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THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”). THE SECURITIES MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE
AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144
OR REGULATION S UNDER SAID ACT.
CALLABLE SECURED CONVERTIBLE NOTE
New York, New York
November 29, 2005
$148,750
FOR
VALUE RECEIVED, INFE, HUMAN RESOURCES,
INC., a Nevada corporation (hereinafter called the “Borrower”),
hereby promises to pay to the order of AJW PARTNERS, LLC or registered assigns
(the “Holder”) the sum of $148,750, on November 29, 2008
(the “Maturity Date”), and to pay interest on the unpaid
principal balance hereof at the rate of eight percent (8%) (the “Interest
Rate”) per annum from November 29, 2005 (the “Issue Date”)
until the same becomes due and payable, whether at maturity or upon
acceleration or by prepayment or otherwise. Any amount of principal or
interest on this Note which is not paid when due shall bear interest at the
rate of fifteen percent (15%) per annum from the due date thereof until the
same is paid (“Default Interest”). Interest shall
commence accruing on the Issue Date, shall be computed on the basis of a
365-day year and the actual number of days elapsed and shall be payable
quarterly provided that no interest shall be due and payable for any month in
which the Trading Price (as such term is defined below) is greater than $.6375
for each Trading Day (as such term is defined below) of the month. All payments
due hereunder (to the extent not converted into common stock, $.001 par value
per share (the “Common Stock”) in accordance with the terms
hereof) shall be made in lawful money of the United States of America.
All payments shall be made at such address as the Holder shall hereafter
give to the Borrower by written notice made in accordance with the provisions
of this Note. Whenever any amount expressed to be due by the terms of
this Note is due on any day which is not a business day, the same shall instead
be due on the next succeeding day which is a business day and, in the case of
any interest payment date which is not the date on which this Note is paid in
full, the extension of the due date thereof shall not be taken into account for
purposes of determining the amount of interest due on such date. As used
in this Note, the term “business day” shall mean any day other than
a Saturday, Sunday or a day on which commercial banks in the city of New York,
New York are authorized or required by law or executive order to remain closed.
Each capitalized term used herein, and not otherwise defined, shall have
the meaning ascribed thereto in that certain Securities Purchase Agreement,
dated November 29, 2005, pursuant to which this Note was originally issued (the
“Purchase Agreement”).
This Note is
free from all taxes, liens, claims and encumbrances with respect to the issue
thereof and shall not be subject to preemptive rights or other similar rights
of shareholders of the Borrower and will not impose personal liability upon the
holder thereof. The obligations of the Borrower under this Note shall be
secured by that certain Security Agreement and Intellectual Property Security
Agreement, each dated November 29, 2005 by and between the Borrower and the
Holder.
The
following terms shall apply to this Note:
ARTICLE I. CONVERSION RIGHTS
1.1
Conversion
Right.
