-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CwcG9Mtjp+daVhTnS0kUHdpofNQcYrbw62jHrg1s28iYLPB1cFO9JsUG2w3Uwp2m N8jFMoqmDfwqVhQBroJA3A== 0000950170-98-000401.txt : 19980304 0000950170-98-000401.hdr.sgml : 19980304 ACCESSION NUMBER: 0000950170-98-000401 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980224 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980303 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MANSUR INDUSTRIES INC CENTRAL INDEX KEY: 0000934851 STANDARD INDUSTRIAL CLASSIFICATION: MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT [3590] IRS NUMBER: 650226813 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-21325 FILM NUMBER: 98556435 BUSINESS ADDRESS: STREET 1: 8305 NW 27TH STREET STREET 2: SUITE 107 CITY: MIAMI STATE: FL ZIP: 33122 BUSINESS PHONE: 3055938015 MAIL ADDRESS: STREET 1: 8305 NW 27TH STREET STREET 2: SUITE 107 CITY: MIAMI STATE: FL ZIP: 33122 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): FEBRUARY 24, 1998 MANSUR INDUSTRIES INC. (Exact name of registrant as specified in its charter) FLORIDA (State or other jurisdiction of incorporation) 000-21325 65-0226813 (Commission File Number) (I.R.S. Employer Identification No.) 8305 N.W. 27TH STREET, SUITE 107 MIAMI, FLORIDA 33122 (Address of principal executive offices) (Zip Code) (305) 593-8015 (Registrant's telephone number, including area code) (NOT APPLICABLE) (Former name or former address, if changed since last report) Page 1 of 2 Pages Exhibit Index at Page 2 ITEM 5. OTHER EVENTS. On February 24, 1998, Mansur Industries Inc. (the "Registrant") consummated a private placement of $17 million aggregate principal amount of 8 1/4% Subordinated Convertible Notes Due 2003. A copy of the press release issued by the Registrant on February 25, 1998 announcing the transaction is attached hereto as Exhibit 99.1 and incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits The following Exhibits are provided in accordance with the provisions of Item 601 of Regulation S-K and are filed herewith unless otherwise noted. EXHIBIT INDEX 4.1 Form of Subordinated Convertible Note Purchase Agreement dated as of February ___, 1998 between Mansur Industries Inc. and each investor signatory. 4.2 Form of 8 1/4% Subordinated Convertible Notes Due 2003. 99.1 Press Release of Mansur Industries Inc. dated February 25, 1998. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MANSUR INDUSTRIES INC. Date: March 3, 1998 By: /s/RICHARD P. SMITH ------------------------- Richard P. Smith Chief Financial Officer Page 2 of 2 Pages EXHIBIT INDEX EXHIBIT DESCRIPTION - ------- ----------- 4.1 Form of Subordinated Convertible Note Purchase Agreement dated as of February ___, 1998 between Mansur Industries Inc. and each investor signatory. 4.2 Form of 8 1/4% Subordinated Convertible Notes Due 2003. 99.1 Press Release of Mansur Industries Inc. dated February 25, 1998. EX-4.1 2 EXHIBIT 4.1 SUBORDINATED CONVERTIBLE NOTE PURCHASE AGREEMENT SUBORDINATED CONVERTIBLE NOTE PURCHASE AGREEMENT ("Agreement") dated as of February ___, 1998 between Mansur Industries Inc., a Florida corporation (the "Company"), and each person or entity who executes a counterpart signature page to this Agreement and is listed as an investor on Schedule I attached to this Agreement (each individually an "Investor" and collectively the "Investors"). W I T N E S S E T H: WHEREAS, the Company desires to sell and issue to the Investors, and the Investors desire to purchase from the Company, up to an aggregate principal amount of $17,000,000 of the Company's eight and one-quarter percent (8 1/4%) Subordinated Convertible Notes Due February 23, 2003 with the terms set forth in the Notes, in the identical form and substance of Exhibit A attached hereto (the "Notes") on the terms and conditions set forth herein; and WHEREAS, the Notes will be convertible into shares ("Common Shares") of common stock, par value $0.001, of the Company ("Common Stock"), pursuant to the terms set forth in the form of Note, and the Investors will have registration rights with respect to such Common Shares issuable upon conversion, pursuant to the terms herein; NOW, THEREFORE, in consideration of the foregoing premises and the covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: CERTAIN DEFINITIONS. As used in this Agreement, the following terms shall have the following respective meanings: "Closing" and "Closing Date" shall have the meanings ascribed to such terms in Section 1.3 herein. "Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Registrable Securities" shall mean: (i) the Common Shares issued to each Holder or its permitted transferee or designee upon conversion of the Notes or upon any stock split, stock dividend, recapitalization or similar event with respect to such Common Shares; (ii) any securities issued or issuable to each Holder upon the exchange or conversion of any Notes or Common Shares; or (iii) any other security of the Company issued as a dividend or other distribution with respect to, in exchange of or in replacement of Registrable Securities. The terms "register", "registered" and "registration" shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement. "Registration Expenses" shall mean all expenses to be incurred by the Company in connection with each Holder's registration rights under this Agreement, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, blue sky fees and expenses, reasonable fees and disbursements of Orrick, Herrington & Sutcliffe LLP or other counsel for Holders (using a single counsel selected by a majority in the interest of the Holders) for a "due diligence" examination of the Company and review of the Registration Statement and related documents, and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company, which shall be paid in any event by the Company). "Selling Expenses" shall mean all underwriting discounts and selling commissions applicable to the sale of Registrable Securities and all fees and disbursements of counsel for Holders not included within "Registration Expenses". "Holder" and "Holders" shall include an Investor or the Investors, respectively, and any transferee of the Notes or Common Shares or Registrable Securities which have not been sold to the public to whom the registration rights conferred by this Agreement have been transferred in compliance with this Agreement. "Registration Statement" shall have the meaning set forth in Section 4.1(a) herein. "Regulation D" shall mean Regulation D as promulgated pursuant to the Securities Act, and as subsequently amended. "Securities Act" or "Act" shall mean the Securities Act of 1933, as amended. ARTICLE I PURCHASE AND SALE OF NOTES Section 1.1 PURCHASE AND SALE OF NOTES. Upon the following terms and conditions, the Company shall issue and sell to each Investor severally, and each Investor severally shall purchase from the Company, the principal amount of Notes indicated next to such Investor's name on Schedule I attached hereto. Section 1.2 PURCHASE PRICE. The Notes shall be offered in $1,000 denominations (the "Purchase Price"). 2 Section 1.3 THE CLOSING. (a) The initial closing of the purchase and sale of the Notes (the "initial Closing"), shall take place at the offices of Orrick, Herrington & Sutcliffe LLP, at 10:00 a.m., local time following acceptance by the Company of subscriptions representing not less than $11,000,000 aggregate principal amount of Notes on the later of the following: (i) the date on which the last to be fulfilled or waived of the conditions set forth in Article V hereof and applicable to any Closing Date (as defined herein) shall be fulfilled or waived in accordance herewith, or (ii) such other time and place and/or on such other date as the Investors and the Company may agree. Subsequent Closings, if any, will be held at such times as are agreed upon by the Company and the Investors. The date on which the initial Closing and any subsequent Closings, if any, occurs is referred to herein as the "Closing Date." (b) On any Closing Date, the Company shall deliver to each Investor certificates (with the number of and denomination of such certificates reasonably requested by such Investor) representing the Notes purchased hereunder by such Investor registered in the name of such Investor or its nominee or deposit such Notes into accounts designated by such Investor, and such Investor shall deliver to the Company the Purchase Price for the principal amount of Notes purchased by such Investor hereunder by wire transfer in immediately available funds to an account designated in writing by the Company. In addition, each party shall deliver all documents, instruments and writings required to be delivered by such party pursuant to this Agreement at or prior to any Closing Date. ARTICLE II REPRESENTATIONS AND WARRANTIES Section 2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby makes the following representations and warranties to each of the Investors (except for those Investors who did not close on the initial Closing Date) as of the date hereof and the initial Closing Date. The Company hereby makes the following representations and warranties to each of the Investors who did not close on the initial Closing Date as of the date hereof and any subsequent Closing Date: (a) ORGANIZATION AND QUALIFICATION; MATERIAL ADVERSE EFFECT. Each of the Company and its Subsidiary (as defined below) is a corporation duly incorporated and existing in good standing under the laws of its respective jurisdiction of incorporation and the Company and the Subsidiary each have the requisite corporate power to own its properties and to carry on its business as now being conducted. The Company owns 100% of the outstanding capital stock of Systemone Technologies Inc., a Florida corporation (the "Subsidiary"). The Company does not have any other direct or indirect subsidiaries. Each of the Company and the Subsidiary is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary other than those in which the failure so to qualify would not have a Material Adverse Effect. "Material Adverse Effect" means any adverse effect on the business, operations, properties, prospects, or financial condition of the entity with respect to which such term is used 3 and which is material to such entity and other entities controlling or controlled by such entity taken as a whole, and any material adverse effect on the transactions contemplated under this Agreement or any other agreement or document contemplated hereby or thereby. (b) AUTHORIZATION; ENFORCEMENT. (i) The Company has the requisite corporate power and authority to enter into and perform this Agreement and to issue the Notes in accordance with the terms hereof, (ii) the execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby, including the issuance of the Notes, have been duly authorized by all necessary corporate action, and no further consent or authorization of the Company or its Board of Directors or stockholders is required, (iii) this Agreement has been duly executed and delivered by the Company, and (iv) this Agreement constitutes the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of creditors' rights and remedies or by other equitable principles of general application. (c) CAPITALIZATION. The authorized capital stock of the Company consists of 25,000,000 shares of Common Stock and 1,500,000 shares of preferred stock; without giving effect to this offering, there are 4,601,309 shares of Common Stock and no shares of preferred stock issued and outstanding, respectively. All of the outstanding shares of the Common Stock have been validly issued and are fully paid and non-assessable. No shares of Common Stock or preferred stock are entitled to preemptive rights; without giving effect to this offering, 213,180 shares of Common Stock (including any shares of Common Stock issuable upon the exercise of any outstanding options, warrants or rights or upon the exchange or conversion of any exchangeable or convertible securities of the Company) are entitled to registration rights; and without giving effect to this offering, there are outstanding options for 113,180 shares of Common Stock and outstanding warrants for 100,000 shares of Common Stock. There are no other scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights exchangeable or convertible into, any shares of capital stock of the Company, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of capital stock of the Company or options, warrants, scrip, rights to subscribe to, or commitments to purchase or acquire, any shares, or securities or rights convertible into shares, of capital stock of the Company (except as contemplated by this Agreement or disclosed in the SEC Documents (as defined below)). (d) ISSUANCE OF COMMON SHARES. The Common Shares issuable upon conversion of the Notes (the "Underlying Shares") are duly authorized and will be as of any Closing Date reserved for issuance and, upon such conversion in accordance with the terms of the Note, such Underlying Shares will be validly issued, fully paid and non-assessable, free and clear of any and all liens, claims and encumbrances, and the holders of such Underlying Shares shall be entitled to all rights and preferences accorded to a holder of Common Shares. The outstanding Common Shares are currently listed on the Nasdaq SmallCap Market ("Nasdaq"). (e) NO CONFLICTS. