The Contract Rate shall not at any time be less than nine
percent (9%). Interest shall be (i) calculated on the basis of a 360
day year, and (ii) payable monthly, in arrears, commencing on December 1, 2007,
on the first business day of each consecutive calendar month thereafter through
and including the Maturity Date, and on the Maturity Date, whether by
acceleration or otherwise.
1.2 Contract
Rate Payments. The Contract Rate shall be calculated on the last
business day of each calendar month hereafter (other than for increases or
decreases in the Prime Rate which shall be calculated and become effective
in
accordance with the terms of Section 1.1) until the Maturity Date and shall
be
subject to adjustment as set forth herein.
1.3 Principal
Payments.
(a) Amortizing
payments of the Principal Amount shall be made, jointly and severally, by the
Companies on June 1, 2008 and on the first business day of each succeeding
month
thereafter through and including the Maturity Date (each, an “Amortization
Date”). Subject to Article III below, commencing on the first
Amortization Date, the Companies shall make, jointly and severally, monthly
payments to the Holder on each Amortization Date, each such payment in the
amount of $73,333 together with any accrued and unpaid interest on such portion
of the Principal Amount plus any and all other unpaid amounts which are then
owing to the Holder under this Note, the Security Agreement and/or any other
Ancillary Agreement (collectively, the “Monthly Amount”). Any
outstanding Principal Amount together with any accrued and unpaid interest
and
any and all other unpaid amounts which are then owing by the Companies to the
Holder under this Note, the Security Agreement and/or any other Ancillary
Agreement shall be due and payable on the Maturity Date.
(b) Upon
receipt by any Company of any principal payment made to such Company in respect
of any Note Receivable, such Company shall immediately apply an amount equal
to
fifty percent (50%) of such payment to prepay the outstanding principal balance
of the Notes, to be applied first against the last maturing installments of
the
Principal Amount of the Term Loan in the inverse order thereof (including any
accrued and unpaid interest thereon) until the Term Loan is paid in full and
then to the Revolving Loans (including any accrued and unpaid interest thereon);
provided, however, following the occurrence and during the
continuance of an Event of Default, such prepayments shall be applied to the
Obligations in such order as the Agent may elect in its sole
discretion. If more than one Note is outstanding, the proceeds
payable under this Section 1.3(b) shall be applied to the Notes on a pro rata
basis.
ARTICLE
II
CONVERSION
AND REDEMPTION
2.1 Payment
of Monthly Amount.
(a) Payment
in Cash or Common Stock. If the Monthly Amount (or a portion of
such Monthly Amount if not all of the Monthly Amount may be converted into
shares of Common Stock pursuant to Section 3.2) is required to be paid in cash
pursuant to Section 2.1(b), then the Companies shall pay the Holder an amount
in
cash equal to 100% of the Monthly Amount (or such portion of such Monthly Amount
to be paid in cash) due and owing to the Holder on the Amortization
Date. If the Monthly Amount (or a portion of such Monthly Amount if
not all of the Monthly Amount may be converted into shares of Common Stock
pursuant to Section 3.2) is required to be paid in shares of Common Stock
pursuant to Section 2.1(b), the number of such shares to be issued by the Parent
to the Holder on such Amortization Date (in respect of such portion of the
Monthly Amount converted into shares of Common Stock pursuant to Section
2.1(b)), shall be the number determined by dividing (i) the portion of the
Monthly Amount converted into shares of Common Stock, by (ii) the then
applicable Fixed Conversion Price. For purposes hereof, subject to
Section 3.6 hereof, the initial “Fixed Conversion Price” means $.20 which
has been determined on the date of this Note as an amount equal to 107% of
the
average closing price of the Common Stock for the ten (10) trading days
immediately prior to the date of this Note.
