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EXHIBIT 4.3
NEITHER THIS SECURITY NOR THE ISSUANCE TO THE HOLDER OF THE
SECURITIES INTO
WHICH THIS SECURITY IS CONVERTIBLE OR WHICH ARE ISSUABLE UPON
REDEMPTION OF THIS
SECURITY HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933,
AS AMENDED (THE "1933 ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933
ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT.
THIS NOTE DOES NOT REQUIRE PHYSICAL SURRENDER OF THIS NOTE IN
THE EVENT OF A
PARTIAL CONVERSION OR REDEMPTION. AS A RESULT, FOLLOWING ANY
CONVERSION OR
REDEMPTION OF ANY PORTION OF THIS NOTE, THE OUTSTANDING
PRINCIPAL AMOUNT
REPRESENTED BY THIS NOTE MAY BE LESS THAN THE PRINCIPAL AMOUNT
STATED ON THE
FACE OF THIS NOTE.
AMENDED AND RESTATED
CONVERTIBLE NOTE DUE 2005-2008
OF
ZIX CORPORATION
NO. __ $10,000,000.00
DATED _______ ___, 2005 NEW YORK, NEW YORK
FOR VALUE RECEIVED, ZIX CORPORATION, a Texas corporation
(the
"Company"), hereby promises to pay to or upon the order of [NAME
OF REGISTERED
HOLDER], or its registered assigns or successors-in-interest
(the "Holder"), the
principal sum of Ten Million Dollars ($10,000,000.00), in
installments on the
Installment Maturity Dates and on the Final Maturity Date, and
to pay interest
thereon at the Applicable Rate from the date hereof on the
Interest Payment
Dates until the same becomes due and payable, whether at
maturity or upon
acceleration or by redemption or repurchase in accordance with
the terms hereof,
or otherwise. Interest on this Note shall be computed on the
basis of a 360-day
year of 30-day months and actual days elapsed. Unless otherwise
determined by
the Holder or required by applicable law, payments will be
applied
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first to any unpaid collection costs, then to unpaid interest
and fees and any
remaining amount to unpaid principal.
All payments of principal of and interest on this Note shall be
made
in lawful money of the United States of America or, as required
by Section 2(d)
and subject to the provisions of this Note, principal of this
Note shall be
redeemed through issuance of shares of Common Stock in
accordance with Section
2(c), and interest payable on the Interest Payment Dates may be
paid in whole or
in part in fully paid and nonassessable shares of Common Stock.
All cash
payments by the Company shall be made by wire transfer of
immediately available
funds to such account as the Holder may from time to time
designate by written
notice in accordance with the provisions of this Note. This Note
may not be
prepaid in whole or in part except as specifically provided
herein. Whenever any
amount expressed to be due by the terms of this Note is due on
any day which is
not a Business Day (as defined below), 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 that 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 in
determining the amount
of interest due on such date.
The obligations of the Company under this Note shall rank in
right
of payment on parity with all other unsubordinated obligations
of the Company
for indebtedness for borrowed money or the purchase price of
property. This Note
is issued pursuant to the Purchase Agreement and the Holder of
this Note and
this Note are subject to the terms and entitled to the benefits
of the Purchase
Agreement. Payment and performance of the Company's obligations
under this Note
and the other Transaction Documents is secured pursuant to the
Security
Agreement.
This Note amends and restates a Convertible Note due
2005-2008
issued on the Issuance Date pursuant to the Purchase Agreement.
This Note is one
of a duly authorized issue of the Company's Amended and Restated
Convertible
Notes due 2005-2008 limited to an aggregate principal amount of
$20,000,000
(excluding Amended and Restated Convertible Notes due 2005-2008
issued in
replacement of lost, stolen, destroyed or mutilated notes or
issued on transfer
of such notes).
The following terms and conditions shall apply to this Note:
SECTION 1. DEFINITIONS.
(a) Capitalized terms used herein and not otherwise defined
herein
shall have the meanings set forth in the Purchase Agreement.
(b) All the agreements or instruments herein defined shall
mean
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such agreements or instruments as the same may from time to time
be supplemented
or amended or the terms thereof waived or modified to the extent
permitted by,
and in accordance with, the terms thereof and of this Note.
(c) For purposes hereof the following terms shall have the
meanings
ascribed to them below:
"Acquisition Transaction" means a transaction in which the
Company
acquires another business or its tangible or intangible
assets.
"Affiliate" means, with respect to any Person, any other Person
that
directly, or indirectly through one or more intermediaries,
controls, is
controlled by or is under common control with the subject
Person. For purposes
of this definition, "control" (including, with correlative
meaning, the terms
"controlled by" and "under common control with"), as used with
respect to any
Person, shall mean the possession, directly or indirectly, of
the power to
direct or cause the direction of the management and policies of
such Person,
whether through the ownership of voting securities or by
contract or otherwise.
"Aggregation Party" means a person whose beneficial ownership
of
Common Stock would be aggregated with the beneficial ownership
of Common Stock
by the Holder for purposes of determining whether a "group"
exists or for
purposes of determining the Holder's beneficial ownership of
Common Stock for
purposes of Section 13(d) of the 1934 Act and Regulation 13D-G
thereunder.
"Allocated Redemption Percentage" means with respect to a
particular
Share Redemption the product obtained by multiplying 20 percent
by a fraction,
of which the numerator is the original principal amount of the
principal
installment of this Note that is being redeemed in such Share
Redemption, as
identified in the applicable Share Redemption Notice, and the
denominator is the
aggregate original principal amount of the principal
installments of this Note
and the Other Note being redeemed in, or contemporaneously with,
such Share
Redemption, as identified in the applicable Share Redemption
Notice and the
applicable notice given to the holder of the Other Note;
provided however, that
if all of the outstanding principal amount of such installment
of principal of
this Note is being redeemed in such Share Redemption, as
identified in the
applicable Share Redemption Notice, and less than all of the
outstanding
principal amount of such principal installment of the Other Note
is being
redeemed contemporaneously with such Share Redemption, as
identified in the
applicable notice given to the holder of the Other Note, then
the Allocated
Redemption Percentage of this Note shall be the product obtained
by multiplying
20 percent by a fraction, of which the numerator is the
principal amount of such
installment of this Note being redeemed in such Share
Redemption, as identified
in the applicable Share Redemption Notice, and the denominator
is the aggregate
principal amount of such principal installments of
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this Note and the Other Note being redeemed in or
contemporaneously with such
Share Redemption, as identified in the applicable Share
Redemption Notice and
the applicable notice given to the holder of the Other Note (and
the Allocated
Redemption Percentage shall be analogously determined if less
than all of such
principal installment of this Note and all of such principal
installment of the
Other Note are being redeemed contemporaneously with such Share
Redemption, as
so identified in such notices).
"AMEX" means the American Stock Exchange, Inc.
"Applicable Rate" means for each Interest Period a rate per
annum
equal to LIBOR for such Interest Period, plus three percent (or
such lesser rate
as shall be the highest rate permitted by applicable law) or, if
an Event of
Default shall occur, then so long as any Event of Default shall
continue, the
Default Rate.
"Board of Directors" means the Board of Directors of the
Company.
"Board Resolution" means a copy of a resolution certified by
the
Secretary or an Assistant Secretary of the Company to have been
duly adopted by
the Board of Directors, or duly authorized committee thereof (to
the extent
permitted by applicable law), and to be in full force and effect
on the date of
such certification, and delivered to the Holder.
"Business Day" means any day other than a Saturday, Sunday or a
day
on which commercial banks in The City of New York, New York or
Dallas, Texas are
authorized or required by law or executive order to remain
closed.
"Cash and Cash Equivalents Balances" of any Person on any date
shall
be determined on an unconsolidated basis from such Person's
books maintained in
accordance with Generally Accepted Accounting Principles, and
means, without
duplication, the sum of (1) the cash held by such Person on such
date and
available for use by such Person on such date, (2) all assets
which would, on a
balance sheet of such Person prepared as of such date in
accordance with
Generally Accepted Accounting Principles, be classified as cash
equivalents;
provided, however, that (x) for purposes of computing the Cash
and Cash
Equivalents Balances as of any date, no amount shall be included
as cash or a
cash equivalent if such amount is subject to any lien, charge,
equity or
encumbrance in favor of any other Person or is subject to any
agreement,
arrangement or understanding by the Company with any other
Person to maintain
the amount thereof or which restricts the use thereof by the
Company (in any
such case, other than as provided in Section 3(m) of this Note
and the Other
Note and other than the lien and security interest in favor of
the Collateral
Agent arising under the Security Agreement) and (y) cash and
cash equivalents
described in the preceding clauses (1) and (2) that are held at
any time as
Collateral under the Security Agreement and in which the
Collateral Agent has a
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perfected first priority security interest and which are not
subject to any
lien, charge, equity or encumbrance in favor of any other Person
shall be
included in determining the amount of Cash and Cash Equivalents
Balances at such
time.
"Closing Date" shall have the meaning provided in the
Purchase
Agreement.
"Collateral Agent" means Law Offices of Brian W Pusch, as
collateral
agent pursuant to the Security Agreement, and from time to time
its duly
appointed and acting successor or successors.
"Common Stock" means the Common Stock, $0.01 par value, or
any
shares of capital stock of the Company into which such shares
shall be changed
or reclassified after the Closing Date.
"Common Stock Equivalent" means any warrant, option,
subscription or
purchase right with respect to shares of Common Stock, any
security convertible
into, exchangeable for, or otherwise entitling the holder
thereof to acquire,
shares of Common Stock or any warrant, option, subscription or
purchase right
with respect to any such convertible, exchangeable or other
security.
"Company Certificate" means a certificate of the Company signed
by
an Officer.
"Company Conversion Date" means the conversion date set forth in
the
Company Conversion Notice and selected by the Company in
accordance with Section
6(d)(2).