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions 4 contemplated hereby and thereby do not and will not (i) result in a violation of the Charter or By-Laws of the Company or the Subsidiary or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or the Subsidiary is a party, or result in a violation of any federal, state, local or foreign law, rule, regulation, order, judgment or decree (including Federal and state securities laws and regulations) applicable to the Company or the Subsidiary or by which any property or asset of the Company or the Subsidiary is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect); provided that, for purposes of such representation as to Federal, state, local or foreign law, rule or regulation, no representation is made herein with respect to any of the same applicable solely to the Investors and not to the Company or the Subsidiary. Neither the business of the Company nor of the Subsidiary is being conducted in violation of any law, ordinance or regulation of any governmental entity, except for violations which either singly or in the aggregate do not and will not have a Material Adverse Effect. The Company is not required under Federal, state, local or foreign law, rule or regulation to obtain any consent, authorization or order of, or to make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or issue and sell the Notes in accordance with the terms hereof and issue the Underlying Shares upon conversion thereof, except for the registration provisions provided for herein, provided that, for purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the relevant representations and agreements of the Investors herein. (f) SEC DOCUMENTS; FINANCIAL STATEMENTS. The Common Stock of the Company is registered pursuant to Section 12(g) of the Exchange Act and the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the Commission pursuant to the reporting requirements of the Exchange Act, including material filed pursuant to Section 13(a) or 15(d), in addition to one or more registration statements and amendments thereto heretofore filed by the Company with the Commission (all of the foregoing including filings incorporated by reference therein being referred to herein as the "SEC Documents"). The Company has delivered or made available to the Investors true and complete copies of all SEC Documents (including, without limitation, proxy information and solicitation materials and registration statements) filed with the Commission since September 27, 1996 and all annual SEC Documents filed with the Commission since September 27, 1996. The Company has not provided to any Investor any information which, according to applicable law, rule or regulation, should have been disclosed publicly by the Company but which has not been so disclosed. As of their respective dates, the SEC Documents (as amended by any amendments filed prior to the date of this Agreement or any Closing Date and provided to each Investor) complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder and other federal, state and local laws, rules and regulations applicable to such SEC Documents, and none of the SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included 5 in the SEC Documents comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). (g) PRINCIPAL EXCHANGE/MARKET. The principal market on which the Common Shares are currently traded is Nasdaq. (h) NO MATERIAL ADVERSE CHANGE. Since September 30, 1997, the date through which the most recent quarterly report of the Company on Form 10-Q has been prepared and filed with the Commission, a copy of which is included in the SEC Documents, no event which had or is likely to have a Material Adverse Effect has occurred or exists with respect to the Company or the Subsidiary, except as otherwise disclosed or reflected in press releases or other SEC Documents prepared through or as of a date subsequent to September 30, 1997. (i) NO UNDISCLOSED LIABILITIES. Neither the Company nor the Subsidiary has any liabilities or obligations not disclosed in the SEC Documents, other than those liabilities incurred in the ordinary course of its respective business since September 30, 1997 or liabilities or obligations, individually or in the aggregate, which do not or would not have a Material Adverse Effect on the Company or the Subsidiary, taken as a whole. (j) NO UNDISCLOSED EVENTS OR CIRCUMSTANCES. No event or circumstance has occurred or exists with respect to the Company, the Subsidiary or their respective business, properties, prospects, operations or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed. (k) NO GENERAL SOLICITATION. None of the Company, the Subsidiary or, to the Company's knowledge, any of their respective affiliates or any person acting on its or their behalf has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Notes. (l) NO INTEGRATED OFFERING. None of the Company, the Subsidiary, or, to the Company's knowledge, any of their respective affiliates, or any person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the Notes. (m) INTELLECTUAL PROPERTY. Each of the Company and the Subsidiary owns or has licenses to use certain patents, copyrights and trademarks ("intellectual property") associated with its respective business. Each of the Company and the Subsidiary has all 6 intellectual property rights which are needed to conduct its respective business as it is now being conducted or as proposed to be conducted as disclosed in the SEC Documents. The Company has no reason to believe that the intellectual property rights owned by the Company or the Subsidiary are invalid or unenforceable or that the use of such intellectual property by the Company or the Subsidiary infringes upon or conflicts with any right of any third party, and neither the Company nor the Subsidiary has received notice of any such infringement or conflict. The Company has no knowledge of any infringement of the Company's or the Subsidiary's intellectual property by any third party. (n) NO LITIGATION. Except as set forth in the SEC Documents delivered to the Investors prior to the date of this Agreement ("Pre-Agreement SEC Documents") no litigation or claim (including those for unpaid taxes) against the Company or the Subsidiary is pending or, to the Company's knowledge, threatened, and no other event has occurred, which if determined adversely would have a Material Adverse Effect on the Company or the Subsidiary, taken as a whole or would materially adversely effect the transactions contemplated hereby. The legal proceedings described in the Pre-Agreement SEC Documents will not have an effect on the transactions contemplated hereby, and will not have a Material Adverse Effect on the Company or the Subsidiary, taken as a whole. (o) BROKERS. The Company has taken no action which would give rise to any claim by any person, other than Credit Suisse First Boston Corporation or Josephthal & Co. Inc., for brokerage commissions, finder's fees or similar payments by any Investor relating to this Agreement or the transactions contemplated hereby. Section 2.2 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each of the Investors (except for those Investors who did not close on the initial Closing Date), severally and not jointly, hereby makes the following representations and warranties to the Company as of the date hereof and on the initial Closing Date. Each of the Investors who did not close on the initial Closing Date, severally and not jointly, hereby makes the following representations and warranties to the Company as of the date hereof and on any subsequent Closing Date: (a) AUTHORIZATION; ENFORCEMENT. (i) Such Investor has the requisite power and authority to enter into and perform this Agreement and to purchase the Notes being sold hereunder, (ii) the execution and delivery of this Agreement by such Investor and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate or partnership action, as required, and (iii) this Agreement constitutes the valid and binding obligation of such Investor enforceable against such Investor in accordance its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of creditors' rights and remedies or by other equitable principles of general application. (b) NO CONFLICTS. The execution, delivery and performance of this Agreement and the consummation by such Investor of the transactions contemplated hereby and thereby do not and will not (i) result in a violation of such Investor's organizational documents, or (ii) conflict with any agreement, indenture, or instrument to which such Investor is a party, or (iii) 7 result in a violation of any law, rule, or regulation or any order, judgment or decree of any court or governmental agency applicable to such Investor. Such Investor is not required to obtain any consent or authorization of any governmental agency in order for it to perform its obligations under this Agreement. (c) INVESTMENT REPRESENTATION. Such Investor is purchasing the Notes for its own account and not with a view to distribution in violation of any securities laws. Such Investor has no present intention to sell the Notes and such Investor has no present arrangement (whether or not legally binding) to sell the Notes to or through any person or entity; provided, however, that by the representations herein, such Investor does not agree to hold the Notes for any minimum or other specific term and reserves the right to dispose of the Notes at any time in accordance with Federal and state securities laws applicable to such disposition. (d) ACCREDITED INVESTOR. Such Investor is an "accredited investor" as defined in Rule 501 promulgated under the Act. The Investor has such knowledge and experience in financial and business matters in general and investments in particular, so that such Investor is able to evaluate the merits and risks of an investment in the Notes and to protect its own interests in connection with such investment. In addition (but without limiting the effect of the Company's representations and warranties contained herein), such Investor has received such information as it considers necessary or appropriate for deciding whether to purchase the Notes pursuant hereto. (e) RULE 144. Such Investor understands that there is no public trading market for the Notes, that none is expected to develop, and that the Notes must be held until repaid in full unless such Notes are converted or registered under the Act or an exemption from