2
(b) Monthly
Amount Conversion Conditions. Subject to Sections 2.1(a), 2.2,
and 3.2 hereof, the Holder shall convert into shares of Common Stock all or
a
portion of the Monthly Amount due on each Amortization Date if the following
conditions (the “Conversion Criteria”) are satisfied: (i) the average
closing price of the Common Stock as reported by Bloomberg, L.P. on the
Principal Market for the five (5) trading days immediately preceding such
Amortization Date shall be greater than or equal to 115% of the Fixed Conversion
Price and (ii) the amount of such conversion does not exceed twenty-five percent
(25%) of the average dollar trading volume of the Common Stock for the period
of
twenty-two (22) trading days immediately preceding and including such
Amortization Date. If subsection (i) of the Conversion Criteria is
met but subsection (ii) of the Conversion Criteria is not met as to the entire
Monthly Amount, the Holder shall convert only such part of the Monthly Amount
that meets subsection (ii) of the Conversion Criteria. Any portion of
the Monthly Amount due on an Amortization Date that the Holder has not been
able
to convert into shares of Common Stock due to the failure to meet the Conversion
Criteria, shall be paid in cash by the Companies, jointly and severally, at
the
rate of 100% of the Monthly Amount otherwise due on such Amortization Date,
within three (3) business days of such Amortization Date.
2.2 No
Effective Registration. Notwithstanding anything to the contrary
herein, the Parent shall not be permitted to pay any part of its obligations,
or
the obligations of any other Company, to the Holder hereunder in shares of
Common Stock if (i) there fails to exist an effective current Registration
Statement (as defined in the Registration Rights Agreement) covering the resale
of the shares of Common Stock to be issued in connection with such payment
and
there fails to exist an exemption from registration for resale available
pursuant to Rule 144 of the Securities Act and in respect of the Common Stock
to
be issued in connection with such payment or (ii) an Event of Default (as
hereinafter defined) exists and is continuing, unless such Event of Default
is
cured within any applicable cure period or otherwise waived in writing by the
Holder.
2.3 Optional
Redemption in Cash. The Companies may prepay this Note
(“Optional Redemption”) by paying to the Holder a sum of money equal to
(a) one hundred thirty percent (130%) of the Principal Amount outstanding at
such time if such payment occurs prior to the first anniversary of the Closing
Date, (b) one hundred eighteen (118%) of the Principal Amount outstanding at
such time if such payment occurs on or after the first anniversary of the
Closing Date and prior to the second anniversary of the Closing Date and (c)
one
hundred seven percent (107%) of the Principal Amount outstanding at such time
if
such payment occurs on or after the second anniversary of the Closing Date,
in
each case, 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 other Ancillary Agreement (the “Redemption
Amount”) outstanding on the Redemption Payment Date (as defined
below). The Companies shall deliver to the Holder a written notice of
redemption (the “Notice of Redemption”) specifying the date for such
Optional Redemption (the “Redemption Payment Date”), which date shall be
ten (10) business 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
previously delivered a Notice of Conversion (as hereinafter defined) or for
conversions elected to be made by the Holder pursuant to Article III during
the
Redemption Period. The Redemption Amount shall be determined as if
the Holder’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 Companies fail to pay the Redemption Amount on the Redemption Payment
Date as set forth herein, then such Redemption Notice will be null and
void. If any Notes issued pursuant to the Security Agreement, in
addition to this Note, are outstanding (collectively, the “Outstanding
Notes”) and the Company pursuant to this Section elects to make an Optional
Redemption, then the Company shall take the same action with respect to all
Outstanding Notes and make such payments to all holders of Outstanding Notes
on
a pro rata basis based upon the Redemption Amount of each Outstanding
Note.
3
ARTICLE
III
HOLDER’S
CONVERSION RIGHTS
3.1 Optional
Conversion. Subject to the terms set forth in this Article III,
the Holder shall have the right, but not the obligation, to convert all or
any
portion of the issued and outstanding Principal Amount and/or accrued interest
and fees due and payable into fully paid and non-assessable shares of Common
Stock at the Fixed Conversion Price. The shares of Common Stock to be
issued upon such conversion are herein referred to as, the “Conversion
Shares.”