"Company Conversion Notice" means a Company Conversion Notice in
the
form attached hereto as EXHIBIT F.
"Company Notice" means a Company Notice in the form attached
as
EXHIBIT C.
"Computed Price" means, with respect to a particular Trading Day
in
the Share Redemption Computation Period for a particular Share
Redemption, 90
percent of the VWAP of the Common Stock for such Trading
Day.
"Conversion Date" means the date on which a Conversion Notice
is
given in accordance with Section 6(b)(1).
"Conversion Delay Payments" shall have the meaning provided
in
Section 6(b)(5)(C).
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"Conversion Notice" means a duly executed Notice of Conversion
of
Amended and Restated Convertible Note due 2005-2008
substantially in the form of
EXHIBIT A to this Note.
"Conversion Price" means $6.00, subject to adjustment as
provided in
Section 6(c).
"Current Market Price" shall mean the arithmetic average of
the
daily Market Prices per share of Common Stock for the ten
consecutive Trading
Days immediately prior to the date in question; provided,
however, that
(1) if the "ex" date (as hereinafter defined) for any event
(other
than the issuance or distribution requiring such computation)
that
requires an adjustment to the Conversion Price pursuant to
Section
6(c)(1), (2), (3), (4), (5), (6), or (7), occurs during such
ten
consecutive Trading Days, the Market Price for each Trading Day
prior to
the "ex" date for such other event shall be adjusted by
multiplying such
Market Price by the same fraction by which the Conversion Price
is so
required to be adjusted as a result of such other event,
(2) if the "ex" date for any event (other than the issuance
or
distribution requiring such computation) that requires an
adjustment to
the Conversion Price pursuant to Section 6(c)(1), (2), (3), (4),
(5), (6),
or (7), occurs on or after the "ex" date for the issuance or
distribution
requiring such computation and prior to the day in question, the
Market
Price for each Trading Day on and after the "ex" date for such
other event
shall be adjusted by multiplying such Market Price by the
reciprocal of
the fraction by which the Conversion Price is so required to be
adjusted
as a result of such other event, and
(3) if the "ex" date for the issuance or distribution requiring
such
computation is prior to the day in question, after taking into
account any
adjustment required pursuant to clause (1) or (2) of this
proviso, the
Market Price for each Trading Day on or after such "ex" date
shall be
adjusted by adding thereto the amount of any cash and the fair
market
value (as determined by the Board of Directors in a manner
consistent with
any determination of such value for purposes of Section 6(c)(4)
or (6),
whose determination shall be conclusive and described in a
Board
Resolution) of the evidences of indebtedness, shares of capital
stock or
assets being distributed applicable to one share of Common Stock
as of the
close of business on the day before such "ex" date.
For purposes of any computation under Section 6(c)(4), the
Current Market Price
of the Common Stock on any date shall be deemed to be the
arithmetic average of
the daily Market Prices per share of Common Stock for such day
and the next two
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succeeding Trading Days; provided, however, that if the "ex"
date for any event
(other than the Tender Offer requiring such computation) that
requires an
adjustment to the Conversion Price pursuant to Section 6(c)(1),
(2), (3), (4),
(5), (6), or (7), occurs on or after the Expiration Time for the
Tender Offer
requiring such computation and prior to the day in question, the
Market Price
for each Trading Day on and after the "ex" date for such other
event shall be
adjusted by multiplying such Market Price by the reciprocal of
the fraction by
which the Conversion Price is so required to be adjusted as a
result of such
other event. For purposes of this paragraph and the definition
of the term
"VWAP", the term "ex" date, (1) when used with respect to any
issuance or
distribution, means the first date on which the Common Stock
trades, regular
way, on the relevant exchange or in the relevant market from
which the Market
Price was obtained without the right to receive such issuance or
distribution,
(2) when used with respect to any subdivision or combination of
shares of Common
Stock, means the first date on which the Common Stock trades,
regular way, on
such exchange or in such market after the time at which such
subdivision or
combination becomes effective, and (3) when used with respect to
any Tender
Offer means the first date on which the Common Stock trades,
regular way, on
such exchange or in such market after the Expiration Time of
such Tender Offer.
Notwithstanding the foregoing, whenever successive adjustments
to the Conversion
Price are called for pursuant to Section 6(c), such adjustments
shall be made to
the Current Market Price as may be necessary or appropriate to
effectuate the
intent of Section 6(c) and to avoid unjust or inequitable
results as determined
in good faith by the Board of Directors.
"Default Rate" means 16 percent per annum (or such lesser rate
as
shall be the highest rate permitted by applicable law).
"DTC" means The Depository Trust Company.
"DWAC" means DTC's Deposit Withdrawal Agent Commission
system.
"Effective Date" means the date on which a Registration
Statement
covering all the Underlying Shares and other Registrable
Securities (as defined
in the Registration Rights Agreement) is first declared
effective by the SEC.
"Eligible Bank" means a corporation organized or existing under
the
laws of the United States or any other state, having combined
capital and
surplus of at least $250 million and subject to supervision by
federal or state
authority and which has a branch located in New York, New
York.
"Event of Default" shall have the meaning provided in Section
4(a).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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"Excluded Shares" means securities or rights to acquire
securities
that entitle the holder or owner to acquire shares of Common
Stock and that have
limitations on the holder's or owner's right to convert,
exercise or purchase
similar to the limitations in Section 6(h).
"Extended Company Conversion Date" means with respect to any
portion
of this Note to which Section 6(d)(3)(A) applies, the date that
is 30 Trading
Days after the latest date on which the Restricted Ownership
Percentage no
longer restricts the Holder's right to convert the remaining
Inconvertible
Portion, but in no event later than the date that is 90 days
after the Final
Maturity Date.
"Expiration Time" shall have the meaning provided in Section
6(c)(6).
"FAST" means DTC's Fast Automated Securities Transfer
program.
"Final Maturity Date" means November 2, 2008.
"Fundamental Change" means
(a) Any consolidation or merger of the Company or any
material
Subsidiary with or into another entity (other than a merger
or
consolidation of a Subsidiary into the Company or a
wholly-owned
Subsidiary) where the stockholders of the Company immediately
prior to
such transaction do not collectively own at least 51% of the
outstanding
voting securities of the surviving corporation of such
consolidation or
merger immediately following such transaction;
(b) The sale of (i) all or substantially all of the assets of
the
Company and the Subsidiaries in a single transaction or a series
of
transactions or (ii) one or more Subsidiaries or the assets of
one or more
Subsidiaries which sale individually or in the aggregate is
material to
the Company and the subsidiaries taken as a whole, in the case
of the
preceding clause (ii) other than any such sale or sales which
individually
or in the aggregate could not reasonably be expected to have a
material
adverse effect on (i) the business, properties, operations,
condition
(financial or other), results of operation or financial
prospects of the
Company and the Subsidiaries, taken as a whole, (ii) the
validity or
enforceability of, or the ability of the Company to perform
its
obligations under, the Transaction Documents; (iii) the rights
and
remedies of the Holder under the terms of the Transaction
Documents; or
(iv) the Collateral or the first priority perfected security
interest in
the Collateral granted to the Collateral Agent pursuant to the
Security
Agreement;
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(c) The occurrence of any transaction or event in connection
with
which all or substantially all the Common Stock shall be
exchanged for,
converted into, acquired for or constitute the right to
receive
consideration (whether by means of an exchange offer,
liquidation, tender
offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) which is not all or substantially
all
capital stock which is (or will, upon consummation of or
immediately
following such transaction or event, will be) listed on a
registered
national securities exchange or approved for quotation on Nasdaq
or any
similar United States system of automated dissemination of
transaction
reporting of securities prices; or
(d) The acquisition by a Person or entity or group of Persons
or
entities acting in concert as a partnership, limited
partnership,
syndicate or group (as that term is defined for purposes of
Section 13(d)
of the 1934 Act and Regulation 13D-G thereunder), as a result of
a tender
or exchange offer, open market purchases, privately negotiated
purchases
or otherwise, of beneficial ownership of securities of the
Company
representing 50% or more of the combined voting power of the
outstanding
voting securities of the Company ordinarily (and apart from
rights
accruing in special circumstances) having the right to vote in
the
election of directors.
"Holder Notice" means a Holder Notice in the form attached
as
EXHIBIT D.
"Inconvertible Portion" shall have the meaning provided in
Section
6(d)(3).
"Indebtedness" means, when used with respect to any Person,
without
duplication:
(1) all indebtedness, obligations and other liabilities
(contingent
or otherwise) of such Person for borrowed money (including
obligations of
such Person in respect of overdrafts, foreign exchange
contracts, currency
exchange agreements, currency purchase or similar agreements,
Interest
Rate Protection Agreements, and any loans or advances from
banks, whether
or not evidenced by notes or similar instruments) or evidenced
by bonds,
debentures, notes or other instruments for the payment of money,
or
incurred in connection with the acquisition of any property,
services or
assets (whether or not the recourse of the lender is to the
whole of the
assets of such Person or to only a portion thereof), other than
any
account payable or other accrued current liability or obligation
to trade
creditors incurred in the ordinary course of business in
connection with
the obtaining of materials or services;
(2) all reimbursement obligations and other liabilities
(contingent
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or otherwise) of such Person with respect to letters of credit,
bank
guarantees, bankers' acceptances, surety bonds, performance
bonds or other
guaranty of contractual performance;
(3) all obligations and liabilities (contingent or otherwise)
in
respect of (a) leases of such Person required, in conformity
with
generally accepted accounting principles, to be accounted for
as
capitalized lease obligations on the balance sheet of such
Person and (b)
any lease or related documents (including a purchase agreement)
in
connection with the lease of real property which provides that
such Person
is contractually obligated to purchase or cause a third party to
purchase
the leased property and thereby guarantee a minimum residual
value of the
leased property to the landlord and the obligations of such
Person under
such lease or related document to purchase or to cause a third
party to
purchase the leased property;
(4) all direct or indirect guaranties or similar agreements by
such
Person in respect of, and obligations or liabilities (contingent
or
otherwise) of such Person to purchase or otherwise acquire or
otherwise
assure a creditor against loss in respect of, indebtedness,
obligations or
liabilities of another Person of the kind described in clauses
(1) through
(3);
(5) any indebtedness or other obligations described in clauses
(1)
through (4) secured by any mortgage, pledge, lien or other
encumbrance
existing on property which is owned or held by such Person,
regardless of
whether the indebtedness or other obligation secured thereby
shall be
payable by or shall have been assumed by such Person; and
(6) any and all deferrals, renewals, extensions and refundings
of,
or amendments, modifications or supplements to, any
indebtedness,
obligation or liability of the kind described in clauses (1)
through (5).