registration is available. Such Investor has been advised or is aware of the provisions of Rule 144 promulgated under the Act. (f) BROKERS. Such Investor has taken no action which would give rise to any claim by any person other than Credit Suisse First Boston Corporation or Josephthal & Co. Inc., for brokerage commissions, finder's fees or similar payments by the Company relating to this Agreement or the transactions contemplated hereby. (g) RELIANCE BY THE COMPANY. Such Investor understands that the Notes are being offered and sold in reliance on a transactional exemption from the registration requirements of Federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of such Investor set forth herein in order to determine the applicability of such exemptions and the suitability of such Investor to acquire the Notes. ARTICLE III COVENANTS Section 3.1 REGISTRATION AND LISTING. Until the later of (i) such time as no Notes are outstanding or (ii) the expiration of the Effectiveness Period (as hereinafter defined in 8 Section 4.3), the Company will cause the Common Shares to continue to be registered under Section 12(g) of the Exchange Act, will comply in all respects, with its reporting and filing obligations under the Exchange Act, and will not take any action or file any document (whether or not permitted by the Exchange Act or the rules thereunder) to terminate or suspend such reporting and filing obligations. Until the later of (i) such time as no Notes are outstanding or (ii) the expiration of the Effectiveness Period, the Company shall use its best efforts to continue the listing or trading of the Common Shares on Nasdaq, the Nasdaq National Market or a principal exchange and comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of Nasdaq and any exchange or market where the Common Shares are then traded. Section 3.2 CERTIFICATES ON CONVERSION. Upon any conversion (automatic or optional) of the Notes, the Company shall issue and deliver to such Investor (or the then holder) within three (3) days of the Conversion Date (as defined in the Notes) a new certificate or certificates for the principal amount of Notes which such Investor (or holder) has not yet been converted but which are evidenced in part by the certificate(s) submitted to the Company in connection with such conversion (with the number of and denomination of such new certificate(s) designated by such Investor or holder). Section 3.3 REPLACEMENT CERTIFICATES. The certificate(s) representing the Notes held by any Investor (or then holder) may be exchanged by such Investor (or such holder) at any time and from time to time for certificates with different denominations representing an equal aggregate principal amount of Notes, as reasonably requested by such Investor (or such holder) upon surrendering the same. No service charge will be made for such registration, transfer or exchange. Section 3.4 SECURITIES COMPLIANCE. The Company shall notify the Commission and Nasdaq, in accordance with their requirements, of the transactions contemplated by this Agreement, and shall take all other necessary action and proceedings as may be required and permitted by applicable law, rule and regulation, for the legal and valid issuance of the Notes hereunder and the Common Shares issuable upon conversion thereof. Section 3.5 NOTICES. The Company agrees to provide all holders of Notes with copies of all notices and information, including without limitation notices and proxy statements in connection with any meetings, that are provided to the holders of shares of Common Shares, contemporaneously with the delivery of such notices or information to such Common Share holders. Section 3.6 RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Company shall at all times reserve and keep available out of its authorized but unissued Common Shares, solely for the purpose of affecting the conversion of the Notes, such number of its Common Shares as shall from time to time be sufficient to effect the conversion of all outstanding Notes, and if at any time the number of authorized but unissued Common Shares shall not be sufficient to effect the conversion of all the then outstanding Notes, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued Common 9 Shares to such number of shares as shall be sufficient for such purpose, including without limitation engaging in best efforts to obtain the requisite shareholder approval. ARTICLE IV REGISTRATION Section 4.1 REGISTRATION REQUIREMENTS. The Company shall use its reasonable best efforts to effect the registration of the Registrable Securities (including without limitation the execution of an undertaking to file post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act) as would permit or facilitate the sale or distribution of all the Registrable Securities in the manner (including manner of sale) and in all states reasonably requested by the Holder. Such reasonable best efforts by the Company shall include the following: (a) the Company shall, as expeditiously as reasonably possible after the final Closing Date: (i) Prepare and file a registration statement with the Commission pursuant to Rule 415 under the Securities Act on such appropriate registration form of the Commission as shall be reasonably selected by the Company covering the Registrable Securities ("Registration Statement") within 45 days following the final Closing Date. Thereafter the Company shall use its reasonable best efforts to cause such Registration Statement to be declared effective by the Commission within 90 days following the final Closing Date. In the event that such Registration Statement is not declared effective within 90 days following the final Closing Date, there shall be a 30 day grace period. The Company shall use its reasonable best efforts to cause the Registration Statement to become effective during this 30 day grace period, if applicable. In the event that such Registration Statement has not been declared effective within 120 days from the final Closing Date, then the Company shall until the Registration Statement is declared effective, pay in cash to each Holder an amount equal to 2% of the principal amount of the Note (the "Liquidated Damages") held by such Holder for each 30 day period beginning on the 121st day following the final Closing Date (the "Default Period") that the Registration Statement has not been declared effective; provided however, that the Default Period shall terminate and Liquidated Damages shall cease to accrue on the date upon which such Registrable Securities may be sold under Rule 144(k) in the reasonable opinion of counsel to the Company (provided that the Company's transfer agent has accepted an instruction from the Company to such effect). If any applicable Default Period is less than 30 days such cash payment shall be on a pro rata basis. Such cash payment shall be calculated by the Company on the earlier of (i) the effective date of such Registration Statement or (ii) the last day of each Default Period and a check in lawful money of the United States of America shall be sent within three (3) business days of such calculation to the address of each Holder as listed in the 10 Note Register maintained by the Company pursuant to Section 7 of the Note. Notwithstanding the foregoing, if the Default Period commences from the failure of the Company to cause to become effective the Registration Statement solely by reason of the failure of any Holder to provide such information as (i) the Company may reasonably request from such Holder to be included in the Registration Statement or (ii) the Commission or Nasdaq may request in connection with such Registration Statement (the "Late Holder"), the Company shall not be required to pay such Liquidated Damages to any of the Holders; provided, that the Company shall file the Registration Statement excluding the Late Holder, within two (2) business days after the initial day of the Default Period. The Company agrees to promptly file an amendment to such Registration Statement including the Late Holder once the requested information has been provided. (ii) Prepare and file with the Commission such amendments and supplements to such Registration Statement and the prospectus used in connection with such Registration Statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such Registration Statement and notify the Holders of the filing and effectiveness of such Registration Statement and any amendments or supplements. (iii) Furnish to each Holder such numbers of copies of a current prospectus conforming with the requirements of the Act, copies of the Registration Statement, any amendment or supplement thereto and any documents incorporated by reference therein and such other documents as such Holder may reasonably require in order to facilitate the disposition of Registrable Securities owned by such Holder. (iv) Use its best efforts to register and qualify the securities covered by such Registration Statement under such other securities or "Blue Sky" laws of such jurisdictions as shall be reasonably requested by each Holder; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions. (v) Notify each Holder immediately of the happening of any event as a result of which the prospectus (including any supplement thereto or thereof) included in such Registration Statement, as then in effect, includes an untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and use its best efforts to promptly update and/or correct such prospectus. (vi) Notify each Holder immediately of the issuance by the Commission or any state securities commission or agency of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose. The Company shall use its reasonable best efforts to 11 prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible time. (vii) Permit a single firm of counsel, designated as Holders' counsel by the Holders of a majority of the Registrable Securities included in the Registration Statement, to review the Registration Statement and all amendments and supplements thereto within a reasonable period of time prior to each filing, and shall not file any document in a form to which such counsel reasonably objects. (viii) Use its reasonable best efforts to list the Registrable Securities covered by such Registration Statement with all securities exchange(s) and/or markets on which the Common Shares are then listed, and prepare and file any required filings with the National Association of Securities Dealers, Inc. or any exchange or market where the Common Shares are traded. (b) The Company shall make available for inspection by the Holders, representative(s) of all the Holders together, any underwriter participating in any disposition pursuant to a Registration Statement, and any attorney or accountant retained by any Holder or underwriter, all financial and other records customary for purposes of the Holders' due diligence examination of the Company and all SEC Documents filed subsequent to the final Closing Date, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors and employees to supply all information reasonably requested by any such representative, underwriter, attorney or accountant in connection with such Registration Statement, provided that such parties agree to keep such information confidential. Section 4.2 EXPENSES OF REGISTRATION. All Registration Expenses incurred in connection with any registration, qualification or compliance with registration pursuant to this Section 4 shall be borne by the Company, and all Selling Expenses of a Holder shall be borne by such Holder. Section 4.3 REGISTRATION PERIOD. In the case of the registration effected by the Company pursuant to this Section 4, the Company will use its best efforts to keep such registration effective (the "Effectiveness Period") until the earlier to occur of (a) two years from the final Closing Date, provided that the Company may suspend the effectiveness of the Registration Statement if the Board of Directors determines, upon advice of counsel, that in order to maintain effectiveness of the Registration Statement, the Company would be required to disclose a significant corporate development which disclosure would have a material effect on the Company; provided, however, that the period of time which such Registration Statement is required to be effective shall be increased by the number of days that the Registration Statement's effectiveness was suspended, if any, during the two year period from the final Closing Date, (b) the date on which all the Holders have completed the sales or distribution described in the Registration Statement relating thereto or, (c) the date on which such Registrable Securities may be sold under Rule 144(k) in the reasonable opinion of counsel to the Company (provided that the Company's transfer agent has accepted an instruction from the Company to such effect). Section 4.4 INDEMNIFICATION. 