Exhibit 4.2
THIS NOTE AND
THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED.
CONVERTIBLE PROMISSORY
NOTE
FOR VALUE RECEIVED, CaminoSoft Corp., a
California corporation (the “ Company
”), promises to pay to the order of The Frost National Bank,
FBO US Special Opportunities Trust PLC, a public limited company
registered in England and Wales, Trust No. W00118000 (“
Holder ”), or its registered assigns, on or
before May 7, 2007 (unless this Note shall have been sooner
presented for conversion as herein provided), in lawful money of
the United States, the principal sum of one hundred thousand
dollars ($100,000), together with interest at the rate of eight
percent (8%) per annum from the date of this Note until
paid.
1.
Priority . This Note, and the obligations and liabilities
represented hereby, shall be senior to all other obligations and
liabilities of the Company; provided, however, that this Note, and
the obligations and liabilities represented hereby, (i) shall be
subordinated only to secured senior indebtedness of the Company
which, by its express terms, is secured and is senior to all other
indebtedness of the Company and which has been previously committed
in writing or funded, and (ii) shall rank pari passu in
all respects to all indebtedness of the Company to the
“Lenders” named in that certain Borrower’s
Security Agreement, dated as of July 19, 2004, among the Company,
Renaissance Capital Growth & Income Fund III, Inc., a Texas
corporation, Renaissance US Growth Investment Trust PLC, a public
limited company registered in England and Wales, US Special
Opportunities Trust PLC (formerly BFS US Special Opportunities
Trust PLC), a public limited company registered in England and
Wales, and Renaissance Capital Group, Inc., a Texas corporation, as
Agent, as amended from time to time (the “ Security
Agreement ”).
2.
Interest . Accrued and unpaid interest on this Note shall be
payable in monthly installments, commencing March 1,
2007.
3.
Conversion Right . Holder shall have the right, at
Holder’s option, at any time, to convert all, or any part of
the outstanding principal amount of this Note into such number of
fully paid and nonassessable shares of common stock, without par
value (the “ Common Stock ”), as
provided herein. Holder may exercise the conversion right by giving
written notice (the “ Conversion Notice
”) to the Company of the exercise of such right and stating
the name or names in which the stock certificate or stock
certificates for the shares of Common Stock are to be issued and
the address to which such certificates shall be delivered. The
Conversion Notice shall be accompanied by this Note. The number of
shares of Common Stock that shall be issuable upon conversion of
this Note shall equal the outstanding principal amount of the Note
being converted, divided by the Conversion Price (as defined below)
in effect on the date the Conversion Notice is given. Conversion
shall be deemed to have been effected on the date the Conversion
Notice is delivered (the “ Conversion Date
”). Within ten (10) business days after receipt of the
Conversion Notice, the Company shall issue and deliver by hand
against a signed receipt therefor or by United States registered
mail, return receipt requested, to the address designated in the
Conversion Notice, a stock certificate or stock certificates of the
Company representing the number of shares of Common Stock to which
Holder is entitled and a check or cash in payment of all interest
accrued and unpaid on this Note up to and including the Conversion
Date. The conversion rights will be governed by the following
provisions:
(a)
Conversion Price . On the issue date hereof and until such
time as an event requiring an adjustment pursuant to this
Section 3 shall occur, the initial Conversion Price shall be
$0.30.
(b)
Adjustment for Issuance of Shares at Less Than the Conversion
Price . If and whenever any Additional Common Stock shall be
issued by the Company (the date upon which such Additional Common
Stock is issued is referred to herein as the “ Stock
Issue Date ”) for a consideration per share less
than the then-current Conversion Price, then in each such case such
Conversion Price shall be reduced to a new Conversion Price equal
to the price per share for the Additional Common Stock then issued,
if issued in connection with a sale of shares, or the value of the
Additional Common Stock then issued, as determined in accordance
with generally accepted accounting principles, if issued other than
for cash, and the number of shares issuable to Holder upon
conversion shall be proportionately increased; and, in the case of
Additional Common Stock issued without consideration, the then
current Conversion Price shall be reduced to an amount, and the
number of shares issued upon conversion shall be increased to an
amount, so as to maintain for Holder the right to convert this Note
into shares equal in amount to the same percentage interest in the
Common Stock of the Company as existed for Holder immediately
preceding the Stock Issue Date.
(c) Sale of
Shares . In case of the issuance of Additional Common Stock for
a consideration part or all of which shall be cash, the amount of
the cash consideration therefor shall be deemed to be the gross
amount of the cash paid to the Company for such shares, before
deducting any underwriting compensation or discount in the sale,
underwriting or purchase thereof by underwriters or dealers or
others performing similar services or for any expenses incurred in
connection therewith. In case of the issuance of any shares of
Additional Common Stock for a consideration part or all of which
shall be other than cash, the amount of the consideration therefor,
other than cash, shall be deemed to be the then fair market value
of the property received, as determined by mutual agreement of
Holder and the Company, or in the absence of agreement, by
arbitration in accordance with the rules then in effect of the
American Arbitration Association, before a single arbitrator to be
chosen from a panel of persons qualified by education and training
to pass on the matter to be decided.
(d) Stock
Splits, Subdivisions or Combinations . In the event of a stock
split or subdivision of the Common Stock into a greater number of
shares, the Conversion Price shall be proportionately decreased,
and in the event of a combination of the Common Stock into a
smaller number of shares, the Conversion Price shall be
proportionately increased, such increase or decrease, as the case
may be, becoming effective at the record date thereof.
(e) Stock
Dividends . Shares of Common Stock issued as a dividend or
other distribution on any class of capital stock (other than in
connection with a stock split or subdivision of shares) of The
Company shall be deemed to have been issued without consideration,
and the Conversion Price shall be adjusted pursuant to Section
3(b) .
(f)
Exceptions . The term “ Additional Common Stock
” herein shall mean all shares of Common Stock or securities
convertible into or exercisable for shares of Common Stock
hereafter issued by the Company (including Common Stock held in the
treasury of the Company), except (A) Common Stock issued upon the
conversion of any presently outstanding convertible securities; (B)
Common Stock awards or Common Stock issued upon exercise of any
presently outstanding stock options or Common Stock awards or stock
options issued in the future pursuant to an equity incentive plan
duly approved by the Company’s Board of Directors or a
Compensation Committee of the Board of Directors, which approval
shall include the approval of a majority of any nonemployee
directors; (C) securities issued pursuant to acquisitions or
strategic transactions duly approved by the Company’s Board
of Directors, provided any such issuance shall only be to an entity
(or its security holders) which is, itself or through its
subsidiaries, an opera
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