This Note, and any securities to be acquired upon the conversion of this
Note, have not been registered under the Securities Act of 1933, as amended,
and may not be sold, hypothecated or otherwise transferred or disposed of in
the absence of such registration, unless an exemption from the requirement
of such registration is available under the circumstances at the time
obtaining and, if required at the sole discretion of the Company,
demonstrated by opinion of counsel satisfactory to the Company.
AMERICOMM RESOURCES CORPORATION
Convertible Note Due March 15, 2001
$296,430.00 Tulsa, Oklahoma
March 15, 2000
FOR VALUE RECEIVED, AMERICOMM RESOURCES CORPORATION, a Delaware corporation
(the "Company"), promises to pay The Albert E. Whitehead Living Trust, or
registered assigns, the principal sum of TWO HUNDRED NINETY SIX THOUSAND
FOUR HUNDRED THIRTY United States Dollars ($296,430.00) on March 15, 2001
(the "Due Date"), together with interest from the date hereof on the unpaid
balance of such principal amount from time to time outstanding at the rate
of 10% per annum.
Payments of principal and interest shall be made in such coin or currency
of the United States of America as at the time of payment is legal tender
for the payment of public and private debts, by check mailed and addressed
to the registered holder thereof at the address shown in the register
maintained by the Company for such purpose or, at the option of the holder
hereof, in such manner and at such place in the United States of America
acceptable to the Company as the holder hereof shall have designated to the
Company in writing.
1. Definitions. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:
(a) "Common Stock" shall mean (i) the Common Stock, par value $.001, of
the Company as constituted on March 15, 2000, (ii) any stock into which such
Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock, (iii) all other stock of any class
or classes (however designated) of the Company, the holders of which have
the right, without limitation as to amount, either to all or to a share of
the balance of current dividends and liquidating dividends after the payment
of dividends and distributions of any shares entitled to preference, (iv)
other securities of the Company or of any other person (corporate or
otherwise) which the holders of this Note at any time shall be entitled to
receive, or shall have received, upon the conversion of this Note, in lieu
of or in addition to Common Stock, and (v) other securities which at any
time shall be issuable or shall have been issued to holders of Common Stock
in exchange for, in addition to or in replacement of, Common Stock pursuant
to Section 5 hereof or otherwise.
(b)"Company" includes any corporation which shall succeed to or assume the
obligations of the Company hereunder in compliance with Section 5 hereof.
(c)"Conversion Price" shall mean $0.4370 per share for each share of Common
Stock.
(d)"Pro Forma Dilution Price" shall have the meaning specified in section 4.l.
2. Conversion of Note.
2.l. Conversion. This Note may be converted at any time prior to the Due
Date by the holder hereof, in whole or in part (but not as to less than 100
shares of Common Stock unless this Note entitles the holder to convert this
Note into less than 100 shares of Common Stock), into that number of shares
as shall be obtained by dividing the principal amount hereof to be so
converted by the Conversion Price, on any business day, by surrender of
this Note, with the form of conversion at the end hereof (or a reasonable
facsimile thereof) duly executed by such holder, to the Company at its
office in Tulsa, Oklahoma, or at the office or agency, if any, maintained
for such purpose pursuant to Section 11, designating the amount of principal
hereof to be converted. Such holder shall thereupon be entitled to receive
the number of shares of Common Stock, determined as provided in Section 4.l,
and the accrued and unpaid interest to and including the date of surrender
on the principal amount of the Note so converted. Notwithstanding anything
to the contrary herein, if the Company elects to prepay all or a portion
of this Note pursuant to Section 3 hereof, the right to convert the
portion of the Note to be prepaid shall expire unless exercised prior
to the close of business on the business day preceding the Prepayment
Date (as defined in Section 3).
2.2. When Conversion Effective. Each conversion of this Note shall be
deemed to have been effected immediately prior to the close of business
on the business day on which this Note shall have been surrendered to the
Company as provided in section 2.l or as soon thereafter as compliance
with section 2.5 shall have been completed. At such time, the person or
persons in whose name or names any certificate or certificates for shares
of Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record thereof.
2.3. Delivery of Stock Certificates, etc. As soon as practicable after
the conversion of this Note in full or in part, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to
be issued in the name of and delivered to the holder hereof, or (subject
to the restrictions on transfer referenced in the legend at the head of
this Note and to Section 2.5 hereof) as such holder (upon payment by such
holder of any applicable transfer taxes) may direct:
(a) a certificate or certificates for the number of full shares of
Common Stock to which such holder shall be entitled upon such conversion
plus, in lieu of any fractional share to which such holder would otherwise
be entitled, cash in an amount equal to the portion of the Conversion Price
representing such fractional share; and
(b) in case such conversion is in part only, a new Note of like tenor,
in a principal amount equal to the principal amount hereof minus the
principal amount of this Note converted as provided in Section 2.1.
