Exhibit 10.2
NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO
WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF
COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR
RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE
TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii) AND 17(a) HEREOF.
THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE
SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE
AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii)
OF THIS NOTE.
AMENDED AND RESTATED CONVERTIBLE
SUBORDINATED NOTE
Issuance Date: October 11, 2006
Principal: U.S. $1,775,000
FOR VALUE RECEIVED, NOBLE
INTERNATIONAL, LTD., a Delaware corporation (the
“Company” ), hereby promises to pay to the order
of HFR RVA Combined Master Trust or registered assigns (
“Holder” ) the amount set out above as the
Principal (as reduced pursuant to the terms hereof pursuant to
redemption, conversion or otherwise, the
“Principal” ) when due, whether upon the
Maturity Date (as defined below), acceleration, redemption or
otherwise (in each case in accordance with the terms hereof) and to
pay interest ( “Interest” ) on any outstanding
Principal at the rate of 6.00% per annum, subject to periodic
adjustment pursuant to Section 2 (the “Interest
Rate” ), from the date set out above as the Issuance
Date (the “Issuance Date” ) until the same
becomes due and payable, whether upon an Interest Date (as defined
below), the Maturity Date, acceleration, conversion, redemption or
otherwise (in each case in accordance with the terms hereof). This
Amended and Restated Convertible Subordinated Note (the
“Note” ) amends and restates in its entirety
that certain Convertible Subordinated Note dated March 24,
2004 in the original aggregate principal amount of $1,400,000 (the
“Prior Note” ). This Note is in substitution,
and not payment or satisfaction, of the Prior Note and the
Company’s obligations to Holder under this Note, including
its obligations to make payments, are expressly conditioned upon
Holder’s delivery to Company of the Prior Note, or if the
Holder cannot deliver the Prior Note, evidence reasonably
satisfactory to the Company that the Prior Note has been lost,
stolen or mutilated or cannot otherwise be delivered. This Note is
one of a series of four Notes being issued on the date hereof
(collectively, the “Notes” and such other
Amended and Restated Convertible Subordinated Notes, the
“Other Notes” ). Certain capitalized terms are
defined in Section 27.
1. MATURITY. On the Maturity Date,
the Holder shall surrender this Note to the Company and the Company
shall pay to the Holder an amount in cash representing all
outstanding Principal, accrued and unpaid Interest and accrued and
unpaid Late Charges, if any. The “Maturity Date”
shall be October 11, 2011.
2. INTEREST; INTEREST RATE. Interest on this
Note shall commence accruing on the Issuance Date and shall be
computed on the basis of a 365-day year and actual days elapsed and
shall be payable in arrears on the first day of each March and
September and on the Maturity Date during the period beginning on
the Issuance Date and ending on, and including, the Maturity Date
(each, an “Interest Date” ) with the first
Interest Date being March 1, 2007. Interest shall be payable
on each Interest Date in cash. Prior to the payment of Interest on
an Interest Date, Interest on this Note shall accrue at the
Interest Rate and be payable by way of inclusion of the Interest in
the Conversion Amount in accordance with Section 3(b)(i). In
the event the Company has not reissued this Note in fully
registered, book-entry form within forty five (45) days after
the Issuance Date, then from and after the date that is 45 days
after the Issuance Date through the date on which such reissuance
occurs, the Interest Rate shall be increased to 7%. From and after
the occurrence of an Event of Default, the Interest Rate shall be
increased to 11%. In the event that such Event of Default is
subsequently cured, the adjustment referred to in the preceding
sentence shall cease to be effective as of the date of such cure;
provided that the Interest as calculated at such increased rate
during the continuance of such Event of Default shall continue to
apply to the extent relating to the days after the occurrence of
such Event of Default through and including the date of cure of
such Event of Default.
3. CONVERSION OF NOTE. This Note
shall be convertible into shares of the Company’s common
stock, par value $0.00067 per share (the “Common
Stock” ), on the terms and conditions set forth in this
Section 3.
(a) Conversion Right .