12 (a) COMPANY INDEMNITY. The Company will indemnify each Holder, each of its officers, directors and partners, and each person controlling each Holder, within the meaning of Section 15 of the Securities Act and the rules and regulations thereunder with respect to which registration, qualification or compliance has been effected pursuant to this Agreement, and each underwriter, if any, and each person who controls, within the meaning of Section 15 of the Securities Act and the rules and regulations thereunder, any underwriter, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus, offering circular or other document (including any related registration statement, notification or the like) incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act or any state securities law or in either case, any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse each Holder, each of its officers, directors and partners, and each person controlling such Holder, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to a Holder to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by such Holder or the underwriter (if any) therefor and stated to be specifically for use therein. The indemnity agreement contained in this Section 4.4(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent will not be unreasonably withheld). (b) HOLDER INDEMNITY. Each Holder will, severally and not jointly, if Registrable Securities held by it are included in the securities as to which such registration, qualification or compliance is being effected, indemnify the Company, each of its directors, officers, partners, and each underwriter, if any, of the Company's securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act and the rules and regulations thereunder, each other Holder (if any), and each of their directors, officers and partners, and each person controlling such other Holder(s) against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statement therein not misleading, in each case only insofar as such untrue statement or alleged untrue statement or omission relates to such Holder, and will reimburse the Company and such other Holder(s) and their directors, officers and partners, underwriters or control persons for any legal or any other expenses reasonably incurred in connection with investigating and defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the 13 Company by such Holder and stated to be specifically for use therein, and provided that the maximum amount for which such Holder shall be liable under this indemnity shall not exceed the net proceeds received by such Holder from the sale of the Registrable Securities. The indemnity agreement contained in this Section 4.4(b) shall not apply to amounts paid in settlement of any such claims, losses, damages or liabilities if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld). (c) PROCEDURE. Each party entitled to indemnification under this Article (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim in any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party's expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Article except to the extent that the Indemnifying Party is materially and adversely affected by such failure to provide notice. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with the defense of such claim and litigation resulting therefrom. Section 4.5 CONTRIBUTION. If the indemnification provided for in Section 4 herein is unavailable to the Indemnified Parties in respect of any losses, claims, damages or liabilities referred to herein (other than by reason of the exceptions provided therein), then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities as between the Company on the one hand and any Holder on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of such Holder in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of any Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by such Holder. In no event shall the obligation of any Indemnifying Party to contribute under this Section 4.5 exceed the amount that such Indemnifying Party would have been obligated to pay by way of indemnification if the indemnification provided for under Section 4.4(a) or 4.4(b) hereof had been available under the circumstances. The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 4.5 were determined by PRO RATA allocation (even if the Holders or the 14 underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraphs. The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraphs shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this section, no Holder or underwriter shall be required to contribute any amount in excess of the amount by which (i) in the case of any Holder, the net proceeds received by such Holder from the sale of Registrable Securities or (ii) in the case of an underwriter, the total price at which the Registrable Securities purchased by it and distributed to the public were offered to the public exceeds, in any such case, the amount of any damages that such Holder or underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement, omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. ARTICLE V CONDITIONS Section 5.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO ISSUE THE NOTES. The obligation hereunder of the Company to issue the Notes to the Investors is subject to the satisfaction, at or before any Closing Date, of each of the conditions set forth below. These conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion. (a) ACCURACY OF THE INVESTORS' REPRESENTATIONS AND WARRANTIES. The representations and warranties of each Investor shall be true and correct in all material respects as of the date when made and as of any Closing Date as though made at that time (except for representations and warranties that speak as of a particular date). (b) PERFORMANCE BY THE INVESTORS. Each Investor shall have performed all agreements and satisfied all conditions required to be performed or satisfied by such Investor at or prior to any Closing Date. (c) NO INJUNCTION. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement. Section 5.2 2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE INVESTORS TO PURCHASE THE NOTES. The obligation hereunder of each Investor to acquire and pay for the Notes is subject to the satisfaction, at or before any Closing Date, of each of the conditions set forth below. These conditions are for the Investors' sole benefit and may be waived by the Investors at any time in their sole discretion. 15 (a) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The representation and warranties of the Company shall be true and correct in all material respects as of the date when made and as of any Closing Date as though made at that time (except for representations and warranties that speak as of a particular date). (b) PERFORMANCE BY THE COMPANY. The Company shall have performed all agreements and satisfied all conditions required to be performed or satisfied by the Company at or prior to any Closing Date. (c) NASDAQ. From the date hereof to any Closing Date, trading in the Company's Common Shares shall not have been suspended by the Commission or Nasdaq, and trading in securities generally as reported by Nasdaq, shall not have been suspended or limited, and the Common Shares shall not have been delisted from any exchange or market where they are currently listed. (d) NO INJUNCTION. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority or competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement. (e) OPINION OF COUNSEL. At any Closing Date the Investors shall have received an opinion of counsel to the Company in substantially the form attached hereto as Exhibit B and such other opinions, certificates and documents as the Investors or their counsel shall reasonably require incident to the Closing. (f) MINIMUM SUBSCRIPTION. In connection with the initial Closing Date, Notes in the aggregate principal amount of $11,000,000 shall have been purchased by the Investors pursuant to this Agreement. (g) SECRETARY'S CERTIFICATE. The Company shall have delivered to the Investors a certificate in form and substance reasonably satisfactory to the Investors, executed by the Secretary of the Company on behalf of the Company, certifying as to satisfaction of closing conditions, incumbency of signing officers, charter, by-laws, good standing and authorizing resolutions of the Company. ARTICLE VI LEGEND AND STOCK Each certificate representing the Notes shall be stamped or otherwise imprinted with a legend substantially in the following form: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND THEY MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE SECURITIES OR (II) PURSUANT TO A 16 SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, BUT ONLY UPON A HOLDER HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL OF THE ISSUER, OR OTHER COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER, THAT THE PROPOSED DISPOSITION IS CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY APPLICABLE "BLUE SKY" OR SIMILAR SECURITIES LAW. Any Common Shares issued pursuant to conversion of Notes shall bear a legend in the same form as the legend on the Notes indicated above. ARTICLE VII TERMINATION Section 7.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated at any time prior to the initial Closing Date by the mutual written consent of the Company and the Investors. Section 7.2 OTHER TERMINATION. This Agreement may be terminated by action of the Board of Directors of the Company or by any of the Investors at any time if the initial Closing Date shall not have been consummated by the fifth business day following the date of this Agreement. ARTICLE VIII MISCELLANEOUS Section 8.1 1 STAMP TAXES; AGENT FEES. The Company shall pay all stamp and other taxes and duties levied in connection with the issuance of the Notes pursuant hereto and the Common Shares issued upon conversion thereof. Section 8.2 2 SPECIFIC ENFORCEMENT; CONSENT TO JURISDICTION. (a) The Company and the Investors acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which any of them may be entitled by law or equity. 17 (b) The Company and each of the Investors (i) hereby irrevocably submits to the exclusive jurisdiction of the United States District Court, the New York State courts and other courts of the United States sitting in New York County, New York for the purposes of any suit, action or proceeding arising out of or relating to this Agreement and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. The Company and each of the Investors consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this paragraph shall affect or limit any right to serve process in any other manner permitted by law. Section 8.