THIS CONVERTIBLE NOTE (THE "NOTE") AND THE SHARES OF COMMON STOCK AND WARRANTS
ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR UNDER THE LAWS OF ANY OTHER JURISDICTION
AND HAVE BEEN OFFERED AND SOLD IN AN "OFFSHORE TRANSACTION" IN RELIANCE UPON
REGULATION S AS PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION.
ACCORDINGLY, THE NOTE AND THE SHARE OF COMMON STOCK AND WARRANTS ISSUABLE
HEREUNDER MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED IN THE
UNITED STATES OR TO A "U.S. PERSON" (AS DEFINED UNDER REGULATION S) EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF GLOBUS INTERNATIONAL RESOURCES CORPORATION
(THE "CORPORATION"). NEITHER THE CORPORATION NOR ITS TRANSFER AGENT SHALL BE
OBLIGATED TO REMOVE THIS LEGEND UNLESS IT SHALL HAVE RECEIVED AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO THE CORPORATION AND ITS TRANSFER AGENT,
STATING THAT SUCH REMOVAL COMPLIES WITH THE REQUIREMENTS OF THE ACT.
GLOBUS INTERNATIONAL RESOURCES CORP.
(a Nevada corporation)
10% Convertible Note due November 2, 1998
Total Note: U.S. $500,000
Dated November 3, 1997
Globus International Resources Corp., a Nevada corporation (the
ACorporation@ and/or the "Maker"), for value received, promises to pay (subject
to the conversion provisions set forth herein) to the order of FTP, Inc., a
Bahamas corporation (the "Holder"), on November 2, 1998 (the "Due Date"), upon
presentation of this convertible note (the "Note"), Five Hundred Thousand
($500,000) Dollars (the "Principal Amount"). The Note is convertible into shares
of common stock (the "Common Stock") and warrants to purchase shares of Common
Stock (the "Warrants"), of the Corporation as provided below in Section 2.
Interest in arrears on the Principal Amount from time to time outstanding at the
rate of 10% per annum as provided herein shall be paid by the Maker.
The Corporation covenants, promises and agrees as follows:
1. Interest. Interest, which shall accrue on the outstanding Principal
Amount shall be payable in semi-annual installments on the first day of January
and the first day of July, with the first payment of such interest to be made on
July 1, 1998. All payments of principal and interest shall be made at the
Holder's address as set forth herein, or at such other place or places as may be
designated in writing by the Holder hereof.
2. Conversion.
2.1. Option to Convert. The Holder shall have the right, at its option, at
any time, to convert, subject to the terms and provisions hereof, the principal
and interest of the Note or any portion of the principal and interest thereof,
into shares of Common Stock at a conversion price as hereinafter provided. In
addition, for each share of Common Stock issued upon any such conversion, the
Holder shall be issued a Warrant to purchase a share of Common Stock exercisable
at $3.625 per shares.
2.2. Exercise of Conversion Right. The conversion right shall be exercised,
if at all, by surrender of the Note to ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Escrow Agent") together with written notice of
election executed by the Holder, which may be in the form which is included with
this Note (hereinafter referred to as the "Conversion Notice") to convert such
Note or a specified portion thereof. The Escrow Agent shall act as escrow agent
in accordance with the terms of the Off-Shore Securities Purchase Agreement
being executed simultaneously herewith. The number of shares of Common Stock
that shall be issuable upon conversion of the Note shall equal the amount of the
outstanding principal for which a Conversion Notice is given, divided by a
conversion price (the "Conversion Price") equal to the lesser of (x) $2.50 per
share of Common Stock or (y) seventy five (75%) percent of the average closing
bid prices of the Corporation's Common Stock as reported by the NASD
Over-the-Counter Bulletin Board (or NASDAQ if the Corporation's shares are then
trading on NASDAQ), for the five (5) consecutive trading days immediately
preceding the Date of Conversion (as defined below), subject to adjustment as
provided in Section 4.
As promptly as practicable after surrender as herein provided, of the Note
for conversion and the receipt of the Conversion Notice relating thereto, the
Corporation shall deliver or cause to be delivered upon the written order of the
Holder of the Note so surrendered, a certificate or certificates representing
the number of fully paid and non-assessable shares of Common Stock and Warrants
into which such Note is to be converted in accordance with the provisions
hereof, registered in such name or names as are specified in the Conversion
Notice. In case any Note shall be surrendered for partial conversion, the
Corporation shall execute and deliver to the Escrow Agent, without charge to the
Holder, a new Note or Notes in authorized denominations, in an aggregate
principal amount equal to the unconverted portion of the surrendered Note. Such
conversion shall be deemed to have been effected at the close of business on the
date when the Note shall have been surrendered for conversion together with the
Conversion Notice, so that the rights of the Holder as such Holder shall cease
at such time and the persons or persons entitled to receive the shares of Common
Stock and Warrants upon conversion of the Note
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shall be treated for all purposes as having become the record holder or holders
of such shares of Common Stock and Warrants.