The Holder shall have the right from time to time, and at any time on or
prior to the earlier of (i) the Maturity Date and (ii) the date of payment of
the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or
Article III, the Optional Prepayment Amount (as defined in Section 5.1 or any
payments pursuant to Section 1.7, each in respect of the remaining outstanding
principal amount of this Note to convert all or any part of the outstanding and
unpaid principal amount of this Note into fully paid and non-assessable shares
of Common Stock, as such Common Stock exists on the Issue Date, or any shares
of capital stock or other securities of the Borrower into which such Common
Stock shall hereafter be changed or reclassified at the conversion price
(the “Conversion Price”) determined as provided herein
(a “Conversion”); provided, however, that in
no event shall the Holder be entitled to convert any portion of this Note in
excess of that portion of this Note upon conversion of which the sum of (1) the
number of shares of Common Stock beneficially owned by the Holder and its
affiliates (other than shares of Common Stock which may be deemed beneficially
owned through the ownership of the unconverted portion of the Notes or the
unexercised or unconverted portion of any other security of the Borrower
(including, without limitation, the warrants issued by the Borrower pursuant to
the Purchase Agreement) subject to a limitation on conversion or exercise analogous
to the limitations contained herein) and (2) the number of shares of Common
Stock issuable upon the conversion of the portion of this Note with respect to
which the determination of this proviso is being made, would result in
beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock and provided further that the
Holder shall not be entitled to convert any portion of this Note during any
month immediately succeeding a Determination Date on which the Borrower
exercises its prepayment option pursuant to Section 5.2 of this Note. For
purposes of the proviso to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder,
except as otherwise provided in clause (1) of such proviso. The number of
shares of Common Stock to be issued upon each conversion of this Note shall be
determined by dividing the Conversion Amount (as defined below) by the
applicable Conversion Price then in effect on the date specified in the notice
of conversion, in the form attached hereto as Exhibit A (the “Notice
of Conversion”), delivered to the Borrower by the Holder in
accordance with Section 1.4 below; provided that the Notice of Conversion is
submitted by facsimile (or by other means resulting in, or reasonably expected
to result in, notice) to the Borrower before 6:00 p.m., New York, New York time
on such conversion date (the “Conversion Date”). The
term “Conversion Amount” means, with respect to any
conversion of this Note, the sum of (1) the principal amount of this Note to be
converted in such conversion plus (2) accrued and unpaid interest, if
any, on such principal amount at the interest rates provided in this Note to
the Conversion Date, provided, however, that the Company shall have the right
to pay any or all interest in cash plus (3) Default Interest, if any, on
the amounts referred to in the immediately preceding clauses (1) and/or (2) plus
(4) at the Holder’s option, any amounts owed to the Holder pursuant to
Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of that certain
Registration Rights Agreement, dated as of November 29, 2005, executed in
connection with the initial issuance of this Note and the other Notes issued on
the Issue Date (the “Registration Rights Agreement”).
The term “Determination Date” means the last business
day of each month after the Issue Date.
2
1.2
Conversion
Price.
(a)
Calculation
of Conversion Price. The Conversion Price shall be the Variable Conversion Price
(as defined herein) (subject, in each case, to equitable adjustments for stock
splits, stock dividends or rights offerings by the Borrower relating to the
Borrower’s securities or the securities of any subsidiary of the
Borrower, combinations, recapitalization, reclassifications, extraordinary
distributions and similar events). The “Variable Conversion
Price” shall mean the Applicable Percentage (as defined herein)
multiplied by the Market Price (as defined herein). “Market
Price” means the average of the lowest three (3) Trading Prices (as
defined below) for the Common Stock during the twenty (20) Trading Day period
ending one Trading Day prior to the date the Conversion Notice is sent by the
Holder to the Borrower via facsimile (the “Conversion Date”).
“Trading Price” means, for any security as of any
date, the intraday trading price on the Over-the-Counter Bulletin Board (the
“OTCBB”) as reported by a reliable reporting service (“Reporting
Service”) mutually acceptable to Borrower and Holder and hereafter
designated by Holders of a majority in interest of the Notes and the Borrower
or, if the OTCBB is not the principal trading market for such security, the
intraday trading price of such security on the principal securities exchange or
trading market where such security is listed or traded or, if no intraday
trading price of such security is available in any of the foregoing manners,
the average of the intraday trading prices of any market makers for such
security that are listed in the “pink sheets” by the National
Quotation Bureau, Inc. If the Trading Price cannot be calculated for such
security on such date in the manner provided above, the Trading Price shall be
the fair market value as mutually determined by the Borrower and the holders of
a majority in interest of the Notes being converted for which the calculation
of the Trading Price is required in order to determine the Conversion Price of
such Notes. “Trading Day” shall mean any day on which
the Common Stock is traded for any period on the OTCBB, or on the principal
securities exchange or other securities market on which the Common Stock is
then being traded. “Applicable Percentage” shall mean
50.0%.