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement together with the agreements and documents executed in connection herewith and therewith, contains the entire understanding of the parties with respect to the matters covered hereby and thereby and, except as specifically set forth herein or therein, neither the Company nor any Investor makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by a written instrument signed by the party against whom enforcement of any such amendment or waiver is sought. Section 8.4 NOTICES. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be effective upon actual receipt of such mailing. The addresses for such communications shall be: 18 to the Company: Mansur Industries Inc. 8305 N.W. 27th Street Suite 107 Miami, Florida 33122 Attn: Paul I. Mansur, Chief Executive Officer with copies to: Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A. 1221 Brickell Avenue Miami, Florida 33131 Attn: Gary M. Epstein, Esq. to the Investors: To each Investor at the address set forth on Schedule I of this Agreement. with copies to: Orrick, Herrington & Sutcliffe LLP 666 Fifth Avenue New York, New York 10103 Attn: Rubi Finkelstein, Esq. Any party hereto may from time to time change its address for notices by giving at least 10 days written notice of such changed address to the other parties hereto. Section 8.5 INDEMNITY. Each party shall indemnify each other party against any loss, cost or damages (including reasonable attorney's fees but excluding consequential damages) incurred as a result of such parties' breach of any representation, warranty, covenant or agreement in this Agreement. Section 8.6 WAIVERS. No waiver by any party of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter. Section 8.7 HEADINGS. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. Section 8.8 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The parties hereto may amend this Agreement without notice to or the consent of any third party. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of all Investors (which consent may be withheld for any reason in their sole discretion), except that the Company may assign this Agreement in connection with a merger, consolidation, business combination or the sale of all or substantially all of its assets provided that the Company is not released from any of its obligations hereunder, such 19 successor in interest or assignee assumes all obligations of the Company hereunder, and appropriate adjustment of the provisions contained in this Agreement is made, in form and substance satisfactory to the Investors, to place the Investors in substantially the same position as they would have been but for such assignment. Any Investor may assign this Agreement (in whole or in part) or any rights or obligations hereunder without the consent of the Company in connection with any sale or transfer of all or any portion of the Notes held by such Investor, provided that no Investor may assign this Agreement prior to any Closing Date without the Company's prior consent except to an affiliate or affiliates of such Investor. Section 8.9 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person. Section 8.10 GOVERNING LAW. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York without regard to such state's principles of conflict of laws. Section 8.11 SURVIVAL. The representations and warranties and the agreements and covenants of the Company and each Investor contained herein shall survive the Closing. Section 8.12 EXECUTION. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement, it being understood that all parties need not sign the same counterpart. Section 8.13 PUBLICITY. The Company agrees that it will not disclose, and will not include in any public announcement, the name of any Investor without its consent, unless and until such disclosure is required by law or applicable regulation, and then only to the extent of such requirement. Section 8.14 SEVERABILITY. The parties acknowledge and agree that the Investors are not agents, affiliates or partners of each other, that all representations, warranties, covenants and agreements of the Investors hereunder are several and not joint, that no Investor shall have any responsibility or liability for the representations, warrants, agreements, acts or omissions of any other Investor, and that any rights granted to "Investors" hereunder shall be enforceable by each Investor hereunder. Section 8.15 LIKE TREATMENT OF HOLDERS. Neither the Company nor any of its affiliates shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee, payment for the redemption or exchange of Notes, or otherwise, to any holder of Notes, for or as an inducement to, or in connection with the solicitation of, any consent, waiver or amendment of any terms or provisions of the Notes or this Agreement, unless such consideration is required to be paid to all holders of Notes bound by such consent, waiver or amendment whether or not such holders so consent, waive or agree to amend and whether or not such holders tender their Notes for redemption or exchange. The Company shall not, directly or indirectly, redeem any Notes unless such offer of redemption is made pro rata to all holders of Notes on identical terms. 20 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. The Company: MANSUR INDUSTRIES, INC. By: ________________________________ Name: Paul I. Mansur Title: Chief Executive Officer INVESTOR: By: ________________________________ Name: Title: ____________________________________ Exact Name in Which Note(s) Should be registered 21 EX-4.2 3 EXHIBIT 4.2 THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THEY MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE SECURITIES, OR (II) PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, BUT ONLY UPON A HOLDER HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL TO THE ISSUER, OR OTHER COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER, THAT THE PROPOSED DISPOSITION IS CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY APPLICABLE "BLUE SKY" OR OTHER SIMILAR SECURITIES LAW. MANSUR INDUSTRIES INC. 8 1/4% SUBORDINATED CONVERTIBLE NOTE DUE 2003 $____________ FEBRUARY ___, 1998 NEW YORK, NEW YORK FOR VALUE RECEIVED, Mansur Industries Inc., a Florida corporation (the "Company"), promises to pay to ___________ (the "Holder") or registered assigns, the principal amount of __________ Dollars ($_________), or such greater amount as determined in accordance with SECTION 3 hereof, and to pay interest (computed on the basis of a 360 day year of twelve 30 day months) on the unpaid principal amount hereof (as determined in accordance with SECTION 3 hereof) at the rate of eight and one-quarter percent (8 1/4%) per annum. Principal and accrued but unpaid interest hereunder shall be due and payable in cash on the Maturity Date (as defined in SECTION 4 hereof), subject to the terms and conditions of SECTIONS 5 and 6 hereof. This Note is one of several subordinated convertible notes (collectively, the "Notes") issued by the Company to several holders (collectively, the "Holders") pursuant to a Subordinated Convertible Note Purchase Agreement dated February ___, 1998 (the "Agreement"). Unless otherwise defined herein, all capitalized terms used herein shall have the meanings ascribed to them in the Agreement. This Note is subject to the following terms and conditions: 1. UNSECURED OBLIGATIONS; SUBORDINATION. This Note and the amounts payable hereunder, including principal, premium, if any, and accrued interest shall be unsecured obligations of the Company, and shall be subordinate and junior to all indebtedness of the Company presently existing or hereinafter incurred by the Company from time to time in accordance with Section 2(h) hereof. 2. COVENANTS. The Company covenants and agrees that, so long as this Note is outstanding and unpaid: (a) PAYMENT OF NOTE. The Company will punctually pay or cause to be paid the principal, premium, if any, and interest on this Note at the dates and places and in the manner specified herein. Any sums required to be withheld from any payment of principal, premium, if any, or interest on this Note by operation of law or pursuant to any order, judgment, execution, treaty, rule or regulation may be withheld by the Company and paid over in accordance therewith. In the event any restriction is placed upon payment of principal, premium, if any, or interest by virtue of a currency or monetary control law, rule or regulation of the United States Federal Government, as set forth in a written notice delivered to the Holder within thirty (30) days after the imposition of such a restriction, such payments shall be deposited to the account of the payee in a bank, trust company or other financial institution, as directed by the payee. Such payment or deposit will be deemed payment to the Holder. Nothing in this Note or in any other agreement between the Holder and the Company shall require the Company to pay, or the Holder to accept, interest in an amount which would subject the Holder to any penalty or forfeiture under applicable law. In the event that the payment of any charges, fees or other sums due under this Note or provided for in any other agreement between the Company and the Holder are or could be held to be in the nature of interest and would subject the Holder to any penalty or forfeiture under applicable law, then IPSO facto the obligations of the Company to make such payment to the Holder shall be reduced to the highest rate authorized under applicable law and, in the event that the Holder shall have ever received, collected, accepted or applied as interest any amount in excess of the maximum rate of interest permitted to be charged by applicable law, such amount which would be excess interest under applicable law shall be applied first to the reduction of principal then outstanding, and, second, if such principal amount is paid in full, any remaining excess shall forthwith be returned to the Company. (b) MAINTENANCE OF CORPORATE EXISTENCE; MERGER AND CONSOLIDATION. The Company will at all times cause to be done all things necessary or appropriate to preserve and keep in full force and effect its corporate existence and the corporate existence of any significant subsidiary (as defined in Rule 405 of the Rules and Regulations under the Securities Act ("Significant Subsidiary")) and it shall not consolidate with or merge into any other corporation or transfer all or substantially all of its assets to any person unless (i) the corporation formed by such consolidation or into which the Company is merged or to which all or substantially all of the assets of the Company are transferred is a corporation that expressly assumes all of the obligations of the Company under this Note and (ii) after giving effect to such transaction, no 2 Event of Default and no event which, after notice or lapse of time, or both, would become an Event of Default, shall have occurred and be continuing. (c) MAINTENANCE OF PROPERTIES. The Company will reasonably maintain in good repair, working order and condition, reasonable wear and tear excepted, its properties and other assets, and those of any Significant Subsidiary, and from time to time make all necessary or desirable repairs, renewals and replacements thereto. (d) PAYMENT OF TAXES. The Company will, and will cause any Significant Subsidiary to, pay or discharge or cause to be paid, set aside for payment or discharge, before the same shall become delinquent, all taxes, assessments and governmental charges levied or imposed upon the Company or any Significant Subsidiary, as the case may be, or upon their respective income, profits or property; provided, that neither the Company nor any Significant Subsidiary shall be required to pay or discharge, or cause to be paid or discharged, any such tax, assessment, charge or claim whose amount or validity is being contested in good faith by appropriate proceedings. (e) COMPLIANCE WITH STATUTES. The Company will, and will cause any Significant Subsidiary to, comply in all material respects with all applicable