EXHIBIT 4.1
FORM OF SENIOR CONVERTIBLE
NOTE
NEITHER THESE SECURITIES NOR THE
SECURITIES ISSUABLE UPON CONVERSION OR EXERCISE OF THESE SECURITIES
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE
OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE
SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION OR EXERCISE
OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT SECURED BY SUCH SECURITIES.
ANY TRANSFEREE OF THIS NOTE
SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS
3 AND 14 HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND,
ACCORDINGLY, THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY
BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO
SECTION 3(c)(iii) OF THIS NOTE.
ALPHA INNOTECH
CORP.
SENIOR CONVERTIBLE
NOTE
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Issuance Date:
July , 2006
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Principal: U.S. $
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FOR VALUE RECEIVED,
ALPHA INNOTECH CORP., a Delaware
corporation (the “Company” ), hereby promises to
pay to the order of
or registered
assigns ( “Holder” ) the amount set out above as
the Principal (as reduced pursuant to the terms hereof pursuant to
redemption, conversion or otherwise, the
“Principal” ) when due, whether upon the
Maturity Date (as defined below), acceleration, redemption or
otherwise (in each case in accordance with the terms hereof) and to
pay interest ( “Interest” ) on any outstanding
Principal at the rate of 3% per annum, compounded annually
(the “Interest Rate” ) unless otherwise provided
herein, from the date set out above as the Issuance Date (the
“Issuance Date” ) until the same becomes due and
payable, whether upon, the Maturity Date, acceleration, conversion,
redemption or otherwise (in each case in accordance with the terms
hereof). This Senior Convertible Note (including all Senior
Convertible Notes issued in exchange, transfer or replacement of,
the “Note” ) is one of an issue of Senior
Convertible Notes (collectively, the “ Notes ”
and such other Senior Convertible Notes, the “Other
Notes” ) issued on the Issuance Date pursuant to the
Securities Purchase Agreement (as defined below). Certain
capitalized terms are defined in Section 23.
1. MATURITY . On the Maturity
Date, the Holder shall surrender this Note to the Company and the
Company shall pay to the Holder an amount in cash representing all
outstanding Principal and accrued and unpaid Interest, if any. The
“Original Maturity Date” shall be July
, 2011, as may be extended at the
sole option of the Holder in the event that, and for so long as, an
Event of Default (as defined in Section 4(a)) shall have occurred
and be continuing or any event shall have occurred and be
continuing which with the passage of time and the failure to cure
would result in a Conversion Failure.
2. INTEREST; INTEREST DATE .
Interest on this Note shall commence accruing on the Issuance Date
and shall be computed on the basis of a 365-day year and actual
days elapsed and shall be payable on the Maturity Date (the “
Interest Date ”).
3. CONVERSION OF NOTES . This
Note shall be convertible into shares of the Company’s common
stock, par value $0.01 per share (the “Common
Stock” ), on the terms and conditions set forth in this
Section 3.
(a) Conversion Right .
Subject to the provisions of Section 3(d), at any time or
times on or after the Issuance Date, the Holder shall be entitled
to convert any portion of the outstanding and unpaid Conversion
Amount (as defined below) into fully paid and nonassessable shares
of Common Stock in accordance with Section 3(c), at the
Conversion Rate (as defined below). The Company shall not issue any
fraction of a share of Common Stock upon any conversion. If the
issuance would result in the issuance of a fraction of a share of
Common Stock, the Company shall pay to the Holder an amount in cash
equal to the value of such fractional share based on the closing
price of the Common Stock on the last trading day prior
to
the conversion. The Company shall pay any and
all documentary, stamp and similar taxes that may be payable with
respect to the issuance and delivery of Common Stock upon
conversion of any Conversion Amount. The Company shall not,
however, be required to pay any such tax which may be payable in
respect of any transfer of Securities involved in the issue and
delivery of the Common Stock in any name other than that of the
Holder.
(b) Conversion Rate . The
number of shares of Common Stock issuable upon conversion of any
Conversion Amount pursuant to Section 3(a) shall be determined
by dividing (x) such Conversion Amount by (y) the
Conversion Price (the “Conversion Rate”
).
(i) “Conversion
Amount” means the Principal to be converted, redeemed or
otherwise with respect to which this determination is being made,
plus all accrued and unpaid Interest on the Principal being
converted.
(ii) “Conversion
Price” means, subject to adjustment as provided herein,
$1.60.
(c) Mechanics of Conversion
.