"Installment Maturity Dates" mean November 2, 2005, November 2,
2006
and November 2, 2007.
"Interest Payment Date" means each February 1, May 1, August 1
and
November 1, commencing on the first such date after the Issuance
Date, and the
Final Maturity Date.
"Interest Payment Shares" means the shares of Common Stock
issuable
in payment of interest on this Note in accordance with Section
2(a).
"Interest Period" means with respect to any outstanding
principal of
this Note,
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(1) initially the period commencing on the Issuance Date and
ending
on the date that is six months thereafter; and
(2) thereafter each period commencing on the last day of the
next
preceding Interest Period and ending six months thereafter;
provided that, all of the foregoing provisions relating to
Interest Periods are
subject to the limitation that any Interest Period for any
installment of
principal that would otherwise extend beyond the Installment
Maturity Date or
the Final Maturity Date, as the case may be, for such
installment shall end on
such Installment Maturity Date or the Final Maturity Date, as
the case may be.
"Interest Rate Protection Agreement" means, with respect to
any
Person, any interest rate swap agreement, interest rate cap or
collar agreement
or other financial agreement or arrangement designed to protect
such Person
against fluctuations in interest rates, as in effect from time
to time.
"Interest Share Price" means for any Interest Payment Date an
amount
equal to 90 percent of the arithmetic average of the daily VWAPs
of the Common
Stock for all of the Trading Days during the period of ten
consecutive Trading
Days ending on and including the Trading Day immediately
preceding such Interest
Payment Date.
"Issuance Date" means the "Closing Date" as defined in the
Purchase
Agreement.
"LIBOR" means, with respect to each Interest Period, the six
month
London Interbank Offered Rate at 11:00 a.m., London time, on the
date that is
two London banking days before the first day of such Interest
Period, as
reported by Bloomberg Financial L.P., using the BBAM function
and the Official
BBA LIBOR quote shown thereby.
"Majority Holders" means at any time, the holders of two-thirds
of
the aggregate outstanding principal amount of this Note and the
Other Note.
"Market Price" with respect to any security on any day shall
mean
the closing bid price of such security on such day on the
Nasdaq, the NYSE or
the AMEX, as applicable, or, if such security is not listed or
admitted to
trading on the Nasdaq, the NYSE or the AMEX, on the principal
national
securities exchange or quotation system on which such security
is quoted or
listed or admitted to trading, in any such case as reported by
Bloomberg, L.P.
(or if such source ceases to be available, comparable source
selected by the
Majority Holders and acceptable to the Company in its reasonable
judgment) or,
if not quoted or listed or admitted to trading on any national
securities
exchange or quotation system, the average of the
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closing bid and asked prices of such security on the
over-the-counter market on
the day in question, as reported by the National Quotation
Bureau, Incorporated,
or a similar generally accepted reporting service, or if not so
available, in
such manner as furnished by any NYSE member firm selected from
time to time by
the Board of Directors for that purpose, or a price determined
in good faith by
the Board of Directors, whose determination shall be conclusive
and described in
a Board Resolution.
"Maximum Share Amount Deficiency" shall have the meaning
provided in
the Purchase Agreement.
"1934 Act" means the Securities Exchange Act of 1934, as
amended.
"1933 Act" means the Securities Act of 1933, as amended.
"Nasdaq" means the Nasdaq National Market.
"Newly Issued Shares" shall have the meaning provided in
Section
6(c)(7)(A).
"Note" means this instrument as originally executed, or if
later
amended or supplemented in accordance with its terms, then as so
amended or
supplemented.
"NYSE" means the New York Stock Exchange, Inc.
"Officer" means the Chairman of the Board, the Chief
Executive
Officer, the President or the Chief Financial Officer of the
Company.
"Optional Redemption Consideration" means (1) an amount in
cash
equal to the sum of (A) an amount equal to 105 percent of the
principal amount
of this Note that is outstanding on the applicable Optional
Redemption Date plus
(B) accrued and unpaid interest on such principal amount to the
applicable
Optional Redemption Date plus (C) accrued and unpaid interest,
if any, at the
Default Rate on the amount referred to in the immediately
preceding clause (B)
to the applicable Optional Redemption Date and (2) a Redemption
Warrant that
initially (I) entitles the holder thereof to purchase a number
of shares of
Common Stock equal to 70 percent of the quotient obtained by
dividing (x) the
principal amount of this Note outstanding immediately prior to
redemption of
this Note on the applicable Optional Redemption Date by (y) the
Conversion Price
in effect immediately prior to redemption of this Note on the
applicable
Optional Redemption Date and (II) has a Purchase Price (as
defined in the
Redemption Warrant) equal to the Conversion Price in effect
immediately prior to
redemption of this Note on the applicable Optional Redemption
Date, subject to
adjustment as provided in the Redemption
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Warrant.
"Optional Redemption Date" means, with respect to a
particular
redemption of this Note or a portion hereof under Section 2(b),
the Business
Day, selected by the Company in accordance with Section 2(b), on
which this Note
or such portion hereof is to be redeemed pursuant to Section
2(b).
"Optional Redemption Notice" means an Optional Redemption Notice
in
the form attached hereto as EXHIBIT B.
"Optional Redemption Period" means the period that commences on
the
date that is ten Trading Days after the Effective Date and ends
on the Final
Maturity Date.
"Other Note" means the Amended and Restated Convertible Note
due
2005-2008 issued by the Company upon amendment and restatement
of the Company's
Convertible Note due 2005-2008 originally issued pursuant to the
Other Purchase
Agreement, and any or all such instruments issued upon transfer
or split-up
thereof.
"Other Purchase Agreement" means the Purchase Agreement, dated
as of
November 1, 2004, by and between the Company and the original
holder of the
Other Note or its predecessor instrument.
"Other Redemption Warrants" means any Common Stock Purchase
Warrants
issuable or issued by the Company upon optional redemption of
the Other Note
pursuant to Section 2(b) thereof.
"Permitted Indebtedness" means:
(1) Indebtedness outstanding on the Issuance Date prior to
issuance
of this Note and reflected in the Company's financial statements
included
in the SEC Filings;
(2) Indebtedness evidenced by this Note and the Other Note;
(3) Indebtedness outstanding on, or incurred after, the
Issuance
Date in an aggregate amount not to exceed $5 million at any one
time
outstanding so long as (A) such Indebtedness (x) is incurred for
the
purpose of acquiring equipment owned or used or to be owned or
used by the
Company or any Subsidiary (or for the purpose of acquiring the
capital
stock or similar equity interests of a Subsidiary that is formed
for the
limited purpose of owning same and does not own or hold any
other material
assets) and does not exceed the purchase price of the equipment,
capital
stock or other equity
-13-
<PAGE>
interest so acquired plus reasonable transaction expenses and
(y) if
secured, is secured solely by the interest of the Company or one
of its
Subsidiaries in the equipment so acquired and rights related
thereto or
(B) is the reimbursement obligations and other liabilities
(contingent or
otherwise) of the Company or any Subsidiary with respect to
letters of
credit issued in lieu of cash security deposits for leases of
real
property or equipment used by the Company or any Subsidiary, or
commercial
or standby letters of credit issued in the ordinary course of
the business
of the Company and its Subsidiaries (the amount of which shall
for this
purpose be deemed to be the maximum reimbursement obligations
and other
liabilities (contingent or otherwise) with respect to such
letters of
credit, whether or not a drawing thereunder has been made);
(4) Indebtedness incurred after the Issuance Date that is
unsecured
and that is subordinated as to payment to the Indebtedness
evidenced by
this Note and the Other Note on terms that have been approved in
writing
by the Majority Holders before the incurrence of such
Indebtedness;
(5) endorsements for collection or deposit in the ordinary
course of
business; and
(6) in the case of any Subsidiary, Indebtedness owed by such
Subsidiary to the Company.
"Person" means any natural person, corporation, partnership,
limited
liability company, trust, incorporated organization,
unincorporated association
or similar entity or any government, governmental agency or
political
subdivision.
"Principal Market" means at any time Nasdaq or such other
U.S.
market or exchange which is the principal market on which the
Common Stock is
then listed for trading.
"Purchase Agreement" means the Purchase Agreement, dated as
of
November 1, 2004, by and between the Company and the original
holder of this
Note or its predecessor instrument, pursuant to which this Note,
or its
predecessor instrument was originally issued, as amended by the
Purchase
Agreement Amendment.
"Purchase Agreement Amendment" means Amendment No. 1 to
Purchase
Agreement, dated as of April___ , 2005, by and between the
Company and the
original holder of the Convertible Promissory Note due 2005-2008
that was
amended and restated by this Note or this Note's predecessor
instrument.
"QIB" means a "qualified institutional buyer" as defined in
Rule
144A.
-14-
<PAGE>
"Record Date" shall mean, with respect to any dividend,
distribution
or other transaction or event in which the holders of Common
Stock have the
right to receive any cash, securities or other property or in
which the Common
Stock (or other applicable security) is exchanged for or
converted into any
combination of cash, securities or other property, the date
fixed for
determination of stockholders entitled to receive such cash,
securities or other
property (whether such date is fixed by the Board of Directors
or by statute,
contract or otherwise).