2.4. Company to Reaffirm Obligations. The Company will, at the time of
each conversion of this Note, upon the request of the holder hereof,
acknowledge in writing its continuing obligation to afford to such holder
all rights to which such holder shall continue to be entitled after such
conversion in accordance with the terms of this Note, provided that if the
holder of this Note shall fail to make any such request, such failure shall
not affect the continuing obligation of the Company to afford such rights
to such holder.
2.5. Securities Act Compliance. At the time this Note is converted
pursuant to section 2.l, if the Company has been directed to issue a
certificate or certificates for shares of Common Stock to a person or
entity other than the holder hereof, at the request of the Company, the
holder hereof shall deliver to the Company (at the holder's expense) an
opinion of counsel, in form and content reasonably satisfactory to the
Company, to the effect that the issuance by the Company of the shares
of Common Stock pursuant to the terms of this Note does not require
registration under the Securities Act of 1933, as amended (the "Act").
3. Prepayment of Note. From and after the date of this Note, the
outstanding principal amount of this Note may be prepaid by the Company,
in whole or in part, on written notice from the Company to the holder
hereof specifying the date of prepayment ("Prepayment Date"), which shall
be no less than thirty (30) calendar days from the date of notice. On the
Prepayment Date, upon receipt of the original Note, the Company shall pay
to the holder of this Note the principal amount to be prepaid plus accrued
and unpaid interest thereon to and including the Prepayment Date.
Notwithstanding anything to the contrary herein, all rights of the Company
to prepay this Note are subject to the rights of the holder hereof to
convert such Note in accordance with section 2.1 hereof, which are exercised
prior to the close of business on the business day preceding the Prepayment
Date. After the close of business on the Prepayment Date, any portion of
the principal amount of this Note which has been prepaid or which upon
surrender of the original Note is to be repaid in accordance with this
Section 3 shall cease to accrue interest and all rights of the holder
thereof with respect to such prepaid principal amount shall cease on
such date, except the right to receive the amount payable hereunder on
presentation and surrender of the original Note. In the event of a
prepayment hereunder by the Company of less than the entire principal
amount of this Note, then promptly upon such partial prepayment, the
Company shall issue and deliver to the holder hereof a new Note, of like
tenor hereto, equal in principal amount to the unpaid principal amount
of this Note.
4. Adjustment of Common Stock Issuable Upon Conversion.
4.l. General; Pro Forma Dilution Price. The number of shares of Common
Stock which the holder of this Note shall be entitled to receive upon the
conversion hereof shall be determined by multiplying the number of shares
of Common Stock which would otherwise (but for the provisions of this
section) be issuable upon such conversion, by the fraction of which (a)
the numerator is the Conversion Price and (b) the denominator is the Pro
Forma Dilution Price (as defined below in this section 4.l) in effect on
the date of such conversion. The "Pro Forma Dilution Price" per share of
Common Stock shall initially be the Conversion Price and shall be adjusted
and readjusted from time to time as provided in this section (and, as so
adjusted or readjusted, shall remain in effect until a further adjustment
or readjustment thereof is required by this section), provided, that the
Company shall not be required to make any adjustments required by this
section, if the amount of such adjustment would be less than $1.00, but
in such case any adjustment that would otherwise be required then
to be made shall be carried forward and shall be made at the time
of and together with the next subsequent adjustments, which, together
with any adjustment or adjustments so carried forward, shall amount to
at least $1.00 per share.
4.2. Adjustment of Pro Forma Dilution Price. In case the Company
shall declare, order, pay or make a dividend or other distribution
(including, without limitation, any distribution of other or additional
stock or other securities or property by way of dividend or spinoff,
reclassification, recapitalization or similar corporate rearrangement)
on the Common Stock other than a dividend payable in cash or other property
and declared out of earned surplus of the Company, then, and in each such
case, the Pro Forma Dilution Price shall, immediately after the close
of business on the record date fixed for the determination of holders
of any class of securities entitled to receive such dividend or distribution,
be reduced or increased to a price (calculated to the nearest cent, a half
cent being considered a full cent) determined by dividing
(x) an amount equal to
(i) the product obtained by multiplying the number of shares of
Common Stock outstanding immediately prior to the close of business
on such record date by the Pro Forma Dilution Price in effect at such
time,
minus
(ii) the aggregate amount of such dividend or distribution (dividends
or distributions of property other than cash being valued at the fair
market value of such property as determined in good faith by the board
of directors of the Company),
by
(y) the number of shares of Common Stock outstanding at the close of
business on such record date,
provided that, for the purposes of this section 4.2, treasury shares
shall not be deemed to be outstanding; and provided, further, that in
no event shall the effect of this section 4.2 result in a price to be
paid upon actual conversion of this Note which is greater than the
Conversion Price, as adjusted in the manner provided in section 4.3.
