<PAGE>
EXHIBIT 4.1
-----------
NOTE: ATTACHED SCHEDULE FOR OMITTED INFORMATION
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND
MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE ENCUMBERED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
No. __________ $____________
DIAL-THRU INTERNATIONAL CORPORATION
CONVERTIBLE NOTE
DIAL-THRU INTERNATIONAL CORPORATION, a Delaware corporation (together with
its successors, the "Corporation"), for value received hereby promises to pay
to:
___________________________________
(the "Holder") and registered assigns, the principal sum of
____________________________ Dollars ($_________), on or before the earlier of
(a) February 4, 2001 or (b) the Corporation's consummation of a Qualified
Financing (as defined below) (the "Maturity Date"). This Convertible Note has
been issued pursuant to the terms of the Convertible Note and Warrant
Subscription Agreement delivered of even date herewith. No interest shall accrue
or be payable on the principal amount that may be outstanding from time to time
under this Convertible Note.
1. CERTAIN DEFINITIONS.
In addition to the defined terms included elsewhere herein, the following
terms as used herein shall have the following meanings:
"Common Stock" means the common stock of the Corporation, par value $.001
per share.
"Conversion Period" means the period commencing upon the ninety-first
(91st) day following the date hereof and ending upon the repayment in full of
this Convertible Note.
"Conversion Price" shall mean $4.00 per share, as adjusted pursuant to
Section 4.3.
_______________________________________________________________________________
CONVERTIBLE NOTE - Page 1
<PAGE>
"Qualified Financing" shall mean the Corporation's receipt of net proceeds
of no less than five million dollars ($5,000,000) as a result of the
consummation of any debt or equity financing by the Corporation, other than any
equipment financing or capital leases.
2. PAYMENT TERMS.
2.1. Convertible Note. The principal balance of this Convertible
Note ("Convertible Note") shall be convertible at any time or from time to time,
in whole or in part, into Common Stock of the Corporation as set forth in
Article 4 below.
2.2. Repayment of Note.
(a) The Corporation shall repay the remaining unpaid balance of this
Convertible Note on the Maturity Date.
(b) The Corporation may voluntarily prepay all or any portion of this
Convertible Note (in $1,000 increments) at any time prior to the
commencement of the Conversion Period, and Holder shall not have any right
to convert this Convertible Note with regard to the amounts so prepaid.
(c) The Corporation may voluntarily prepay all or any portion of this
Convertible Note (in $1,000 increments) during the Conversion Period upon
ten days prior notice to the Holder, whereupon the Holder shall have the
right to convert this Convertible Note pursuant to Article 4 below.
2.3. Method of Payment. The Corporation will pay all cash sums due on this
Convertible Note by wire transfer of immediately available funds to the Holder
of this Convertible Note in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts at the address specified for the Holder in Section 5.3,
or by such other method or at such other address as such Holder shall have from
time to time specified to the Corporation in writing for such purpose, without
the presentation or surrender of this Convertible Note.
2.4. Additional Warrants. If this Convertible Note has not been repaid
within six months following the date of issuance, the Corporation will issue to
Holder warrants in the form attached hereto as Exhibit A to acquire an
---------
additional 125 shares of Common Stock at an exercise price of $2.75 per share
for each one thousand dollars ($1,000) principal amount outstanding (and not
previously converted) under this Convertible Note as of such date.
3. REGISTRATION.
3.1. Record Ownership. The Corporation shall maintain a register of the
Holder of this Convertible Note (the "Register") showing its name and address
and the serial number and principal amount of Convertible Note issued to or
transferred of record by it from time to time. The Register may be maintained in
electronic, magnetic or other computerized form. The Corporation may treat the
Person named as the Holder in the Register as the sole owner of this Convertible
Note. The Holder (as properly noted in the Register) is the Person exclusively
entitled to receive payments on this Convertible Note, receive notifications
with respect to this
_______________________________________________________________________________
CONVERTIBLE NOTE - Page 2
<PAGE>
Convertible Note, convert it into Common Stock and otherwise exercise all of the
rights and powers as the absolute owner hereof.