"Redemption Delay Payments" shall have the meaning provided
in
Section 2(c)(6)(C).
"Redemption Warrant" means any Common Stock Purchase Warrant in
the
form attached as EXHIBIT E issuable or issued as part of the
Optional Redemption
Consideration.
"Registration Statement" shall have the meaning set forth in
the
Registration Rights Agreement.
"Repurchase Event" means the occurrence of any one or more of
the
following events:
(a) For any period of five consecutive Trading Days following
the
date hereof there shall be no reported sale price of the Common
Stock on
any of Nasdaq, the NYSE or the AMEX;
(b) The Common Stock ceases to be listed for trading on Nasdaq,
the
NYSE or the AMEX for a period of five consecutive Trading
Days;
(c) Any Fundamental Change;
(d) The adoption of any amendment to the Company's Articles
of
Incorporation (other than any certificate designating a series
of
preferred stock of the Company) which materially and adversely
affects the
rights of the Holder or the taking of any other action by the
Company
which materially and adversely affects the rights of the Holder
in respect
of the Holder's interest in the Common Stock in a different and
more
adverse manner than it affects the rights of holders of Common
Stock
generally;
(e) The inability of the Holder or holders of any Other Note for
30
Trading Days (whether or not consecutive) during any period of
365
consecutive days occurring on or after the SEC Effective Date to
sell
shares of Common Stock issued or issuable upon conversion of
this Note or
the Other Note or exercise of the Warrants or issued as Interest
Payment
-15-
<PAGE>
Shares pursuant to the Registration Statement (1) by reason of
the
requirements of the 1933 Act, the 1934 Act or any of the rules
or
regulations under either thereof or (2) due to the Registration
Statement
containing any untrue statement of material fact or omitting to
state a
material fact required to be stated therein or necessary to make
the
statements therein not misleading or other failure of the
Registration
Statement to comply with the rules and regulations of the SEC,
excluding
any such inability to sell that results from an untrue statement
of a
material fact in such Registration Statement or Prospectus or
omission to
state a material fact required to be stated in such Registration
Statement
or Prospectus in order to make the statements therein not
misleading,
which misstatement or omission was made by the Holder in
written
information it furnished to the Company specifically for
inclusion in such
Registration Statement or Prospectus which such information
was
substantially relied upon by the Company in preparation of
the
Registration Statement or Prospectus or any amendment or
supplement
thereto, unless the Company shall have failed timely to amend
or
supplement such Registration Statement or Prospectus after the
Holder
shall have corrected such misstatement or omission; or
(f) The Registration Statement required by Section 2(a)(i) of
the
Registration Rights Agreement is not declared effective by the
SEC within
95 days (or 125 days if the SEC staff determines to review
such
Registration Statement) following the Closing Date, or the
Registration
Statement required by Section 2(a)(ii) of the Registration
Rights
Agreement is not declared effective by the SEC within 95 days
(or 125 days
if the SEC staff determines to review such Registration
Statement)
following demand of the Holder pursuant to the Registration
Rights
Agreement.
"Repurchase Price" means with respect to any repurchase pursuant
to
Section 5 an amount in cash equal to the greater of (1) the sum
of (A) the
outstanding principal amount of this Note that the Holder has
elected to be
repurchased plus (B) accrued and unpaid interest on such
principal amount to the
date of such repurchase plus (C) accrued and unpaid interest, if
any, at the
Default Rate on the amount referred to in the immediately
preceding clause (B)
to the date of such repurchase and (2) the product obtained by
multiplying (A)
the Current Market Price on the date the Repurchase Event
occurs, the date the
Company gives the Company Notice to the Holder, the date the
Holder gives the
Holder Notice to the Company or the applicable repurchase date
pursuant to
Section 5, whichever such Current Market Price is the highest,
times (B) the
number of shares of Common Stock which would be issuable upon
conversion of the
principal amount of this Note (and interest thereon as provided
in Section 6(a))
to be repurchased by reason of the occurrence of such Repurchase
Event
(determined without regard to any limitation on conversion
contained in Section
6) if such conversion were made on the date for which, pursuant
to the
immediately preceding clause (A), the
-16-
<PAGE>
Current Market Price is used for the computation of the
Repurchase Price
pursuant to this clause (2).
"Required Cash Amount" means for any date the amount set forth
below
with respect to such date:
<TABLE>
<CAPTION>
DATE AMOUNT
---- ------
<S> <C> <C>
Issuance Date through November 2, 2007 $10,000,000.00
thereafter $ 5,000,000.00
</TABLE>
; provided, however, that the reduction shown in the foregoing
table shall occur
only if all installments of principal due on or before the date
of such
scheduled reduction have been paid and all installments of
principal required by
Section 2(d) to be redeemed on or before the date of such
scheduled reduction
have been redeemed in accordance with Section 2(d); provided
further, however,
that if the Company redeems in full in accordance with Section
2(d)(2) the
installments of principal of this Note scheduled to be due on
November 2, 2005
and November 2, 2008 on or before the respective redemption
dates therefor
specified in Section 2(d)(2), then thereafter through November
2, 2006 the
Required Cash Amount shall be $9,000,000.00, subject to the next
succeeding
proviso, and, if the Company also pays in accordance with
Section 2(d)(1) the
full amount of the installment of principal due on November 2,
2006 then
thereafter the Required Cash Amount shall be $5,000,000.00; and
provided
further, however, that if the Company redeems in full in
accordance with Section
2(d)(2) the installments of principal of this Note scheduled to
be due on
November 2, 2005 and November 2, 2008 on or before the
respective redemption
dates therefor specified in Section 2(d)(2), and thereafter the
Holder or the
holder of the Other Note requires the Company to redeem all or
any portion of
this Note in accordance with Section 6.16(b)(2) of the Purchase
Agreement or the
Other Purchase Agreement, as the case may be, then to the extent
any such
redemption reduces the aggregate outstanding principal amount of
this Note and
the Other Note to an amount less than $9,000,000.00, then
immediately following
such redemption the Required Cash Amount shall be reduced to the
aggregate
outstanding principal amount of this Note and the Other Note
immediately after
such redemption.
"Restricted Ownership Percentage" shall have the meaning
provided in
Section 6(h).
"Rule 144A" means Rule 144A as promulgated under the 1933 Act or
any
successor rule thereto.
"SEC" means the U.S. Securities and Exchange Commission.
-17-
<PAGE>
"SEC Filings" shall have the meaning provided in the
Purchase
Agreement.
"Security Agreement" means the Security Agreement, dated as
of
November 2, 2004, by and between the Company and the Collateral
Agent.
"Share Interest Payment Limitation" means, with respect to
any
Interest Payment Date, a number of Interest Payment Shares equal
to 50% of the
aggregate number of shares of Common Stock traded on the
Principal Market on all
of the Trading Days during the period from and including the
date that is 29
Trading Days prior to such Interest Payment Date to and
including the date that
is 20 Trading Days prior to such Interest Payment Date (as
reported by
Bloomberg, L.P. or if such source ceases to be available, a
comparable source
selected by the Majority Holders at the request of the Company
and acceptable to
the Company in its reasonable judgment), equitably adjusted for
stock splits,
stock dividends and similar events that are reflected in the
trading market for
the Common Stock during such period, unless the Majority Holders
consent in
writing to a higher number of shares with respect to any
particular Interest
Payment Date.
"Share Interest Payment Option" shall have the meaning provided
in
Section 2(a)(1).
"Share Redemption" means a redemption of this Note or a
portion
hereof pursuant to Section 2(c).
"Share Redemption Computation Period" means, with respect to
a
particular Share Redemption, the period of 15 consecutive
Trading Days ending on
and including the Trading Day immediately preceding the
applicable Share
Redemption Date for such Share Redemption.
"Share Redemption Daily Amount" means, with respect to a
particular
Trading Day in the Share Redemption Computation Period for a
particular Share
Redemption, the lesser of following amounts:
(1) an amount equal to one-fifteenth of the Share Redemption
Price
stated in the applicable Share Redemption Notice for such
Share
Redemption, and
(2) the Share Redemption Daily Limitation for such Trading
Day.
"Share Redemption Daily Limitation" means, with respect to a
particular Trading Day in the Share Redemption Computation
Period for a
particular Share Redemption, the sum of (x) 105 percent of the
product obtained
by multiplying (A) the product obtained by multiplying (i) the
Allocated
Redemption
-18-
<PAGE>
Percentage for such Share Redemption times (ii) the number of
shares of Common
Stock traded on such Trading Day, as reported by Bloomberg
Financial, L.P.,
based on a Trading Day from 9:30 a.m., Eastern Time, to 4:00
p.m., Eastern Time,
using the AQR Function for such Trading Day times (B) the
Computed Price , plus
(y) accrued and unpaid interest on an amount equal to 100
percent of the product
of the amount in clause (A) in the immediately preceding clause
(x) times the
amount in clause (B) in the immediately preceding clause (x) to
the applicable
Share Redemption Date, computed as if the amount on which such
interest were
being calculated were principal of this Note to be redeemed on
the applicable
Share Redemption Date plus (z) accrued and unpaid interest, if
any, computed at
the Default Rate on the amount specified in the immediately
preceding clause
(y).
"Share Redemption Date" means, with respect to a particular
redemption of this Note or a portion hereof under Section 2(c),
the Trading Day
selected by the Company in accordance with Section 2(c), on
which this Note or
such portion hereof is to be redeemed pursuant to Section
2(c).
"Share Redemption Notice" means a Share Redemption Notice in
the
form attached hereto as EXHIBIT G.
"Share Redemption Period" means the period that commences
three
Trading Days after the Company files the Current Report on Form
8-K contemplated
by Section 6.3 of the Purchase Agreement Amendment and ends on
December 31,
2005.