4.3. Stock Dividends, Stock Splits, etc. In case the Company at any
time or from time to time after September 23, 1997 shall declare or
pay any dividend on the Common Stock payable in Common Stock or effect
a subdivision of the outstanding shares of Common Stock into a greater
number of shares of Common Stock (by reclassification or otherwise),
the Pro Forma Dilution Price in effect immediately prior to such dividend
shall, as of the opening of business on the date of payment of such
dividend, be proportionately decreased.
4.4. Adjustments for Combinations, etc. In case the outstanding
shares of Common Stock shall be combined or consolidated, by reclassification
or otherwise, into a lesser number of shares of Common Stock, the Pro Forma
Dilution Price in effect immediately prior to such combination or
consolidation shall, concurrently with the effectiveness of such
combination or consolidation, be proportionately increased.
5. Adjustments for Consolidation, Merger, Reorganization, etc. In
case the Company, after the date of this Note, (a) shall consolidate
with or merge into any other person and shall not be the continuing or
surviving corporation of such consolidation or merger, or (b) shall
permit any other person to consolidate with or merge into the Company
and the Company shall be the continuing or surviving person but, in
connection with such consolidation or merger, the Common Stock shall
be changed into or exchanged for stock or other securities or
property of any other person, or (c) shall effect a capital reorganization
or reclassification of the Common Stock, then, and in each such case,
proper provision shall be made so that, on the terms and in the manner
provided in Section 4, the holder of this Note, upon the conversion
hereof at any time after the consummation of such consolidation, merger,
reorganization or reclassification, shall be entitled to receive, in lieu
of the Common Stock issuable upon such conversion prior to such consummation,
the stock and other securities to which such holder would have been
entitled upon such consummation if such holder had so converted this Note
immediately prior thereto, subject to adjustments (subsequent to such
corporate action) as nearly equivalent as possible to the adjustments
provided for in Section 4.
6. No Dilution or Impairment. The Company (a) will not permit the par
value of any shares of stock receivable upon the conversion of this Note
to exceed the amount payable therefor upon such conversion, (b) will take
all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable
shares of stock upon the conversion of this Note from time to time
outstanding, and (c) will not consolidate with or merge into any other
person where the Company is not the continuing or surviving person, or
permit any other person to consolidate with or merge into the Company
where the Company is the continuing or surviving person if, in connection
with such consolidation or merger, the Common Stock then issuable upon
the conversion of this Note shall be changed into or exchanged for stock
or other securities or property of any other person, unless, the continuing
or surviving entity after such consolidation or merger or the entity issuing
or distributing such stock or other securities or property, as the case
may be, shall expressly assume in writing and be bound by all the terms
of this Note.
7. Report as to Adjustments. In case of any adjustment or readjustment
in the shares of Common Stock issuable upon the conversion of this Note,
the Company at its expense will promptly compute such adjustment or
readjustment in accordance with the terms of this Note and will prepare
a report, certified by the principal financial officer of the Company
setting forth such adjustment or readjustment and showing, in detail,
the facts upon which such adjustment or readjustment is based, including
a statement of (a) the number of shares of Common Stock outstanding
or deemed to be outstanding and (b) the Pro Forma Dilution Price in
effect as adjusted and readjusted (if required by section 4) on account
thereof. The Company will forthwith mail a copy of each such report to
the holder of this Note, and will, upon the written request at any time
of the holder of this Note, furnish to such holder a like report setting
forth the Pro Forma Dilution Price at the time in effect and showing how
it was calculated.
8. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a regular cash dividend
payable out of earned surplus at the same rate as that applicable to the
most recent such dividend, notice of which has been given pursuant to this
section 8) or other distribution, or any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other securities
or property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any transfer
of all or substantially all the assets of the Company to any other person
or any consolidation or merger involving the Company and any other person,
or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company,
the Company will mail to the holder of this Note a notice specifying
(i) the date or expected date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and stating
the amount and character of such dividend, distribution or right, and
(ii) the date or expected date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up is to take place and the time,
if any such time is to be fixed, as of which the holders of record
of Common Stock shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up. Such notice shall be mailed
at least 45 days prior to the date therein specified.
