EXHIBIT 99.7
EXHIBIT A
---------
SECURED NOTE
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER
HEREOF, BY PURCHASING SUCH SECURITIES AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT, OR (C) IF REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS. IN ADDITION, A EXCHANGE AGREEMENT, DATED AS OF THE DATE HEREOF,
A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL EXECUTIVE
OFFICE, CONTAINS CERTAIN ADDITIONAL AGREEMENTS AMONG THE PARTIES, INCLUDING,
WITHOUT LIMITATION, PROVISIONS WHICH (A) LIMIT THE CONVERSION RIGHTS OF THE
HOLDER, (B) SPECIFY VOLUNTARY AND MANDATORY REPAYMENT, PREPAYMENT AND REDEMPTION
RIGHTS AND OBLIGATIONS AND (C) SPECIFY EVENTS OF DEFAULT FOLLOWING WHICH THE
REMAINING BALANCE DUE AND OWING HEREUNDER MAY BE ACCELERATED.
No. 1 $1,540,000.00
Donini, Inc.
SECURED NOTE
Donini, Inc., a New Jersey corporation (together with its successors, the
"Company"), for value received hereby promises to pay to:
Global Capital Funding Group, L.P.
(the "Holder") and registered assigns, the principal sum of One Million Five
Hundred Forty Thousand Dollars ($1,540,000.00) or, if less, the principal amount
of this Note then outstanding, on the Maturity Date by wire transfer of
immediately available funds to the Holder 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 (the "Note"). The Maturity Date is June 7,
2006.
Upon an Event of Default, and until such Default has been cured interest
shall accrue at a rate of 14% per annum ("Default Interest"). All payments of
principal and interest hereunder shall be made for the benefit of the Holder
pursuant to the terms of the Agreement (hereafter defined).
This Note (this "Note") is secured by a Security Agreement (the "Security")
of even date herewith made by the Company (or one of its subsidiaries, as
applicable) and Holder creating a security interest in favor of Holder in
certain of the assets described in the Security (the "Collateral").
This Note is a duly authorized issuance of $1,540,000.00 aggregate
principal amount of Notes of the Company dated as of the date hereof of the
Company referred to in that certain Exchange Agreement dated as of the date
hereof between the Company and the Purchaser named therein (the "Agreement").
The Agreement and the Security contain certain additional agreements among the
parties with respect to the terms of this Note, including, without limitation,
provisions which (A) specify voluntary and mandatory repayment, prepayment and
redemption rights and obligations and (B) specify Events of Default following
which the remaining balance due and owing hereunder may be accelerated. All such
provisions are an integral part of this Note and are incorporated herein by
reference. This Note is transferable and assignable to one or more Persons, in
accordance with the limitations set forth in the Agreement.
The Company shall keep a register (the "Register") in which shall be
entered the names and addresses of the registered holder of this Note and
particulars of this Note held by such holder and of all transfers of this Note.
References to the Holder or "Holders" shall mean the Person listed in the
Register as registered holder of such Notes. The ownership of this Note shall be
proven by the Register.
1. Certain Terms Defined. All terms defined in the Agreement and not
otherwise defined herein shall have for purposes hereof the meanings provided
for in the Agreement.
2. Covenants. Unless the Majority Holders otherwise consent in writing,
the Company covenants and agrees to observe and perform each of its covenants,
obligations and undertakings contained in the Agreement, which obligations and
undertakings are expressly assumed herein by the Company and made for the
benefit of the holder hereof.
3. Payment of Principal. Subject to Section 4 of this Note, the Company
shall repay the remaining unpaid balance of this Note, plus accrued Interest, if
any, on June 7, 2006 (the "Maturity Date"). The Company may, and shall be
obligated to, prepay all or a portion of this Note on the terms specified in the
Agreement.
4. Pre-Payment of Principal. For so long as no Event of Default shall
have occurred and is continuing, the Company may, at its option, pre-pay the
full principal amount of this Note at any time before the Maturity Date at a
pre-payment price equal to (i) $1,392,000 plus liquidated damages of $40,000
until June 7, 2005 and (ii) the outstanding principal amount of the Note, plus
liquidated dames of $40,000 and all accrued and unpaid interest on any day
following June 7, 2005 (the "Prepayment Price").
5. Ranking. This Note shall be senior in respect to any other
indebtedness of the Company outstanding as of the date hereof or incurred
hereafter.
2
6. Right of Conversion. Upon (i) an Event of Default (as defined in the
Agreement or the Security Agreement) or (ii) at any time following June 7, 2005,
at the option of Holder, this Note shall become convertible into Common Stock of
the Company according to the conversion price (the "Conversion Price") which is
defined by the formula F/P, where:
F = Principal amount of Note being converted, together with the accrued and
unpaid Interest through the date of conversion, and
P = 100% of the average of the three lowest bid prices, as reported by
Bloomberg LP, during the twenty (20) trading days immediately preceding the date
of the related notice of conversion.
Conversion pursuant to Section 6(ii) hereof shall not be available unless,
at the time of conversion, the price of the Common Stock of the Company is equal
to or greater than sixty cents ($0.60) per share as reported by Bloomberg LP. To
the extent of any conversion, the Note will be reduced accordingly.
The Company agrees and covenants to execute the necessary documentation to
amend this Note upon Holder's exercise of such right of conversion so that the
Common Shares issuable upon conversion of this Note will have the registration
rights set forth in the Agreement and the Registration Rights Agreement executed
the date hereof between the Company and Holder. In that regard, the Holders
shall be subject to such reasonable restrictions on conversion as may be called
for pursuant to applicable law and to the Bulletin Board Rules and Guidelines,
which restrictions shall be set forth in any such amendment to the Registration
Rights Agreement.
7. Miscellaneous. This Note shall be deemed to be a contract made under
the laws of the State of New Jersey, and for all purposes shall be governed by
and construed in accordance with the laws of said State. The parties hereto,
including all guarantors or endorsers, hereby waive presentment, demand, notice,
protest and all other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this Note, except as specifically
provided herein, and asset to extensions of the time of payment, or forbearance
or other indulgence without notice. The Company hereby submits to the exclusive
jurisdiction of the United States District Courts of New Jersey and of any New
Jersey state court sitting in New Jersey for purposes of all legal proceedings
arising out of or relating to this Note. The Company irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum. The Company hereby irrevocably waives any and all
right to trial by jury in any legal proceeding arising out of or relating to
this Note.
The Holder of this Note by acceptance of this Note agrees to be bound by
the provisions of this Note which are expressly binding on such Holder.
Signature Page on Following Page
3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: October 1, 2004
DONINI, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President
4
5
ANNEX A
REPAYMENT LEDGER
---------------------------------------------------------------------------------------------------------------------------------
Date Principal Balance Interest Paid Principal Paid New Principal Balance Issuer Initials Holder Initials
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
FULL NAME AND ADDRESS OF SUBSCRIBER FOR REGISTRATION PURPOSES:
NAME:
ADDRESS:
TEL NO:
FAX NO:
CONTACT
NAME:
DELIVERY INSTRUCTIONS (IF DIFFERENT FROM REGISTRATION NAME):
NAME:
ADDRESS:
TEL NO:
FAX NO:
CONTACT
NAME:
SPECIAL INSTRUCTIONS: __________________________________________________________