Exhibit 4.1
THIS SECURITY (OR ITS PREDECESSOR)
WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND THIS SECURITY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER
OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS
SECURITY MAY BE RELYING ON AN EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT.
THE HOLDER OF THIS SECURITY AGREES
FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IF THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE),
(III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (IV) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, OR
(V) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED ON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY), IN EACH OF CASES (I) THROUGH
(V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN
CLAUSE (A) ABOVE.
SIRVA, INC.
10% CONVERTIBLE NOTE DUE JUNE
1, 2011
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$____________
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September 29, 2006
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SIRVA, Inc., a
Delaware Corporation (the “ Company ” which term
includes any successor Company or other successor business entity),
for value received, hereby promises to pay to _____________ (or its
successors and permitted assigns)(“ Holder ”),
the principal sum of _________ Dollars ($___________) (the “
Principal Amount ”) on the Maturity Date (as defined
below), together with accrued interest on the unpaid balance of the
principal amount of this Note
at the rate
of ten percent (10%) per annum. The maturity date under this
Note shall be June 1, 2011 (the “ Maturity Date
”). Certain defined terms used in this Note have the
meanings assigned to them in Section 21.
1.
Interest .
(a)
Cash Interest . Interest (“ Interest
”) on this Note shall accrue on the unpaid principal at a per
annum rate of 10% beginning on the Issuance Date. Interest
shall be payable in cash quarterly in arrears on the Quarterly
Interest Payment Date and on the Maturity Date or any other Date
this Note is paid in full, commencing on the first Quarterly
Interest Payment Date following the Issuance Date. Any
Interest accrued and not paid on any Quarterly Interest Payment
date shall be added to the principal sum outstanding and thereafter
accrue additional interest in respect thereof at the per annum rate
set forth above, notwithstanding that the failure to pay Interest
on any Quarterly Interest Payment Date also may be considered an
Event of Default under Section 5. Interest will be computed
on the basis of a 365-day year and actual days elapsed.
(b)
Common Stock Interest . If a Conversion Event has not
occurred by May 31, 2007, the Company shall pay interest in
addition to all other interest payable under this Note in the form
of Common Stock on each Quarterly Interest Payment Date
thereafter (“ Common Stock Interest ”).
The Common Stock Interest shall be equal to 2% per annum of the
outstanding principal amount hereof, with one quarter of such
amount to be issued as Common Stock on each Quarterly Interest
Payment Date at a conversion value of $3.00 per share, rounding
down to the next whole share amount. All such shares
shall be issued in the name of the Holder or its designee and shall
be fully paid and non-assessable and subject only to transfer
restrictions which are similar to those set forth in the Securities
Purchase Agreement.
2.
Payments of Principal . On the Maturity Date or upon
redemption in accordance with Section 6, the Company shall pay to
the Holder an amount in cash equal to the Principal Amount plus any
accrued but unpaid Interest and Common Stock Interest to, but not
including, the date of payment.
3.
Method of Payment . The Company shall pay the
Principal Amount and any accrued Interest in currency of the United
States that at the time of payments is legal tender for payment of
public and private debts. Payments shall be made to the
Holder by wire transfer of immediately available funds to the
account designated in writing by the Holder or by such other means
designated in writing by the Holder and provided to the Company at
least five Business Days before any such payment. If the
Principal Amount, accrued Interest and Common Stock Interest on
this Note are not paid in accordance with its terms, the Company
shall pay to the Holder, in addition to the Principal Amount and
accrued Interest and Common Stock
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Interest thereon, all costs of
collection of the Principal Amount and accrued Interest and Common
Stock Interest, including, but not limited to, reasonable
attorneys’ fees, court costs and other costs for the
enforcement of payment of this Note.
4.
Conversion .
(a)
Conversion after Conversion Event . Upon the
Conversion Event, each $1,000 of the Original Principal Amount
shall automatically convert into one (1) share (“
Conversion Shares ”) of Convertible Preferred Stock,
subject to any applicable laws.
(b)
Covenants . The Company covenants and agrees that so
long as this Note is outstanding, (i) the Company shall have
authorized and reserved a sufficient number of shares of
Convertible Preferred Stock to enable the Holder to convert this
Note into Convertible Preferred Stock, in addition to any other
terms and preferences agreed to by the Holder in writing, and (ii)
the Company shall issue the shares of Convertible Preferred Stock
upon conversion of this Note in accordance with the terms
hereof. The Company further covenants to cause the shares of
Convertible Preferred Stock, when issued pursuant to this Section
4, to be fully paid and nonassessable, and free from all taxes,
liens and charges with respect to the issuance thereof (other than
any liens that may be imposed pursuant to applicable securities
laws).
(c)
Procedure . The Company shall immediately
provide written notice to the Holder after the Conversion
Event. Upon prompt surrender of the Note to the Company by
the Holder after the Conversion Event, the Company shall issue and
deliver the Conversion Shares to the Holder on behalf of the
Company and pay any accrued and unpaid Interest and Common Stock
Interest owed to the Holder up to and including the Conversion
Date. The Holder shall be deemed to have become the holder of
record of, and shall be treated for all purposes as the record
holder of, the Conversion Shares issuable hereunder (and such
Conversion Shares shall be deemed to have been issued) the day
following the Conversion Date.
5.