(i) Optional Conversion . To
convert any Conversion Amount into shares of Common Stock on any
date (a “Conversion Date” ), the Holder shall
(A) transmit by facsimile (or otherwise deliver), for receipt
on or prior to 4:59 p.m., New York Time, on such date, a copy of an
executed notice of conversion in the form attached hereto as
Exhibit I (the “Conversion Notice” ) to
the Company and (B) if required by Section 3(c)(iii),
deliver this Note to a common carrier for delivery to the Company
as soon as practicable on or following such date (or a customary
indemnification undertaking with respect to this Note in the case
of its loss, theft or destruction). On or before the close of the
business on the first Business Day following the date of receipt of
a Conversion Notice, the Company shall transmit by facsimile a
confirmation of receipt of such Conversion Notice to the Holder and
the Company’s transfer agent (the “Transfer
Agent” ). On or before the second Business Day following
the date of receipt of a Conversion Notice (the “Share
Delivery Date” ), the Company’s transfer agent
shall issue and deliver to the address as specified in the
Conversion Notice, a certificate, registered in the name of the
Holder or its designee, for the number of shares of Common Stock to
which the Holder shall be entitled. If this Note is physically
surrendered for conversion as required by Section 3(c)(iii)
and the outstanding Principal of this Note is greater than the
Principal being converted, then the Company shall as soon as
practicable and in no event later than three (3) Business Days
after receipt of this Note and at its own expense, issue and
deliver to the Holder a new Note representing the outstanding
Principal not converted and otherwise in substantially the same
form as this Note. The Person or Persons entitled to receive the
shares of Common Stock issuable upon a conversion of this Note
shall be treated for all purposes as the record holder or holders
of such shares of Common Stock on the Conversion Date.
(ii) Book-Entry .
Notwithstanding anything to the contrary set forth herein, upon
conversion of any portion of this Note in accordance with the terms
hereof, the Holder shall not be required to physically surrender
this Note to the Company unless (A) the full Conversion Amount
represented by this Note is being converted or (B) the Holder
has provided the Company with prior written notice (which notice
may be included in a Conversion Notice)
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requesting physical surrender and reissue of
this Note. The Holder and the Company shall maintain records
showing the Principal converted and the dates of such conversions
or shall use such other method, reasonably satisfactory to the
Holder and the Company, so as not to require physical surrender of
this Note upon conversion.
(d) Principal Market
Regulation . The Company shall not be obligated to issue any
shares of Common Stock upon conversion of this Note if the issuance
of such shares of Common Stock would exceed that number of shares
of Common Stock which the Company may issue upon conversion of the
Notes without breaching the Company’s obligations under the
rules or regulations of the Principal Market (the
“Exchange Cap” ), except that such limitation
shall not apply in the event that the Company (A) obtains the
approval of its stockholders as required by the applicable rules of
the Principal Market for issuances of Common Stock in excess of
such amount (Company shall be required to obtain such approval if
the issuance would exceed that number of shares of Common Stock
which the Company may issue upon conversion of the Notes if it
breaches the Company’s obligations under the Exchange
Cap ) or (B) obtains a written opinion from outside
counsel to the Company that such approval is not required, which
opinion shall be reasonably satisfactory to the holders of the
Notes representing at least a majority of the principal amounts of
the Notes then outstanding. Until such approval or written opinion
is obtained, no purchaser of the Notes pursuant to the Securities
Purchase Agreement (the “Purchasers” ) shall be
issued, upon conversion of Notes, shares of Common Stock in an
amount greater than the product of the Exchange Cap multiplied by a
fraction, the numerator of which is the principal amount of Notes
issued to such Purchaser pursuant to the Securities Purchase
Agreement on the Issuance Date and the denominator of which is the
aggregate principal amount of all Notes issued to the Purchasers
pursuant to the Securities Purchase Agreement on the Issuance Date
(with respect to each Purchaser, the “Exchange Cap
Allocation” ). In the event that any Purchaser shall sell
or otherwise transfer any of such Purchaser’s Notes, the
transferee shall be allocated a pro rata portion of such
Purchaser’s Exchange Cap Allocation, and the restrictions of
the prior sentence shall apply to such transferee with respect to
the portion of the Exchange Cap Allocation allocated to such
transferee.