3
(b)
Conversion
Price During Major Announcements. Notwithstanding anything contained in Section 1.2(a) to the
contrary, in the event the Borrower (i) makes a public announcement that it
intends to consolidate or merge with any other corporation (other than a merger
in which the Borrower is the surviving or continuing corporation and its
capital stock is unchanged) or sell or transfer all or substantially all of the
assets of the Borrower or (ii) any person, group or entity (including the
Borrower) publicly announces a tender offer to purchase 50% or more of the
Borrower’s Common Stock (or any other takeover scheme) (the date of the
announcement referred to in clause (i) or (ii) is hereinafter referred to as
the “Announcement Date”), then the Conversion Price
shall, effective upon the Announcement Date and continuing through the Adjusted
Conversion Price Termination Date (as defined below), be equal to the lower of
(x) the Conversion Price which would have been applicable for a Conversion
occurring on the Announcement Date and (y) the Conversion Price that would
otherwise be in effect. From and after the Adjusted Conversion Price
Termination Date, the Conversion Price shall be determined as set forth in this
Section 1.2(a). For purposes hereof, “Adjusted Conversion
Price Termination Date” shall mean, with respect to any proposed
transaction or tender offer (or takeover scheme) for which a public
announcement as contemplated by this Section 1.2(b) has been made, the date
upon which the Borrower (in the case of clause (i) above) or the person, group
or entity (in the case of clause (ii) above) consummates or publicly announces
the termination or abandonment of the proposed transaction or tender offer (or
takeover scheme) which caused this Section 1.2(b) to become operative.
1.3
Authorized
Shares.
The Borrower covenants that during the period the conversion right
exists, the Borrower will reserve from its authorized and unissued Common Stock
a sufficient number of shares, free from preemptive rights, to provide for the
issuance of Common Stock upon the full conversion of this Note and the other
Notes issued pursuant to the Purchase Agreement. The Borrower is required
at all times to have authorized and reserved two times the number of shares
that is actually issuable upon full conversion of the Notes (based on the
Conversion Price of the Notes or the Exercise Price of the Warrants in effect
from time to time) (the “Reserved Amount”). The
Reserved Amount shall be increased from time to time in accordance with the
Borrower’s obligations pursuant to Section 4(h) of the Purchase
Agreement. The Borrower represents that upon issuance, such shares will
be duly and validly issued, fully paid and non-assessable. In addition,
if the Borrower shall issue any securities or make any change to its capital
structure which would change the number of shares of Common Stock into which
the Notes shall be convertible at the then current Conversion Price, the
Borrower shall at the same time make proper provision so that thereafter there
shall be a sufficient number of shares of Common Stock authorized and reserved,
free from preemptive rights, for conversion of the outstanding Notes. The
Borrower (i) acknowledges that it has irrevocably instructed its transfer agent
to issue certificates for the Common Stock issuable upon conversion of this
Note, and (ii) agrees that its issuance of this Note shall constitute full
authority to its officers and agents who are charged with the duty of executing
stock certificates to execute and issue the necessary certificates for shares
of Common Stock in accordance with the terms and conditions of this Note.
4
If, at any time a Holder of this Note submits a Notice of
Conversion, and the Borrower does not have sufficient authorized but unissued
shares of Common Stock available to effect such conversion in accordance with
the provisions of this Article I (a “Conversion Default”),
subject to Section 4.8, the Borrower shall issue to the Holder all of the
shares of Common Stock which are then available to effect such conversion.
