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Exhibit 10.2 Form of Callable Secured Convertible Note due March
17, 2007
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE
SECURITIES MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION
STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF
COUNSEL IN FORM,
SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN
COMPARABLE
TRANSACTIONS THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
UNLESS SOLD
PURSUANT TO RULE 144 OR REGULATION S UNDER SAID ACT.
CALLABLE SECURED CONVERTIBLE NOTE
Valencia, California
March 17, 2005 $__________
FOR VALUE RECEIVED, CONECTISYS CORPORATION, a Colorado
corporation (hereinafter
called the "Borrower"), hereby promises to pay to the order
of
___________________ or registered assigns (the "Holder") the sum
of
$__________, on March 17, 2007 (the "Maturity Date"), and to pay
interest on
the unpaid principal balance hereof at the rate of eight percent
(8%) (the
"Interest Rate") per annum from March 17, 2005 (the "Issue
Date") until the
same becomes due and payable, whether at maturity or upon
acceleration or by
prepayment or otherwise, or so much thereof as may be advanced
and be
outstanding, with interest thereon, to be computed on each
advance from the
date of its disbursement. Any amount of principal or interest on
this Note
which is not paid when due shall bear interest at the rate of
fifteen percent
(15%) per annum from the due date thereof until the same is paid
("Default
Interest"). Interest shall commence accruing on the Issue Date,
shall be
computed on the basis of a 365-day year and the actual number of
days elapsed
and shall be payable quarterly provided that no interest shall
be due and
payable for any month in which the Trading Price (as such term
is defined
below) of the Common Stock (as such term is defined below) is
greater than
$.0035 for each Trading Day (as such term is defined below) of
the month. All
payments due hereunder (to the extent not converted into common
stock, no par
value per share, of the Borrower (the "Common Stock") in
accordance with the
terms hereof) shall be made in lawful money of the United States
of America
provided that interest payable for the first month following the
Issue Date
shall be payable on the date hereof and deemed for all purposes
as a prepayment
of such obligation. All payments shall be made at such address
as the Holder
shall hereafter give to the Borrower by written notice made in
accordance with
the provisions of this Note. Whenever any amount expressed to be
due by the
terms of this Note is due on any day which is not a business
day, 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 which 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 for purposes of determining the amount of interest due
on such date.
As used in this Note, the term "business day" shall mean any day
other than a
Saturday, Sunday or a day on which commercial banks in the city
of New York,
New York are authorized or required by law or executive order to
remain closed.
Each capitalized term used herein, and not otherwise defined,
shall have the
meaning ascribed thereto in that certain Securities Purchase
Agreement, dated
March 17, 2005, pursuant to which this Note was originally
issued (the
"Purchase Agreement").
This Note is free from all taxes, liens, claims and encumbrances
with respect
to the issue thereof and shall not be subject to preemptive
rights or other
similar rights of shareholders of the Borrower and will not
impose personal
liability upon the holder thereof. The obligations of the
Borrower under this
Note shall be secured by that certain Security Agreement and
Intellectual
Property Security Agreement, each dated March 17, 2005 by and
between the
Borrower and the Holder.
