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Exhibit
10.43
THIS NOTE AND THE SECURITIES ISSUABLE
UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT AND/OR APPLICABLE
STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD
PURSUANT TO RULE 144 OF SUCH ACT.
COMVERGE,
INC.
SUBORDINATED CONVERTIBLE
PROMISSORY NOTE
FOR VALUE RECEIVED, Comverge,
Inc., a Delaware corporation (the “ Company ”),
promises to pay to «Holders_Name» (the “
Holder ”), or its registered assigns, the principal
amount of $«Amount», or such lesser amount as shall equal
the outstanding principal amount hereof, together with interest on
the unpaid balance hereof from time to time outstanding at the rate
of 5.5% per annum (calculated on the basis of 365 days and
paid for the actual number of days elapsed) (the “
Interest Rate ”) compounded and paid on a quarterly
basis. Principal and any accrued but unpaid interest shall be paid
in full on April 1, 2009 (the “ Maturity Date
”). All unpaid principal, together with any then accrued but
unpaid interest and any other amounts payable hereunder, shall be
due and payable on the Maturity Date, unless payment is accelerated
pursuant to Section 7 (such earlier date is hereinafter
referred to as “ Maturity ”). The Holder
acknowledges that this Subordinated Convertible Promissory Note
(this “ Note ”) is one in a series of notes (the
“ Acquisition Notes ”) issued by the Company on
the date first set forth above in connection with that certain
Agreement and Plan of Merger dated June 27, 2007 (the “
Merger Agreement ”), by and among the Company,
Comverge Eagle, Inc., a Delaware corporation, Enerwise Global
Technologies, Inc., a Delaware corporation, and the Stockholder
Representative, as defined therein.
The following is a statement
of the rights of the Holder of this Note and the conditions to
which this Note is subject and to which the Holder, by the
acceptance of this Note, agrees:
1. Certain Definitions
. As used in this Note, the following capitalized terms have the
following meanings:
(a) “ Acquisition
Notes ” has the meaning set forth in the preamble to this
Note.
(b) “ Business
Day ” means any day other than a Saturday, Sunday or
other day on which the national or state banks located in the
Commonwealth of Pennsylvania or the State of New Jersey are
authorized to be closed.
(c) “ Change of
Control ” means any (i) the acquisition of the
Company by another entity (or group of affiliated entities or
entities operating as a group) by means of any transaction or
series of related transactions (including, without limitation, any
reorganization, merger or
consolidation) unless the
Company’s stockholders of record as constituted immediately
prior to such acquisition or sale will, immediately after such
acquisition or sale (by virtue of securities issued as
consideration for the Company’s acquisition or sale or
otherwise) hold at least 50% of the voting power of the surviving
or acquiring entity and in substantially the same proportion or
(ii) a sale, lease or other conveyance or disposition of all
or substantially all of the assets of the Company, including a sale
of all or substantially all of the assets of the Company’s
subsidiaries, if such assets constitute substantially all of the
assets of the Company and such subsidiaries taken as a
whole.
(d) “ Common
Stock ” means the Company’s common stock, par value
$0.001 per share.
(e) “ Company
” has the meaning set forth in the preamble to this
Note.
(f) “ Conversion
Date ” has the meaning set forth in
Section 4(a) hereof.
(g) “ Event of
Default ” shall have the meaning set forth in
Section 5 hereof.
(h) “ Holder
” has the meaning set forth in the preamble to this
Note.
(i) “ Interest
Rate ” has the meaning set forth in the preamble to this
Note.
(j) “ Majority
Holders ” means Holders holding a majority of the
then-outstanding aggregate principal amount of the Acquisition
Notes.
(k) “ Maturity
” has the meaning set forth in the preamble to this
Note.
(l) “ Maturity
Date ” has the meaning set forth in the preamble to this
Note.
(m) “ Merger
Agreement ” has the meaning set forth in the preamble of
this Note.
(n) “ Note
Conversion Price ” means $[ 125% of the average
closing price of the Common Stock for the 20 trading days
immediately prior to the signing of Project Eagle ] per share
of Common Stock, subject to adjustment as set forth in
Section 4(d).
(o) “
Obligations ” means any and all obligations of the
Company to the Holder pursuant to the terms of this Note, including
without limitation, the principal, interest and any other amounts
due and payable under this Note.
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2. Interest . Accrued
and unpaid interest on this Note shall be payable quarterly
commencing on August 1, 2007, with subsequent interest
payments being payable on each of the subsequent October 1
st
, January 1
st
, April 1
st
and August 1 st thereafter until Maturity;
provided , however , if the date of such interest
payment does not fall on a Business Day, then such interest payment
shall be made on the next Business Day thereafter. Upon the
occurrence of an Event of Default, and until such time as the Event
of Default has been cured, the rate of interest accruing on the
unpaid principal balance and all other amounts due and payable
under this Note shall be 10% per annum (calculated on the
basis of 365 days and paid for the actual number of days elapsed).
Overdue amounts payable under this Note will be payable upon
demand.
3. Prepayment . The
Note may not be prepaid in whole or in part, without the prior
written consent of the Holder of this Note, and in no event shall
any prepayment be made with respect to any other Acquisition Note
unless and until the Company shall have offered to prepay a like
proportion of this Note.
4. Conversion
.
(a) Generally .
Beginning on July 23, 2008, and prior to the repayment of this
Note, all, but not less than all, of the then-outstanding principal
amount of this Note, any accrued but unpaid interest and any other
amounts payable under this Note may be converted, at the Option of
the Holder, into that number of shares, subject to Section
4(d) , of Common Stock equal to the quotient of (i) the
amount of the then-unpaid principal amount of this Note, any
accrued but unpaid interest and any other amounts payable under
this Note to be converted divided by (ii) the Note Conversion
Price.