"Share Redemption Price" means an amount equal to the sum of (1)
105
percent of the principal amount of this Note that is to be
redeemed on the
applicable Share Redemption Date plus (2) accrued and unpaid
interest on such
principal amount to the applicable Share Redemption Date plus
(3) accrued and
unpaid interest, if any, at the Default Rate on the amount
referred to in the
immediately preceding clause (2) to the applicable Share
Redemption Date.
"Share Redemption Share Amount" means, with respect to a
particular
Share Redemption, an amount determined by computing for each
Trading Day in the
Share Redemption Computation Period for such Share Redemption
the quotient
obtained by dividing (x) the Share Redemption Daily Amount for
such Trading Day
by (y) the Computed Price for such Trading Day and then
computing the sum of
such quotients for all of the Trading Days in such Share
Redemption Computation
Period.
"Tender Offer" means a tender offer or exchange offer.
"Trading Day" means at any time a day on which the Principal
Market
is open for the general trading of securities.
-19-
<PAGE>
"Transaction Documents" means this Note, the Other Note, the
Purchase Agreement, the Purchase Agreement Amendment, the Other
Purchase
Agreement, the Security Agreement, the Warrants, the Redemption
Warrant and the
Other Redemption Warrants.
"Transfer Agent" shall mean the institution acting as transfer
agent
for the Common Stock.
"Trigger Event" shall have the meaning provided in Section
6(c)(4).
"Underlying Shares" means the shares of Common Stock issued
or
issuable upon conversion of, or in lieu of cash payment of
interest on, this
Note in accordance with the terms hereof and the Purchase
Agreement.
"VWAP" of any security on any Trading Day or for any period
of
Trading Days means the volume-weighted average price of such
security on such
Trading Day or for such period of Trading Days on the Principal
Market, as
reported by Bloomberg Financial, L.P., based on a Trading Day
from 9:30 a.m.,
Eastern Time, to 4:00 p.m., Eastern Time, using the AQR
Function, for such
Trading Day or for such period of Trading Days; provided,
however, that during
any period that the daily VWAP is being determined or for any
period for which
the VWAP is being determined, such VWAP shall be subject to
equitable
adjustments from time to time on terms consistent with Section
6(c) and
otherwise reasonably acceptable to the Majority Holders for (i)
stock splits,
(ii) stock dividends, (iii) combinations, (iv) capital
reorganizations, (v)
issuance to all holders of Common Stock of rights or warrants to
purchase shares
of Common Stock, (vi) distribution by the Company to all holders
of Common Stock
of evidences of indebtedness of the Company or cash (other than
regular
quarterly cash dividends), (vii) Tender Offers by the Company or
any Subsidiary
for, or other repurchases of shares of, Common Stock in one or
more transactions
which, individually or in the aggregate, result in the purchase
of more than ten
percent of the Common Stock outstanding, and (viii) similar
events relating to
the Common Stock, in each case which occur, or with respect to
which the "ex"
date occurs, during such period.
"Warrants" means Common Stock Purchase Warrants of the
Company
issued to the original Holder of this Note or its predecessor
instrument
pursuant to the Purchase Agreement and issued to the original
holders of the
Other Note or their predecessor instruments pursuant to the
Other Purchase
Agreement, as amended pursuant to the Purchase Agreement
Amendment and the like
amendments to the Other Purchase Agreement.
-20-
<PAGE>
SECTION 2. PAYMENT OF CERTAIN INTEREST IN COMMON STOCK;
OPTIONAL
REDEMPTION.
(a) ISSUANCE OF COMMON STOCK IN LIEU OF CASH INTEREST. (1) If
the
Company exercises its option to make a payment of interest on
this Note wholly
or partly in Common Stock (the "Share Interest Payment Option"),
the issuance of
Interest Payment Shares upon such exercise of the Share Interest
Payment Option
shall have been authorized by the Board of Directors of the
Company.
(2) The Company shall not be permitted to exercise the Share
Interest Payment Option with respect to any payment of interest
on this Note if:
(i) on the date the Company notifies the Holder of the
Company's
election to exercise the Share Interest Payment Option or on the
date the
Company is required to deliver the Interest Payment Shares, the
number of
shares of Common Stock authorized, unissued and unreserved for
all
purposes, or held in the Company's treasury, is insufficient to
pay the
portion of such interest to be paid in Common Stock;
(ii) the issuance or delivery of Interest Payment Shares or
the
public resale of such Interest Payment Shares by the Holder
would require
registration or filing with or approval of any governmental
authority
under any law or regulation, and such registration, filing or
approval has
not been effected or obtained by or is not in effect on the date
the
Company notifies the Holder of the Company's election to
exercise the
Share Interest Payment Option or at any time thereafter to and
including
the later of (A) such Interest Payment Date and (B) the date the
Company
delivers such Interest Payment Shares to the Holder, the
Registration
Statement (x) is unavailable for use by the Holder for the
resale of the
Interest Payment Shares or (y) is not expected to be available
for such
use for at least 15 Trading Days after the date the Company
delivers such
Interest Payment Shares to the Holder and in either case in the
preceding
clause (x) or (y) the Interest Payment Shares are ineligible for
resale by
the Holder under Rule 144(k) under the 1933 Act, unless in any
such case
described in this clause (ii) the Holder notifies the Company
that it will
accept such Interest Payment Shares notwithstanding the failure
to satisfy
this clause (ii);
(iii) the outstanding shares of Common Stock are neither (A)
listed
or admitted for trading on a national securities exchange nor
(B) quoted
on the Nasdaq; or the Interest Payment Shares shall not at the
time of
issuance have been authorized for listing, upon official notice
of
issuance, on the Principal Market;
(iv) the Interest Share Price for the Interest Payment Shares
is
less
-21-
<PAGE>
than the par value of the Common Stock;
(v) an Event of Default has occurred and is continuing on the
date
the Company makes such election or on the applicable Interest
Payment
Date; or
(vi) on the date the Company notifies the Holder of the
Company's
election to exercise the Share Interest Payment Option or at any
time
thereafter to and including the later of (A) such Interest
Payment Date
and (B) the date the Company delivers such Interest Payment
Shares to the
Holder a Maximum Share Amount Deficiency exists.
(3) (A) The Company may exercise its right to elect the
Share
Interest Payment Option with respect to any Interest Payment
Date only by giving
notice of such election to the Holder not less than 15 or more
than 19 Trading
Days prior to such Interest Payment Date, which notice shall
state the
percentage of the interest payable on such Interest Payment Date
which is to be
paid in Interest Payment Shares. Time shall be of the essence in
the giving of
such notice. The Company shall have the right to elect the Share
Interest
Payment Option with respect to this Note only if the Company
also elects the
similar option which it has with respect to the Other Note for
the interest due
thereon on the date which is such Interest Payment Date and in
each such case
pro rata among this Note and the Other Note, based on the
amounts of interest
due on such date hereon and thereon. If the Company elects the
Share Interest
Payment Option with respect to a particular Interest Payment
Date, the Company
shall issue to the Holder in respect of such Interest Payment
Date the aggregate
number of whole shares of Common Stock determined by dividing
the per share
Interest Share Price of the Common Stock on the applicable
Interest Payment Date
into an amount equal to the total amount of lawful money of the
United States of
America which the Holder would receive if the aggregate amount
of interest due
on this Note which is being paid in Common Stock were being paid
in such lawful
money. Notwithstanding any other provision of this Note, in no
event may the
Company issue in respect of the interest payable on this Note
and the Other Note
on any Interest Payment Date an aggregate number of Interest
Payment Shares in
excess of the Share Interest Payment Limitation and any interest
on this Note
not paid in Interest Payment Shares due to the Share Interest
Payment Limitation
shall be paid in cash.
(B) If the Company elects the Share Interest Payment Option
with
respect to an Interest Payment Date, the Interest Payment Shares
for such
Interest Payment Date shall become issuable on such Interest
Payment Date and
the Company shall deliver, or cause to be delivered, the
appropriate number of
shares of Common Stock to the Holder within three Trading Days
after the
applicable Interest Payment Date. If in any case the Company
shall fail to
deliver or cause to be delivered such number of shares of Common
Stock to the
Holder within such
-22-
<PAGE>
period of three Trading Days, then in addition to any other
liabilities the
Company may have hereunder and under applicable law (1) the
Company shall pay or
reimburse the Holder on demand for all out-of-pocket expenses,
including,
without limitation, reasonable fees and expenses of legal
counsel, incurred by
the Holder as a result of such failure, (2) if as a result of
such failure the
Holder shall suffer any direct damages or liabilities from such
failure
(including, without limitation, margin interest and the cost of
purchasing
securities to cover a sale (whether by the Holder or the
Holder's securities
broker) or borrowing of shares of Common Stock by the Holder for
purposes of
settling any trade involving a sale of shares of Common Stock
made by the Holder
during the period beginning on the date the Company notified the
Holder of the
Company's election of the Share Interest Payment Option and
ending on the date
the Company delivers or causes to be delivered to the Holder the
shares of
Common Stock issuable in respect thereof), then the Company
shall upon demand of
the Holder pay to the Holder an amount equal to the actual
direct, out-of-pocket
damages and liabilities suffered by the Holder by reason thereof
which the
Holder documents to the reasonable satisfaction of the Company,
and (3) the
Holder may by written notice (which may be given by mail,
courier, personal
service or telephone line facsimile transmission) or oral notice
(promptly
confirmed in writing), given at any time prior to delivery to
the Holder of the
shares of Common Stock issuable in connection with such exercise
of the Share
Interest Payment Option, require payment in cash of the interest
in respect of
which the Company exercised the Share Interest Payment Option,
in which case the
amount of such interest shall be immediately due and payable,
with interest
thereon, if any, at the Default Rate from the applicable
Interest Payment Date
until paid in full, and the Company shall not be obligated or
entitled to issue
such Interest Payment Shares in respect of such Interest Payment
Date.