statutes and regulations of the United States of America and of any state or municipality, and of any agency thereof, in respect of the conduct of business and the ownership of property by the Company or any Significant Subsidiary; provided, that nothing contained in this SECTION 1(e) shall require the Company or a Significant Subsidiary to comply with any such statute or regulations so long as its legality or applicability shall be contested in good faith. (f) RESTRICTIONS ON DIVIDENDS, REDEMPTIONS, ETC. The Company will not, and will cause its subsidiaries (other than wholly-owned subsidiaries) not to, (i) declare or pay any dividend or make any other distribution of the Company, except dividends or distributions payable in equity securities of the Company, or (ii) purchase, redeem or otherwise acquire or retire for value any equity securities of the Company, except (A) equity securities acquired upon conversion or exchange thereof into other equity securities of the Company and (B) any equity security issued to employees, directors of others performing services in accordance with agreements providing for such repurchase at original cost upon termination of employment, membership on the Board of Directors or other affiliation with the Company. (g) TRANSACTIONS WITH AFFILIATES. Neither the Company nor any Significant Subsidiary will itself, and will not permit any of their respective officers or directors, or holder of 5% or more of the Company's common stock ("Common Stock"), to engage in any transaction of any kind or nature with any affiliate of the Company or any Significant Subsidiary, other than transactions with any wholly-owned subsidiary of the Company or any Significant Subsidiary or pursuant to the terms of any agreement existing as of the date hereof between the Company or any Significant Subsidiary and any affiliate of the Company or any Significant Subsidiary, unless such transaction, or in the case of a course of related or similar transactions or continuing transactions, such course of transactions or continuing transactions is or are approved by independent directors of the Company or is or are upon terms which are fair to the Company or any Significant Subsidiary and which are reasonably similar to, or more beneficial to the Company 3 or any Significant Subsidiary than the terms deemed likely to be obtained in similar transactions with unrelated persons under the same circumstances. (h) LIMITATION OF INCURRENCE OF INDEBTEDNESS. The Company will not, and will not permit any of its subsidiaries to, at any time, incur, create, assume or guarantee, or otherwise become or be liable in any manner with respect to any indebtedness (the "Incurrence") unless, after giving pro forma effect to the Incurrence thereof, the ratio of Total Debt (as defined below) to Consolidated EBITDA (as defined below) for any period of twelve months then most recently ended shall be less than 6.0:1.0; provided, however, the Company may incur up to $5,000,000 of Total Debt (excluding the Notes) at any time. "Total Debt" shall mean the principal amount of all indebtedness of the Company and its subsidiaries, determined on a consolidated basis in accordance with generally accepted accounting principles, (a) in respect of money borrowed or evidenced by a promissory note, debenture or like written obligation to pay money (including the Notes), (b) in respect of any capital lease obligation; (c) obligations incurred or assumed as part of the deferred purchase price of any assets acquired by the Company or its subsidiaries; (d) all obligations or liabilities of others secured by a lien on any asset owned by the Company or any of its subsidiaries, irrespective of whether such obligation or liability is assumed, to the extent of the lesser of such obligation or liability or the fair market value of such asset; and (e) any guarantees by the Company or its subsidiaries of any indebtedness of another person or entities, provided, however, that in determining the indebtedness of the Company or any subsidiary, all liabilities for which the Company or any subsidiary is jointly and severally liable with one or more other persons or entities (including, without limitation, all liabilities of any partnership or joint venture of which the Company is a general partner or co-venturer) shall be included at the full amount thereof without regard to any right the Company or subsidiary may have against any such other person or entity for contribution or indemnity. The term "Consolidated EBITDA" shall mean for any period for which the amount thereof is to be determined, the Consolidated Net Income (as defined below) for such period plus the aggregate amounts deducted in determining such Consolidated Net Income in respect of (i) Interest Expense (as defined below) for such period, (ii) income and other taxes measured by income or profits for such period, and (iii) Depreciation and Amortization Expense (as defined below) for such period. The term "Consolidated Net Income" shall mean, for any period, the consolidated net income (or loss) of the Company and its subsidiaries for such period determined in accordance with generally accepted accounting principles applied on a consistent basis, after eliminating all offsetting debits and credits between the Company and its subsidiaries, operating expenses, provisions for all taxes and reserves (including reserves for deferred income taxes) and other items to be eliminated in accordance with generally accepted accounting principles, but, in any event, excluding: (i) any net gains or net losses (less all fees and expenses related thereto) on the sale or other disposition of investments or fixed or capital assets, and any taxes on such excluded gains and any tax deductions or credits on account of any such excluded losses; 4 (ii) all items properly classified as extraordinary in accordance with generally accepted accounting principles; (iii) net earnings and losses of any subsidiary accrued prior to the date it became a subsidiary; (iv) net earnings and losses of any person or entity (other than a subsidiary), substantially all the assets of which have been acquired by the Company or any subsidiary in any manner, realized by such other person or entity prior to the date of such acquisition, except to the extent that any such earnings have been received by the Company or such subsidiary in the form of cash dividends or other similar cash distributions; (v) net earnings and losses of any person or entity (other than a subsidiary) which shall have been merged into or consolidated with the Company or any subsidiary prior to the date of such merger or consolidation; (vi) any portion of the net earnings of any subsidiary which for any reason is unavailable for payment of dividends to the Company or any subsidiary; (vii) earnings or losses resulting from any reappraisal, revaluation, write-up or write-down of assets during such period; (viii) any income resulting from any excess of the equity in any person or entity at the date of acquisition thereof over the amount invested in such person or entity; (ix) any net gain arising from the acquisition of any capital stock or other securities of the Company or any subsidiary; (x) any deferred credit or amortization thereof from the acquisition of any properties or assets of any person or entity; and (xi) any net gain from the collection of the proceeds of life insurance policies. The term "Depreciation and Amortization Expense" shall mean, for any period, without duplication, the total expense of the Company and its subsidiaries during such period for depreciation, amortization of intangible assets and other noncash charges, all calculated in accordance with generally accepted accounting principles. The term "Interest Expense" shall mean, for any period, without duplication, the aggregate of all interest paid or accrued, including, without limitation, amortization of debt issuance costs, of the Company and its subsidiaries as determined on a consolidated basis in accordance with generally accepted accounting principles. 5 3. INTEREST. Interest shall be paid semi-annually on the unpaid principal amount hereof at the rate of eight and one-quarter percent (8 1/4%) per annum on each August ___ and February ___, commencing on August ___, 1998 (each an "Interest Payment Date"), and on the Maturity Date; provided, however, that the accrued interest that would otherwise be due on each Interest Payment Date prior to February ___, 2000 shall be added to the principal amount of this Note then outstanding and thereafter be principal of this Note for all purposes. After February ___, 2000, the Company may elect to pay the accrued interest due on each Interest Payment Date in cash; provided, however, if the Company fails to pay the accrued interest due on any Interest Payment Date after February ___, 2000 in cash, such accrued interest shall be added to the principal amount of this Note then outstanding and be principal under this Note for all purposes. 4. MATURITY If this Note is not converted into Common Stock in accordance with SECTION 5 hereof or redeemed in accordance with SECTION 6 hereof, the principal amount of this Note as determined in accordance with SECTION 2 hereof, together with accrued but unpaid interest, shall be due and payable in cash on February ___, 2003 (the "Maturity Date"). 5. CONVERSION All, but not less than all, of the principal amount of this Note as determined in accordance with SECTION 3 of this Note and accrued interest thereon may be converted into shares of Common Stock (the "Note Shares") at the option of the Holder at any time on or prior to the Maturity Date, subject to the terms and conditions set forth in this SECTION 5 or, if earlier, prior to the date fixed for redemption pursuant to SECTION 6 hereof. Upon conversion into Note Shares pursuant to this paragraph, the principal amount of this Note as determined in accordance with SECTION 3 and accrued interest thereon shall be discharged. From and after February ___, 1999, if the closing bid price of the Common Stock as reported on Nasdaq (or the closing sale price if the Common Stock is then traded on any principal national exchange or Nasdaq National Market) exceeds 175% of the Conversion Price (as defined below) for a period of twenty (20) consecutive trading days, including the twenty (20) trading days prior to February ___, 1999 (the "Calculation Period") an early conversion event ("Early Conversion Event") shall have occurred. Upon the first Early Conversion Event, if any, in each calendar quarter, the principal amount of the Notes (as determined in accordance with SECTION 3 hereof) shall automatically and without any action by the Holder or the Company be converted into the Company's Common Stock, on a pro rata basis, in an amount determined in accordance with the following formula: CN = V X 22 X CP where CN is the principal amount of the Notes to be converted; V is the average daily reported volume of trading in the Company's Common Stock on all national securities exchanges and/or 6 reported through the automated quotation system of a registered national securities association during the Calculation Period; and CP is the Conversion Price (as hereinafter defined). Notwithstanding the foregoing, none of the outstanding principal of the Notes shall be converted as a result of an Early Conversion Event pursuant to this SECTION 5 unless the resale of the Note Shares is subject to an effective Registration Statement, provided, however, the foregoing condition shall terminate upon the expiration of the Effectiveness Period. Accrued interest on the principal amount converted upon the occurrence of an Early Conversion Event shall be paid on the next Interest Payment Date in accordance with SECTION 3 hereof. (a) CONVERSION PRICE. The "Conversion Price" shall equal seventeen dollars ($17.00) (subject to adjustment under certain