3.2. Registration of Transfer. Transfers of this Convertible Note may be
registered on the Register. Transfers shall be registered when (i) this
Convertible Note is presented to the Corporation with a request to register the
transfer hereof; (ii) the Convertible Note is accompanied by a written
instrument of transfer in form reasonably satisfactory to the Corporation, duly
executed by the Holder thereof or his attorney duly authorized in writing; (iii)
the Corporation has received reasonable assurances that the endorsements are
genuine and effective; and (iv) the Corporation has received evidence reasonably
satisfactory to it that such transfer is rightful and in compliance with this
Convertible Note and all applicable laws, including state and federal securities
laws. When this Convertible Note is presented for transfer and duly transferred
hereunder, it shall be canceled and a new Convertible Note showing the name of
the transferee as the record holder thereof shall be issued in lieu hereof. When
this Convertible Note is presented to the Corporation with a reasonable request
to exchange it for an equal principal amount of Convertible Notes of other
denominations, the Corporation shall make such exchange and shall cancel this
Convertible Note and issue in lieu thereof Convertible Notes having a total
principal amount equal to the outstanding principal amount of this Convertible
Note in the denominations requested by the Holder.
3.3. Worn and Lost Securities. If this Convertible Note becomes worn,
defaced or mutilated but is still substantially intact and recognizable, the
Corporation or its agent may issue a new Convertible Note in lieu hereof upon
its surrender bearing a number not contemporaneously outstanding. Where the
Holder claims that the Convertible Note has been lost, destroyed or wrongfully
taken, the Corporation shall issue a new Convertible Note in place of the
original Convertible Note bearing a number not contemporaneously outstanding if
the Holder so requests by written notice to the Corporation actually received by
the Corporation before it is notified that the Convertible Note has been
acquired by a bona fide purchaser and the Holder has delivered to the
Corporation an indemnity bond in such amount and issued by such surety as the
Corporation deems reasonably satisfactory together with an affidavit of the
Holder setting forth the facts concerning such loss, destruction or wrongful
taking and such other information in such form with such proof or verification
as the Corporation may reasonably request.
4. CONVERSION AT THE OPTION OF THE HOLDER
4.1. Optional Conversion. At the option of the Holder and at any time or
from time to time during the Conversion Period, all or any portion of the
outstanding principal balance of this Convertible Note may be converted into
that certain number of fully paid and nonassessable shares of Common Stock of
the Corporation as is determined by dividing such applicable balance of this
Convertible Note by the effective Conversion Price (the "Conversion Shares").
4.2. Conversion Procedures.
(a) The conversion of this Convertible Note will be deemed to have
been effected as of the close of business on the date on which the Holder
delivers a notice of conversion (including via telecopy) to the Corporation
of the conversion of this
_______________________________________________________________________________
CONVERTIBLE NOTE - Page 3
<PAGE>
Convertible Note (the "Conversion Date"). Any such notice must specify what
portion of the outstanding principal balance of this Convertible Note is to
be converted (the "Conversion Amount"). All Conversion Amounts must be in
$1,000 increments.
(b) Within five Business Days of the Conversion Date, the Holder
shall surrender this Convertible Note at the principal office of the
Corporation.
(c) As soon as possible after a conversion has been effected (but in
any event within five Business Days), the Corporation will deliver to the
converting Holder a certificate or certificates representing the number of
the Conversion Shares in such name or names and such denomination or
denominations as the converting Holder has specified (the "Certificate
Delivery"). If the Conversion Amount is less than the entire outstanding
principal balance as of the Conversion Date, then the Corporation will also
deliver to the converting Holder a new Convertible Note in the principal
amount of any such remaining balance.
(d) On the Conversion Date, the rights of the Holder of this
Convertible Note to receive payment of the Conversion Amount will cease and
the Person or Persons in whose name or names any certificate or
certificates for Conversion Shares are to be issued upon such conversion
will be deemed to have become the holder or holders of record of the shares
of Common Stock represented thereby.
(e) The issuance of certificates for the Conversion Shares will be
made without charge to the Holder for any issuance tax in respect thereof
or other cost incurred by the Corporation in connection with such
conversion and the related issuance of shares of Common Stock. Upon
conversion of this Convertible Note, the Corporation will take all such
actions as are necessary in order to insure that the Common Stock issuable
with respect to such conversion will be validly issued, fully paid and
nonassessable.
(f) If any fractional interest in a share of Common Stock would,
except for the provisions of this subparagraph (f), be deliverable upon any
conversion of this Convertible Note, the Corporation, in lieu of delivering
the fractional share therefor, will pay an amount to the Holder thereof
equal to the fair market value of such fractional interest as of the date
of conversion.
4.3. Adjustments to Conversion Price. Upon the occurrence of any of the
following events, the following adjustments to the Conversion Price shall be
made:
(a) If the number of outstanding shares of Common Stock of the
Company shall be increased by way of a stock dividend, stock split,
recapitalization or similar means, the Conversion Price shall be adjusted
by multiplying the Conversion Price in effect immediately prior to such
stock increase by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such increase, and
the denominator of which shall be the number of shares of Common Stock
outstanding immediately following such increase.