The following terms shall apply to this Note:
ARTICLE I. CONVERSION RIGHTS
1.1 Conversion Right. The Holder shall have the right from time
to time, and
at any time on or prior to the earlier of (i) the Maturity Date
and (ii) the
date of payment of the Default Amount (as defined in Article
III) pursuant to
Section 1.6(a) or Article III, the Optional Prepayment Amount
(as defined in
Section 5.1 or any payments pursuant to Section 1.7, each in
respect of the
remaining outstanding principal amount of this Note to convert
all or any part
of the outstanding and unpaid principal amount of this Note into
fully paid and
non-assessable shares of Common Stock, as such Common Stock
exists on the Issue
Date, or any shares of capital stock or other securities of the
Borrower into
which such Common Stock shall hereafter be changed or
reclassified at the
conversion price (the "Conversion Price") determined as provided
herein (a
"Conversion"); provided, however, that in no event shall the
Holder be entitled
to convert any portion of this Note in excess of that portion of
this Note upon
conversion of which the sum of (1) the number of shares of
Common Stock
beneficially owned by the Holder and its affiliates (other than
shares of
Common Stock which may be deemed beneficially owned through the
ownership of
the unconverted portion of the Notes or the unexercised or
unconverted portion
of any other security of the Borrower (including, without
limitation, the
warrants issued by the Borrower pursuant to the Purchase
Agreement) subject to
a limitation on conversion or exercise analogous to the
limitations contained
herein) and (2) the number of shares of Common Stock issuable
upon the
conversion of the portion of this Note with respect to which the
determination
of this proviso is being made, would result in beneficial
ownership by the
Holder and its affiliates of more than 4.99% of the outstanding
shares of
Common Stock and provided further that the Holder shall not be
entitled to
convert any portion of this Note during any month immediately
succeeding a
Determination Date occurring during a month in which the
Borrower exercises its
prepayment option pursuant to Section 5.2 of this Note. For
purposes of the
proviso to the immediately preceding sentence, beneficial
ownership shall be
determined in accordance with Section 13(d) of the Securities
Exchange Act of
1934, as amended, and Regulations 13D-G thereunder, except as
otherwise
provided in clause (1) of such proviso. The number of shares of
Common Stock
to be issued upon each conversion of this Note shall be
determined by dividing
the Conversion Amount (as defined below) by the applicable
Conversion Price
then in effect on the date specified in the notice of
conversion, in the form
attached hereto as Exhibit A (the "Notice of Conversion"),
delivered to the
Borrower by the Holder in accordance with Section 1.4 below;
provided that the
Notice of Conversion is submitted by facsimile (or by other
means resulting in,
or reasonably expected to result in, notice) to the Borrower
before 6:00 p.m.,
New York, New York time on such conversion date (the "Conversion
Date"). The
term "Conversion Amount" means, with respect to any conversion
of this Note,
the sum of (1) the principal amount of this Note to be converted
in such
conversion plus (2) accrued and unpaid interest, if any, on such
principal
amount at the interest rates provided in this Note to the
Conversion Date plus
(3) Default Interest, if any, on the amounts referred to in the
immediately
preceding clauses (1) and/or (2) plus (4) at the Holder's
option, any amounts
owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof or
pursuant to
Section 2(c) of that certain Registration Rights Agreement,
dated as of March
17, 2005, executed in connection with the initial issuance of
this Note and the
other Notes issued on the Issue Date (the "Registration Rights
Agreement").
The term "Determination Date" means the last business day of
each month after
the Issue Date.
1.2 Conversion Price.
(a) Calculation of Conversion Price. The Conversion Price shall
be the lesser
of (i) the Variable Conversion Price (as defined herein) and
(ii) the Fixed
Conversion Price (as defined herein) (subject, in each case, to
equitable
adjustments for stock splits, stock dividends or rights
offerings by the
Borrower relating to the Borrower's securities or the securities
of any
subsidiary of the Borrower, combinations, recapitalization,
reclassifications,
extraordinary distributions and similar events). The "Variable
Conversion
Price" shall mean the Applicable Percentage (as defined herein)
multiplied by
the Market Price (as defined herein). "Market Price" means the
average of the
lowest three (3) Trading Prices (as defined below) for the
Common Stock during
the twenty (20) Trading Day period ending one Trading Day prior
to the date the
Conversion Notice is sent by the Holder to the Borrower via
facsimile (the
"Conversion Date"). "Trading Price" means, for any security as
of any date,
the intraday trading price on the Over-the-Counter Bulletin
Board (the "OTCBB")
as reported by a reliable reporting service mutually acceptable
to and
hereafter designated by Holders of a majority in interest of the
Notes and the
Borrower or, if the OTCBB is not the principal trading market
for such
security, the intraday trading price of such security on the
principal
securities exchange or trading market where such security is
listed or traded
or, if no intraday trading price of such security is available
in any of the
foregoing manners, the average of the intraday trading prices of
any market
makers for such security that are listed in the "pink sheets" by
the National
Quotation Bureau, Inc. If the Trading Price cannot be calculated
for such
security on such date in the manner provided above, the Trading
Price shall be
the fair market value as mutually determined by the Borrower and
the holders of
a majority in interest of the Notes being converted for which
the calculation
of the Trading Price is required in order to determine the
Conversion Price of
such Notes. "Trading Day" shall mean any day on which the Common
Stock is
traded for any period on the OTCBB, or on the principal
securities exchange or
other securities market on which the Common Stock is then being
traded.