The portion of this Note which the Holder included in its Conversion
Notice and which exceeds the amount which is then convertible into available
shares of Common Stock (the “Excess Amount”) shall,
notwithstanding anything to the contrary contained herein, not be convertible
into Common Stock in accordance with the terms hereof until (and at the
Holder’s option at any time after) the date additional shares of Common
Stock are authorized by the Borrower to permit such conversion, at which time
the Conversion Price in respect thereof shall be the lesser of (i) the
Conversion Price on the Conversion Default Date (as defined below) and (ii) the
Conversion Price on the Conversion Date thereafter elected by the Holder in
respect thereof. In addition, the Borrower shall pay to the Holder
payments (“Conversion Default Payments”) for a Conversion
Default in the amount of (x) the sum of (1) the then outstanding
principal amount of this Note plus (2) accrued and unpaid interest on
the unpaid principal amount of this Note through the Authorization Date (as
defined below) plus (3) Default Interest, if any, on the amounts
referred to in clauses (1) and/or (2), multiplied by (y) .24, multiplied
by (z) (N/365), where N = the number of days from the day the holder
submits a Notice of Conversion giving rise to a Conversion Default (the “Conversion
Default Date”) to the date (the “Authorization Date”)
that the Borrower authorizes a sufficient number of shares of Common Stock to
effect conversion of the full outstanding principal balance of this Note.
The Borrower shall use its best efforts to authorize a sufficient number
of shares of Common Stock as soon as practicable following the earlier of (i)
such time that the Holder notifies the Borrower or that the Borrower otherwise
becomes aware that there are or likely will be insufficient authorized and
unissued shares to allow full conversion thereof and (ii) a Conversion Default.
The Borrower shall send notice to the Holder of the authorization of
additional shares of Common Stock, the Authorization Date and the amount of
Holder’s accrued Conversion Default Payments. The accrued
Conversion Default Payments for each calendar month shall be paid in cash or
shall be convertible into Common Stock (at such time as there are sufficient
authorized shares of Common Stock) at the applicable Conversion Price, at the
Borrower’s option, as follows:
(a)
In the
event Holder elects to take such payment in cash, cash payment shall be made to
Holder by the fifth (5th) day of the month following the month in
which it has accrued; and
(b)
In the
event Holder elects to take such payment in Common Stock, the Holder may
convert such payment amount into Common Stock at the Conversion Price (as in
effect at the time of conversion) at any time after the fifth day of the month
following the month in which it has accrued in accordance with the terms of
this Article I (so long as there is then a sufficient number of authorized
shares of Common Stock).
5
The Holder’s election shall be made in writing to the
Borrower at any time prior to 6:00 p.m., New York, New York time, on the third
day of the month following the month in which Conversion Default payments have
accrued. If no election is made, the Holder shall be deemed to have
elected to receive cash. Nothing herein shall limit the Holder’s
right to pursue actual damages (to the extent in excess of the Conversion
Default Payments) for the Borrower’s failure to maintain a sufficient
number of authorized shares of Common Stock, and each holder shall have the
right to pursue all remedies available at law or in equity (including degree of
specific performance and/or injunctive relief).
1.4
Method
of Conversion.
(a)
Mechanics
of Conversion. Subject to Section 1.1, this Note may be converted by the
Holder in whole or in part at any time from time to time after the Issue Date,
by (A) submitting to the Borrower a Notice of Conversion (by facsimile or
other reasonable means of communication dispatched on the Conversion Date prior
to 6:00 p.m., New York, New York time) and (B) subject to Section 1.4(b),
surrendering this Note at the principal office of the Borrower.
(b)
Surrender
of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein,
upon conversion of this Note in accordance with the terms hereof, the Holder
shall not be required to physically surrender this Note to the Borrower unless
the entire unpaid principal amount of this Note is so converted. The
Holder and the Borrower shall maintain records showing the principal amount so
converted and the dates of such conversions or shall use such other method,
reasonably satisfactory to the Holder and the Borrower, so as not to require
physical surrender of this Note upon each such conversion. In the event
of any dispute or discrepancy, such records of the Borrower shall be
controlling and determinative in the absence of manifest error.