Events of Default; Rights Upon Event of Default
(a)
Events of Default. Each of the following events shall
constitute an “Event of Default”:
(i)
the Company’s failure to pay to the Holder any amount of
Principal, Interest, Common Stock Interest or other amounts when
and as due under this Note (including, without limitation, the
Company’s failure to pay any redemption payments or amounts
hereunder), which such failure continues for a period of at least
30 days;
(ii)
default in the performance, or breach, of any covenant or warranty
of the Company in the Transaction Documents or any other agreement,
document, certificate or other instrument delivered in connection
with the transactions contemplated hereby and thereby to which the
Holder is a party and continuance of such default or breach for a
period of 30 days after there has been given, by registered or
certified mail, to the Company by a Holder of at least 20% in
principal amount of the then outstanding Notes a written notice
specifying such default
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or breach and requiring it to be
remedied and stating that such notice is a “notice of
default” hereunder;
(iii)
a default under any bonds, debentures, notes or other evidences of
indebtedness for money borrowed of the Company or under any
mortgages, indentures or instruments under which there may be
issued or by which there may be secured or evidenced any
indebtedness for money borrowed by the Company, whether such
indebtedness now exists or shall hereafter be created, which
indebtedness, individually or in the aggregate, has a principal
amount outstanding in excess of $10,000,000, which default shall
have resulted in such indebtedness becoming or being declared due
and payable prior to the date on which it would otherwise have
become due and payable, without such indebtedness having been
discharged, or such acceleration having been rescinded or annulled,
within a period of 30 days after there shall have been given, by
registered or certified mail, to the Company by the Holders of at
least 20% in principal amount of the then outstanding Notes, a
written notice specifying such default and requiring the Company to
cause such indebtedness to be discharged or cause such acceleration
to be rescinded or annulled and stating that such notice is a
“notice of default” hereunder (unless such default has
been cured or waived);
(iv)
a final judgment or judgments for the payment of money aggregating
in excess of $10,000,000 are rendered against the Company or any of
its Subsidiaries and which judgments are not, within 30 days after
the entry thereof, bonded, discharged or stayed pending appeal, or
are not discharged within 30 days after the expiration of such
stay; provided, however, that any judgment which is covered by
insurance or an indemnity from a credit worthy party shall not be
included in calculating the $10,000,000 amount set forth above so
long as the Company provides the Holder a written statement from
such insurer or indemnity provider (which written statement shall
be reasonably satisfactory to the Holder) to the effect that such
judgment is covered by insurance or an indemnity and the Company
will receive the proceeds of such insurance or indemnity within 30
days of the issuance of such judgment;
(v)
the Company or any Subsidiary (as defined in the Securities
Purchase Agreement) pursuant to or within the meaning of any
Bankruptcy Law:
(1)
commences a voluntary case,
(2)
consents to the entry of an order for relief against it in an
involuntary case,
(3)
consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(4)
makes a general assignment for the benefit of its creditors;
or
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(5)
a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(a)
is for relief against the Company or any Subsidiary in an
involuntary case,
(b)
appoints a Custodian of the Company or any Subsidiary or for all or
substantially all of the property of any of them, or
(c)
orders the winding up or liquidation of the Company or any
Subsidiary, and the order or decree remains unstayed and in effect
for 30 days.
As used in this Section 5(a), the
term “ Bankruptcy Law ” means title 11,
U.S. Code or any similar Federal or State law for the relief
of debtors and the term “ Custodian ” means any
receiver, trustee, assignee, liquidator or other similar official
under any Bankruptcy Law.
(b)
Consequences of Event of Default . Promptly after the
Company has knowledge of the occurrence of an Event of Default or
any event which with the giving of notice or the passage of time,
or both, could become such an Event of Default with respect to this
Note or any other Note, the Company shall deliver written notice
thereof via facsimile and overnight courier to the Holder. At
any time after the occurrence and during the continuance of an
Event of Default, the Holder may require the Company to redeem this
Note. The Holder may effect the redemption by sending written
notice (“ Redemption Notice ”) to the Company
stating the Holder has elected to exercise the redemption option,
surrendering the Note and providing payment instructions. The
Company shall have ten days to pay the Principal Amount plus any
accrued but unpaid Interest and Common Stock Interest up to and
including the payment date (“ Redemption Price
”) upon receipt of the Redemption Notice. The Company
shall pay the Redemption Price in cash (except for any accrued
Common Stock Interest).The Holder shall be entitled to seek any
available remedy for the enforcement of this Note, including for
the payment of any Redemption Price). Nothing shall preclude
the Holder from pursuing or obtaining specific performance or other
equitable relief with respect to this Note.
6.
Redemption .
(a)
Fundamental Change Redemption . The Holder shall have
the option to have the Company redeem the Note at the Redemption
Price if a Fundamental Change occurs (“ Fundamental Change
Redemption ”). The Holder may effect the
Fundamental Change Redemption, by delivering a Redemption Notice to
the Company stating the Holder has elected to exercise the
Fundamental Change Redemption, surrendering the Note and providing
payment instructions. The Company shall have ten days to pay
the Redemption Price upon receipt of the Redemption Notice.
The Company shall pay the Redemption Price in cash (except for any
accrued Common Stock Interest).
(b)
Limitation on Fundamental Change Redemption . A
Fundamental Change Redemption is subject to the Company’s
obligation to repay or repurchase any Indebtedness that
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may be required to be repaid or
repurchased in connection with a Fundamental Change and to any
contractual restrictions contained in the terms of any
Inde