"Applicable Percentage" shall mean 40.0%. The "Fixed Conversion
Price" shall
mean $.005.
(b) Conversion Price During Major Announcements. Notwithstanding
anything
contained in Section 1.2(a) to the contrary, in the event the
Borrower (i)
makes a public announcement that it intends to consolidate or
merge with any
other corporation (other than a merger in which the Borrower is
the surviving
or continuing corporation and its capital stock is unchanged) or
sell or
transfer all or substantially all of the assets of the Borrower
or (ii) any
person, group or entity (including the Borrower) publicly
announces a tender
offer to purchase 50% or more of the Borrower's Common Stock (or
any other
takeover scheme) (the date of the announcement referred to in
clause (i) or
(ii) is hereinafter referred to as the "Announcement Date"),
then the
Conversion Price shall, effective upon the Announcement Date and
continuing
through the Adjusted Conversion Price Termination Date (as
defined below), be
equal to the lower of (x) the Conversion Price which would have
been applicable
for a Conversion occurring on the Announcement Date and (y) the
Conversion
Price that would otherwise be in effect. From and after the
Adjusted Conversion
Price Termination Date, the Conversion Price shall be determined
as set forth
in this Section 1.2(a). For purposes hereof, "Adjusted
Conversion Price
Termination Date" shall mean, with respect to any proposed
transaction or
tender offer (or takeover scheme) for which a public
announcement as
contemplated by this Section 1.2(b) has been made, the date upon
which the
Borrower (in the case of clause (i) above) or the person, group
or entity (in
the case of clause (ii) above) consummates or publicly announces
the
termination or abandonment of the proposed transaction or tender
offer (or
takeover scheme) which caused this Section 1.2(b) to become
operative.
1.3 Authorized Shares. Subject to the Stockholder Approval (as
defined in the
Agreement), the Borrower covenants that during the period the
conversion right
exists, the Borrower will reserve from its authorized and
unissued Common Stock
a sufficient number of shares, free from preemptive rights, to
provide for the
issuance of Common Stock upon the full conversion of this Note
and the other
Notes issued pursuant to the Purchase Agreement. The Borrower is
required at
all times to have authorized and reserved two times the number
of shares that
is actually issuable upon full conversion of the Notes (based on
the Conversion
Price of the Notes or the Exercise Price of the Warrants in
effect from time to
time) (the "Reserved Amount"). The Reserved Amount shall be
increased from
time to time in accordance with the Borrower's obligations
pursuant to Section
4(h) of the Purchase Agreement. The Borrower represents that
upon issuance,
such shares will be duly and validly issued, fully paid and
non-assessable. In
addition, if the Borrower shall issue any securities or make any
change to its
capital structure which would change the number of shares of
Common Stock into
which the Notes shall be convertible at the then current
Conversion Price, the
Borrower shall at the same time make proper provision so that
thereafter there
shall be a sufficient number of shares of Common Stock
authorized and reserved,
free from preemptive rights, for conversion of the outstanding
Notes. The
Borrower (i) acknowledges that it has irrevocably instructed its
transfer agent
to issue certificates for the Common Stock issuable upon
conversion of this
Note, and (ii) agrees that its issuance of this Note shall
constitute full
authority to its officers and agents who are charged with the
duty of executing
stock certificates to execute and issue the necessary
certificates for shares
of Common Stock in accordance with the terms and conditions of
this Note.
