THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS
NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION
OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT AS PERMITTED
UNDER THE SECURITIES PURCHASE AGREEMENT (AS
DEFINED).
June __, 2008
New York, New York
N-___
8% CONVERTIBLE PROMISSORY NOTE
FOR
VALUE RECEIVED, ARDMORE HOLDING CORPORATION, a Delaware
corporation (the “
Company ”),
hereby promises to pay to________________________________
____________________________________, or its permitted assigns (the
“
Holder ”),
except to the extent previously converted as provided herein, on
December __, 2009 or as otherwise earlier provided herein (the
“
Maturity Date ”),
the sum of _____________________Dollars ($_________), together with
simple interest at the rate of eight percent (8%) per annum. After
the Maturity Date, interest on the outstanding principal amount
shall be payable on the last day of each month at the rate of 15%
per annum. Interest shall be calculated on the basis of a 365 day
year on the number of days actually elapsed. All
payments in cash hereunder shall be made in U.S. dollars and in
immediately available funds, and payments shall be applied first to
charges and expenses owed hereunder, next, to interest payable
hereunder, and then to the principal amount outstanding
hereunder. Nothing
contained herein or in any document referred to herein or delivered
in connection herewith shall be deemed to establish or require the
payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law.
This
Note has been issued pursuant to the Amended and Restated
Securities Purchase Agreement dated as of May 12, 2008 between
the Company and the original Holder, as amended (the
“
Securities Purchase Agreement ”),
and shall be governed by the terms thereof. Unless otherwise
separately defined herein, all capitalized terms used in this Note
shall have the same meaning as is set forth in the Securities
Purchase Agreement.
ARTICLE I
CONVERSION RIGHTS
The
Holder shall have the right to convert the principal amount
due under this Note into shares of Common Stock, as set forth
below.
1.1
Conversion into Common Stock .
(a)
The
Holder shall have the right, from and after the date of the
issuance of this Note and until such time as this Note is
fully paid, to convert all or any portion of the outstanding
unpaid principal amount of this Notes into the number of fully
paid and non-assessable shares of Common Stock equal to the
quotient obtained by dividing the (A) sum of (i) principal
amount being converted and (ii) the unpaid interest that has
accrued through the Conversion Date (as defined) on the
principal amount to be converted, by (B) the Conversion Price
(as defined). The Company shall issue and deliver to the
Holder within five Business Days from the Conversion Date
(such fifth business day being the “
Delivery Date ”)
certificates evidencing that number of shares of Common Stock into
which of the Note (or any portion thereof) has been converted. The
term “
Conversion Date ”
means the Business Day (or if such day is not a Business Day, then
the next such day which is a Business Day) on which the Company
receives (x) this Note duly endorsed for transfer and (y) the
properly completed notice of conversion, substantially in the form
annexed hereto.
(b)
Subject
to adjustment as provided in Section 1.1(c) hereof, the
conversion price per share shall be $ 1.08 (the “
Conversion Price ”).
(c)
The
Conversion Price and number and kind of shares of Common Stock
or other securities to be issued upon conversion, shall be
subject to adjustment from time to time upon the happening of
certain events while this Note remains outstanding, as
follows:
(i)
Reorganization, Consolidation, Merger, etc .
In case at any time or from time to time, the Company shall (A)
effect a reorganization, (B) consolidate with or merge into any
other person or (C) transfer all or substantially all of its
properties or assets to any other person under any plan or
arrangement contemplating the dissolution of the Company, then, in
each such case, as a condition to the consummation of such a
transaction, proper and adequate provision shall be made by the
Company whereby the Holder of this Note, on the conversion hereof
as provided in this Article I, at any time after the consummation
of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in
lieu of the Common Stock (or other securities) issuable on such
conversion prior to such consummation or such effective date, the
stock and other securities and property, including cash
(collectively, the “
Other Securities and Property ”),
to which such Holder would have been entitled upon such
consummation or in connection with such dissolution, as the case
may be, if such Holder had so converted this Note, immediately
prior thereto, all subject to further adjustment thereafter as
provided in Section 1.1(c)(iv).
(ii)
Dissolution .
In the event of any dissolution of the Company following the
transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense
deliver or cause to be delivered the stock and Other Securities and
Property by the Holder of this Note after the effective date of
such dissolution to a bank or trust company (a “
Trustee ”)
having its principal office in New York, New York, as trustee for
the Holder.
(iii)
Continuation of Terms .
Upon any reorganization, consolidation, merger or transfer (and any
dissolution following any transfer) referred to in this Article I,
this Note shall continue in full force and effect and the terms
hereof shall be applicable to the Other Securities and Property
receivable on the conversion of this Note after the consummation of
such reorganization, consolidation or merger or the effective date
of dissolution following any such transfer, as the case may be, and
shall be binding upon the issuer of any Other Securities and
Property, including, in the case of any such transfer, the person
acquiring all or substantially all of the properties or assets of
the Company, whether or not such person shall have expressly
assumed the terms of this Note. In the event this Note does not
continue in full force and effect after the consummation of the
transaction described in this Article I, then only in such event
will the Company’s securities and property (including cash,
where applicable) receivable by the Holder of the Notes be
delivered to the Trustee as contemplated by Section
1.1(c)(ii).
(iv)
Extraordinary Events Regarding Common Stock .
In the event that the Company shall (A) issue additional shares of
Common Stock as a dividend or other distribution on its outstanding
Common Stock, (B) subdivide its outstanding shares of Common Stock,
or (C) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, then, in each such event,
the Conversion Price shall, simultaneously with the happening of
such event, be adjusted so that the Holder shall be entitled to
receive the number of shares of Common Stock the Holder would have
owned or been entitled to receive after the occurrence of any of
the events described in this Section 1.1(c)(iv) had this Note been
converted immediately prior to such event. The Conversion Price, as
so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described
herein.
(v)
Certificate as to Adjustments .
In each case of any adjustment or readjustment in the shares of
Common Stock (or Other Securities and Property) issuable on the
conversion of the Notes, the Company at its expense will promptly
cause its Chief Financial Officer or other appropriate designee to
compute such adjustment or readjustment in accordance with the
terms of the Note and prepare a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon
which such adjustment or readjustment is based, including a
statement of (A) the consideration received or receivable by the
Company for any additional shares of Common Stock (or Other
Securities and Property) issued or sold or deemed to have been
issued or sold, (B) the number of shares of Common Stock (or Other
Securities and Property) outstanding or deemed to be outstanding,
and (C) the Conve
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