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Exhibit
10.44
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
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$_________
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September 29, 2007 |
FOR VALUE RECEIVED, Comverge
Giants, Inc., a Delaware corporation (the “ Company
”), promises to pay to __________ (the “ Holder
”), or his registered assigns, the principal amount of $
, 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 March 29, 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 of two notes (the “ Notes ”)
issued by the Company on the date first set forth above in
connection with that certain Equity Purchase Agreement dated
September 29, 2007 (the “ Purchase Agreement
”), by and among the Company, Comverge, Inc., a Delaware
corporation, Keith Hartman and Lori Hartman.
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) “ Business
Day ” means any day other than a Saturday, Sunday or
other day on which the national or state banks located in the State
of New Jersey are authorized to be closed.
(b) “ Change of
Control ” means (i) the acquisition of the Company
or Parent 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 or Parent’s stockholders of record, as
applicable, 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 or
Parent’s acquisition or sale or otherwise, as applicable)
hold at least 50% of the
voting power of the surviving or
acquiring entity and in substantially the same proportion; provided
that any transactions or series of transaction with respect to the
Company that results in the Company continuing to be a subsidiary
of Parent, whether directly or indirectly, shall not be deemed to
be a “Change of Control;” or (ii) a sale, lease or
other conveyance or disposition of all or substantially all of the
assets of the Company or Parent , including a sale of all or
substantially all of the assets of the Company’s subsidiaries
or Parent’s subsidiaries, as applicable, if such assets
constitute substantially all of the assets of the Company or
Parent, as applicable, and such subsidiaries taken as a whole;
provided that any sale, lease or other conveyance or disposition of
all or substantially all of the Company’s assets to another
entity controlled by Parent, whether directly or indirectly, shall
not be deemed to be a “Change of Control.”
(c) “ Company
” has the meaning set forth in the preamble to this
Note.
(d) “ Conversion
Date ” has the meaning set forth in
Section 4(a) hereof.
(e) “ Event of
Default ” shall have the meaning set forth in
Section 5 hereof.
(f) “ Holder
” has the meaning set forth in the preamble to this
Note.
(g) “ Interest
Rate ” has the meaning set forth in the preamble to this
Note.
(h) “ Majority
Holder ” means the holder(s) of a majority of the
then-outstanding aggregate principal amount of the
Notes.
(i) “ Maturity
” has the meaning set forth in the preamble to this
Note.
(j) “ Maturity
Date ” has the meaning set forth in the preamble to this
Note.
(k) “ Notes
” has the meaning set forth in the preamble to this
Note.
(l) “ Parent
” means Comverge, Inc., a Delaware corporation and holder of
all of the outstanding stock of the Company.
(m) “ Parent Common
Stock ” means Parent’s common stock, par value
$0.001 per share.
(n) “ Purchase
Agreement ” has the meaning set forth in the preamble of
this Note.
(o) “ Note
Conversion Price ” means the price per share of Parent
Common Stock that is equal to 125% of the average closing price of
the Parent Common Stock for the 20 trading days commencing nine
trading days prior to the Closing date and ending ten trading days
after the Closing, subject to adjustment as set forth in
Section 4(d).
(p) “
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 January 1, 2008, with subsequent interest
payments being payable on each of the subsequent April 1
st
, July 1
st
, October 1
st
and January 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.
4. Conversion
.
(a) Total Conversion .
Beginning on September 29, 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 Parent Common Stock equal to the
quotient of (i) the amount of the then-outstanding 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 September 29, 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 Parent Common Stock equal to the
quotient of (i) the amount of then-outstanding 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) or 4(b) , the Holder shall give written
notice to the Company and Parent notifying the Company and Parent
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. At the
request of the Company, Parent shall, as soon as practicable
thereafter, issue and deliver to the Company a certificate or
certificates for the number of shares to which the Holder shall be
entitled upon such conversion, and the Company promptly thereafter
shall transfer to such Holder at the address indicated in the
Holder’s 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 from
the Company the 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 identical (other than with respect to
principal amount) 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. The Company and Parent covenant
that the shares of Parent 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 and Parent 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 Parent shall
at any time subdivide, combine or consummate a similar transaction
with respect to the outstanding shares of Parent Common Stock or
shall issue a stock dividend with respect to the Parent 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 Parent
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 Parent 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 provisions
of this Section 4(d)(ii) shall similarly apply to
successive reclassifications, exchanges, substitutions, or other
events and successive dividends or other distributions.
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(iii) Adjustment for
Reorganization . If there shall occur any reorganization,
recapitalization, reclassification, consolidation or merger
involving Parent in which the Parent 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 Parent 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 s
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