If, at any time a Holder of this Note submits a Notice of
Conversion, and the
Borrower does not have sufficient authorized but unissued shares
of Common
Stock available to effect such conversion in accordance with the
provisions of
this Article I (a "Conversion Default"), subject to Section 4.8,
the Borrower
shall issue to the Holder all of the shares of Common Stock
which are then
available to effect such conversion. The portion of this Note
which the Holder
included in its Conversion Notice and which exceeds the amount
which is then
convertible into available shares of Common Stock (the "Excess
Amount") shall,
notwithstanding anything to the contrary contained herein, not
be convertible
into Common Stock in accordance with the terms hereof until (and
at the
Holder's option at any time after) the date additional shares of
Common Stock
are authorized by the Borrower to permit such conversion, at
which time the
Conversion Price in respect thereof shall be the lesser of (i)
the Conversion
Price on the Conversion Default Date (as defined below) and (ii)
the Conversion
Price on the Conversion Date thereafter elected by the Holder in
respect
thereof. In addition, the Borrower shall pay to the Holder
payments
("Conversion Default Payments") for a Conversion Default in the
amount of (x)
the sum of (1) the then outstanding principal amount of this
Note plus (2)
accrued and unpaid interest on the unpaid principal amount of
this Note through
the Authorization Date (as defined below) plus (3) Default
Interest, if any, on
the amounts referred to in clauses (1) and/or (2), multiplied by
(y) .24,
multiplied by (z) (N/365), where N = the number of days from the
day the holder
submits a Notice of Conversion giving rise to a Conversion
Default (the
"Conversion Default Date") to the date (the "Authorization
Date") that the
Borrower authorizes a sufficient number of shares of Common
Stock to effect
conversion of the full outstanding principal balance of this
Note. The
Borrower shall use its best efforts to authorize a sufficient
number of shares
of Common Stock as soon as practicable following the earlier of
(i) such time
that the Holder notifies the Borrower or that the Borrower
otherwise becomes
aware that there are or likely will be insufficient authorized
and unissued
shares to allow full conversion thereof and (ii) a Conversion
Default. The
Borrower shall send notice to the Holder of the authorization of
additional
shares of Common Stock, the Authorization Date and the amount of
Holder's
accrued Conversion Default Payments. The accrued Conversion
Default Payments
for each calendar month shall be paid in cash or shall be
convertible into
Common Stock (at such time as there are sufficient authorized
shares of Common
Stock) at the applicable Conversion Price, at the Borrower's
option, as
follows:
(a) In the event Borrower elects to make such payment in cash,
cash payment
shall be made to Holder by the fifth (5th) day of the month
following the month
in which it has accrued; and
(b) In the event Borrower elects to make such payment in Common
Stock, the
Borrower shall convert such payment amount into Common Stock at
the Conversion
Price (as in effect at the time of conversion) at any time after
the fifth
(5th) day of the month following the month in which it has
accrued in
accordance with the terms of this Article I (so long as there is
then a
sufficient number of authorized shares of Common Stock).
The Borrower's election shall be made in writing to the Holder
at any time
prior to 6:00 p.m., New York, New York time, on the third day of
the month
following the month in which Conversion Default payments have
accrued. If no
election is made, the Borrower shall be deemed to have elected
to pay in cash.
Nothing herein shall limit the Holder's right to pursue actual
damages (to the
extent in excess of the Conversion Default Payments) for the
Borrower's failure
to maintain a sufficient number of authorized shares of Common
Stock, and each
holder shall have the right to pursue all remedies available at
law or in
equity (including degree of specific performance and/or
injunctive relief).
1.4 Method of Conversion.
(a) Mechanics of Conversion. Subject to Section 1.1, this Note
may be
converted by the Holder in whole or in part at any time from
time to time after
the Issue Date, by (A) submitting to the Borrower a Notice of
Conversion (by
facsimile or other reasonable means of communication dispatched
on the
Conversion Date prior to 6:00 p.m., New York, New York time) and
(B) subject to
Section 1.4(b), surrendering this Note at the principal office
of the Borrower.
(b) Surrender of Note Upon Conversion. Notwithstanding anything
to the
contrary set forth herein, upon conversion of this Note in
accordance with the
terms hereof, the Holder shall not be required to physically
surrender this
Note to the Borrower unless the entire unpaid principal amount
of this Note is
so converted. The Holder and the Borrower shall maintain records
showing the
principal amount so converted and the dates of such conversions
or shall use
such other method, reasonably satisfactory to the Holder and the
Borrower, so
as not to require physical surrender of this Note upon each such
conversion.