Notwithstanding the foregoing the Company shall not be liable to
the Holder
under clause (2) of the immediately preceding sentence to the
extent the failure
of the Company to deliver or to cause to be delivered such
shares of Common
Stock results from fire, flood, storm, earthquake, shipwreck,
strike, war, acts
of terrorism, crash involving facilities of a common carrier,
acts of God, or
any similar event outside the control of the Company (it being
understood that
the action or failure to act of the Transfer Agent shall not be
deemed an event
outside the control of the Company except to the extent
resulting from fire,
flood, storm, earthquake, shipwreck, strike, war, acts of
terrorism, crash
involving facilities of a common carrier, acts of God, or any
similar event
outside the control of the Transfer Agent or the bankruptcy,
liquidation or
reorganization of the Transfer Agent under any bankruptcy,
insolvency or other
similar law). The Holder shall notify the Company in writing (or
by telephone
conversation, confirmed in writing) as promptly as practicable
following the
third Trading Day after such Interest Payment Date if the Holder
becomes aware
that shares of Common Stock so issuable have not been received
as provided
herein but any failure to give such notice shall not affect the
Holder's rights
under this Note or otherwise. If the Company shall have
exercised the Share
Interest Payment Option with respect to a particular Interest
Payment Date and
either (1) the Company
-23-
<PAGE>
shall notify the Holder on or after such Interest Payment Date
that the Interest
Payment Shares might not be delivered within three Trading Days
after such
Interest Payment Date or (2) the Holder learns after the date
which is three
Trading Days after such Interest Payment Date that the Holder
has not received
such Interest Payment Shares, then, without releasing the
Company of its
obligations with respect thereto, from and after the Trading Day
next succeeding
the earlier of the events described in the preceding clauses (1)
and (2) of this
sentence the Holder shall make reasonable efforts not to sell
shares of Common
Stock in anticipation of receipt of such Interest Payment Shares
in a manner
which is likely to increase materially the liability of the
Company under clause
(2) of the second preceding sentence. No fractional shares of
Common Stock shall
be issued in payment of interest on this Note. In lieu thereof,
the Company may,
at its option, issue a number of shares of Common Stock which
reflects a
rounding up to the next whole number or may pay lawful money of
the United
States of America in lieu of issuance of such fractional
share.
(4) If the Company elects the Share Interest Payment Option
with
respect to a payment of interest on this Note with respect to a
particular
Interest Payment Date, the Company shall deliver to the Holder,
on or prior to
the date on which Interest Payment Shares for such payment of
interest on this
Note are to be received by the Holder, a Company Certificate
setting forth (i)
the total amount of the cash interest payment to which the
Holder is entitled,
(ii) the portion of such interest payment being made in Interest
Payment Shares,
expressed in dollars and as a percentage, (iii) the number of
Interest Payment
Shares allocable to such payment, as calculated pursuant to this
Section 2(a),
(iv) any rounding adjustment to such number or any payment
necessary to be made
pursuant to Section 2(a)(3), (v) a brief statement of the facts
requiring such
adjustment, and (vi) a representation and warranty, which, if
false or
misleading, shall be an Event of Default under Section 4(a)(5),
that none of the
conditions set forth in Section 2(a)(2) has occurred and is
existing and that
all of the requirements of this Section 2(a) have been met. Such
Company
Certificate shall be conclusive evidence of the correctness of
the calculation
of the number of Interest Payment Shares allocable to the
payments to which such
Company Certificate relates and of any adjustments to such
number made pursuant
to this Section 2(a) in the absence of manifest error. The
Interest Payment
Shares shall be duly issued in the name of the Holder or its
nominee. On or
before the applicable Interest Payment Date, the Company shall
issue, or cause
the Transfer Agent to prepare and issue, the Interest Payment
Shares in the name
of the Holder or its nominee before being so delivered by the
Company on such
Interest Payment Date.
(5) The Interest Payment Shares, when issued pursuant to and
in
compliance with this Section 2(a), shall be, and for all
purposes shall be
deemed to be, validly issued, fully paid and nonassessable
shares of Common
Stock; the issuance and delivery thereof is in all respects
hereby authorized;
and the issuance
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<PAGE>
thereof, together with lawful money of the United States of
America, if any,
paid in lieu of fractional shares of Common Stock, will be, and
for all purposes
shall be deemed to be, in full discharge and satisfaction of the
Company's
obligation to pay the interest on this Note to which such
Interest Payment
Shares relate.
(6) Any amount of interest not paid in Interest Payment Shares
shall
be due and payable in cash on the applicable Interest Payment
Date.
(b) OPTIONAL AND MANDATORY REDEMPTION. (1) At any time during
the
Optional Redemption Period, the Company shall have the right to
redeem the
principal installments stated in Section 2(d)(1) to be due on
November 2, 2006
and November 2, 2007 in whole or from time to time in part, and
on the
respective dates specified in Section 2(d)(2), the Company shall
have the
obligation to redeem the then remaining outstanding amounts of
the principal
installments stated in Section 2(d)(1) to be due on November 2,
2005 and
November 2, 2008 in full, in each such case by payment of the
Optional
Redemption Consideration pursuant to this Section 2(b) on the
applicable
Optional Redemption Date, so long as the following conditions
precedent are
satisfied:
(A) on the date a particular Optional Redemption Notice is given
and
at all times thereafter to and including the applicable
Optional
Redemption Date, no Event of Default and no event which, with
notice or
passage of time, or both, would become an Event of Default has
occurred
and is continuing (unless, by reason of such redemption, the
requirements
of this clause (A) will be satisfied immediately after the
redemption of
this Note and the Other Note on the applicable Optional
Redemption Date
and the Company shall furnish Company Certificates to the Holder
to such
effect on the date such Optional Redemption Notice is given to
the Holder
and on the applicable Optional Redemption Date);
(B) on the date such Optional Redemption Notice is given and at
all
times thereafter to and including the applicable Optional
Redemption Date,
no Repurchase Event has occurred with respect to which the
Holder has the
right to exercise repurchase rights pursuant to Section 5 or
with respect
to which the Holder has exercised such repurchase rights and
the
Repurchase Price has not been paid to the Holder and no event
which, with
notice or passage of time, or both, would become a Repurchase
Event has
occurred and is continuing;
(C) on the date such Optional Redemption Notice is given and at
all
times thereafter to and including the applicable Optional
Redemption Date,
the Registration Statement shall be effective and available for
use by the
Holder, the holders of the Other Note and the holders of the
Warrants for
the resale of the shares of Common Stock issued and issuable
upon
conversion of
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<PAGE>
this Note and the Other Note and issued or issuable upon
exercise of the
Warrants, as the case may be, and is reasonably expected to
remain
effective and available for such use for at least 30 days after
the
applicable Optional Redemption Date, and the Company shall be
in
compliance in all material respects with its obligations under
the
Registration Rights Agreement;
(D) on the date such Optional Redemption Notice is given and at
all
times thereafter to and including the applicable Optional
Redemption Date
one or more registration statements under the 1933 Act covering
the resale
of the shares of Common Stock issuable to the Holder upon
exercise of the
Redemption Warrants issuable to the Holder in payment of a
portion of the
Optional Redemption Consideration on the applicable Optional
Redemption
Date and any Redemption Warrants previously issued to the Holder
shall be
effective under the 1933 Act and available for use by the Holder
for the
resale of such shares of Common Stock and each such registration
statement
shall reasonably be expected to remain available for such use
for at least
30 Trading Days after the applicable Optional Redemption
Date;
(E) on the date such Optional Redemption Notice is given,
the
Company has funds available to pay the cash portion of the
Optional
Redemption Consideration payable on the applicable Optional
Redemption
Date;
(F) other than in the case of a redemption required by
Section
2(d)(2) or by Section 6.16(b)(2) of the Purchase Agreement, the
Optional
Redemption Date selected by the Company in accordance with this
Section
2(b) and set forth in such Optional Redemption Notice shall be
at least
365 days after any earlier Optional Redemption Date;
(G) except as otherwise provided in Section 6.16(b)(2) of
the
Purchase Agreement, on the date such Optional Redemption Notice
is given
and at all times thereafter to and including the applicable
Optional
Redemption Date no Maximum Share Amount Deficiency exists
(unless, by
reason of such redemption, the requirements of this clause (G)
will be
satisfied immediately after the redemption of this Note and the
Other Note
on the applicable Optional Redemption Date and the Company shall
furnish
Company Certificates to the Holder to such effect on the date
such
Optional Redemption Notice is given to the Holder and on the
applicable
Optional Redemption Date); and
(H) during the period beginning five days prior to the date
the
Company gives such Optional Redemption Notice and ending on the
applicable
Optional Redemption Date the Company shall not have been engaged
in
discussions or negotiations concerning, or entered in to an
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<PAGE>
agreement or received any proposal for, any transaction that
might result
in a Fundamental Change, and the Company shall not enter into
any
agreement or accept any proposal for, any transaction that might
result in
a Fundamental Change for a period of 60 days after the
applicable Optional
Redemption Date.