2.3. Mechanics of Conversion. No fractional shares of Common Stock shall be
issued upon conversion of this Note. In lieu thereof, the Corporation shall
round up to the nearest whole share. In the case of a dispute as to the
calculation of the Conversion Price, the Corporation's calculation shall be
deemed conclusive absent manifest error. In order to convert this Note into full
shares of Common Stock, the Holder shall surrender this Note, duly endorsed, to
the Escrow Agent, together with the Conversion Notice that it elects to convert
the same, the amount of principal to be so converted, and a calculation of the
Conversion Price (with an advance copy of the Note and the notice by facsimile);
provided, however, that the Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon such conversion
unless either the Note is delivered to the Escrow Agent as provided above, or
the Holder notifies the Corporation that such Note has been lost, stolen or
destroyed and executes an agreement satisfactory to the Corporation to indemnify
the Corporation from any loss incurred by it in connection with such Note.
Within three (3) business days after receiving a properly submitted
Conversion Notice, the Escrow Agent shall instruct Continental Stock Transfer
Corporation or any duly appointed transfer agent of the Corporation subsequently
designated (the "Transfer Agent") to issue and deliver as promptly as
practicable to the Escrow Agent at the address of the Escrow Agent as
hereinafter set forth, a certificate or certificates for the number of shares of
Common Stock and Warrants to which it shall be entitled (subject to the delivery
of the original Note to the Escrow Agent). In the absence of an opinion of
counsel to the Holder reasonably acceptable to the Corporation indicating that
the securities underlying this Note may be issued without restrictive legends
pursuant to an exemption from the Act, or the registration thereof, the
certificate or certificates representing such underlying securities shall bear a
legend substantially similar to that set forth on this Note. The date of
conversion (the "Date of Conversion") shall be the date on which the Conversion
Notice is received by the Escrow Agent and the Corporation and the person or
persons entitled to receive the shares of Common Stock and Warrants issuable
upon such conversion shall be treated for all purposes as the record Holder or
Holders of such shares of Common Stock and Warrants on such date.
2.4. Reservation of Shares. The Corporation shall at all times reserve and
keep available, free from preemptive rights, unissued or treasury shares of
Common Stock sufficient to effect the conversion of this Note; and if at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding
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principal of this Note, the Corporation will take such corporate action as may
be necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purpose.
3. Default.
3.1. Conversion of this Note shall, at the election of the Holder, be
accelerated immediately upon the occurrence of any of the following events (a
"Default Event"):
(a) The non-payment by the Corporation when due of principal and interest
as provided in this Note.
(b) If the Corporation (i) applies for or consents in writing to the
appointment of, or if there shall be a taking of possession by, a receiver,
trustee or liquidator for the Corporation of all or substantially all of its
property; (ii) admits in writing its inability to pay its debts as they become
due; (iii) makes a general assignment for the benefit of creditors; (iv) files
any petition for relief under the Bankruptcy Code or any similar federal or
state statute; or (v) has assessed or imposed against it, or if there shall
exist, any general or specific lien for any federal, state or local taxes
against any of its property or assets other than liens for taxes not yet due or
being contested in good faith.
(c) Any failure by the Corporation to issue and deliver shares of Common
Stock and Warrants as provided herein upon conversion of this Note, in whole or
in part.
Notwithstanding the foregoing, the Corporation shall have fifteen (15) days
from the receipt of a written Notice of Default to cure said Default Event, and
no acceleration of conversion hereunder shall be deemed to have occurred until
the thirtieth day after the Corporation's receipt of a written Notice of Default
from the Holder of this Note. Upon such cure, the terms of this Note shall
continue in effect.
3.2. Each right, power or remedy of the Holder hereof upon the occurrence
of any Default Event as provided for in this Note or now or hereafter existing
at law or in equity or by statute shall be cumulative and concurrent and shall
be in addition to every other right, power or remedy provided for in this Note
or now or hereafter existing at law or in equity or by statute, and the exercise
by the Holder of any one or more of such rights, powers or remedies shall not
preclude the simultaneous or later exercise by the Holder hereof of any or all
such other rights, powers or remedies.
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4. Anti-Dilution Adjustments. The Conversion Price shall be subject to
adjustment as follows:
(a) In case the Corporation shall at any time subdivide the outstanding
shares of Common Stock issuable upon conversion of the Note, the conversion
price in effect immediately prior to such subdivision (including the exercise
price of the Warrants) shall be proportionately decreased, and in case the
Corporation shall at any time combine the outstanding shares of Common Stock and
Warrants issuable upon conversion of the Note, the conversion price in effect
immediately prior to such combination shall be proportionately increased. Any
such adjustment shall be effective at the close of business on the date such
subdivision or combination shall become effective.