circumstances). The number of Note Shares into which this Note may be converted shall be determined by dividing the aggregate amount of outstanding principal on this Note as determined in accordance with SECTION 3 and accrued interest thereon to be converted on the Conversion Date (as defined below) by the then applicable Conversion Price. (b) METHOD OF CONVERSION. Before the Holder shall be entitled to receive Note Shares upon the conversion of this Note, the Holder shall surrender this Note and deliver a Notice of Conversion (in the form attached hereto as EXHIBIT A) in the event of conversion at the option of the Holder to the office of the Company or its designated agent. The Notice of Conversion shall state therein the amount(s) in which the certificate(s) for Note Shares are to be issued. Upon the conversion of this Note, in whole or in part, in connection with an Early Conversion Event the Company shall send to the Holder of this Note a Notice of Early Conversion (in the form attached hereto as EXHIBIT B) stating the amount of principal of the Note to be converted and the number of shares of Common Stock into which such principal shall be converted. The time of conversion (the "Conversion Date") shall be the close of business on the first business day following the date on which the Company receives the Notice of Conversion in the event of conversion at the option of the Holder or the last date of a Calculation Period in the event of conversion upon an Early Conversion Event, as the case may be. Interest on the principal amount of Notes converted ceases to accrue on and after the Conversion Date of such principal amount. (c) ISSUANCE OF NOTE SHARES. The Company shall, as soon as practicable after surrender of this Note and receipt of the Notice of Conversion or delivery of the Notice of Early Conversion and receipt of this Note, but in no event more than three (3) business days thereafter, issue and deliver to the Holder, a certificate(s) for the number of Note Shares to which the Holder shall be entitled as aforesaid. (d) NO FRACTIONAL SHARES. No fractional Note Shares shall be issuable upon conversion (optional or automatic) of this Note. If the conversion of this Note and any other Note(s) held by the Holder, in the aggregate would result in the issuance of a fractional share of Common Stock, such fractional share shall be rounded up to the nearest whole share and issued to the Holder. 7 (e) ADJUSTMENT OF CONVERSION PRICE; MERGER. (i) If the Company at any time or from time to time while this Note is issued and outstanding shall declare or pay, without consideration, any dividend on the Common Stock payable in Common Stock, or shall effect a subdivision of the outstanding shares of Common Stock into a greater number of shares of Common Stock (by stock split, reclassification or otherwise than by payment of a dividend in Common Stock or in any right to acquire Common Stock), or if the outstanding shares of Common Stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of shares of Common Stock, then the Conversion Price in effect immediately before such event shall, concurrently with the effectiveness of such event, be proportionately decreased or increased, as appropriate. If the Company shall declare or pay, without consideration, any dividend on the Common Stock payable in any right to acquire Common Stock for no consideration, then the Company shall be deemed to have made a dividend payable in Common Stock in an amount of shares equal to the maximum number of shares issuable upon exercise of such rights to acquire Common Stock. (ii) If the Common Stock shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares provided for in SECTION 5(e)(i)), the Conversion Price then in effect shall, concurrently with the effectiveness of such reorganization or reclassification, be proportionately adjusted so that the Note Shares shall be convertible into, in lieu of the number of shares of Common Stock which the Holder would otherwise have been entitled to receive, a number of shares of such other class or classes of stock equivalent to the number of shares of Note Shares that would have been subject to receipt by the Holder upon payment of Note Shares on this Note immediately before that change. (iii) In case of any consolidation or merger of the Company with any other corporation, limited liability company or any other entity (each such transaction, a "Merger"), the entity formed by the Merger shall succeed to the covenants, stipulations, promises and the agreements contained in this Note. In the event of a Merger, the Company shall make appropriate provisions so that the Holder shall have the right thereafter to convert this Note into the kind and amount of securities receivable upon such Merger by a Holder of the number of securities into which this Note could have been converted immediately prior to a Merger. The above provisions shall similarly apply to successive Mergers. (iv) Upon the occurrence of each adjustment or readjustment of any Conversion Price pursuant to this SECTION 5(e), the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to the Holder a notice setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. 8 (f) RESERVATION OF STOCK. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the Notes into Note Shares, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all of the Notes; 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 of the Notes then, the Company will take such corporate action as in the opinion of its counsel 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, including without limitation, engaging in best efforts to obtain the requisite shareholder approval. (g) ISSUE TAXES. The Company shall pay any and all issue and other taxes that may be payable in respect of any issue or delivery of Note Shares; provided, that the Company shall not be obligated to pay any transfer taxes resulting from any transfer requested by the Holder in connection with any such conversion. 6. REDEMPTION (a) The principal amount of this Note plus any accrued but unpaid interest may be redeemed by the Company in cash at any time after 36 months from the date of this Note pursuant to the following schedule: (i) After 36 months, but prior to 48 months, from the date of this Note, at a redemption price of 104% of the principal amount plus any accrued but unpaid interest. (ii) After 48 months from the date of issuance, at a redemption price of 102% of the principal amount plus any accrued but unpaid interest. (b) Notice of intention to redeem this Note pursuant to SECTION 6(b) will be given to the Holders by mailing notice thereof to such Holders' address as listed in the Note Register. Such notice will be deemed to have been given on the date of mailing as evidenced by an affidavit from the Chief Financial Officer of the Company. Notice will be given not more than sixty (60) days nor less than thirty (30) days prior to the redemption date. 7. REGISTRATION: REGISTRATION OF TRANSFER AND EXCHANGE OF THIS NOTE (a) The Company shall keep or cause to be kept a note register (the "Note Register") for the Notes in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of the Notes and the registration of transfers of the Notes. (b) Subject to the restrictions on transfer set forth herein, this Note may be exchanged, at the option of each Holder, for other Notes in any authorized denominations, of a like aggregate principal amount, upon surrender of this Note to be exchanged at the offices of the Company or its designated agent (either, the "Registrar"). 9 (c) All Notes issued upon any registration of transfer or exchange of this Note shall be valid obligations of the Company, evidencing the same debt, and entitling the Holder to the same benefits under this Note. (d) Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by a written instrument of transfer in form satisfactory to the Registrar, duly executed by the Holder thereof or such Holder's attorney duly authorized in writing. (e) No charge shall be made to a Holder for any registration of transfer or exchange of Notes. (f) Prior to due presentment for registration of transfer of any Note, the Company may treat the person in whose name any Note is registered (as of the day of determination) as the Holder for the purpose of receiving payments of principal of and interest on such Note and for all other purposes, and neither the Company nor any agent of the Company shall be affected by notice to the contrary. 8. DEFAULT (a) DEFAULT. For purposes of this Section 8, the term "Significant Subsidiary" shall have the same meaning as defined in Rule 405 of the Rules and Regulations under the Securities Act, except that the applicable percentage expressed in each of the conditions under such Rule 405 shall be 25% instead of 10%. The occurrence of any one or more of the following events shall constitute an event of default (each an "Event of Default") hereunder: (i) if the Company fails to make payment of any sum payable with respect to the Note, which failure is not cured within ten (10) business days of the stated due date of such payment, or if the Company violates any of the agreements, promises, covenants, terms and conditions of any of, the Notes and such violation remains uncured for ten (10) business days after the earlier of (i) the date of the applicable Notice of Event of Default (as defined below) or (ii) the date that a Responsible Officer (as defined below) acquires knowledge of any such violation. (ii) if any warranty, representation or statement of fact made herein by the Company is false or misleading in any material respect when made; (iii) if the Company or any Significant Subsidiary fails to maintain its corporate existence and such failure remains uncured for ten (10) business days after earlier of (i) the date of the applicable Notice of Event of Default (as defined below) or (ii) the date that a Responsible Officer (as defined below) acquires knowledge of any such failure; (iv) if the Company or any Significant Subsidiary becomes insolvent (however defined or evidenced) or makes an assignment for the benefit of creditors; 10 (v) if there shall be filed by or against the Company or any Significant Subsidiary any petition for any relief under the bankruptcy laws of the United States now or hereafter in effect or any proceeding shall be commenced with respect to the Company or any Significant Subsidiary under any insolvency, readjustment of debt, reorganization, dissolution, liquidation or similar law or statute of any jurisdiction now or hereafter in effect (whether at law or in equity), provided that in the case of any involuntary filing or the commencement of any involuntary proceeding against the Company or any Significant Subsidiary such proceeding or petition shall have continued undismissed and unvacated for at least 60 days; (vi) if any proceeding, procedure or remedy supplementary to or in enforcement of a final non-appealable judgment (other than any judgment that would not have a Material Adverse Effect on the Company or any Significant Subsidiary, taken as a whole) shall be commenced against, or with respect to any material property of, the Company or any Significant Subsidiary; or (vii) if any petition or application to any court or tribunal, at law or in equity, shall be filed by or against the Company or any Significant Subsidiary for the appointment of any receiver or trustee for the Company or any Significant Subsidiary or any material part of the property of the Company or any Significant Subsidiary, provided that in the case of any involuntary filing against the Company or any Significant Subsidiary, such proceeding or appointment shall have continued undismissed and unvacated for at least 60 days. (b) NOTICE OF EVENT OF DEFAULT. Upon the Chairman, the Chief Executive Officer, the Chief Financial Officer (or principal accounting officer), or any