Subject to the provisions of Section 3(d), at any time or
times on or after the Issuance Date, the Holder shall be entitled
to convert any portion of the outstanding and unpaid Conversion
Amount (as defined below) into fully paid and nonassessable shares
of Common Stock in accordance with Section 3(c), at the
Conversion Rate (as defined below). The Company shall not issue any
fraction of a share of Common Stock upon any conversion. If the
issuance would result in the issuance of a fraction of a share of
Common Stock, the Company shall round such fraction of a share of
Common Stock up to the nearest whole share. The Company shall pay
any and all taxes that may be payable with respect to the issuance
and delivery of Common Stock upon conversion of any Conversion
Amount.
(b) Conversion Rate . The
number of shares of Common Stock issuable upon conversion of any
Conversion Amount pursuant to Section 3(a) shall be determined
by dividing (x) such Conversion Amount by (y) the
Conversion Price (as defined below) (the “Conversion
Rate” ).
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(i)
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“Conversion Amount”
means the sum of (A) the
portion of the Principal to be converted, redeemed or otherwise
with respect to which this determination is being made,
(B) accrued and unpaid Interest with respect to such Principal
and (C) accrued and unpaid Late Charges with respect to such
Principal and Interest.
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(ii)
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“Conversion Price”
means, as of any Conversion Date (as
defined below) or other date of determination that is
(x) prior to the Reset Date, $18.50 (as adjusted for any stock
dividend, stock split, stock combination, reclassification or
similar transaction) and (y) from and after the Reset Date,
the product of (A) 125% and (B) the forty-five
(45) consecutive Trading Day trailing average daily Closing
Sale Price of the Common Stock as of the Reset Date, each subject
to adjustment as provided herein.
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(c) Mechanics of Conversion
.
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(i)
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Optional
Conversion . To convert
any Conversion Amount into shares of Common Stock on any date (a
“Conversion Date” ), the Holder shall
(A) transmit by facsimile (or otherwise deliver), for receipt
on or prior to 11:59 p.m., New York Time, on such date, a copy of
an executed notice of conversion in the form attached hereto as
Exhibit I (the “Conversion Notice” ) to
the Company and (B) if required by Section 3(c)(iii),
surrender this Note to a common carrier for delivery to the Company
as soon as practicable on or following such date (or an
indemnification undertaking with respect to this Note in the case
of its loss, theft or destruction). On or before the first Business
Day following the date of receipt of a Conversion Notice, the
Company shall transmit by facsimile a confirmation of receipt of
such Conversion Notice to the Holder and the Company’s
transfer agent (the “Transfer Agent” ). On or
before the second Business Day following the date of receipt of a
Conversion Notice (the “Share Delivery Date” ),
the Company shall (X) credit such aggregate number of shares
of Common Stock to which the Holder shall be entitled to the
Holder’s or its designee’s balance account with
Depository Trust Company ( “DTC” ) through its
Deposit Withdrawal Agent Commission system or (Y) if the
Transfer Agent is not participating in DTC Fast Automated
Securities Transfer Program, issue and deliver to the address as
specified in the Conversion Notice, a certificate, registered in
the name of the Holder or its designee, for the number of shares of
Common Stock to which the Holder shall be entitled. If this Note is
physically surrendered for conversion as required by
Section 3(c)(iii) and the outstanding Principal of this Note
is greater than the Principal portion of the Conversion Amount
being converted, then the Company shall as soon as practicable and
in no event later than three (3) Business Days after receipt
of this Note and at its own expense, issue and deliver to the
holder a new Note (in accordance with Section 17(d))
representing the outstanding Principal not converted. The Person or
Persons entitled to receive the shares of Common Stock issuable
upon a conversion of this Note shall be treated for all purposes as
the record holder or holders of such shares of Common Stock on the
Conversion Date.