In order to exercise its right of redemption under this Section
2(b) the Company
shall give the particular Optional Redemption Notice to the
Holder not less than
20 Trading Days or more than 40 Trading Days prior to the
applicable Optional
Redemption Date, stating that: (1) the Company is exercising its
right to redeem
this Note in accordance with this Section 2(b); (2) the
principal amount of this
Note to be redeemed; (3) the amount of the cash portion of the
Optional
Redemption Consideration payable on such Optional Redemption
Date (assuming no
conversion of this Note from the date the Company gives such
Optional Redemption
Notice to the applicable Optional Redemption Date); (4) the
number of shares of
Common Stock and the purchase price therefor to be contained in
the Redemption
Warrant included in such Optional Redemption Consideration
(assuming no
conversion of this Note from the date the Company gives such
Optional Redemption
Notice to the applicable Optional Redemption Date); (5) the
Optional Redemption
Date; and (6) that all of the conditions of this Section 2(b)
entitling the
Company to call this Note for redemption have been met. On the
Optional
Redemption Date (or such later date as the Holder surrenders
this Note to the
Company) the Company shall (x) pay to or upon the order of the
Holder, by wire
transfer of immediately available funds to such account as shall
be specified
for such purpose by the Holder at least one Business Day prior
to the applicable
Optional Redemption Date, an amount equal to the cash portion of
the Optional
Redemption Consideration and (y) issue and deliver to the Holder
the portion of
such Optional Redemption Consideration consisting of the
Redemption Warrant,
which will be deemed for all purposes to have been issued to the
Holder on the
applicable Optional Redemption Date, unless the Company shall
have failed to pay
the amount specified in the immediately preceding clause (x)
when due.
(2) The Company shall not be entitled to give an Optional
Redemption
Notice or to redeem any portion of this Note with respect to
which the Holder
has given a Conversion Notice on or prior to the date the
Company gives such
Optional Redemption Notice. Notwithstanding the giving of a
particular Optional
Redemption Notice, the Holder shall be entitled to convert all
or any portion of
this Note, in accordance with the terms of this Note, by giving
a Conversion
Notice at any time on or prior to the later of (1) the date
which is one Trading
Day prior to the applicable Optional Redemption Date and (2) if
the Company
fails to pay and deliver to the Holder, or deposit in accordance
with Section
7(k), the Optional Redemption Consideration payable on the
applicable Optional
Redemption Date on or before the applicable Optional Redemption
Date, the date
on which the Company pays and delivers to the Holder, or
deposits in
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<PAGE>
accordance with Section 7(k), such Optional Redemption
Consideration. If after
giving effect to any such conversion of this Note that occurs
after the date the
Company gives a particular Optional Redemption Notice to the
Holder, the
principal amount of this Note remaining outstanding is less than
the amount
thereof to be redeemed as stated in the applicable Optional
Redemption Notice,
then the Optional Redemption Consideration set forth in the
Optional Redemption
Notice shall be adjusted to reflect the reduced outstanding
principal amount of
this Note and related accrued interest (and interest, if any,
thereon at the
Default Rate) on the applicable Optional Redemption Date
resulting from any such
conversions of this Note after the Company gives such Optional
Redemption Notice
to the Holder. Any redemption of this Note pursuant to this
Section 2(b), other
than a redemption required by Section 2(d)(2), shall be applied
to the
installments of principal outstanding on the applicable Optional
Redemption Date
first to the principal installment stated in Section 2(d)(1) to
be due on
November 2, 2007, second to the principal installment stated in
Section 2(d)(1)
to be due on November 2, 2006 and thereafter to the remaining
principal
installments in the inverse order of their maturity stated in
Section 2(d)(1),
and any redemption of this Note pursuant to this Section 2(b)
that is required
by Section 2(d)(2) shall be applied to the installment of
principal outstanding
on the applicable Optional Redemption Date that is required by
Section 2(d)(2)
to be redeemed under this Section 2(b) on such Optional
Redemption Date.
(3) In order that the Company shall not discriminate among
the
Holder and the holders of the Other Note, the Company agrees
that each
redemption of this Note pursuant to this Section 2(b) shall be
made at the same
time as a redemption by the Company of the Other Note and that
such redemption
shall be made pro rata based on the principal amounts of this
Note and the Other
Note outstanding on the date the Company gives the particular
Optional
Redemption Notice. In order that the Company not discriminate
among the Holder
and the holders of the Other Note, the Company agrees that it
shall not redeem
any of the Other Note pursuant to the provisions thereof similar
to this Section
2(b) or repurchase or otherwise acquire any of the Other Note
(other than a
mandatory redemption pursuant to provisions of the Other Note
comparable to
Section 5 or as provided in Sections 6.2 and 6.16 of the
Purchase Agreement and
the Other Purchase Agreement) unless the Company offers
simultaneously to
redeem, repurchase or otherwise acquire a pro rata portion
(based on outstanding
principal amount) of this Note for cash at the same unit price
as the Other Note
or Other Note.
(c) SHARE REDEMPTION. (1) During the Share Redemption Period,
the
Company shall, as provided in Sections 2(d)(2) and 2(d)(3),
redeem the principal
installments of this Note due on November 2, 2005 and November
2, 2008 in whole
or from time to time in part, in each such case by issuing the
number of shares
of Common Stock to the Holder determined as provided in Section
2(c)(2), so long
as
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<PAGE>
the following conditions precedent are satisfied:
(A) on the date a particular Share Redemption Notice is given
and at
all times thereafter to and including the applicable Share
Redemption
Date, no Event of Default and no event which, with notice or
passage of
time, or both, would become an Event of Default has occurred and
is
continuing (unless, by reason of such redemption, the
requirements of this
clause (A) will be satisfied immediately after the redemption of
this Note
and the Other Note on the applicable Share Redemption Date and
the Company
shall furnish Company Certificates to the Holder to such effect
on the
date such Share Redemption Notice is given to the Holder and on
the
applicable Share Redemption Date);
(B) on the date such Share Redemption Notice is given and at
all
times thereafter to and including the applicable Share
Redemption Date, no
Repurchase Event has occurred with respect to which the Holder
has the
right to exercise repurchase rights pursuant to Section 5 or
with respect
to which the Holder has exercised such repurchase rights and
the
Repurchase Price has not been paid to the Holder and no event
which, with
notice or passage of time, or both, would become a Repurchase
Event has
occurred and is continuing;
(C) on the date such Share Redemption Notice is given and at
all
times thereafter to and including the applicable Share
Redemption Date,
the Registration Statement shall be effective and available for
use by the
Holder, the holders of the Other Note and the holders of the
Warrants for
the resale of the shares of Common Stock issued and issuable
upon such
Share Redemption and issued or issuable upon conversion of this
Note and
the Other Note and issued or issuable upon exercise of the
Warrants, as
the case may be, and is reasonably expected to remain effective
and
available for such use for at least 30 days after the applicable
Share
Redemption Date, and the Company shall be in compliance in all
material
respects with its obligations under the Registration Rights
Agreement;
(D) on the date such Share Redemption Notice is given, the
Company
has authorized and unissued shares of Common Stock not reserved
for any
purpose other than Share Redemption of this Note in an amount
sufficient
to satisfy the applicable Share Redemption Price by issuance of
shares of
Common Stock;
(E) the Share Redemption Date selected by the Company in
accordance
with this Section 2(c) and set forth in such Share Redemption
Notice shall
be at least 24 Trading Days after any earlier Share Redemption
Date;
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<PAGE>
(F) the Company shall have complied with Section 3(o) with
respect
to all Share Redemptions occurring prior to the giving of such
Share
Redemption Notice;
(G) on the date such Share Redemption Notice is given and at
all
times thereafter to and including the applicable Share
Redemption Date no
Maximum Share Amount Deficiency exists and no Maximum Share
Amount
Deficiency would result from such Share Redemption or the
contemporaneous
redemption of the Other Note pursuant to Section 2(c)
thereof;
(H) during the period beginning five days prior to the date
the
Company gives such Share Redemption Notice and ending on the
applicable
Share Redemption Date the Company shall not have been engaged
in
discussions or negotiations concerning, or entered in to an
agreement or
received any proposal for, any transaction that might result in
a
Fundamental Change, and the Company shall not enter into any
agreement or
accept any proposal for, any transaction that might result in
a
Fundamental Change for a period of 60 days after the applicable
Share
Redemption Date; and
(I) the Computed Price for such Share Redemption is not less
than
the par value of the Common Stock.
In order to exercise its right of redemption under this Section
2(c) the Company
shall give the particular Share Redemption Notice to the Holder
not less than 17
Trading Days or more than 19 Trading Days prior to the
applicable Share
Redemption Date, stating: (1) that the Company is exercising its
right to redeem
this Note in accordance with this Section 2(c), (2) the
principal amount of this
Note to be redeemed (assuming no conversion of this Note from
the date the
Company gives such Share Redemption Notice to the applicable
Share Redemption
Date and that the Share Redemption Share Amount for such Share
Redemption will
be computed based on the entire such principal amount), (3) the
amount of the
Share Redemption Price payable on such Share Redemption Date
(assuming no
conversion of this Note from the date the Company gives such
Share Redemption
Notice to the applicable Share Redemption Date and that the
Share Redemption
Share Amount for such Share Redemption will be computed based on
the entire
principal amount included such Share Redemption Price), (4) the
principal
installment to which such Share Redemption shall be applied, (5)
the applicable
Share Redemption Date and (6) that all of the conditions of this
Section 2(c)
entitling the Company to call this Note for redemption have been
met. As
promptly as practicable, but in no event later than three
Trading Days, after
the applicable Share Redemption Date, the Company shall issue
and shall deliver
to the Holder or the Holder's designee the number of full shares
of Common Stock
issuable upon such Share Redemption of
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<PAGE>
this Note or portion hereof in accordance with the provisions of
this Section
2(c) and deliver a check or cash in respect of any fractional
interest in
respect of a share of Common Stock arising upon such redemption,
as provided in
Section 2(c)(7). In lieu of delivering physical certificates for
the shares of
Common Stock issuable upon any such redemption of this Note,
provided the
Transfer Agent is participating in FAST, upon request of the
Holder, the Company
shall use commercially reasonable efforts to cause the Transfer
Agent
electronically to transmit such shares of Common Stock issuable
upon redemption
to the Holder (or its designee), by crediting the account of the
Holder's (or
such designee's) broker or other participant with DTC through
DWAC (provided
that the same time periods herein as for stock certificates
shall apply). The
Holder shall have the right, exercisable by notice given to the
Company from
time to time after the Company gives a Share Redemption Notice
for a particular
Share Redemption, to require the Company to deliver to the
Holder a portion of
the shares of Common Stock issuable in connection with a
particular Share
Redemption in advance of the date that is three Trading Days
after the
applicable Share Redemption Date, in which case the shares so
requested shall be
delivered within three Trading Days after the Holder gives such
notice to the
Company. The aggregate number of shares of Common Stock required
to be so
delivered in advance of a particular Share Redemption Date may
not exceed the
sum for the elapsed Trading Days in the applicable Share
Redemption Computation
Period of quotient obtained by dividing (1) the Share Redemption
Daily Amount
for each such Trading Day by (2) the Computed Price for such
Trading Day.