(b) If the number of outstanding shares of Common Stock shall be
reduced by a recapitalization, reverse stock split or otherwise, the
Conversion Price shall be adjusted
_______________________________________________________________________________
CONVERTIBLE NOTE - Page 4
<PAGE>
by multiplying the Conversion Price in effect immediately prior to such
stock reduction by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding immediately prior to such reduction,
and the denominator of which shall be the number of shares of Common Stock
outstanding immediately following such reduction.
(c) If the Corporation shall consolidate with, or merge into, another
corporation, the Holder of this Convertible Note will thereafter receive,
upon the conversion thereof, on equivalent terms of the Convertible Note,
the securities or property to which the Holder of the number of shares of
Common Stock then deliverable upon the conversion of this Convertible Note
would have been entitled upon such consolidation or merger ("Other
Securities"), and the Corporation shall take such steps in connection with
such consolidation or merger as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to any securities or property thereafter deliverable
upon the conversion of this Convertible Note.
5. MISCELLANEOUS.
5.1. Powers and Remedies Cumulative. No right or remedy herein conferred
upon or reserved to the Holder is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Every power and remedy given by this Convertible Note or by law may be exercised
from time to time, and as often as shall be deemed expedient, by the Holder.
5.2. Modification of Convertible Note. This Convertible Note may be
modified with the written consent of the Holder and the Corporation.
5.3. Notices. Any notice required to be given under this Convertible Note
shall be deemed to have been given when written notice, addressed as hereafter
provided, is delivered by hand or is deposited in the United States mail,
postage prepaid, certified mail, return receipt requested at the addresses
specified below:
(a) If to the Corporation:
Dial-Thru International Corporation
8100 Jetstar Drive, Suite 100
Irving, Texas 75083
(b) If to the Holder:
______________________
______________________
______________________
_______________________________________________________________________________
CONVERTIBLE NOTE - Page 5
<PAGE>
The address of either the Corporation or the Holder may be changed upon giving
notice in the manner specified above.
5.4. Successors. All agreements of the Corporation and the Holder in this
Convertible Note shall bind their successors.
5.5. Severability. In case any provision in this Convertible Note shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby,
and the Holder shall have no claim therefor against any party hereto.
5.6. Miscellaneous.
(a) This Convertible Note shall be deemed to be a contract made under
the laws of the State of Texas and for all purposes shall be governed by
and construed in accordance with the laws of said State without regard to
the body of law controlling conflicts of law.
(b) The Holder by acceptance of this Convertible Note agrees to be
bound by the provisions of this Convertible Note which are expressly
binding on such Holder.
(c) If either the Corporation or the Holder commences any legal
proceeding to collect upon or enforce the terms of this Convertible Note,
the prevailing party shall be entitled to recover, in addition to any
damages, its reasonable attorneys' fees and costs incurred in connection
with enforcing the terms of this Convertible Note.
IN WITNESS WHEREOF, the Corporation has caused this instrument to be duly
executed.
Dated: February 4, 2000
DIAL-THRU INTERNATIONAL CORPORATION
By: _______________________________
Roger D. Bryant
Chairman
_______________________________________________________________________________
CONVERTIBLE NOTE - Page 6
<PAGE>
EXHIBIT A
Form of Contingent Warrant
--------------------------
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND
MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE ENCUMBERED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
Dial-Thru International Corporation
COMMON STOCK PURCHASE WARRANT
DATED: August ___, 2000
<TABLE>
<CAPTION>
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<S> <C> <C>
Number of Common Shares: ______ Holder: ___________________
Purchase Price: $2.75 per share ___________________
Expiration Date: August __, 2005 ___________________________
___________________
For identification only. The governing terms of this Warrant are set forth below.
----------------------------------------------------------------------------------------------
</TABLE>
Dial-Thru International Corporation, a Delaware corporation (the
"Company"), hereby certifies that, for value received, _________________ (the
"Holder"), is entitled, subject to the terms set forth below, to purchase from
the Company at any time or from time to time prior to August __, 2005 (the
"Exercise Period"), at the Purchase Price hereinafter set forth, _____
____________ (_______) fully paid and nonassessable shares of Common Stock (as
hereinafter defined) of the Company. The number and character of such shares of
Common Stock and the Purchase Price are subject to adjustment as provided
herein. This Warrant has been issued pursuant to the terms of the Convertible
Note and Warrant Subscription Agreement and a Convertible Note between the
Company and the Holder issued in connection therewith, each dated as of February
___, 2000.
The purchase price per share of Common Stock issuable upon exercise of this
Warrant (the "Purchase Price") shall initially be $2.75; provided, however, that
the Purchase Price shall be adjusted from time to time as provided herein.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall mean Dial-Thru International Corporation
and any entity that shall succeed or assume the obligations of such
corporation hereunder.
