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EXHIBIT 10.47
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
Yucaipa, California
August 29, 2008
$5,000
FOR VALUE RECEIVED, INGEN TECHNOLOGIES, INC., a Georgia
Corporation (hereinafter called the "BORROWER"), hereby promises to
pay to the
order of AJW Partners, LLC or registered assigns (the "HOLDER") the
sum of
$5,000 on August 29, 2011 (the "MATURITY DATE"), and to pay
interest on the
unpaid principal balance hereof at the rate of twelve percent (12%)
(the
"INTEREST RATE") per annum from August 29, 2008 (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
$41.09 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, no 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
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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 June 16, 2008, 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 that
certain Intellectual Property Security Agreement, each dated June
16, 2008 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
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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 June 16, 2008, 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.
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
40%.
(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
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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 upon the
increase in the number of authorized shares of the Company's Common
Stock to
500,000,000 shares within thirty (30) days from the date hereof and
during the
period the conversion right exists thereafter, 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
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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).
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).
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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 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).
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(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 three (3) 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
$1,000 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.
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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."
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.
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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
