Exhibit - 10.65
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
Clinton Township, Michigan
July 5, 2006
$[_____]
FOR VALUE RECEIVED, MIDNIGHT HOLDINGS GROUP, INC., a Delaware
corporation
(hereinafter called the "BORROWER"), hereby promises to pay to the
order of [_________] or registered assigns (the "HOLDER") the sum of
$[________], on July
5, 2009 (the "MATURITY DATE"), and to pay interest on the
unpaid principal
balance hereof at the rate of ten percent (10%) per annum from
July 5, 2006 (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 on March 31,
June 30, September 30
and December 31 of each year beginning on the last day of
the first full quarter
after Issue Date. All
payments due
hereunder (to the
extent not converted
into common
stock, $.00005 par value per share,
of the
Borrower (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
<PAGE>
capitalized term used herein, and not otherwise defined,
shall have the
meaning
ascribed thereto in that certain Securities Purchase Agreement, dated July 5,
2006, 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 by and
between the Borrower and the Holder of even date herewith.
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 (iii) 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 4.9% of the
outstanding
shares of Common Stock. 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
2
<PAGE>
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
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 July
5,
2006, executed in
connection
with the initial issuance of this Note and the
other Notes issued on the Issue Date (the "REGISTRATION RIGHTS
AGREEMENT").
1.2 CONVERSION PRICE.
(a) CALCULATION OF CONVERSION PRICE. The Conversion Price shall
be
the lesser of (i) the Variable Conversion Price (as defined herein)
and (ii) the
Fixed 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
mutually acceptable to
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
25%; provided, however, that the Applicable Percentage shall be
increased to (i)
30% in the event that the Registration Statement (as defined in the
Registration
Rights Agreement)
is filed on or before
the Filing Date (as defined in the
Registration Rights
Agreement) and (ii)
40% in the event that the Registration
Statement (as defined in the Registration Rights Agreement) becomes
effective on
or before the
Effectiveness Deadline
(as defined in the
Registration
Rights
Agreement).
(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
3
<PAGE>
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. Subject to the completion of the Charter
Amendment Actions (as defined in the Purchase Agreement), 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.
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
4
<PAGE>
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 the Borrower elects to make 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 the
Borrower elects
to make 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).
The Borrower's
election shall be made
in writing to the Holder 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
Borrower shall be
deemed to have elected to remit Common
Stock. 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).
5
<PAGE>
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.
(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 five (5)
business days after such receipt (and, solely in the case of conversion
of the
entire unpaid
principal amount hereof, surrender of this Note) (such
second
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).
6
<PAGE>
(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.
(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)
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
7
<PAGE>
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."
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 EVEN