9. Reservation of Stock, etc. The Company will at all times reserve
and keep available, solely for issuance and delivery upon the conversion
of this Note, all shares of Common Stock from time to time issuable upon
the conversion of this Note at the time outstanding. All shares of Common
Stock issuable upon the conversion of this Note shall be duly authorized,
and when issued, validly issued, fully paid and non-assessable with no
liability on the part of the holders thereof.
10. Substitution of Notes.
10.1. Exchange of Notes. Subject to the restrictions referenced at
the top of the first page of this Note concerning, inter alia, the sale,
transfer, encumbrance or other disposition of this Note, upon surrender
for exchange of this Note, properly endorsed, to the Company, the Company
at its expense will issue and deliver to or upon the order of the holder
thereof a new Note or Notes of like tenor, in the name of such holder or
as such holder (upon payment by such holder of any applicable transfer taxes)
may direct.
10.2. Replacement of Notes. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation
of any Note and, in the case of any such loss, theft or destruction, upon
delivery of an indemnity bond (or, in the sole discretion of the Company,
an indemnity agreement satisfactory to the Company), reasonably satisfactory
in form and amount to the Company or, in the case of any such mutilation,
upon surrender and cancellation of such Note, the Company at its expense
will execute and deliver, in lieu thereof, a new Note of like tenor.
11. Note Agent. The Company may, by written notice to the holder of
this Note, appoint an agent for the purpose of issuing Common Stock
upon the conversion of this Note pursuant to Section 2, exchanging and
replacing this Note pursuant to Section 10, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be,
shall be made at such office by such agent.
12. Subordination.
(a) The holder of this Note by the holder's acceptance hereof, and
each subsequent holder, by its acceptance of any interest in this Note,
agree that the indebtedness represented hereby shall be subordinate in
right of payment to the prior payment in full of all obligations of the
Company in respect of indebtedness to banks or other lending institutions
now existing or hereafter incurred which may be designated as senior
indebtedness by the board of directors of the Company (hereinafter
referred to as "Senior Indebtedness").
(b) In Furtherance of Subordination. No payments of principal or
interest may be made while any event of default exists in respect of
any Senior Indebtedness, and the holder hereof agrees that any payments
which would otherwise be made pursuant hereto shall be applied to the
Senior Indebtedness, and any such payments received by the holder hereof
shall be held in trust for the holders of the Senior Indebtedness until
all such events of default have been cured.
(c) Further Assurance. The holder hereof agrees to take any and
all further action and to execute and deliver any further documents
that any holder or holders of Senior Indebtedness may reasonably request
in order to preserve and protect any right or interest granted or intended
to be granted hereby.
(d) Convertibility. Nothing herein shall be deemed to restrict the
right of conversion of this Note as elsewhere provided herein.
13. Default.
Upon the occurrence and during the continuance of any of the following
conditions or events:
(a) if the Company shall fail or refuse to make any payment of
principal hereof or of interest hereon as and when the same shall
become due and payable, which default shall continue for a period of
10 days or more after written notice to the Company by the holder
hereof; or
(b) it the Company shall default in the due observance or performance
of any of the covenants or conditions contained in this Note which
default shall continue for a period of 10 days or more after written
notice to the Company by the holder hereof; or
(c) if there shall occur an event which constitutes, or, upon the
sending of notice or the passage of time or both, would constitute,
a breach or default under the terms of any agreement or instrument
between the Company and any third party as a result of which the
Company is rendered liable for an amount in excess of $10,000 which
is not paid or otherwise satisfied within 90 days of the final
determination of such liability, or giving rights of acceleration or
similar rights (whether or not exercised) against the Company or its
property with respect to any Senior Indebtedness exceeding $10,000
in principal amount; or
(d) if the Company shall be in default (after the expiration of any
applicable grace periods) in respect of any Senior Indebtedness; or
(e) if the Company shall make a general assignment for the benefit
of its creditors, or shall admit in writing its inability to pay its
debts as they become due, or shall file a voluntary petition in
bankruptcy, or shall be adjudicated a bankrupt or insolvent, or shall
file any petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any present or future statute, law or regulation,
or shall file any answer admitting or not contesting the material
allegations of a petition filed against the Company in any such
proceeding, or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver or liquidator of the Company or
of all or any substantial part of the properties of the Company; or
(f) if, within 60 days after the commencement of any action
against the Company seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such action shall not
have been dismissed or all orders or proceedings thereunder affecting
the operations or the business of the Company stayed, or if the stay of
any such order or proceeding shall thereafter be set aside, or if, within
60 days after the appointment without the consent or acquiescence of
the Company of any trustee, receiver or liquidator of the Company or
of all or any substantial part of the properties of the Company, such
appointment shall not have been vacated;
then, in each case, the holder of this Note may, by written notice
to the Company, declare this Note to be due and payable, whereupon
the principal of this Note and all interest thereon accrued and unpaid
to and including the date of such declaration, shall forthwith mature
and become due and payable without presentment, demand, protest or
other notice, all of which are hereby waived; provided, however, that
in the case of the occurrence of an event described in paragraphs (e)
or (f) of this Section 13, the principal of this Note and all
interest thereon accrued and unpaid to and including the date of
such event shall automatically become immediately due and payable,
without presentment, demand, protest or any notice of any kind, all
of which are hereby waived.
