PROMISSORY NOTE
$____________ _______, 1999
FOR VALUE RECEIVED, Global Eco-Logical Services, Inc. (hereinafter
referred to as the "Maker"), jointly and severally, promises to pay to the
order of ________________________ ("Holder"), or assigns, at
_______________________________, or at such other place as the Holder may
from time to time designate in writing to the Maker, in lawful money of the
United States of America, the principal sum of _______________ Dollars and
No Cents ($________), or so much thereof as may be hereafter disbursed,
together with interest thereon from date set forth above at the rate of six
(6%) percent per annum, simple interest, until maturity. The principal and
interest due under this Note shall be paid semi-annually.
Interest shall accrue only on the amount of principal actually
outstanding from time to time. The indebtedness evidenced by this Note may
be prepaid in whole or in part at any time without penalty or premium. Any
payment of principal or interest on this Note which is not made when due,
as herein provided, shall bear interest at the same rate specified above
unless the Note is accelerated, in which case interest shall accrue as
specified in the following paragraph.
Upon the failure of the Maker to pay, when due, any one of the
installments hereon, the Holder shall have the option and right to declare
the amount of the total unpaid principal balance hereafter due and payable
if the Maker fails to cure such default within ten (10) days after written
notice to Maker of a notice of default and intention to accelerate sent to
the Maker by certified or registered mail to the last address of Maker
known to the Holder. Furthermore, in the event any payment is not made
within five (5) days of its due date, the Maker shall pay a late charge of
four (4%) percent of the amount of the payment, provided that only one (1)
such late charge may be collected on any particular payment however long
that payment shall remain past due. Upon acceleration of the unpaid
principal balance pursuant to this Note, all amounts due under the Note
will bear interest at 18% per annum until paid in full.
If from any circumstances whatsoever fulfillment of any provision of
this Note at the time performance of such provision shall be due shall
involve transcending the limit prescribed by any applicable usury statute
or any other applicable law, with regard to obligations of like character
and amount, then, ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity, so that in no event shall any
exaction be possible under this Note or under any other instrument
evidencing or securing the indebtedness evidenced hereby, that is in excess
of the current limit of such validity, but such obligation shall be
fulfilled to the limit of such validity.
Presentment for payment, demand, protest and notice of demand, notice
of dishonor and notice of nonpayment and all other notices are hereby
waived by Maker. No failure to accelerate the debt evidenced hereby by
reason of default hereunder, acceptance of a past due installment, or
indulgences granted from time to time shall be construed (1) as a novation
of this Note or as a restatement of the indebtedness evidenced hereby or as
a waiver of such right of acceleration or of the right of the Holder
thereafter to insist upon strict compliance with the terms of this Note, or
(2) to prevent the exercise of such right of acceleration or any other
right granted hereunder or by applicable law; and Maker hereby expressly
waives the benefit of any statute or rule of law or equity now provided, or
which may hereafter be provided, which would produce a result contrary to
or in conflict with the foregoing. No extension of the time for the
payment of this Note or any installment due hereunder, made by agreement
with any person now or hereafter liable for the payment of this Note shall
operate to release, discharge, modify, change or affect the original
liability of the Maker under this Note, either in whole or in part, unless
the Holder agrees otherwise in writing. This Note may not be changed
orally, but only by an agreement in writing signed by the party against
whom enforcement of any waiver, change, modification or discharge is
sought.
Maker hereby waives and renounces for itself, its heirs, successors
and assigns, all rights to the benefits of any statute of limitations, any
moratorium, reinstatement, marshaling, forbearance, valuation, stay,
extension, redemption, appraisement and exemption now provided, or which
may hereafter by provided, by the Constitution and laws of the United
States of America and of any state thereof, against the enforcement and
collection of the obligations evidenced by this Note.
This Note shall be convertible at the office of Maker, and at such
other place or places, if any, as the Board of Directors of the Maker may
designate, into fully paid and non-assessable shares (calculated as to each
conversion to the nearest l/100th of a share) of Common Stock of the Maker.