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(ii)
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Company’s Failure to Timely
Convert . If the Company
shall fail to issue a certificate to the Holder or credit the
Holder’s balance account with DTC for the number of shares of
Common Stock to which the Holder is entitled upon conversion of any
Conversion Amount on or prior to the date which is five
(5) Business Days after the Conversion Date (a
“Conversion Failure” ), then (A) the
Company shall pay damages to the Holder for each date of such
Conversion Failure in an amount equal to 1.0% of the product of
(I) the sum of the number of shares of Common Stock not issued
to the Holder on or prior to the Share Delivery Date and to which
the Holder is entitled, and (II) the Closing Sale Price of the
Common Stock on the Share Delivery Date and (B) the Holder,
upon written notice to the Company, may void its Conversion Notice
with respect to, and retain or have returned, as the case may
be,
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any portion of this Note that has
not been converted pursuant to such Conversion Notice; provided
that the voiding of a Conversion Notice shall not affect the
Company’s obligations to make any payments which have accrued
prior to the date of such notice pursuant to this
Section 3(c)(ii) or otherwise.
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(iii)
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Book-Entry . Notwithstanding anything to the contrary set
forth herein, upon conversion of any portion of this Note in
accordance with the terms hereof, the Holder shall not be required
to physically surrender this Note to the Company unless
(A) the full Conversion Amount represented by this Note is
being converted or (B) the Holder has provided the Company
with prior written notice (which notice may be included in a
Conversion Notice) requesting physical surrender and reissue of
this Note. The Holder and the Company shall maintain records
showing the Principal, Interest and Late Charges converted and the
dates of such conversions or shall use such other method,
reasonably satisfactory to the Holder and the Company, so as not to
require physical surrender of this Note upon conversion.
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(d) Limitations on
Conversions .
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(i)
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4.99%
Maximum . The Company
shall not effect any conversion of this Note, and the Holder of
this Note shall not have the right to convert any portion of this
Note pursuant to Section 3(a), to the extent that after giving
effect to such conversion, the Holder (together with the
Holder’s affiliates) would beneficially own in excess of
4.99% of the number of shares of Common Stock outstanding
immediately after giving effect to such conversion. For purposes of
the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its affiliates shall include
the number of shares of Common Stock issuable upon conversion of
this Note with respect to which the determination of such sentence
is being made, but shall exclude the number of shares of Common
Stock which would be issuable upon (A) conversion of the
remaining, nonconverted portion of this Note beneficially owned by
the Holder or any of its affiliates and (B) exercise or
conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any Other
Notes or warrants) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its affiliates. Except as set forth
in the preceding sentence, for purposes of this
Section 3(d)(i), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act
of 1934, as amended. For purposes of this Section 3(d)(i), in
determining the number of outstanding shares of Common Stock, the
Holder may rely on the number of outstanding shares of Common Stock
as reflected in (x) the Company’s most recent Form 10-Q
or Form 10-K, (y) a more recent public announcement by the
Company or (z) any other notice by the Company or the Transfer
Agent setting forth the number of shares of Common Stock
outstanding. For any reason at any time, upon the written or oral
request of the Holder, the Company shall within one
(1) Business Day confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding. In any case,
the number of outstanding shares of Common Stock shall be
determined after giving effect to the conversion or exercise
of
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securities of the Company, including
this Note, by the Holder or its affiliates since the date as of
which such number of outstanding shares of Common Stock was
reported. By written notice to the Company, the Holder may waive
the provisions of this Section 3(d)(i); provided that any such
waiver will not be effective until the sixty-first (61
st
) day after such
notice is delivered to the Company.
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(ii)
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9.99%
Maximum . The Company
shall not effect any conversion of this Note, and the Holder of
this Note shall not have the right to convert any portion of this
Note pursuant to Section 3(a), to the extent that after giving
effect to such conversion, the Holder (together with the
Holder’s affiliates) would beneficially own in excess of
9.99% of the number of shares of Common Stock outstanding
immediately after giving effect to such conversion. For purposes of
the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its affiliates shall include
the number of shares of Common Stock issuable upon conversion of
this Note with respect to which the determination of such sentence
is being made, but shall exclude the number of shares of Common
Stock which would be issuable upon (A) conversion of the
remaining, nonconverted portion of this Note beneficially owned by
the Holder or any of its affiliates and (B) exercise or
conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any Other
Notes or warrants) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its affiliates. Except as set forth
in the preceding sentence, for purposes of this
Section 3(d)(ii), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act
of 1934, as amended. For purposes of this Section 3(d)(ii), in
determining the number of outstanding shares of Common Stock, the
Holder may rely on the number of outstanding shares of Common Stock
as reflected in (x) the Company’s most recent Form 10-Q
or Form 10-K, (y) a more recent public announcement by the
Company or (z) any other notice by the Company or the Transfer
Agent setting forth the number of shares of Common Stock
outstanding. For any reason at any time, upon the written or oral
request of the Holder, the Company shall within one
(1) Business Day confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding. In any case,
the number of outstanding shares of Common Stock shall be
determined after giving effect to the conversion or exercise of
securities of the Company, including this Note, by the Holder or
its affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. By written notice
to the Company, the Holder may waive the provisions of this
Section 3(d)(ii); provided that any such waiver will not be
effective until the sixty-first (61 st ) day after such notice is
delivered to the Company.