President (each a "Responsible Officer") of the Company acquiring knowledge of the existence of an Event of Default, the Company shall send to the Holder a written notice ("Notice of Event of Default") specifying the nature and period of existence of any Event of Default and what action the Company is taking or proposes to take with respect thereto. (c) REMEDIES UPON DEFAULT. If any Event of Default shall occur for any reason, then and in any such event, in addition to all rights and remedies of the Holder under applicable law or otherwise, all such rights and remedies being cumulative, not exclusive and enforceable alternatively, successively and concurrently, the Holder may, at its option, declare any or all amounts owing under this Note, to be due and payable, whereupon the then unpaid balance hereof, together with all accrued and unpaid interest thereon, shall forthwith become due and payable, together with interest accruing thereafter at the then applicable interest rate stated above until the indebtedness evidenced by this Note is paid in full, plus the costs and expenses of collection hereof, including, but not limited to, attorney's fees and legal expenses. (d) THE COMPANY'S WAIVERS. The Company (i) waives diligence, demand, presentment, protest and notice of any kind, (ii) agrees that it will not be necessary for the Holder to first institute suit in order to enforce payment of this Note and (iii) consents to any one or more extensions or postponements of time of payment, release, surrender or forbearance or other 11 indulgence, without notice or consent. The pleading of any statute of limitations as a defense to any demand against the Company is hereby expressly waived by the Company. (e) CERTAIN OBLIGORS. The Holder may proceed against the Company and any guarantors or endorsees hereof in such order and manner as the Holder may choose. 9. OTHER PROVISIONS RELATING TO RIGHTS OF THE HOLDER OF THIS NOTE (a) RIGHTS OF THE HOLDER OF THIS NOTE. This Note shall not entitle the Holder to any of the rights of a shareholder of the Company, including, without limitation, the right to vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of shareholders or any other proceedings of the Company. This SECTION 9(a) shall not affect the rights of the Holder in its capacity as a shareholder of the Company upon conversion of this Note and issuance to the Holder of Note Shares pursuant to SECTION 5 hereof. (b) LOST, STOLEN, MUTILATED OR DESTROYED NOTE. If this Note shall be mutilated, lost, stolen, or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen, or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen, or destroyed but only upon receipt of evidence (which may consist of a signed affidavit of the Holder), of such loss, theft, or destruction of such Note, and of the ownership thereof, and indemnity, if requested, all reasonably satisfactory to the Company. 10. SECURITIES LAW COMPLIANCE (a) RESTRICTIONS ON TRANSFER. The Holder and the Company understand that each of (i) the Holder's right to convert this Note and (ii) the ability of the Company to issue the Note Shares are subject to full compliance with the provisions of all applicable securities laws and the availability thereunder of an exemption from registration, and that the certificates evidencing the Note Shares, shall bear a legend substantially to the effect of the legend on the first page hereof. (b) COMPLIANCE WITH LAWS. The Holder agrees to comply with all applicable laws, rules and regulations of all federal and state securities regulators, including but not limited to, the Securities and Exchange Commission, the National Association of Securities Dealers, Inc., and applicable state securities regulators with respect to disclosure, filings and any other requirements resulting in any way from the issuance or conversion of this Note. 11. OTHER MATTERS (a) BINDING EFFECT; ASSIGNMENT. The provisions of this Note shall be binding upon and inure to the benefit of the parties hereto and the successors and assigns of the Company. (b) FURTHER ACTIONS. At any time and from time to time, the Company and the Holder agree, without further consideration, to take such actions and to execute and deliver such documents as the other may reasonably request to consummate the transactions contemplated in this Note. 12 (c) MODIFICATION; WAIVER. This Note sets forth the entire understanding of the Company and the Holder with respect to the subject matter hereof and supersedes all existing agreements between them concerning such subject matter. This Note may be amended, modified, superseded, canceled, renewed or extended, and the terms hereof may be waived, only by a written instrument signed by the Company and Holders of at least fifty-one percent (51%) in principal amount of the Notes at the time outstanding; provided, however, that the consent of a Holder shall be required to modify the terms of this Note affecting the payment of principal amount of, or interest on, such Holder's Note or the term of such Holder's Note. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof or hereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder preclude any other or further exercise hereof or the exercise of any other right, power or privilege hereunder. Any waiver must be in writing. The rights and remedies provided herein are cumulative and are not exclusive of any rights or remedies which any party may otherwise have at law or in equity. (d) NOTICES. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, or delivered against receipt if to (i) the Company, to Mansur Industries Inc., 8305 N.W. 27th Street, Suite 107, Miami Florida 33122, with a copy to Greenberg Traurig Hoffman Lipoff Rosen & Quentel P.A., 1221 Brickell Avenue, Miami, Florida 33131, Attention: Gary Epstein, Esq. and (ii) the Holder to such Holder at its last address as shown on the Note Register (or to such other address as the party shall have furnished in writing in accordance with the provisions of this SECTION 10(d)). Any notice or other communication given by certified mail shall be deemed given at the time of certification thereof, except for a notice changing a party's address which shall be deemed given at the time of receipt thereof. (e) SEVERABILITY. If any provision of this Note is invalid, illegal, or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. The rate of interest on this Note is subject to any limitations imposed by applicable usury laws. (f) HEADINGS. The headings in this Note are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Note. (g) GOVERNING LAW. This Agreement shall be governed by and construed in all respects under the laws of the State of New York, without reference to its conflict of laws rules or principles. Any suit, action, proceeding or litigation arising out of or relating to this Agreement shall be brought and prosecuted in such federal or state court or courts located within the State of New York as provided by law. The parties hereby irrevocably and unconditionally consent to the jurisdiction of each such court or courts located within the State of New York and 13 to service of process by registered or certified mail, return receipt requested, or by any other manner provided by applicable law, and hereby irrevocably and unconditionally waive any right to claim that any suit, action, proceeding or litigation so commenced has been commenced in an inconvenient forum. (h) DUE AUTHORIZATION. The execution and delivery of this Note and the consummation of the transactions contemplated herein have been authorized by the Board of Directors of the Company. IN WITNESS WHEREOF, the Company has caused this Note to be executed on its behalf by its Chief Executive Officer thereunto duly authorized. MANSUR INDUSTRIES INC. BY:____________________________ Paul I. Mansur Chief Executive Officer Attest: _______________________________ SECRETARY 14 EXHIBIT A NOTICE OF CONVERSION The undersigned being the holder of the attached Subordinated Convertible Note(s) (the "Note(s)") due the Maturity Date (as defined in the Note) of Mansur Industries Inc. (the "Corporation"), hereby exercises the option to convert the Note(s) into Note Shares (as defined in the Note(s)) in accordance with the terms of the Note(s). The undersigned directs that the Note Shares be issued in the name of the holder of the attached Note and delivered as soon as practicable and in accordance with the provisions of the Note(s) to: Full address: ________________________________________ ________________________________________ ________________________________________ ________________________________________ Date: ________________________ By: ________________________ Name: 15 EXHIBIT B NOTICE OF EARLY CONVERSION EVENT Mansur Industries Inc. (the "Company") hereby notifies _______________________, the holder of $___________ principal amount of its Subordinated Convertible Note(s) (the "Note(s)") due the Maturity Date (as defined in the Note), that an Early Conversion Event occurred on ______, 199_, and as such, you are hereby directed to surrender the Note as $______ of principal amount of such Note has been automatically converted into Note Shares (as defined in the Note) in accordance with the terms of the Note. Unless otherwise instructed, the Company shall issue the Note Shares and a new Note for the balance of the principal of the Note not converted in the name of the holder of the attached Note and deliver same as soon as practicable and in accordance with the provisions of the Note(s) to the address set forth in the Note Register. Date: ________________________ Mansur Industries Inc. By: ________________________ Name: 16 EX-99.1 4 EXHIBIT 99.1 Mansur Industries Raises $17MM Through Private Placement of Convertible Notes FOR IMMEDIATE RELEASE Miami, Florida, February 25 - Mansur Industries Inc. (Nasdaq: MANS) announced today the completion of a $17 million private placement of 8 1/4% Subordinated Convertible Notes due 2003. The Notes are convertible into the Company's common stock at a conversion price equal to $17.00 per share. Placement agents for the offering were Credit Suisse First Boston and Josephthal & Co. Principal investors included J.P. Morgan Investment Management, Inc., OppenheimerFunds, Inc., and Warburg Pincus Asset Management, Inc. The Company plans to use the proceeds of the offering to expand manufacturing operations, accelerate the development of its direct marketing and distribution network, and for working capital requirements. Paul I. Mansur, Chief Executive Officer of the Company, stated, "We are very pleased with the strong interest this offering received from leading investment firms representing a vote of confidence for the Company's innovative SystemOne/Registered trademark/ product line and an endorsement of our direct distribution plan. We increased the size of this offering, initially set at $12 million, to respond to the demand." Founded in 1990, Mansur designs, manufactures, sells and supports a full range of self contained, recycling industrial parts washing products for use in the automotive, aviation, marine and general industrial markets. The Company has been awarded eight patents for its products which incorporate innovative, proprietary resource recovery and waste minimization technologies. The Company is headquartered in Miami, Florida. THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS REGARDING FUTURE EVENTS AND THE FUTURE PERFORMANCE OF MANSUR INDUSTRIES THAT INVOLVES RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL EVENTS TO DIFFER MATERIALLY. WE REFER YOU TO THE DOCUMENTS THAT MANSUR INDUSTRIES FILES FORM TIME TO TIME WITH THE SECURITIES AND EXCHANGE COMMISSION WHICH CONTAIN IMPORTANT FACTORS THAT COULD CAUSE ITS RESULTS TO DIFFER FROM ITS CURRENT EXPECTATIONS. CONTACT: Mansur Industries Inc. Paul I. Mansur, Chief Executive Officer, 305/593-8015 -----END PRIVACY-ENHANCED MESSAGE-----