FORM OF NOTE PAYABLE APPENDIX C
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND IS TRANSFERABLE ONLY UPON THE CONDITIONS SPECIFIED IN THE NOTE AGREEMENT
REFERRED TO HEREIN.
PROMISSORY NOTE
$5,000 San Rafael, California Date:________ _____, 1999
FOR VALUE RECEIVED, the undersigned, Trinity Medical Group USA, Inc.
("Maker"), hereby promises to pay to the order of ________________________
("Payee"), the principal sum of Five Thousand and no/100 Dollars ($5,000), in
lawful money in United States of America, which shall be legal tender, in
payment of all debts and dues, public and private, at the time of payment,
bearing interest and payable as provided herein.
Interest on the unpaid balance of this Note shall accrue at a rate of
10% per annum; provided, however, that such interest shall not exceed the
Maximum Rate as hereinafter defined. All past-due principal and interest shall
bear interest at the maximum rate permitted by applicable law. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
All interest to be paid on this Note shall be payable, at the option of
the Maker, in either cash or in shares of Maker common stock. The value of
Maker's common stock shall be the Fair Market Value of the shares of Maker's
common stock, as defined in this Note.
The "Fair Market Value" of a share of Maker common stock on any date
shall be (i) the closing sales price on the immediately preceding business day
of a share of Maker common stock as reported on the principal securities
exchange on which shares of Maker common stock are then listed or admitted to
trading or (ii) if not so reported, the average of the closing bid and asked
prices for a share of Maker common stock on the immediately preceding business
day as quoted on the National Association of Securities Dealers Automated
Quotation System ("Nasdaq") or (iii) if not quoted on Nasdaq, the average of the
closing bid and asked prices for a share of Maker common stock as quoted by the
National Association of Securities Dealers' OTC Bulletin Board System. If the
price of a share of Maker common stock shall not be so reported, the Fair Market
Value of a share of Maker common stock shall be determined by the Maker's Board
of Directors in its absolute discretion. In no event shall the Fair Market Value
of any share of Maker common stock be less than its par value.
The principal amount and accrued interest of this Note shall be due and
payable on August, 30, 2001, provided however, the principal amount and accrued
interest of this Note shall be due and payable immediately upon the occurrence
of either of the following events: (i) a Change in Control of Trinity Medical
Group USA, Inc., as defined in this Note, or (ii) the completion of an equity
financing which raises in the aggregate at least $250,000, in the form of one
equity transaction or in the form of a series of equity transactions within a
six month period. The Note may be renewed for additional thirty day periods at
the option of the holder.
For the purpose of this Note, "Change in Control" shall mean the
occurrence of any of the following events:
(i) any person becomes, after the issue date of this Note, the
"beneficial owner" (as defined in Rule 13d-3 promulgated under
the Securities Exchange Act of 1934, as amended ("Exchange
Act")), directly or indirectly, of securities of the Maker
representing 30% or more of the combined voting power of the
Maker's then outstanding securities, unless the Board of
Directors of the Maker (as constituted immediately prior to
such Change in Control) determines in its sole absolute
discretion that no Change in Control has occurred;
(ii) Individuals who constitute the Board of Directors of the Maker
on the issue date of this Note cease, for any reason, to
constitute at least a majority of the Board of Directors of
the Maker; provided, however, that any person becoming a
director subsequent to the issue date of this Note who was
nominated for election by at least 66% of the Board of
Directors of the Maker as
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constituted on the issue date of this Note (other than the
nomination of an individual whose initial assumption of office
is in connection with an actual or threatened election contest
relating to the election of the Board of Directors of the
Maker, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) shall be, for purposes of
this Note, considered a member of the Board of Directors of
the Maker as constituted on the issue date of this Note; or
(iii) the Board of Directors of the Maker determines in its sole and
absolute discretion that there has been a Change in Control of
the Maker.
This Note may be prepaid in whole or in part, at any time and from time
to time, without premium or penalty.
If any payment of principal or interest on this Note shall become due
on a Saturday, Sunday or any other day on which national banks are not open for
business, such payment shall be made on the next succeeding business day.
The indebtedness evidenced by this Note is unsecured and subordinate
and junior in right of payment to the prior payment in full of all senior
indebtedness (however defined in any debt instrument).
Notwithstanding anything to the contrary in this Note or any other
agreement entered into in connection herewith, whether now existing or hereafter
arising and whether written or oral, it is agreed that the aggregate of all
interest and any other charges constituting interest, or adjudicated as
constituting interest, and contracted for, chargeable or receivable under this
Note or otherwise in connection with this loan transaction, shall under no
circumstances exceed the Maximum Rate. In the event the maturity of this Note is
accelerated by reason of an Event of Default under this Note, other agreement
entered into in connection herewith or therewith, by voluntary prepayment by
Maker or otherwise, then earned interest may never include more than the Maximum
Rate, computed from the dates of each advance of the loan proceeds outstanding
until payment. If from any circumstance any holder of this Note shall ever
receive interest or any other charges constituting interest, or adjudicated as
constituting interest, the amount, if any, which would exceed the Maximum Rate
shall be applied to the reduction of the principal amount owing on this Note,
and not to the payment of interest; or if such excessive interest exceeds the
unpaid balance of principal hereof, the amount of such excessive interest that
exceeds the unpaid balance of principal hereof shall be refunded to Maker. In
determining whether or not the interest paid or payable exceeds the Maximum
Rate, to the extent permitted by applicable law (i) any non-principal payment
shall be characterized as an expense, fee or premium rather than as interest;
and (ii) all interest at any time contracted for, charged, received or preserved
in connection herewith shall be amortized, prorated, allocated and spread in
equal parts during the period of the full stated term of this Note. The term
"Maximum Rate" shall mean the maximum rate of interest allowed by applicable
federal or state law.
Except as provided herein, Maker and any sureties, guarantors and
endorsers of this Note jointly and severally waive demand, presentment, notice
of nonpayment or dishonor, notice of intent to accelerate, notice of
acceleration, diligence in collecting, grace, notice and protest, and consent to
all extensions without notice for any period or periods of time and partial
payments, before or after maturity, without prejudice to the holder. The holder
shall similarly have the right to deal in any way, at any time, with one or more
of the foregoing parties without notice to any other party, and to grant any
such party any extensions of time for payment of any of said indebtedness, or to
grant any other indulgences or forbearance whatsoever, without notice to any
other party and without in any way affecting the personal liability of any party
hereunder. If any efforts are made to collect or enforce this Note or any
installment due hereunder, the undersigned agrees to pay all collection costs
and fees, including reasonable attorney's fees.
This Note shall be construed and enforced under and in accordance with
the laws of the State of California.
IN WITNESS WHEREOF, Xxxxx has duly executed this Note as of the day and
year first above written.
TRINITY MEDICAL GROUP USA, INC.
By /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, Ph.D.
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