(b) Partial Conversion
. In addition to the conversion right set forth in
Section 4(a) , one time after July 23, 2008, and
prior to repayment of this Note, the Holder shall be entitled to
convert a portion of the then-outstanding principal amount of this
Note, any accrued but unpaid interest and any other amounts payable
under this Note into that number of shares, subject to
Section 4(d) , of Common Stock equal to the quotient of
(i) the amount of then-unpaid principal amount of this Note,
any accrued but unpaid interest and any other amounts payable under
this Note to be converted divided by (ii) the Note Conversion
Price.
(c) Conversion
Procedure . If this Note is converted pursuant to
Section 4(a) , the Holder shall give written notice to
the Company notifying the Company of its election to convert this
Note and specifying the aggregate amount of the unpaid principal
amount of this Note and any accrued but unpaid interest and any
other amounts payable under this Note that the Holder elects to
convert. Before the Holder shall be entitled to convert this Note,
the Holder shall surrender this Note at the Company’s
principal executive office, or, if this Note has been lost, stolen,
destroyed or mutilated, then, in the case of loss, theft or
destruction, the Holder shall deliver an indemnity agreement
reasonably satisfactory in form and substance to the Company
(without the requirement of a bond) or, in the case of mutilation,
the Holder shall surrender and cancel this Note. The Company shall,
as soon as practicable thereafter, issue and deliver to such Holder
at the address indicated in the Holders notice of its election to
convert this Note a certificate or certificates for the number of
shares to which the Holder shall be entitled upon such conversion
(bearing such legends as are required by applicable state and
federal securities laws in the opinion of counsel to the
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Company). Such conversion shall be
deemed to have been made immediately prior to the close of business
on the date of the surrender of this Note or the delivery of an
indemnity agreement. The person or persons entitled to receive
securities issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such securities on such
date. If a portion of the outstanding principal amount of this Note
is converted pursuant to Section 4(b) , a new Note
shall promptly be delivered to the Holder for the unconverted
balance of the principal amount of this Note and shall be like
tenor as to all of the terms of the Note surrendered.
(d) Fractional Shares;
Interest; Nonassessable; Effect of Conversion . Any fractional
shares to be issued upon conversion of this Note shall be rounded
down to the nearest whole share, and the Company shall pay to the
Holder the amount of such fractional share multiplied by the
average of the high and low reported sales price per share of the
Common Stock as of the last trading day prior to the surrender of
this Note or the delivery of an indemnity agreement, as reported in
the principal market for such securities or, if no such market
exists, as determined in good faith by the Company’s board of
directors. The Company covenants that the shares of Common Stock
issuable upon the conversion of this Note will, upon conversion of
this Note, be validly issued, fully paid and nonassessable and free
from all taxes, liens and charges in respect of the issue thereof.
Upon conversion of this Note in full and the payment of the amount
of any Obligations, the Company shall be forever released from all
its obligations and liabilities under this Note.
(e) Adjustment of Note
Conversion Price .
(i) Subdivision, Stock
Dividends, Combinations and the Like . In case the Company
shall at any time subdivide, combine or consummate a similar
transaction with respect to the outstanding shares of Common Stock
or shall issue a stock dividend with respect to the Common Stock,
the Note Conversion Price in effect immediately prior to such
subdivision, issuance of such dividend, combination or other
transaction shall be proportionately decreased, and in case the
Company shall at any time combine the outstanding shares of Common
Stock, the Note Conversion Price in effect immediately prior to
such combination shall be proportionately increased, in each case
effective at the close of business on the date of such subdivision,
dividend or combination, as the case may be.
(ii) Reclassification,
Exchange, Substitution, Other Distribution . Upon any
reclassification, exchange, substitution or other similar event
that results in a change of the number and/or class of the
securities issuable upon exercise or conversion of this Note or
upon the payment of a dividend or other distribution in securities
(other than shares of Common Stock), cash or property, the Holder
shall be entitled to receive, upon conversion of this Note, the
number and kind of securities and property that Holder would have
received if this Note had been converted immediately before the
record date for such reclassification, exchange, substitution, or
other similar event or immediately prior to the record date for
such dividend or other distribution in addition to the number of
shares of Common Stock issuable hereunder. The Company or its
successor shall promptly issue to Holder a new note for such new
securities or other property. The new note shall provide for
adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this
Section 4(d) including, without limitation, adjustments
to the Note Conversion Price and to the number of securities or
property issuable upon conversion of the new note. The
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provisions of this
Section 4(d)(ii) shall similarly apply to successive
reclassifications, exchanges, substitutions, or other events and
successive dividends or other distributions.
(iii) Adjustment for
Reorganization . If there shall occur any reorganization,
recapitalization, reclassification, consolidation or merger
involving the Company in which the Common Stock is converted into
or exchanged for securities, cash or other property (other than a
transaction covered by Sections 4(d)(i) or 4(d)(ii) of this
Note) (collectively, a “ Reorganization ”),
then, following such Reorganization, the Holder shall receive upon
conversion hereof the kind and amount of securities, cash or other
property which the Holder would have been entitled to receive
pursuant to such Reorganization if such conversion had taken place
immediately prior to such Reorganization. Notwithstanding the
foregoing sentence, if (x) there shall occur any
Reorganization in which the Common Stock is converted into or
exchanged for anything other than solely equity securities, and
(y) the common stock of the acquiring or surviving company is
publicly traded, then, as part of such Reorganization, (i) the
Holder shall have the right thereafter to receive upon the
conversion hereof such number of shares of common stock of the
acquiring or surviving company as is determined by multiplying
(A) the number of shares of Common Stock into which this Note
is convertible immediately prior to such Reorganization by
(B) a fraction, the numera
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