3.2 Conversion
Limitation. Notwithstanding anything herein to the contrary, in
no event shall the Holder be entitled to convert any portion of this Note in
excess of that portion of this Note upon exercise of which the sum of (1) the
number of shares of Common Stock beneficially owned by the Holder and its
Affiliates (other than shares of Common Stock which may be deemed beneficially
owned through the ownership of the unconverted portion of this Note or the
unexercised or unconverted portion of any other security of the Holder subject
to a limitation on conversion analogous to the limitations contained herein)
and
(2) the number of shares of Common Stock issuable upon the conversion of the
portion of this Note with respect to which the determination of this proviso
is
being made, would result in beneficial ownership by the Holder and its
Affiliates of any amount greater than 9.99% of the then outstanding shares
of
Common Stock (whether or not, at the time of such conversion, the Holder and
its
Affiliates beneficially own more than 9.99% of the then outstanding shares
of
Common Stock). As used herein, the term “Affiliate” means any person or
entity that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a person or entity, as
such
terms are used in and construed under Rule 144 under the Securities
Act. For purposes of the second preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended, and Regulations 13D-G thereunder, except
as
otherwise provided in clause (1) of such sentence. For any reason at
any time, upon written or oral request of the Holder, the Parent shall within
one (1) business day confirm orally and in writing to the Holder the number
of
shares of Common Stock outstanding as of any given date. The
limitations set forth herein (x) may be waived by the Holder upon provision
of
no less than sixty-one (61) days prior written notice to the Parent and (y)
shall automatically become null and void (i) following notice to the Parent
upon
the occurrence and during the continuance of an Event of Default, or (ii) upon
receipt by the Holder of a Notice of Redemption.
3.3 Mechanics
of Holder’s Conversion. In the event that the Holder elects to
convert this Note into Common Stock, the Holder shall give notice of such
election by delivering an executed and completed notice of conversion in
substantially the form of Exhibit B hereto (appropriate completed)
(“Notice of Conversion”) to the Parent and such Notice of Conversion
shall provide a breakdown in reasonable detail of the Principal Amount, accrued
interest and fees that are 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 Parent within two (2) business days after the Conversion
Date. Each date on which a Notice of Conversion is delivered or
telecopied to the Parent in accordance with the provisions hereof shall be
deemed a Conversion Date (the “Conversion Date”). Pursuant to
the terms of the Notice of Conversion, the Parent 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 the Parent of the Notice of Conversion and shall
cause the transfer agent to transmit the certificates representing the
Conversion Shares to the Holder 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 after receipt by the Parent 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 Parent
of
the Notice of Conversion. The Holder shall be treated for all
purposes as the record holder of the Conversion Shares, unless the Holder
provides the Parent written instructions to the contrary.
4
3.4 Late
Payments. The Companies understand that a delay in the delivery
of the Conversion Shares in the form required pursuant to this Article beyond
the Delivery Date could result in economic loss to the Holder. As
compensation to the Holder for such loss, in addition to all other rights and
remedies which the Holder may have under this Note, applicable law or otherwise,
the Companies shall, jointly and severally, pay late payments to the Holder
for
any late issuance of Conversion Shares in the form required pursuant to this
Article III upon conversion of this Note, in the amount equal to $500 per
business day after the Delivery Date. The Companies shall, jointly
and severally, make any payments incurred under this Section in immediately
available funds upon demand.
3.5 Conversion
Mechanics. 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 converted, if any, by the then applicable
Fixed Conversion Price. In the event of any conversions of a portion
of the outstanding Principal Amount pursuant to this Article III, such
conversions shall be deemed to constitute conversions of the outstanding
Principal Amount applying to Monthly Amounts for the remaining Amortization
Dates in chronological order.
3.6 Adjustment
Provisions. The Fixed Conversion Price and number and kind of
shares or other securities to be issued upon conversion determined pursuant
to
this Note shall be subject to adjustment from time to time upon the occurrence
of certain events during the period that this conversion right remains
outstanding, as follows:
(a) Reclassification. If
the Parent 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 (i)
immediately prior to or (ii) immediately after, such reclassification or other
change at the sole election of the Holder.
(b) 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 or any preferred stock
issued by the Parent in shares of Common Stock, the Fixed Conversion Price
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.
3.7 Reservation
of Shares. During the period the conversion right exists, the
Parent will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of Conversion Shares upon the
full
conversion of this Note and the Warrant. The Parent represents that
upon issuance, the Conversion Shares will be duly and validly issued, fully
paid
and non-assessable. The Parent 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 the Conversion Shares upon the
conversion of this Note.
3.8 Registration
Rights. The Holder has been granted registration rights with
respect to the Conversion Shares as set forth in the Registration Rights
Agreement.