In the event of any dispute or discrepancy, such records of the
Borrower shall
be controlling and determinative in the absence of manifest
error.
Notwithstanding the foregoing, if any portion of this Note is
converted as
aforesaid, the Holder may not transfer this Note unless the
Holder first
physically surrenders this Note to the Borrower, whereupon the
Borrower will
forthwith issue and deliver upon the order of the Holder a new
Note of like
tenor, registered as the Holder (upon payment by the Holder of
any applicable
transfer taxes) may request, representing in the aggregate the
remaining unpaid
principal amount of this Note. The Holder and any assignee, by
acceptance of
this Note, acknowledge and agree that, by reason of the
provisions of this
paragraph, following conversion of a portion of this Note, the
unpaid and
unconverted principal amount of this Note represented by this
Note may be less
than the amount stated on the face hereof.
(c) Payment of Taxes. The Borrower shall not be required to pay
any tax which
may be payable in respect of any transfer involved in the issue
and delivery of
shares of Common Stock or other securities or property on
conversion of this
Note in a name other than that of the Holder (or in street
name), and the
Borrower shall not be required to issue or deliver any such
shares or other
securities or property unless and until the person or persons
(other than the
Holder or the custodian in whose street name such shares are to
be held for the
Holder's account) requesting the issuance thereof shall have
paid to the
Borrower the amount of any such tax or shall have established to
the
satisfaction of the Borrower that such tax has been paid.
(d) Delivery of Common Stock Upon Conversion. Upon receipt by
the Borrower
from the Holder of a facsimile transmission (or other reasonable
means of
communication) of a Notice of Conversion meeting the
requirements for
conversion as provided in this Section 1.4, the Borrower shall
issue and
deliver or cause to be issued and delivered to or upon the order
of the Holder
certificates for the Common Stock issuable upon such conversion
within two (2)
business days after such receipt (and, solely in the case of
conversion of the
entire unpaid principal amount hereof, surrender of this Note)
(such second
business day being hereinafter referred to as the "Deadline") in
accordance
with the terms hereof and the Purchase Agreement (including,
without
limitation, in accordance with the requirements of Section 2(g)
of the Purchase
Agreement that certificates for shares of Common Stock issued on
or after the
effective date of the Registration Statement upon conversion of
this Note shall
not bear any restrictive legend).
(e) Obligation of Borrower to Deliver Common Stock. Upon receipt
by the
Borrower of a Notice of Conversion, the Holder shall be deemed
to be the holder
of record of the Common Stock issuable upon such conversion, the
outstanding
principal amount and the amount of accrued and unpaid interest
on this Note
shall be reduced to reflect such conversion, and, unless the
Borrower defaults
on its obligations under this Article I, all rights with respect
to the portion
of this Note being so converted shall forthwith terminate except
the right to
receive the Common Stock or other securities, cash or other
assets, as herein
provided, on such conversion. If the Holder shall have given a
Notice of
Conversion as provided herein, the Borrower's obligation to
issue and deliver
the certificates for Common Stock shall be absolute and
unconditional,
irrespective of the absence of any action by the Holder to
enforce the same,
any waiver or consent with respect to any provision thereof, 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
Borrower to the
holder of record, or any setoff, counterclaim, recoupment,
limitation or
termination, or any breach or alleged breach by the Holder of
any obligation to
the Borrower, and irrespective of any other circumstance which
might otherwise
limit such obligation of the Borrower to the Holder in
connection with such
conversion. The Conversion Date specified in the Notice of
Conversion shall be
the Conversion Date so long as the Notice of Conversion is
received by the
Borrower before 6:00 p.m., New York, New York time, on such
date.
