ONE WORLD ONLINE.COM, INC.,
a Nevada corporation
10% SECURED CONVERTIBLE PROMISSORY NOTE
No. ________ $____________ USD
NEITHER THIS PROMISSORY NOTE NOR THE UNDERLYING COMMON SHARES HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, OR UNDER ANY OTHER APPLICABLE STATE
SECURITIES LAWS. NEITHER THIS PROMISSORY NOTE NOR ANY COMMON SHARES ISSUED
PURSUANT TO ITS CONVERSION PROVISION MAY BE SOLD, PLEDGED, TRANSFERRED OR
ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS, OR IN A TRANSACTION
WHICH IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT AND
UNDER PROVISIONS OF APPLICABLE STATE SECURITIES LAWS.
1. Promise to Pay. One World Online.com, Inc., a Nevada corporation
("Corporation"), for value received, hereby promises to pay to
_____________________, ("Holder"), the principal sum of ____________________
Dollars ($____________), with interest at the rate of ten percent (10%) per
annum until this Note has been paid in full or converted pursuant to the
provisions hereof.
2. Payments. Principal shall be due and payable in a single balloon
payment on February 1, 2002 (the "Maturity Date"). Payments shall be made in
lawful money of the United States of America to Holder at the address provided
to the Corporation by the Holder, as appears on this instrument below or at such
other addresses as sent by Holder to the Corporation by certified U.S. mail at
least twenty (20) days before said payment date.
3. Default. The occurrence of one or more of the following events shall
constitute an event of default:
3.1 Continued nonpayment of the interest due on this Note for
more than thirty (30) days beyond the payment date when due.
3.2 The nonpayment of the principal of this Note when the same
shall have become due and payable.
3.3 Filing by the Corporation of a petition in bankruptcy or
seeking reorganization, arrangement, adjustment, or composition of or in respect
of the Corporation's debts, whether under the United States Bankruptcy Code or
any other applicable federal or state law; entry of an order for relief under
the United States Bankruptcy Code, whether pursuant to a voluntary or
involuntary petition; the filing of an involuntary petition seeking adjudication
of the Corporation as a debtor under the United States Bankruptcy Code or
similar federal law, if said petition is not dismissed within sixty (60) days;
entry of a decree or order appointing a receiver, liquidator, assignee, or
trustee of the Corporation, or any substantial part if its property, or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of sixty (60) days; or the
making by it of an assignment for the benefit of creditors, or the admission by
it in writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Corporation in furtherance of any such
action.
3.4 Default by the Corporation under the Master Security
Agreement, which default is not cured within ten (10) days of written notice
thereof (or within such longer cure period as allowed by the Master Security
Agreement).
4. Acceleration. At the option of the Holder, and without demand or
notice, all principal and any unpaid interest shall become immediately due and
payable upon a default as set forth in Section 3 above.
<PAGE>
5. Conversion Privilege. The Holder of this Note shall have the right,
at Holder's option, at any time prior to the Maturity Date, and thereafter with
the consent of the Corporation, to convert the principal and accrued, but
unpaid, interest of this Note into common shares of the Corporation ("Common
Shares"), at the rate of $3.00 U.S.D. per common share. The Holder must convert
all of the principal and accrued interest if any is converted. In order to
convert, the Holder must surrender this Note to the Corporation at the
Corporation's principal offices and the Corporation shall, as promptly as
practicable after the surrender, deliver to the Holder a certificate or
certificates representing the number of fully paid and nonassessable Common
Shares of the Corporation into which this Note may be converted. Fractional
shares shall not be issued, but the conversion price of such fractional share
will be paid in cash to the Holder. No payment or adjustment shall be made upon
any conversion with respect to any dividend on the common stock delivered upon
conversion.
6. Call By Corporation. Provided that this Note has not been converted
pursuant to the provisions hereof, the Corporation may at its sole discretion
call this Note for payment at any time prior to the Maturity Date, by the
delivery of a notice of such call to the Holder hereof. The Holder shall have a
30-day period after the Corporation gives notice of the call to convert the
Holder's Note pursuant to Section 5 hereof. Unless so converted, the Corporation
shall pay to the Holder the principal and accrued, but unpaid, interest due as
of the expiration of Holder's conversion right (i.e., 30 days after notice of
the call has been sent to Holder), in exchange for which Holder shall deliver
this Note to the Corporation.
7. Effect of Mergers, etc. on Conversion Privilege.
7.1 In case of any capital reorganization, or of any
reclassification of the common shares of the Corporation or in case of the
consolidation or merger of the Corporation with or into any other corporation or
of the sale, lease or other disposition of the properties and assets of the
Corporation as, or substantially as, an entirety to any other corporation, each
Note shall, after such capital reorganization, reclassification of common
shares, consolidation, merger or sale, lease, or other disposition, be
convertible into the kind and amount of shares or other securities or property
(including cash) to which the holder of the number of common shares deliverable
(immediately prior to the time of such capital reorganization, reclassification
of common shares, consolidation, merger, sale, lease, or other disposition) upon
conversion of such Note would have been entitled upon such capital
reorganization, reclassification of common shares, consolidation, merger, sale,
lease, or other disposition.
7.2 In any such event, effective provision shall be made, in
the certificate or articles of incorporation of the resulting or surviving
corporation, in any contracts of sale and conveyance, or otherwise so that, so
far as appropriate and as nearly as reasonably may be, the provisions set forth
herein for the protection of the rights of the Holder of this Note shall
thereafter be made applicable.