14. This Note shall remain in full force and effect and continue to
be effective should any petition be filed by or against the Company
for liquidation or reorganization, should the Company become insolvent
or make an assignment for the benefit of creditors or should a receiver
or trustee be appointed for all or any significant part of the Company's
assets, and shall continue to be effective or be reinstated, as the case
may be, if at any time payment and performance of the Company's obligations
hereunder, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or
returned by the holder hereof, whether as a "voidable preference,"
"fraudulent conveyance," or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Company's
obligations hereunder shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
15. Ownership of Note. Until this Note is transferred on the books
of the Company, the Company may treat the person in whose name this
Note is issued as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary, except that, if and when
this Note is properly assigned in blank, the Company may (but shall
not be obligated to) treat the bearer hereof as the absolute owner
of this Note for all purposes, notwithstanding any notice to the
contrary. This Note, if properly assigned, may be converted by a
new holder without first having a new Note issued.
16. Notices, etc. All notices and other communications from the
Company to the holder of this Note shall be mailed by first class
registered or certified mail, postage prepaid, or sent via Federal
Express or similar overnight courier service, at such address as may
have been furnished to the Company in writing by such holder, or,
until an address is so furnished, to and at the address of the last
holder of this Note who has so furnished an address to the Company.
17. Miscellaneous.
(a) This Note shall in all respects be governed by the laws of
the State of New York applicable to contracts made and to be
performed entirely in such State.
(b) This Note may not be altered or amended, except by a writing
duly signed by the party against whom such alteration or amendment
is sought to be enforced.
(c) Any provision of this Note which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or enforceability without invalidating
the remaining provisions hereof, and any such prohibition or
unenforceability of such provision in any jurisdiction shall not
affect the validity or enforceability of such provision in any other
jurisdiction.
(d) Any waiver by the holder hereof of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or
remedy which such holder would otherwise have had on any future occasion.
No failure to exercise nor any delay in exercising on the part of the
holder hereof, any right, power or privilege hereunder, shall operate
as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or future exercise
thereof or the exercise of any other right, power or privilege.
The rights and remedies hereunder provided are cumulative and may
be exercised singly or concurrently, and are not exclusive of any
rights and remedies provided by law.
(e) This Note and all obligations of the Company hereunder shall
be binding upon the successors and assigns of the Company, and shall,
together with the rights and remedies of the holder hereunder, inure
to the benefit of the holder and its successors and registered assigns.
(f) The Company hereby waives presentment for payment, demand,
notice of dishonor, notice of protest and protest and diligence in
taking any action to collect amounts due hereunder.
DATED: March 15, 2000 AMERICOMM RESOURCES CORPORATION
By: /s/Thomas R. Bradley
Name: Thomas R. Bradley
Title: President
NOTICE OF CONVERSION
[To be signed only upon conversion of Note]
To AMERICOMM RESOURCES CORPORATION
The undersigned, the holder of the within Note, hereby surrenders
such Note for conversion into shares of Common Stock, par value $.001
per share, of AMERICOMM RESOURCES CORPORATION to the extent of $_________*
unpaid principal amount of such Note and requests that the certificates for
such shares be issued in the name of, and delivered to, whose address is
Dated:
The Albert E. Whitehead Living Trust
By____________________________________
Albert E. Whitehead, Trustee
_________________________
*Insert here the unpaid principal amount of the Note (or, in the case of a
partial conversion, the portion thereof as to which the Note is being
converted), in either case without making any adjustment for additional
Common Stock or any other stock or other securities or property or cash
which, pursuant to the adjustment provisions of the Note, may be deliverable
upon conversion.