Notwithstanding the foregoing, if any portion of this Note is converted
as aforesaid, the Holder may not transfer this Note unless the Holder first physically
surrenders this Note to the Borrower, whereupon the Borrower will forthwith
issue and deliver upon the order of the Holder a new Note of like tenor,
registered as the Holder (upon payment by the Holder of any applicable transfer
taxes) may request, representing in the aggregate the remaining unpaid
principal amount of this Note. The Holder and any assignee, by acceptance
of this Note, acknowledge and agree that, by reason of the provisions of this
paragraph, following conversion of a portion of this Note, the unpaid and
unconverted principal amount of this Note represented by this Note may be less
than the amount stated on the face hereof.
(c)
Payment
of Taxes. The Borrower shall not be required to pay any tax which may
be payable in respect of any transfer involved in the issue and delivery of
shares of Common Stock or other securities or property on conversion of this
Note in a name other than that of the Holder (or in street name), and the
Borrower shall not be required to issue or deliver any such shares or other
securities or property unless and until the person or persons (other than the
Holder or the custodian in whose street name such shares are to be held for the
Holder’s account) requesting the issuance thereof shall have paid to the
Borrower the amount of any such tax or shall have established to the
satisfaction of the Borrower that such tax has been paid.
6
(d)
Delivery
of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile
transmission (or other reasonable means of communication) of a Notice of
Conversion meeting the requirements for conversion as provided in this Section
1.4, the Borrower shall issue and deliver or cause to be issued and delivered
to or upon the order of the Holder certificates for the Common Stock issuable
upon such conversion within three (3) business days after such receipt (and,
solely in the case of conversion of the entire unpaid principal amount hereof,
surrender of this Note) (such third business day being hereinafter referred to
as the “Deadline”) in accordance with the terms hereof and
the Purchase Agreement (including, without limitation, in accordance with the
requirements of Section 2(g) of the Purchase Agreement that certificates for
shares of Common Stock issued on or after the effective date of the
Registration Statement upon conversion of this Note shall not bear any
restrictive legend).
(e)
Obligation
of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of
Conversion, the Holder shall be deemed to be the holder of record of the Common
Stock issuable upon such conversion, the outstanding principal amount and the
amount of accrued and unpaid interest on this Note shall be reduced to reflect
such conversion, and, unless the Borrower defaults on its obligations under
this Article I, all rights with respect to the portion of this Note being so
converted shall forthwith terminate except the right to receive the Common
Stock or other securities, cash or other assets, as herein provided, on such
conversion. If the Holder shall have given a Notice of Conversion as
provided herein, the Borrower’s obligation to issue and deliver the
certificates for Common Stock shall be absolute and unconditional, irrespective
of the absence of any action by the Holder to enforce the same, any waiver or
consent with respect to any provision thereof, the recovery of any judgment
against any person or any action to enforce the same, any failure or delay in
the enforcement of any other obligation of the Borrower to the holder of
record, or any setoff, counterclaim, recoupment, limitation or termination, or
any breach or alleged breach by the Holder of any obligation to the Borrower,
and irrespective of any other circumstance which might otherwise limit such
obligation of the Borrower to the Holder in connection with such conversion.
The Conversion Date specified in the Notice of Conversion shall be the
Conversion Date so long as the Notice of Conversion is received by the Borrower
before 6:00 p.m., New York, New York time, on such date.
(f)
Delivery
of Common Stock by Electronic Transfer.
In lieu of delivering physical
certificates representing the Common Stock issuable upon conversion, provided
the Borrower’s transfer agent is participating in the Depository Trust
Company (“DTC”) Fast Automated Securities Transfer (“FAST”)
program, upon request of the Holder and its compliance with the provisions
contained in Section 1.1 and in this Section 1.4, the Borrower shall use its
best efforts to cause its transfer agent to electronically transmit the Common
Stock issuable upon conversion to the Holder by crediting the account of
Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent
Commission (“DWAC”) system.
7
(g)
Failure
to Deliver Common Stock Prior to Deadline.