The number of shares of Common Stock issuable upon conversion of this Note
shall be equal to $1,000.00 divided by the Conversion Price in effect at
the time of conversion determined as hereinafter provided for each $1,000
in face amount of this Note which is presented for conversion by the Holder
hereof. The price at which shares of Common Stock shall be delivered upon
conversion (the "Conversion Price") shall be initially $6.50 per share of
Common Stock; provided, however, that such Conversion Price shall be
subject to adjustment from time to time in certain instances as hereinafter
provided. No payment or adjustment shall be made in respect of dividends
previously declared and paid on the Common Stock upon conversion of part or
all of this Note into shares of Common Stock. If the Maker elects to prepay
part or all of this Note, such right of conversion shall cease and
terminate, as to the portion designated for prepayment, at the close of
business on the prepayment date, unless the Maker defaults in the
prepayment. Further, if conversion is designated, only the face amount of
the Note herein shall be used to calculate the number of shares issued
hereunder. No fractional shares of Common Stock will be issued, and instead
the number of shares of Common Stock to be issued on conversion of this
Note will, to the extent necessary, be rounded up to the nearest whole
number of shares.
Before the Holder of this Note shall be entitled to convert the same
into Common Stock, the Holder shall surrender this Note to the Maker, duly
endorsed to the Maker or in blank, at the office of the Maker or at such
other place or places, if any, as the Board of Directors of the Maker has
designated, and shall give written notice to the Maker at said office or
place that it elects to convert the same and shall state in writing therein
the name or names (with addresses) in which it wishes the certificate or
certificates for Common Stock to be issued. The Maker will, as soon as
practicable thereafter, issue and deliver at said office or place to such
Holder, or to its nominee or nominees, certificates for the number of full
shares of Common Stock to which it shall be entitled as aforesaid. This
Note shall be deemed to have been converted as of the close of business on
the date of the surrender of the Note for conversion as provided above, and
the person or persons entitled to receive the Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or
holders of such Common Stock as of the close of business on such date. In
the event part or all of this Note is presented for conversion, the Holder
of this Note will be entitled to receive all interest on this Note which
has accrued to the date of conversion on that portion of the Note which is
converted, which interest will be payable on the next regularly scheduled
interest payment date on this Note.
The Conversion Price in effect at any time shall be subject to
adjustment as follows:
(i) In case the Maker shall (A) declare a dividend on its Common Stock
in shares of its capital stock, (B) subdivide its outstanding shares of
Common Stock, (C) combine its outstanding shares of Common Stock into a
smaller number of shares, or (D) issue by reclassification of its Common
Stock (including any such reclassification in connection with a
consolidation or merger in which the Maker is the continuing corporation)
any shares of its capital stock, the Conversion Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification shall be proportionately
adjusted so that if this Note is surrendered for conversion after such
time, the Holder shall be entitled to receive the kind and amount of shares
of Common Stock which it would have owned or have been entitled to receive
had this Note been converted immediately prior to such time. Such
adjustment shall be made successively whenever any event listed above shall
occur.
(ii) In case the Maker shall distribute to all holders of its Common
Stock (including any such distribution made in connection with a
consolidation or merger in which the Maker is the continuing corporation)
evidences of its indebtedness or assets (excluding dividends or other
distributions paid out of earned surplus), the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying
the Conversion Price in effect immediately prior to the close of business
on the date fixed for the determination of stockholders entitled to receive
such distribution by a fraction of which the numerator shall be the Current
Market Price per share of the Common Stock on the date fixed for such
determination less the fair market value (as determined by the Board of
Directors of the Maker, whose determination shall be conclusive and
described in a Board Resolution of the Maker filed with the Transfer Agent)
of the portion of the assets or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator shall be such
Current Market Price per share of the Common Stock on the date fixed for
such determination, such adjustment to become effective immediately prior
to the opening of business of the day following the date fixed for the
determination of stockholders entitled to receive such distribution.