7.3 Whenever the number or kind of securities purchasable upon
conversion of this Note shall be adjusted as required by the provisions of this
Section 7, the Corporation shall forthwith file with its Secretary or Assistant
Secretary at its principal office an officer's certificate showing the adjusted
number of kind of securities purchasable upon conversion of this Note determined
as herein provided and setting forth in reasonable detail such facts as shall be
necessary to show the reason for and the manner of computing such adjustments.
Each such officer's certificate shall be made available at all reasonable times
for inspection by the Holder and the Corporation shall, forthwith after each
such adjustment, mail by certified mail a copy of such certificate to the
Holder.
7.4 So long as this Note shall be outstanding, if the
Corporation shall propose to take any action that would cause an adjustment to
be made pursuant to this Section 7, the Corporation shall mail by certified mail
to the Holder, at least 15 days prior to the day on which such adjustment would
become effective, a notice setting forth in reasonable detail the action to be
so taken.
8. Corporation to Reserve Common Shares. The Corporation covenants that
it will at all times reserve and keep available, free from preemptive rights,
out of the aggregate of its authorized but unissued common shares, or its issued
common shares held in its treasury, or both, for the purpose of effecting
conversions of Notes, the full number of common shares of then deliverable upon
the conversion of all outstanding Notes not theretofore converted; and if at any
time the number of authorized but unissued common shares shall not be sufficient
to effect
<PAGE>
the conversion of all said outstanding Notes, the Corporation will take such
corporate action as may in the opinion of its counsel be necessary to increase
its authorized but unissued common shares to such number of shares as shall be
sufficient for that purpose.
9. Restrictions on Transfer. This Note has not been registered under
the Securities Act of 1933. This Note, or any right hereunder, may not be
enforced against the Corporation by any Holder, except the original Holder
herein, and the Corporation shall not be obligated to recognize any purported
transferee or assignee, (i) unless there is an effective registration covering
the Note or underlying right under the Securities Act of 1933 and applicable
state securities laws, (ii) unless the Corporation receives an opinion of an
attorney, licensed to practice within the United States, that the transfer of
the Note, or any underlying right, complies with the requirements of the
Securities Act of 1933 and any relevant state securities law, or (iii) unless
the transfer is made pursuant to Rule 144 under the Securities Act of 1933. Any
permitted transferee or assignee shall be subject to the restrictions and to the
terms of this Note and the Master Security Agreement, and the Corporation may
require said transferee or assignee to execute and deliver such further
instruments evidencing or acknowledging the same.
10. Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Corporation, either at law or
equity, unless and until Common Shares are issued pursuant to the conversion
provisions hereof.
11. Notices. Any notices required or permitted hereunder shall be in
writing and shall be given by personal delivery; by deposit in the United States
mail, certified mail, return receipt requested, postage prepaid; or by
established express delivery service, freight prepaid. Notices shall be
delivered, addressed, or transmitted to the Corporation and to Holder at the
following addresses, which may be changed by a notice given to the other party
in accordance with this Section. The date notice is deemed to have been given,
received and become effective shall be the date on which the notice is
delivered, if notice is given by personal delivery, two (2) days following the
date of deposit in the mail, if the notice is sent through the United States
mail, or the date of actual receipt, if the notice is sent by express delivery
service.
The Corporation's address is:
One World Online.com, Inc.
Attn. Chief Executive Officer
4778 North 300 West, Suite 200
Provo, Utah 84604
Telephone: 801-852-3540
Fax: 801-852-3553
The Holder's address is:
______________________________
______________________________
______________________________
______________________________
12. Miscellaneous.
A. This Note is one of a series of 10% Secured Convertible
Promissory Notes (the "Notes") issued by the Corporation, which Notes total an
aggregate amount of not more than Three Million Dollars (U.S.) ($3,000,000.00
USD). The obligations of the Corporation under the Notes are secured by a Master
Security Agreement, and the rights and duties of the Corporation and Holder are
subject to the terms of the Master Security Agreement. By acceptance of this
Note, Holder agrees to be bound by the terms of the Master Security Agreement.
<PAGE>
B. The headings of this Note are for purposes of reference
only and shall not limit or define the meaning of any provision of this Note.
C. If suit or action is instituted in connection with any
controversy arising out of this Note, or in the enforcement of any rights
hereunder, the prevailing party shall be entitled to recover in addition to
costs such sums as the court may adjudge as reasonable attorney's fees,
including attorney's fees incurred in any appeal.
D. This Note shall be governed by the laws of the State of
Utah. Any legal action to enforce or obtain an interpretation of this Note may
be filed in the Fourth Judicial District Court of Utah County, or the Third
Judicial District Court of Salt Lake County, and the parties consent to the
exercise of personal over them by said courts.
E. In computing any period of time pursuant to this Note, the
day of the act, event or default from which the designated period of time begins
to run shall be included, unless it is a Saturday, Sunday, or a legal holiday,
in which event the period shall begin to run on the next day which is not a
Saturday, Sunday, or legal holiday, in which event the period shall run until
the end of the next day thereafter which is not a Saturday, Sunday, or legal
holiday.
F. Nothing herein shall be construed to be to the benefit of
any third party, nor is it intended that any provision shall be for the benefit
of any third party.
IN WITNESS WHEREOF, this Note is executed by One World Online.com, Inc,
to be effective as of the ____ day of _______________, 1999.
ONE WORLD ONLINE.COM, INC.,
a Nevada corporation
By___________________________
Its President
STATE OF UTAH )
ss:
COUNTY OF UTAH )
On this ____ day of ______________, 1999, before me appeared
____________, to me personally known, who being duly sworn did say that he/she
is the President of One World Online.com, Inc., the within named corporation,
and that the instrument was signed in behalf of said corporation and
acknowledged the instrument to be the free act and deed of the corporation.
_____________________________
NOTARY PUBLIC
My Commission Expires: Residing at: ________________
________________________