5
3.9 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 Companies to the Holder for the principal balance
of this Note and interest which shall not have been converted or
paid. Subject to the provisions of Article IV of this Note, the
Companies shall not pay any costs, fees or any other consideration to the Holder
for the production and issuance of a new Note.
3.10 Rights
of Shareholders. No Holder shall be entitled to vote or receive
dividends or be deemed the holder of the Note Shares or any other securities
of
the Parent which may at any time be issuable upon conversion of this Note for
any purpose, nor shall anything contained herein be construed to confer upon
the
Holder, as such, any of the rights of a shareholder of the Parent or any right
to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon the recapitalization, issuance of shares,
reclassification of shares, change of nominal value, consolidation, merger,
conveyance or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise, in each case, until the Delivery
Date applicable to the respective Note Shares purchasable upon the conversion
hereof shall have occurred as provided herein.
ARTICLE
IV
EVENTS
OF DEFAULT
4.1 Events
of Default. The occurrence of any Event of Default under the
Security Agreement shall constitute an event of default (“Event of
Default”) hereunder.
4.2 Default
Interest. Following the occurrence and during the continuance of
an Event of Default, each Company shall, jointly and severally, pay additional
interest on the outstanding principal balance of this Note in an amount equal
to
one percent (1%) per month, and all outstanding obligations under this Note,
the
Security Agreement and each other Ancillary Agreement, including unpaid
interest, shall continue to accrue interest at such additional interest rate
from the date of such Event of Default until the date such Event of Default
is
cured or waived.
4.3 Default
Payment. Following the occurrence and during the continuance of
an Event of Default, the Agent may demand repayment in full of all obligations
and liabilities owing by the Companies to the Holder under this Note, the
Security Agreement and/or any other Ancillary Agreement and/or may elect, in
addition to all rights and remedies of the Agent under the Security Agreement
and the other Ancillary Agreements and all obligations and liabilities of each
Company under the Security Agreement and the other Ancillary Agreements, to
require the Companies, jointly and severally, to make a Default Payment
(“Default Payment”). The Default Payment shall be one hundred
fifteen percent (115%) of the outstanding principal amount of this Note, plus
accrued but unpaid interest, all other fees then remaining unpaid, and all
other
amounts payable hereunder. The Default Payment shall be due and
payable immediately on the date that the Agent has demanded payment of the
Default Payment pursuant to this Section 4.3.
6
ARTICLE
V
MISCELLANEOUS
5.1 Conversion
Privileges. The conversion privileges set forth in Article III
shall remain in full force and effect immediately from the date hereof until
the
date this Note is indefeasibly paid in full and irrevocably
terminated.
5.2 Cumulative
Remedies. The remedies under this Note shall be
cumulative.
5.3 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.
5.4 Notices. Any
notice herein required or permitted to be given shall be given in writing in
accordance with the terms of the Security Agreement.
5.5 Amendment
Provision. The term “Note” and all references 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 as such successor instrument may
be
amended or supplemented.
5.6 Assignability. This
Note shall be binding upon each Company and its successors and assigns, and
shall inure to the benefit of the Holder and its successors and assigns, and
may
be assigned by the Holder in accordance with the requirements of the Security
Agreement. No Company may assign any of its obligations under this
Note without the prior written consent of the Holder, any such purported
assignment without such consent being null and void.
5.7 Cost
of Collection. In case of the occurrence of an Event of Default
under this Note, the Companies shall, jointly and severally, pay the Holder
the
Holder’s reasonable costs of collection, including reasonable attorneys’
fees.
7
5.8 Governing
Law, Jurisdiction and Waiver of Jury Trial.
(a) THIS
NOTE
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF
THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.
(b) EACH
COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED
IN
THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION
TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY COMPANY, ON THE ONE HAND,
AND THE HOLDER, ON THE OTHER HAND, PERTAINING TO THIS NOTE OR ANY OF THE OTHER
ANCILLARY AGREEMENTS OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS NOTE
OR
ANY OF THE ANCILLARY AGREEMENTS; PROVIDED, THAT EACH COMPANY ACKNOWLEDGES
THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND
FURTHERPROVIDED, THAT NOTHING IN THIS NOTE SHALL BE DEEMED OR
OPERATE TO PRECLUDE THE HOLDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION
IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER IN FAVOR OF THE HOLDER. EACH COMPANY EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND EACH COMPANY HEREBY WAIVES ANY OBJECTION WHICH
IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM
NON CONVENIENS. EACH COMPANY HEREBY WAIVES PERSONAL SERVICE OF
THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT
AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE
BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE PARENT AT THE ADDRESS SET FORTH
IN
THE SECURITY AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON
THE PARENT’S ACTUAL RECEIPT THEREOF.