(iii) For the purpose of any computation under paragraph (ii) above,
the "Current Market Price" on any date shall be deemed to be the average of
the daily closing prices per share of Common Stock for 20 consecutive
business days selected by the Maker commencing 35 business days before such
date. The closing price for each day shall be the last sale price or, in
case no such sale takes place on such day, the average of the closing bid
and asked prices, in either case on the New York Stock Exchange, or, if the
Common Stock is not listed or admitted to trading on such Exchange, on the
principal national securities exchange on which the Common Stock is listed
or admitted to trading or, if it is not listed or admitted to trading on
any national securities exchange, the average of the closing bid and asked
prices as furnished by any member of the National Association of Securities
Dealers, Inc., selected from time to time by the Maker for that purpose,
or, if no member of the National Association of Securities Dealers, Inc.
furnishes a bid or ask price for the Common stock, the book value of the
Common Stock as determined from an unaudited balance sheet of the Maker
prepared according to generally accepted accounting principles as of a date
which is 90 days preceding the date of the conversion.
(iv) All calculations under this paragraph (6) shall be made to the
nearest cent or the nearest l/100th of a share, as the case may be.
(v) In case of any consolidation or merger of the Maker with or into
any other corporation (other than a consolidation or merger in which the
Maker is the continuing corporation), or in case of any sale or transfer of
all or substantially all of the assets of the Maker, the Holder of this
Note shall after such consolidation, merger, sale or transfer have the
right to convert this Note into the kind and amount of shares of stock and
other securities and property which such holder would have been entitled to
receive upon such consolidation, merger, sale or transfer if he had held
the Common Stock issuable upon the conversion of this Note immediately
prior to such consolidation, merger, sale or transfer.
(vi) In the event that at any time, as a result of an adjustment made
pursuant to paragraph (i) above, the holder of this Note surrendered for
conversion shall become entitled to receive any securities other than
shares of Common Stock, thereafter the amount of such other securities so
receivable upon conversion of this Note shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Common Stock contained in paragraphs
(i) to (v), inclusive, above, and the provisions of this paragraph (6) with
respect to the Common Stock shall apply on like terms to any such other
securities.
(vii) No adjustment in the Conversion Price shall be required unless
such adjustment would require a change of at least l% in such price;
provided, however, that any adjustments which by reason of this paragraph
(vii) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment.
Whenever the Conversion Price is adjustable as herein provided, the
Maker shall notify the Holder of this Note of the change in the Conversion
Price within 30 days of any such change.
The Maker will at all times reserve, keep available and be prepared to
issue, free from any preemptive rights, out of its authorized but unissued
Common Stock, solely for the purpose of effecting conversion of this Note,
the full number of shares of Common Stock then issuable upon the conversion
of all outstanding Notes. The Maker shall from time to time, in accordance
with the laws of the State of Georgia, endeavor to amend its Articles of
Incorporation to increase the authorized amount of its Common Stock if at
any time the authorized amount of its Common Stock remaining unissued shall
be not sufficient to permit the conversion of this Note and all other
securities of the Maker which are convertible into Common Stock. The Maker
shall, if any shares of Common Stock required to be reserved for issuance
upon conversion of this Note pursuant to this paragraph (6) require
registration with or approval of any governmental authority under any
Federal or state law before such shares may be issued upon such conversion,
endeavor to cause such shares to be so registered or approved as
expeditiously as possible.
The Maker will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of this
Note pursuant hereto. The Maker shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved in the issue
or transfer and delivery of shares of Common Stock in a name other than
that in which this Note so converted was originally issued, and no such
issue or delivery shall be made unless and until the person requesting such
issue has paid to the Maker the amount of any such tax or has established
to the satisfaction of the Maker that such tax has been paid.
In the event that this Note is collected by law or through an attorney
at law, or under advice therefrom, the Maker agrees to pay all costs of
collection, including reasonable attorneys' fees.
This Note shall be governed by the laws of the State of Georgia.
Given under the hand and seal of the undersigned, the date and year
indicated above.
GLOBAL ECO-LOGICAL SERVICES, INC.,
___________________________
By:___________________,
Its: President