(f) Delivery of Common Stock by Electronic Transfer. In lieu of
delivering
physical certificates representing the Common Stock issuable
upon conversion,
provided the Borrower's transfer agent is participating in the
Depository Trust
Company ("DTC") Fast Automated Securities Transfer ("FAST")
program, upon
request of the Holder and its compliance with the provisions
contained in
Section 1.1 and in this Section 1.4, the Borrower shall use its
best efforts to
cause its transfer agent to electronically transmit the Common
Stock issuable
upon conversion to the Holder by crediting the account of
Holder's Prime Broker
with DTC through its Deposit Withdrawal Agent Commission
("DWAC") system.
(g) Failure to Deliver Common Stock Prior to Deadline. Without
in any way
limiting the Holder's right to pursue other remedies, including
actual damages
and/or equitable relief, the parties agree that if delivery of
the Common Stock
issuable upon conversion of this Note is more than three (3)
days after the
Deadline (other than a failure due to the circumstances
described in Section
1.3 above, which failure shall be governed by such Section) the
Borrower shall
pay to the Holder $2,000 per day in cash, for each day beyond
the Deadline that
the Borrower fails to deliver such Common Stock. Such cash
amount shall be
paid to Holder by the fifth day of the month following the month
in which it
has accrued or, at the option of the Holder (by written notice
to the Borrower
by the first day of the month following the month in which it
has accrued),
shall be added to the principal amount of this Note, in which
event interest
shall accrue thereon in accordance with the terms of this Note
and such
additional principal amount shall be convertible into Common
Stock in
accordance with the terms of this Note.
1.5 Concerning the Shares. The shares of Common Stock issuable
upon conversion
of this Note may not be sold or transferred unless (i) such
shares are sold
pursuant to an effective registration statement under the Act or
(ii) the
Borrower or its transfer agent shall have been furnished with an
opinion of
counsel (which opinion shall be in form, substance and scope
customary for
opinions of counsel in comparable transactions) to the effect
that the shares
to be sold or transferred may be sold or transferred pursuant to
an exemption
from such registration or (iii) such shares are sold or
transferred pursuant to
Rule 144 under the Act (or a successor rule) ("Rule 144") or
(iv) such shares
are transferred to an "affiliate" (as defined in Rule 144) of
the Borrower who
agrees to sell or otherwise transfer the shares only in
accordance with this
Section 1.5 and who is an Accredited Investor (as defined in the
Purchase
Agreement). Except as otherwise provided in the Purchase
Agreement (and
subject to the removal provisions set forth below), until such
time as the
shares of Common Stock issuable upon conversion of this Note
have been
registered under the Act as contemplated by the Registration
Rights Agreement
or otherwise may be sold pursuant to Rule 144 without any
restriction as to the
number of securities as of a particular date that can then be
immediately sold,
each certificate for shares of Common Stock issuable upon
conversion of this
Note that has not been so included in an effective registration
statement or
that has not been sold pursuant to an effective registration
statement or an
exemption that permits removal of the legend, shall bear a
legend substantially
in the following form, as appropriate:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT
BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT
FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN
FORM, SUBSTANCE
AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE
TRANSACTIONS, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT UNLESS SOLD PURSUANT
TO RULE 144 OR
REGULATION S UNDER SAID ACT."
The legend set forth above shall be removed and the Borrower
shall issue to the
Holder a new certificate therefor free of any transfer legend if
(i) the
Borrower or its transfer agent shall have received an opinion of
counsel, in
form, substance and scope customary for opinions of counsel in
comparable
transactions, to the effect that a public sale or transfer of
such Common Stock
may be made without registration under the Act and the shares
are so sold or
transferred, (ii) such Holder provides the Borrower or its
transfer agent with
reasonable assurances that the Common Stock issuable upon
conversion of this
Note (to the extent such securities are deemed to have been
acquired on the
same date) can be sold pursuant to Rule 144 or (iii) in the case
of the Common
Stock issuable upon conversion of this Note, such security is
registered for
sale by the Holder under an effective registration statement
filed under the
Act or otherwise may be sold pursuant to Rule 144 without any
restriction as to
the number of securities as of a particular date that can then
be immediately
sold. Nothing in this Note shall (i) limit the Borrower's
obligation under the
Registration Rights Agreement or (ii) affect in any way the
Holder's
obligations to comply with applicable prospectus delivery
requirements upon the
resale o
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