_______________________________________________________________________________
EXHIBIT A
<PAGE>
(b) The term "Common Stock" means the Company's common stock, .001 par
value per share.
(c) The term "Warrant Shares" means as of any date during the Exercise
Period, that number of shares of Common Stock which shall be exercisable by
the Holder hereof pursuant to the terms of this Warrant.
1. Exercise of Warrant.
-------------------
1.1. Method of Exercise. This Warrant may be exercised in whole or in
------------------
part (but not as to a fractional share of Common Stock), at any time and
from time to time during the Exercise Period for up to, but not more than,
the number of Warrant Shares at such time, by the Holder hereof by delivery
to the Company at its principal office of (i) a notice of exercise (a
"Notice of Exercise") substantially in the form attached hereto as Exhibit
-------
A, (ii) evidence satisfactory to the Company of the authority of the person
-
executing such Notice of Exercise, (iii) this Warrant, and (iv) payment of
the Purchase Price multiplied by the number of shares of Common Stock for
which this Warrant is being exercised (the "Exercise Price"). Payment of
the Exercise Price shall be made by check or bank draft payable to the
order of the Company or by wire transfer to the account of the Company. The
shares so purchased shall be deemed to be issued as of the close of
business on the date on which the Company shall have received from the
Holder payment in full of the Exercise Price and the other documents
referred to herein (the "Exercise Date").
1.2. Regulation D Restrictions. The Holder hereof represents and warrants
-------------------------
to the Company that it has acquired this Warrant and anticipates acquiring
the shares of Common Stock issuable upon exercise of the Warrant solely for
its own account for investment purposes and not with a view to or for
distributing such securities unless such distribution has been registered
with the Securities and Exchange Commission or an applicable exemption is
available therefor. At the time this Warrant is exercised, the Company may
require the Holder to state in the Notice of Exercise such representations
concerning the Holder as are necessary or appropriate to assure compliance
by the Holder with the Securities Act.
2. Delivery of Stock Certificates, etc., on Exercise. As soon as
-------------------------------------------------
practicable after the exercise of this Warrant, the Company will cause to be
issued in the name of and delivered to the Holder a certificate for the number
of fully paid and nonassessable shares of Common Stock to which the Holder shall
be entitled on such exercise, plus, in lieu of any fractional share to which the
Holder would otherwise be entitled, cash equal to such fraction multiplied by
the then applicable Purchase Price, together with any other stock or other
securities and property (including cash, where applicable) to which the Holder
is entitled upon such exercise pursuant to Section 1 or otherwise.
3. Adjustments on Certain Capital Transactions. On the occurrence of any
-------------------------------------------
of the following events, the following adjustments to the rights granted under
this Warrant shall be made:
_______________________________________________________________________________
EXHIBIT A
<PAGE>
3.1. In case the number of outstanding shares of Common Stock of the
Company shall be increased by way of a stock dividend, stock split,
recapitalization, or other similar means, the number of unexercised shares
of Common Stock covered by this Warrant shall be increased by the amount
that a like number of shares of outstanding Common Stock shall have been
increased as a result of such stock increase and the Purchase Price shall
be adjusted by multiplying the Purchase Price in effect immediately prior
to such stock increase by a fraction, the numerator of which shall be the
number of unexercised shares covered by this Warrant immediately prior to
such stock increase and the denominator of which shall be the number of
unexercised shares of Common Stock covered by this Warrant as adjusted for
such stock increase.
3.2. In case the number of outstanding shares of Common Stock of the
Company shall be reduced by recapitalization, reverse stock split or
otherwise, the number of unexercised shares covered by this Warrant shall
be reduced by the amount that a like number of shares of outstanding Common
Stock shall have been reduced as a result of such stock reduction and the
Purchase Price shall be adjusted by multiplying the Purchase Price in
effect immediately prior to such stock reduction by a fraction, the
numerator of which shall be the number of unexercised shares covered by
this Warrant immediately prior to such stock reduction and the denominator
of which shall be the number of unexercised shares covered by this Warrant
as adjusted for such stock reduction.