Without in any way limiting the
Holder’s right to pursue other remedies, including actual damages and/or
equitable relief, the parties agree that if delivery of the Common Stock
issuable upon conversion of this Note is more than two (2) business days after
the Deadline (other than a failure due to the circumstances described in
Section 1.3 above, which failure shall be governed by such Section) the
Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond
the Deadline that the Borrower fails to deliver such Common Stock. Such
cash amount shall be paid to Holder by the fifth day of the month following the
month in which it has accrued or, at the option of the Holder (by written
notice to the Borrower by the first day of the month following the month in
which it has accrued), shall be added to the principal amount of this Note, in
which event interest shall accrue thereon in accordance with the terms of this
Note and such additional principal amount shall be convertible into Common
Stock in accordance with the terms of this Note.
1.5
Concerning
the Shares. The shares of Common Stock issuable upon conversion
of this Note may not be sold or transferred unless (i) such shares are
sold pursuant to an effective registration statement under the Act or (ii) the
Borrower or its transfer agent shall have been furnished with an opinion of
counsel (which opinion shall be in form, substance and scope customary
for opinions of counsel in comparable transactions) to the effect that the
shares to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration or (iii) such shares are sold or
transferred pursuant to Rule 144 under the Act (or a successor rule) (“Rule
144”) or (iv) such shares are transferred to an
“affiliate” (as defined in Rule 144) of the Borrower who agrees to
sell or otherwise transfer the shares only in accordance with this Section 1.5
and who is an Accredited Investor (as defined in the Purchase Agreement).
Except as otherwise provided in the Purchase Agreement (and subject to
the removal provisions set forth below), until such time as the shares of
Common Stock issuable upon conversion of this Note have been registered under
the Act as contemplated by the Registration Rights Agreement or otherwise may be
sold pursuant to Rule 144 without any restriction as to the number of
securities as of a particular date that can then be immediately sold, each
certificate for shares of Common Stock issuable upon conversion of this Note
that has not been so included in an effective registration statement or that
has not been sold pursuant to an effective registration statement or an
exemption that permits removal of the legend, shall bear a legend substantially
in the following form, as appropriate:
“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR
OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER
SAID ACT.”
8
The legend set forth above shall be removed and the
Borrower shall issue to the Holder a new certificate therefor free of any
transfer legend if (i) the Borrower or its transfer agent shall have received
an opinion of counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions, to the effect that a public sale or
transfer of such Common Stock may be made without registration under the Act
and the shares are so sold or transferred, (ii) such Holder provides the
Borrower or its transfer agent with reasonable assurances that the Common Stock
issuable upon conversion of this Note (to the extent such securities are deemed
to have been acquired on the same date) can be sold pursuant to Rule 144 or
(iii) in the case of the Common Stock issuable upon conversion of this Note,
such security is registered for sale by the Holder under an effective
registration statement filed under the Act or otherwise may be sold pursuant to
Rule 144 without any restriction as to the number of securities as of a
particular date that can then be immediately sold. Nothing in this Note
shall (i) limit the Borrower’s obligation under the Registration Rights
Agreement or (ii) affect in any way the Holder’s obligations to comply
with applicable prospectus delivery requirements upon the resale of the
securities referred to herein.
1.6
Effect
of Certain Events.
(a)
Effect
of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or
disposition of all or substantially all of the assets of the Borrower, the
effectuation by the Borrower of a transaction or series of related transactions
in which more than 50% of the voting power of the Borrower is disposed of, or
the consolidation, merger or other business combination of the Borrower with or
into any other Person (as defined below) or Persons when the Borrower is not
the survivor shall either: (i) be deemed to be an Event of Default (as
defined in Article III) pursuant to which the Borrower shall be required to pay
to the Holder upon the consummation of and as a condition to such transaction
an amount equal to the Default Amount (as defined in Article III) or (ii) be
treated pursuant to Section 1.6(b) hereof. “Person”
shall mean any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization.
9
(b)
Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon