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4. RIGHTS UPON EVENT OF DEFAULT.
(a) Event of Default . Each
of the following events shall constitute an “Event of
Default” :
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(i)
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the failure of
the applicable Registration Statement required to be filed pursuant
to the Registration Rights Agreement to be declared effective by
the SEC on or prior to the date that is 60 days after the
applicable Effectiveness Deadline (as defined in the Registration
Rights Agreement), or, while the applicable Registration Statement
is required to be maintained effective pursuant to the terms of the
Registration Rights Agreement, the effectiveness of the applicable
Registration Statement lapses for any reason (including, without
limitation, the issuance of a stop order) or is unavailable to any
holder of the Notes for sale of all of such holder’s
Registrable Securities (as defined in the Registration Rights
Agreement) in accordance with the terms of the Registration Rights
Agreement, and such lapse or unavailability continues for a period
of 10 consecutive Trading Days or for more than an aggregate of 30
Trading Days in any 365-day period (other than days during an
Allowable Grace Period (as defined in the Registration Rights
Agreement));
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(ii)
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the suspension
from trading or failure of the Common Stock to be listed on the
NASDAQ National Market or The New York Stock Exchange, Inc. for a
period of five (5) consecutive Trading Days or for more than
an aggregate of seven Trading Days in any 365-day
period;
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(iii)
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the
Company’s failure to cure a Conversion Failure by delivery of
the required number of shares of Common Stock within ten
(10) Business Days after the applicable Conversion
Date;
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(iv)
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the
Company’s failure to pay to the Holder any amount of
Principal when and as due under this Note (including, without
limitation, the Company’s failure to pay any Redemption Price
or Make-Whole Premium);
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(v)
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the
Company’s failure to pay to the Holder any amount of
Interest, Late Charges or other amounts when and as due under this
Note, the Registration Rights Agreement or any other agreement,
document, certificate or other instrument delivered in connection
with the transactions contemplated hereby and thereby to which the
Holder is a party, if such failure continues for a period of at
least five (5) Business Days;
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(vi)
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any default
under, redemption of or acceleration prior to maturity of any
Senior Indebtedness (as defined below) of the Company or any of its
Subsidiaries; provided that in the case of a payment default of
such Senior Indebtedness, such default is not cured within
applicable cure periods; further provided that in the case of a
non-payment default of such Senior Indebtedness that has not
resulted in an acceleration or redemption of such Senior
Indebtedness prior to its maturity, only upon acceleration or
redemption of such Senior Indebtedness;
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(vii)
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the Company or
any of its Subsidiaries, pursuant to or within the meaning of Title
11, U.S. Code, or any similar Federal or state law for the relief
of debtors (collectively, “Bankruptcy Law” ),
(A) commences a voluntary case, (B) consents to the entry
of an order for relief against it in an involuntary case,
(C) consents to
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the appointment of a receiver,
trustee, assignee, liquidator or similar official (a
“Custodian” ), (D) makes a general
assignment for the benefit of its creditors or (E) admits in
writing that it is generally unable to pay its debts as they become
due;
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(viii)
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a court of
competent jurisdiction enters an order or decree under any
Bankruptcy Law that (A) is for relief against the Company or
any of its Subsidiaries in an involuntary case, (B) appoints a
Custodian of the Company or any of its Subsidiaries or
(C) orders the liquidation of the Company or any of its
Subsidiaries;
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(ix)
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a final
judgment or judgments for the payment of money aggregating in
excess of $500,000 are rendered against the Company or any of its
Subsidiaries and which judgments are not, within 60 days after the
entry thereof, bonded, discharged or stayed pending appeal, or are
not discharged within 60 days after the expiration of such stay;
provided, however, that any judgment which is covered by insurance
or an indemnity from a credit worthy party shall not be included in
calculating the $500,000 amount set forth above so long as the
Company provides the Holder a written statement from such insurer
or indemnity provider (which written statement shall be reasonably
satisfactory to the Holder) to the effect that such judgment is
covered by insurance or an indemnity and the Company will receive
the proceeds of such insurance or indemnity within 30 days of the
issuance of such judgment;
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(x)
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the Company
materially breaches any representation, warranty, covenant or other
term or condition of the letter agreement of even date herewith
between the Company, the Holder and the Holders of the Other Notes,
the Registration Rights Agreement, this Note, the Closing
Certificate of the Company, or any other agreement, document,
certificate or other instrument delivered in connection with the
transactions contemplated thereby and hereby to which the Holder is
a party, except, in the case of a breach of a covenant or other
term or condition which is curable, only if such breach continues
for a period of at least ten (10) consecutive Business
Days;
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(xi)
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the
Company’s failure to pay in full and cancel that certain
Convertible Subordinated Note dated March 24, 2004 in favor of
Mainfield Enterprises, Inc. in the principal amount of $7,500,000
within three days after the Issuance Date; or
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(xii)
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any Event of
Default (as defined in the Other Notes) occurs with respect to any
Other Notes.
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(b) Rights Upon Event of
Default . Promptly after the occurrence of an Event of Default
with respect to this Note or any of the Other Notes, the Company
shall deliver written notice thereof via facsimile and overnight
courier (an “Event of Default Notice” ) to the
Holder. At any time after the earlier of the Holder’s receipt
of an Event of Default Notice and the Holder becoming aware of an
Event of Default, the Holder may require the Company to redeem all
or any portion of this Note by delivering written notice thereof
(the “Event of Default Redemption Notice” ) to
the Company, which Event of Default Redemption Notice shall
indicate the portion of this Note the Holder is electing to redeem.
Each portion of this Note subject to redemption by the
7
Company pursuant to this
Section 4(b) shall be redeemed by the Company at a price equal
to the greater of (i) the product of (x) the Conversion
Amount to be redeemed and (y) the Redemption Premium and
(ii) the product of (A) the Conversion Rate with respect
to such Conversion Amount in effect at such time as the Holder
delivers an Event of Default Redemption Notice and (B) the
Closing Sale Price of the Common Stock on the date immediately
preceding such Event of Default (the “Event of Default
Redemption Price” ). The Event of Default Redemption
Price shall be paid in the following manner: (I) the Company
shall pay the portion of the Event of Default Redemption Price
equal to the Conversion Amount in cash and (II) the remaining
portion of the Event of Default Redemption Price (the “
Excess Event of Default Redemption Price ”) shall be
paid, at the Company’s option, in either (a) cash or
(b) by delivery of shares of Common Stock (“ Event of
Default Shares ”). The Company shall be required to set
forth in the Event of Default Notice of any election to pay the
Excess Event of Default Redemption Price in Event of Default
Shares. Any portion of the Event of Default Redemption Price that
the Company elects to pay in Common Stock shall be paid in a number
of fully paid and nonassessable shares equal to the quotient of
(1) the Excess Event of Default Redemption Price and
(2) the Event of Default Conversion Price (as hereinafter
defined) in effect; provided that the amount of Event of Default
Shares delivered by the Company as payment for the Excess Event of
Default Redemption Price shall not exceed the Required Reserve
Amount. For purposes of this Section, the “ Event of
Default Conversion Price ” shall mean, as of any date of
determination, if the Equity Conditions have been satisfied (or
waived in writing by the Holder) as of the first day of the Event
of Default Conversion Period (as hereinafter defined) through, and
including, the date of payment of the Event of Default Redemption
Price (disregarding for the purposes of determining whether clause
(i)(y) in the definition of Equity Conditions has been satisfied
the Event of Default giving rise to the redemption hereunder), the
price which shall be computed as 90% of the arithmetic average of
the Weighted Average Price of the Common Stock on each of the 5
consecutive Trading Days following the date on which the Company
publicly announces such redemption (the “ Event of Default
Conversion Period ”); all such determinations to be
appropriately adjusted for any stock split, stock dividend, stock
combination or other similar transaction that proportionately
decreases or increases the Common Stock during such Event of
Default Conversion Period; provided, however, that if the Equity
Conditions have not been satisfied or waived as required above, the
Company and Holder shall determine the Event of Default Conversion
Price using commercially reasonable means agreed to by them.
Redemptions required by this Section 4(b) shall be made in
accordance with the provisions of Section 11 and the date on
which the Event of Default Redemption Price is paid pursuant to
such Section 11 shall be the “ Event of Default
Redemption Date .” When determining if the Equity
Conditions have been satisfied, the term “Call Redemption
Date” shall be replaced with the term “Event of Default
Redemption Date.”
5. RIGHTS UPON CHANGE OF
CONTROL.
(a) Change of Control . Each
of the following events shall constitute a “Change of
Control”:
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(i)
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the
consolidation, merger or other business combination (including,
without limitation, a reorganization, recapitalization or spin-off)
of the Company with or into another Person (other than (A) a
consolidation, merger or other business
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combination (including, without
limitation, reorganization, recapitalization or spin-off) in which
holders of the Company’s voting power immediately prior to
the transaction continue after the transaction to hold, directly or
indirectly, the voting power of the surviving entity or entities
necessary to elect a majority of the members of the board of
directors (or their equivalent if other than a corporation) of such
entity or entities, or (B) pursuant to a migratory merger
effected solely for the purpose of changing the jurisdiction of
incorporation of the Company);
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(ii)
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the sale or
transfer of all or substantially all of the Company’s assets;
or
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(iii)
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a purchase,
tender or exchange offer made to and accepted by the holders of
more than the 50% of the outstanding shares of Common
Stock.
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No sooner than fifteen
(15) days nor later than ten (10) days prior to the
consummation of a Change of Control, but not prior to the public
announcement of such Change of Control, the Company shall deliver
written notice thereof via facsimile and overnight courier to the
Holder (a “Change of Control Notice”
).
(b) Assumption . Prior to the
consummation of any Change of Control, the Company will secure from
any Person purchasing the Company’s assets or Common Stock or
any successor resulting from such Change of Control (in each case,
an “Acquiring Entity” ) a written agreement (in
form and substance satisfactory to the Holder of this Note) to
assume all of the obligations of the Company under this Note and
the other Transaction Documents, including to deliver to the Holder
of the Note in exchange for such Note, a security of the Acquiring
Entity evidenced by a written instrument substantially similar in
form and substance to the Note, including, without limitation,
having a principal amount and interest rate equal to the principal
amounts and the interest rates of the Note held by the Holder, and
satisfactory to the Holder of the Note. In the event that an
Acquiring Entity is directly or indirectly controlled by a company
or entity whose common stock or similar equity interest is listed,
designated or quoted on a securities exchange or trading market,
the Holder of the Note may elect to treat such Person as the
Acquiring Entity for purposes of this Section 5(b). Upon
consummation of a Change of Control as a result of which holders of
Common Stock shall be entitled to receive stock, securities, cash,
assets or any other property with respect to or in exchange for
such Common Stock, the Acquiring Entity shall deliver to the Holder
confirmation that there shall be issued upon conversion of this
Note at any time after the consummation of such Change of Control,
in lieu of the shares of Common Stock issuable upon the conversion
of the Note prior to such Change of Control, such shares of stock,
securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) which
the Holder would have been entitled to receive upon the happening
of such Change of Control had this Note been converted immediately
prior to such Change of Control, as adjusted in accordance with the
provisions of this Note. The provisions of this Section shall be
applied without regard to any limitations on the conversion of this
Note.
(c) Redemption Upon Change of
Control . At any time during the period beginning after the
Holder’s receipt of a Change of Control Notice and ending on
the date of the consummation of such Change of Control (or, in the
event a Change of Control Notice is not delivered at least
10
9
days prior to a Change of Control,
at any time on or after the date which is 10 days prior to a Change
of Control and ending 10 days after the consummation of such Change
of Control), the Holder may require the Company to redeem all or
any portion of this Note by delivering written notice thereof (
“Change of Control Redemption Notice” ) to the
Company, which Change of Control Redemption Notice shall indicate
the Conversion Amount the Holder is electing to redeem;
provided, however , that the Company shall not be under any
obligation to redeem all or any portion of this Note or to deliver
the applicable Change of Control Redemption Price unless and until
the applicable Change of Control is consummated. The portion of
this Note subject to redemption pursuant to this Section 5(c)
shall be redeemed by the Company at a price equal to the greater of
(i) the product of (x) the Conversion Amount being
redeemed and (y) the quotient determined by dividing
(A) the Closing Sale Price of the Common Stock immediately
following the public announcement of such proposed Change of
Control by (B) the Conversion Price and (ii) 110% of the
Conversion Amount being redeemed (the “Change of Control
Redemption Price” ). The Change of Control Redemption
Price shall be paid in the following manner: (I) the Company
shall pay the portion of the Change of Control Redemption Price
equal to the Conversion Amount in cash and (II) the remaining
portion of the Change of Control Redemption Price (the “
Excess Change of Control Redemption Price ”) shall be
paid, at the Company’s option, in either (a) cash or
(b) by delivery of shares of Common Stock (“ Change
of Control Shares ”). The Company shall be required to
set forth in the Change of Control Notice of any election to pay
the Excess Change of Control Redemption Price in Change of Control
Shares. Any portion of the Change of Control Redemption Price that
the Company elects to pay in Common Stock shall be paid in a number
of fully paid and nonassessable shares equal to the quotient of
(1) the Excess Change of Control Redemption Price and
(2) the Change of Control Conversion Price (as hereinafter
defined) in effect; provided that the amount of Change of Control
Shares delivered by the Company as payment for the Excess Change of
Control Redemption Price shall not exceed the Required Reserve
Amount. For purposes of this Section, the “ Change of
Control Conversion Price ” shall mean, as of any date of
determination, if the Equity Conditions have been satisfied (or
waived in writing by the Holder) as of the first day of the Change
of Control Conversion Period (as hereinafter defined) through, and
including, the date of payment of the Change of Control Redemption
Price (disregarding for the purposes of determining whether clause
(i)(x) in the definition of Equity Conditions has been satisfied
the Change of Control giving rise to the redemption hereunder), the
price which shall be computed as 90% of the arithmetic average of
the Weighted Average Price of the Common Stock on each of the 10
consecutive Trading Days commencing 10 Trading Days before the date
the Change of Control becomes effective and ending on day
immediately preceding such effective date (the “ Change of
Control Conversion Period ”); all such determinations to
be appropriately adjusted for any stock split, stock dividend,
stock combination or other similar transaction that proportionately
decreases or increases the Common Stock during such Change of
Control Conversion Period; provided, however, that if the Equity
Conditions have not been satisfied or waived as required above, the
Company and Holder shall determine the Change of Control Conversion
Price using commercially reasonable means agreed to by them.
Redemptions required by this Section 5(c) shall be made in
accordance with the provisions of Section 11 and shall have
priority to payments to stockholders in connection with a Change of
Control and the date on which the Change of Control Redemption
Price is paid pursuant to such Section 11 shall be the “
Change of Control Redemption Date ”. When determining
if the Equity Conditions have been satisfied, the term “Call
Redemption Date” shall be replaced with the term
“Change of Control Redemption Date.”
10
(d) Conversion in the Event of a
Change of Control . In the event a Change of Control occurs,
the Holder shall receive from the Company upon conversion of its
Note pursuant to Section 3, in addition to the amounts
described therein, the Make-Whole Premium (in cash or shares of
Common stock (valued as described in the definition of
“Make-Whole Premium” below) or a combination thereof,
at the option of the Holder). The Company shall deliver written
notice of its election to pay the Make-Whole Premium in shares of
Common Stock to the Holder at least ten (10) days prior to the
consummation of the Change of Control. The Holder may, in lieu of
converting its Note, require the Company to redeem all or any
portion of this Note pursuant to Section 5(c).
The “Make-Whole
Premium” for each $1,000 in Principal amount of the Notes
converted will equal $180 in the event the Change of Control occurs
before the first anniversary of the Issuance Date; $120 in the
event the Change of Control occurs at any time on or after the
first anniversary of the Issuance Date but before the second
anniversary of the Issuance Date; and $60 in the event the Change
of Control occurs at any time on or after the second anniversary of
the Issuance Date but before the Maturity Date. Payments made in
shares of Common Stock will be valued at 95% of the average Closing
Sales Price of the Common Stock for the five (5) consecutive
Trading Days ending on the third day prior to the consummation of
the Change of Control.
6. RIGHTS UPON ISSUANCE OF PURCHASE
RIGHTS AND OTHER CORPORATE EVENTS.
(a) Purchase Rights . If at
any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any
class of Common Stock (the “Purchase Rights” ),
then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights
which the Holder could have acquired if the Holder had held the
number of shares of Common Stock acquirable upon complete
conversion of this Note (without taking into account any
limitations or restrictions on the convertibility of this Note)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of Common
Stock are to be determined for the grant, issue or sale of such
Purchase Rights.
(b) Other Corporate Events .
In addition to and not in substitution for any rights hereunder,
prior to the consummation of any recapitalization, reorganization,
consolidation, merger, spin-off or other business combination
pursuant to which holders of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for
Common Stock (a “Corporate Event” ), the Company
shall make appropriate provision to insure that the Holder will
thereafter have the right to receive upon a conversion of this
Note, (i) in addition to the shares of Common Stock receivable
upon such conversion, such securities or other assets to which the
Holder would have been entitled with respect to such shares of
Common Stock had such shares of Common Stock been held by the
Holder upon the consummation of such
11
Corporate Event or (ii) in lieu
of the shares of Common Stock otherwise receivable upon such
conversion, such securities or other assets received by the holders
of Common Stock in connection with the consummation of such
Corporate Event in such amounts as the Holder would have been
entitled to receive had this Note initially been issued with
conversion rights for the form of such consideration (as opposed to
shares of Common Stock) at a conversion rate for such consideration
commensurate with the Conversion Rate. The provisions of this
Section 6(b) shall apply similarly and equally to successive
Corporate Events and shall be applied without regard to any
limitations or restrictions on the convertibility of this
Note.
7. RIGHTS UPON ISSUANCE OF OTHER
SECURITIES.
(a) Adjustment of Conversion
Price upon Issuance of Common Stock . Other than in connection
with a merger transaction or acquisition by the Company which does
not result in a Change of Control, if and whenever on or after the
Issuance Date, the Company issues or sells, or in accordance with
this Section 7(a) is deemed to have issued or sold, any shares
of Common Stock (including the issuance or sale of shares of Common
Stock owned or held by or for the account of the Company, but
excluding shares of Common Stock deemed to have been issued or sold
by the Company in connection with any Excluded Security) for a
consideration per share (the “New Securities Issuance
Price” ) less than a price (the “Applicable
Price” ) equal to the Conversion Price in effect
immediately prior to such issue or sale (the foregoing a
“Dilutive Issuance” ), then immediately after
such Dilutive Issuance, the Conversion Price then in effect shall
be reduced to an amount (rounded to the nearest cent) equal to the
product of (A) the Conversion Price in effect immediately
prior to such Dilutive Issuance and (B) the quotient
determined by dividing (1) the sum of (I) the product
derived by multiplying the Conversion Price in effect immediately
prior to such Dilutive Issuance and the number of shares of Common
Stock Deemed Outstanding immediately prior to such Dilutive
Issuance plus (II) the consideration, if any, received by the
Com