3.3. In case the Company shall consolidate with or merge into another
corporation, the holder of this Warrant will thereafter receive, upon the
exercise thereof in accordance with the terms of this Warrant, the
securities or property to which the holder of the number of shares of
Common Stock then deliverable upon the exercise of this Warrant would have
been entitled upon such consolidation or merger ("Other Securities") and
the Company shall take such steps in connection with such consolidation or
merger as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to
any securities or property thereafter deliverable upon the exercise of this
Warrant.
4. Rights as a Shareholder. Holder shall not have any rights as a
-----------------------
shareholder of the Company with respect to the shares subject to this Warrant.
5. Securities Law Requirements. Neither this Warrant nor the Warrant
---------------------------
Shares have been registered under the Securities Act or any state securities or
blue sky laws. Accordingly, upon (a) any transfer of this Warrant, any
transferee of this Warrant or (b) the exercise of this Warrant in whole or in
part, and if the Warrant Shares have not been registered under the Securities
Act, Holder or any other person exercising this Warrant shall, as applicable,
represent and agree in writing satisfactory to the Company that Holder or such
other person (a) is acquiring the shares for the purpose of investment and not
with a view to distribution thereof, (b) knows the shares have not been
registered under the Securities Act or any state securities or blue sky laws,
(c) understands that he must bear the economic risk of said investment for an
indefinite period of time until the shares are registered under the Securities
Act and applicable state securities or blue sky laws or an exemption from such
registration is available, and (d) will not
_______________________________________________________________________________
EXHIBIT A
<PAGE>
solicit any offer to sell or sell all or any portion of the shares other than
pursuant to an opinion of counsel reasonably satisfactory to the Company.
6. Reservation of Stock, etc. Issuable on Exercise of Warrant. The
----------------------------------------------------------
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of this Warrant, all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of this Warrant.
7. Replacement of Warrant. On receipt of evidence reasonably satisfactory
----------------------
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security satisfactory in form and amount
to the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new warrant of like tenor.
8. Notices, etc. All notices and other communications hereunder shall be
------------
personally delivered, telecopied or mailed by first class registered or
certified mail, postage prepaid, at such address of facsimile numbers as may
have been furnished to each party by the other in writing.
9. Miscellaneous. This Warrant and any term hereof may be changed,
-------------
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the internal laws of the State of Texas. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
[SIGNATURE PAGE FOLLOWS]
_______________________________________________________________________________
EXHIBIT A
<PAGE>
DATED as of August __, 2000.
DIAL-THRU INTERNATIONAL CORPORATION
By: _____________________________________
Name: ___________________________________
Title: __________________________________
Address: 8100 Jetstar Drive, Suite 100
Irving, Texas 75063
Fax: (972) 929-1616
HOLDER:
------
_________________________________________
Address: _____________________
_____________________
_____________________
Fax: ________________
_______________________________________________________________________________
EXHIBIT A
<PAGE>
EXHIBIT A
FORM OF NOTICE OF EXERCISE - WARRANT
------------------------------------
(To be executed only upon exercise or conversion
of the Warrant in whole or in part)
To Dial-Thru International Corporation
The undersigned registered holder of the accompanying Warrant hereby
exercises such Warrant or portion thereof for, and purchases thereunder,
______________/1/ shares of Common Stock (as defined in such Warrant) and
herewith makes payment therefor of $__________ as of the date written below. The
undersigned requests that the certificates for such shares of Common Stock be
issued in the name of, and delivered to, _________________________________ whose
address is ____________________________________________________________________.
Dated: ____________________
__________________________________________________
(Name must conform to name of holder as specified
on the face of the Warrant)
By: ______________________________________________
Name: ____________________________________________
Title: ___________________________________________
Address of holder:
__________________________________________________
__________________________________________________
__________________________________________________
Date of exercise: __________
________________________
/1/ Insert the number of shares of Common Stock as to which the accompanying
Warrant is being exercised. In the case of a partial exercise, a new Warrant or
Warrants will be issued and delivered, representing the unexercised portion of
the accompanying Warrant, to the holder surrendering the same.
________________________________________________________________________________
EXHIBIT A
<PAGE>
Schedule of Information
Omitted from Convertible Note
(9 Notes Total)
Holder Note Amount
------ -----------
John L. Strauss $ 300,000
John D. Lelong $ 50,00
Robert B. Irwin $ 100,000
Henry Hermann $ 200,000
Carl P. Jayson $ 50,000
Peter P. Smith $ 125,000
Lester V. Murphy $ 50,000
Fred Kull $ 25,000
Brandon M. Dauson $ 100,000
----------
Total $1,000,000
________________________________________________________________________________
EXHIBIT 4.1