(b) In case of any reclassification or change of outstanding shares of
Common Stock and Warrants issuable upon conversion of this Note (other than a
change in par value, or from par value to no par value, or from no par value to
par value), or in case of a consolidation or merger of the Corporation with or
into another corporation (other than a merger or consolidation in which the
Corporation is the continuing corporation and which does not result in a
reclassification of outstanding shares of Common Stock of the class issuable
upon the conversion of this Note except where the security holders of the
Corporation are entitled to receive securities of another issuer), or in case of
any sale or conveyance to another corporation of the property of the Corporation
as an entirety or substantially as an entirety, the Corporation or such
successor or purchasing corporation, as the case may be, shall execute an
instrument providing that the Holder of this Note shall have the right
thereafter to convert this Note into the kind and amount of shares of stock and
other securities and property receivable upon such reclassification,
consolidation, merger, sale, or conveyance by the Holder of the number of shares
of Common Stock of the Corporation into which this Note might have been
converted immediately prior to such reclassification, consolidation, merger,
sale, or conveyance. Such interest shall provide for adjustments which shall be
as nearly equivalent as may be practicable to the adjustments provided for
herein. The foregoing provisions of this Note shall similarly apply to
successive reclassification of shares of Common Stock and to successive
consolidations, mergers, sales, or conveyances.
5. Failure to Act and Waiver. No failure or delay by the Holder hereof to
insist upon the strict performance of any term of this Note or to exercise any
right, power or remedy consequent upon a Default Event hereunder shall
constitute a waiver of any such term or of any such breach, or preclude the
Holder hereof from exercising any such right, power or remedy at any later time
or
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times. By accepting payment after the due date of any amount payable under this
Note, the Holder hereof shall not be deemed to waive the right either to require
payment when due of all other amounts payable under this Note, or to declare a
Default Event for failure to effect such payment of any such other amount.
The failure of the Holder of this Note to give notice of any failure or
breach of the Corporation under this Note shall not constitute a waiver of any
right or remedy in respect of such continuing failure or breach or any
subsequent failure or breach.
6. Consent to Jurisdiction. The Corporation hereby agrees and consents that
any action, suit or proceeding arising out of this Note shall be brought in any
appropriate court in the State of New York, and by the issuance and execution of
this Note the Corporation irrevocably consents to the jurisdiction of each such
court.
7. Transfer/Negotiability. This Note shall be transferred on the books of
the Corporation only by the registered Holder hereof or by its attorney duly
authorized in writing or by delivery to the Corporation of a duly executed
assignment. The foregoing notwithstanding, the Corporation shall not transfer
this Note nor any of the shares of Common Stock or Warrants issuable upon
conversion hereunder except pursuant to registration under the act or an
available exemption from the registration requirements of the Act. Neither the
Corporation nor its Transfer Agent shall be obligated to effect any such
transfer unless it shall have received an opinion of counsel to the Holder
reasonably satisfactory to the Corporation and its Transfer Agent stating that
such removal of the legend complies with the provisions of the Act. The
Corporation shall be entitled to treat any holder of record of the Note as the
holder in fact thereof and shall not be bound to recognize any equitable or
other claim to or interest in this Note in the name of any other person, whether
or not it shall have express or other notice thereof, save as expressly provided
by the laws of New York.
8. Notices. All notices and communications under this Note shall be in
writing and shall be either delivered in person or accompanied by a signed
receipt therefor or mailed first-class United States certified mail, return
receipt requested, postage prepaid, and addressed as follows:
if to the Corporation, to:
Globus International Resources Corp.
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, President
6
if to the Holder, to:
FTP, Inc.
▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
if to the Escrow Agent:
▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
9. Governing Law. This Note shall be governed by and construed and enforced
in accordance with the laws of the State of New York, or, where applicable, the
laws of the United States, without regard to conflicts of law.
10. Incorporation by Reference. The terms and conditions set forth in that
certain Offshore Securities Subscription Agreement between the Corporation, the
Holder and the Escrow Agent dated as of November 3, 1997 are incorporated herein
by this reference, and any transferee or subsequent holder of this Note (or the
shares of Common Stock and Warrants issued upon conversion thereof) shall be
subject to and bound by the provisions of such agreement.
IN WITNESS WHEREOF, the Corporation has caused this Note to be duly
executed as of the 3rd day of November 1997.
GLOBUS INTERNATIONAL RESOURCES CORP.
By:_____________________________
▇▇▇▇▇ ▇▇▇▇▇▇, President
Attest
_____________________________
Secretary
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CONVERSION NOTICE
GLOBUS INTERNATIONAL RESOURCES CORP.
The undersigned holder (the "Holder") of a 10 %, $500,000 principal amount
Convertible Promissory Note (the "Note"), hereby elects, To convert U.S. $
of said Note (into shares of common stock of the Company and
warrants to purchase shares of common stock of the Company
exercisable at $3.625 per share. In accordance with the terms of an Offshore
Securities Purchase Agreement executed by the Holder of the Note and accepted
by the Company. The Holder hereby directs that any such shares and warrants be
issued in the name of and delivered to the Holder or if so specified, to the
person or entity named below.
Dated_______________________
____________________________
Name
_________________________
Signature
_______________________________
Address
_______________________________
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