(2) The number of shares of Common Stock issuable by the Company
in
respect of each Share Redemption shall be the Share Redemption
Share Amount for
such Share Redemption. Notwithstanding the principal amount of
this Note to be
redeemed as stated in the Share Redemption Notice for a
particular Share
Redemption, the principal amount actually redeemed shall be the
sum, for all of
the Trading Days in the Share Redemption Computation Period for
such Share
Redemption, of (x) the principal amount of this Note included in
the amount
specified in clause (1) of the definition of Share Redemption
Daily Amount for
each Trading Day in such Share Redemption Computation Period for
which the Share
Redemption Daily Amount for such Trading Day is computed under
clause (1) of
such definition, or (y) the product obtained by multiplying (i)
the amount set
forth in subclause (A) of the definition of Share Redemption
Daily Limitation
times (ii) the amount set forth in subclause (B) of the
definition of Share
Redemption Daily Limitation for each Trading Day in such Share
Redemption
Computation Period for which the Share Redemption Daily Amount
for such Trading
Day is computed under clause (2) of such definition.
(3) The Company shall not be entitled to give a Share
Redemption
Notice or to redeem any portion of this Note with respect to
which the Holder
has given a Conversion Notice on or prior to the date the
Company gives such
Share Redemption Notice. Notwithstanding the giving of a
particular Share
Redemption
-31-
<PAGE>
Notice, the Holder shall be entitled to convert all or any
portion of this Note,
in accordance with the terms of this Note, to be redeemed by
reason of the
giving of such Share Redemption Notice by giving a Conversion
Notice at any time
on or prior to the later of (1) the date which is one Trading
Day prior to the
applicable Share Redemption Date and (2) if the Company fails to
issue or
deliver to the Holder the shares of Common Stock issuable in
satisfaction of
such Share Redemption Price on or before the due date therefor,
the date on
which the Company issues and delivers to the Holder such shares
of Common Stock.
If after giving effect to any such conversion of this Note that
occurs after the
date the Company gives a particular Share Redemption Notice to
the Holder, the
principal amount of a particular principal installment of this
Note remaining
outstanding is less than the amount thereof to be redeemed as
stated in the
applicable Share Redemption Notice, then the Share Redemption
Share Amount for
such Share Redemption shall be reduced form what it otherwise
would be to
reflect the reduced outstanding principal amount of this Note
and related
accrued interest (and interest, if any, thereon at the Default
Rate) on the
applicable Share Redemption Date resulting from any such
conversions of this
Note after the Company gives such Share Redemption Notice to the
Holder. Such
reduction of the Share Redemption Share amount shall be made by
reducing the
Share Redemption Daily Amounts used to calculate the Share
Redemption Share
Amount for such Share Redemption in the inverse of their
chronological order to
the extent necessary to reduce the principal amount reflected in
such Share
Redemption Share Amount by the principal amount so converted.
Any redemption of
this Note pursuant to this Section 2(c) that is required by
Section 2(d)(2)
shall be applied to the installments of principal outstanding on
the applicable
Share Redemption Date first to the principal installment stated
by Section
2(d)(1) to be due on November 2, 2005 and then to the principal
installment
stated by Section 2(d)(1) to be due on November 2, 2008.
(4) Each redemption of this Note (or portion hereof) pursuant
to
this Section 2(c) shall be deemed to have been effected on the
applicable Share
Redemption Date, and the person in whose name any certificate or
certificates
for shares of Common Stock shall be issuable upon such
redemption shall be
deemed to have become on such Share Redemption Date the holder
of record of the
shares represented thereby; provided, however, that if a Share
Redemption Date
is a date on which the stock transfer books of the Company shall
be closed such
redemption shall constitute the person in whose name the
certificates are to be
issued as the record holder thereof for all purposes on the next
succeeding day
on which such stock transfer books are open. Upon redemption of
this Note or any
portion hereof pursuant to this Section 2(c), the accrued and
unpaid interest on
this Note (or portion hereof) so redeemed to (but excluding) the
applicable
Share Redemption Date shall be deemed to be paid to the Holder
of this Note
through receipt of such number of shares of Common Stock issued
upon redemption
of this Note or portion hereof as shall have an aggregate
Current Market Price
on the Trading Day
-32-
<PAGE>
immediately preceding such Share Redemption Date equal to the
amount of such
accrued and unpaid interest.
(5) The Company shall not be required to pay any tax which may
be
payable in respect of any transfer involved in the issuance and
delivery of
shares of Common Stock or other securities or property on
redemption of this
Note pursuant to this Section 2(c) in a name other than that of
the Holder, and
the Company shall not be required to issue or deliver any such
shares or other
securities or property unless and until the person or persons
requesting the
issuance thereof shall have paid to the Company the amount of
any such tax or
shall have established to the satisfaction of the Company that
such tax has been
paid. The Holder shall be responsible for the amount of any
income or
withholding tax payable in connection with any such redemption
of this Note.
(6) (A) If the Company shall have given a Share Redemption
Notice in
accordance with the terms of this Note, the Company's obligation
to issue and
deliver the shares of Common Stock upon such redemption on the
terms and subject
to the conditions of this Note shall be absolute and
unconditional, irrespective
of any action or inaction by the Holder to enforce the same, any
waiver or
consent with respect to any provision hereof, 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 Company to the
Holder, or any
setoff, counterclaim, recoupment, limitation or termination, or
any breach or
alleged breach by the Holder or any other person of any
obligation to the
Company or any violation or alleged violation of law by the
Holder or any other
Person, and irrespective of any other circumstance which might
otherwise limit
such obligation of the Company to the Holder in connection with
such redemption;
provided, however, that nothing herein shall limit or prejudice
the right of the
Company to pursue any such claim in any other manner permitted
by applicable
law.
(B) If in any case the Company shall fail to issue and deliver
the
shares of Common Stock to the Holder in connection with a
particular redemption
of this Note within three Trading Days after the due date
therefor, in addition
to any other liabilities the Company may have hereunder and
under applicable law
(i) the Company shall pay or reimburse the Holder on demand for
all
out-of-pocket expenses, including, without limitation,
reasonable fees and
expenses of legal counsel, incurred by the Holder as a result of
such failure
and (ii) if as a result of such failure the Holder shall suffer
any direct
damages or liabilities from such failure (including, without
limitation, margin
interest and the cost of purchasing securities to cover a sale
(whether by the
Holder or the Holder's securities broker) or borrowing of shares
of Common Stock
by the Holder for purposes of settling any trade involving a
sale of shares of
Common Stock made by the Holder during the period beginning on
the Issuance Date
and ending on the date the Company delivers or causes to be
delivered to the
Holder such shares of Common Stock), then
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<PAGE>
the Company shall upon demand of the Holder pay to the Holder an
amount equal to
the actual direct, out-of-pocket damages and liabilities
suffered by the Holder
by reason thereof which the Holder documents to the reasonable
satisfaction of
the Company. Notwithstanding the foregoing, the Company shall
not be liable to
the Holder under clause (ii) of the immediately preceding
sentence to the extent
the failure of the Company to deliver or to cause to be
delivered such shares of
Common Stock results from fire, flood, storm, earthquake,
shipwreck, strike,
war, acts of terrorism, crash involving facilities of a common
carrier, acts of
God, or any similar event outside the control of the Company (it
being
understood that the action or failure to act of the Transfer
Agent shall not be
deemed an event outside the control of the Company except to the
extent
resulting from fire, flood, storm, earthquake, shipwreck,
strike, war, acts of
terrorism, crash involving facilities of a common carrier, acts
of God, or any
similar event outside the control of the Transfer Agent or the
bankruptcy,
liquidation or reorganization of the Transfer Agent under any
bankruptcy,
insolvency or other similar law). In the case of the Company's
failure to issue
and deliver or cause to be delivered the shares of Common Stock
to the Holder
within three Trading Days of the due date therefor, the amount
payable by the
Company pursuant to this clause (B) of Section 2(c)(6) with
respect to such
conversion shall be reduced by the amount of Redemption Delay
Payments
previously paid by the Company to the Holder with respect to
such redemption.
The Holder shall notify the Company in writing (or by telephone
conversation,
confirmed in writing) as promptly as practicable following the
third Trading Day
after the applicable Share Redemption Date if the Holder becomes
aware that such
shares of Common Stock so issuable have not been received as
provided herein,
but any failure so to give such notice shall not affect the
Holder's rights
under this Note or otherwise. If the Holder learns after the
date which is three
Trading Days after the due date for delivery of shares of Common
Stock under
this Section 2(c) that the Holder has not received such shares
of Common Stock,
then, without releasing the Company of its obligations with
respect thereto,
from and after the Trading Day next succeeding the date the
Holder so learns of
such failure of delivery, the Holder shall make reasonable
efforts not to sell
shares of Common Stock in anticipation of receipt of such shares
of Common Stock
in a manner which is likely to increase materially the liability
of the Company
under clause (ii) of the first sentence of this clause (B) of
Section 2(c)(6).
(C) If the Company fails to deliver or cause to be delivered to
the
Holder such shares of Common Stock pursuant to this Section 2(c)
(free of any
restrictions on transfer or legends except to the extent
permitted under Section
6.11 of the Purchase Agreement
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