(c) EACH
COMPANY DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE
BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, EACH COMPANY HERETO WAIVES
ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN
THE
HOLDER AND/OR ANY COMPANY ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE,
ANY
OTHER ANCILLARY AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR
THERETO.
5.9 Severability. 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 enforceability of any other provision of this
Note.
5.10 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
rate
permitted by such law, any payments in excess of such maximum rate shall be
credited against amounts owed by the Companies to the Holder and thus refunded
to the Companies.
5.11 Security
Interest. The Agent, for the ratable benefit of the Creditor
Parties, has been granted a security interest in certain assets of the Companies
as more fully described in the Security Agreement and the other Ancillary
Agreements.
5.12 Construction;
Counterparts. 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. This Note may be executed by the parties hereto in
one or more counterparts, each of which shall be deemed an original and all
of
which when taken together shall constitute one and the same
instrument. Any signature delivered by a party by facsimile or
electronic transmission shall be deemed to be an original signature
hereto.
5.13 Registered
Obligation. This Note shall be registered (and such registration shall
thereafter be maintained) as set forth in Section 24(b) of the Security
Agreement. Notwithstanding any document, instrument or agreement
relating to this Note to the contrary, transfer of this Note (or the right
to
any payments of principal or stated interest thereunder) may only be effected
by
(i) surrender of this Note and either the reissuance by the Companies of this
Note to the new holder or the issuance by the Companies of a new instrument
to
the new holder or (ii) registration of such holder as an assignee in accordance
with Section 24(b) of the Security Agreement.
[Balance
of page intentionally left blank; signature page follows]
8
IN
WITNESS WHEREOF, each Company has caused this Secured Convertible Term
Note to be signed in its name effective as of this 30 day of November,
2007.
|
WITNESS:
|
NEWMARKET
TECHNOLOGY, INC.
|
|
By:_____________________________
|
By:/s/
Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
CEO
|
|
WITNESS:
|
IP
GLOBAL VOICE, INC.
|
|
By:_____________________________
|
By:/s/
Xxxxx Xxxxxx
Name:
Xxxxx Xxxxxx
Title:
President
|
|
WITNESS:
|
NEWMARKET
CHINA, INC.
|
|
By:_____________________________
|
By:/s/
Xxxxxx X. Xxxxx
Name:
Xxxxxx X. Xxxxx
Title:
President
|
|
WITNESS:
|
NEWMARKET
INTELLECTUAL PROPERTY, INC.
|
|
By:_____________________________
|
By:/s/
Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
President
|
|
WITNESS:
|
NETSCO,
INC.
|
|
By:_____________________________
|
By:/s/
Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
President
|
|
WITNESS:
|
NEWMARKET
BROADBAND, INC.
|
|
By:_____________________________
|
By:/s/
Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
President
|
9
EXHIBIT
A
OTHER
COMPANIES
IP
Global
Voice, Inc., a Delaware corporation
NewMarket
China, Inc., a Nevada corporation
Netsco,
Inc., a North Carolina corporation
NewMarket
Intellectual Property, Inc., a Nevada corporation
NewMarket
Broadband, Inc., a Nevada corporation
EXHIBIT
B
NOTICE
OF CONVERSION
(To
be
executed by the Holder in order to convert all or part of
the
Secured Convertible Term Note into Common Stock)
NewMarket
Technology, Inc.
00000
Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx,
Xxxxx 00000
Attn: Xxxxxx
Xxxxx
The
undersigned hereby converts $_________ of the principal due on
[specify applicable Repayment Date] under the Secured
Convertible Term Note dated as of November 30, 2007 (the “Note”) issued
by NewMarket Technology, Inc. (the “Parent”) and certain of its
Subsidiaries by delivery of shares of Common Stock of the Parent
(“Shares”) on and subject to the conditions set forth in the
Note.
1. Date
of
Conversion
2. Shares
To
Be
Delivered:
[HOLDER]
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