(e) Mandatory Conversion . If
the closing price of the Common Stock has been at or above $2.50
(as adjusted for stock splits, stock dividends, recapitalizations
and like transactions), for at least 30 consecutive Business Days,
then any remaining Principal and accrued and unpaid Interest under
the Note shall automatically convert into Common Stock in
accordance with this Section 3; provided that Holder shall not
have to complete such conversion until such time as: (i) the
amount of Common Stock outstanding is equal to the Required Reserve
Amount; and (ii) conversion would not be impaired pursuant to
Section 3(d) hereof.
4. RIGHTS UPON EVENT OF
DEFAULT .
(a) Event of Default . Each
of the following events shall constitute an “Event of
Default” :
(i) default in the payment of the
Principal and unpaid accrued Interest of this Note within five
(5) Business Days of becoming due and payable;
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(ii) any other default by the
Company of the performance of any of its obligations or any breach
by the Company of any representations or covenants (provided that a
default of any such covenant is not otherwise defined as an Event
of Default under this Section 4(a)) hereunder or under the
Securities Purchase Agreement (provided that the representations
and warranties under the Securities Purchase Agreement shall only
survive for one year from the date of execution of the Securities
Purchase Agreement) upon 10 days notice from the Holder to the
Company;
(iii) the Company shall make an
assignment for the benefit of creditors, file a petition in
bankruptcy, consent to entry of an order for relief against it in
an involuntary case, be adjudicated insolvent or bankrupt, petition
or apply to any tribunal for the appointment of any receiver,
trustee or similar official for it or a substantial part of its
assets, or commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or
hereafter in effect; there shall occur the appointment of a
receiver, trustee, assignee, liquidator, custodian or similar
official of it or a substantial part of its assets; or there shall
have been filed any such petition or application or any such
proceeding shall have been commenced against it, which remains
undismissed for a period of 60 days or more; the Company by any act
or omission shall indicate its consent to, approval of or
acquiescence in any such petition, application or proceeding or the
appointment of any trustee for it or any substantial part of any of
its properties; or
(iv) a court of competent
jurisdiction shall enter an order or decree under any Bankruptcy
Law that is for relief against the Company in an involuntary case,
appoints a receiver, trustee, assignee, liquidator or similar
official of the Company or for any substantial part of its
property, or orders the liquidation of the Company; and the order
or decree remains unstayed and in effect for 30 days.
(b) Redemption Right Upon Event
of Default . Promptly after the occurrence of an Event of
Default with respect to this Note or any Other Note, the Company
shall deliver written notice thereof via facsimile and overnight
courier (an “Event of Default Notice” ) to the
Holder and the holders of the Other Notes. At any time after the
earlier of the Holder’s receipt of an Event of Default Notice
and the Holder becoming aware of an Event of Default, the Holder
may require the Company to redeem all or any portion of the Notes
by delivering written notice thereof (the “Event of
Default Redemption Notice” ) to the Company, which Event
of Default Redemption Notice shall indicate the portion of the
Notes that the Holder is electing to cause to be redeemed.
Notwithstanding the immediately preceding sentence to the contrary,
in the case of an Event of Default pursuant to
Section 4(a)(iii) above, all amounts of Principal and Interest
accrued under this Note shall be deemed automatically due, payable,
and collectible, without need for any Notice.
(c) Default Rate of Interest
. Notwithstanding the immediately preceding terms of this section,
upon the occurrence of an Event of Default, all amounts due and
owing under this Note shall bear interest at a rate of ten percent
(10%) per annum from the date of such default until all such
amounts are paid in full.
5. RIGHTS UPON CERTAIN CORPORATE
EVENTS . Prior to the consummation of any recapitalization,
reorganization, consolidation, merger, spin-off or other
business
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combination (including, without limitation, a
Change of Control (defined below)) pursuant to which holders of
Common Stock are entitled to receive securities or other assets
with respect to or in exchange for Common Stock (a
“Corporate Event” ), the Company shall make
appropriate provision at the Holder’s option to insure that
the Holder will thereafter have the right to receive upon a
conversion of this Note: (i) in addition to the shares of
Common Stock receivable upon such conversion, such securities or
other assets to which the Holder would have been entitled with
respect to such shares of Common Stock had such shares of Common
Stock been held by the Holder upon the consummation of such
Corporate Event (without taking into account any limitations or
restrictions on the convertibility of this Note); or (ii) in
lieu of the shares of Common Stock otherwise receivable upon such
conversion, such securities or other assets received by the holders
of Common Stock in connection with the consummation of such
Corporate Event in such amounts as the Holder would have been
entitled to receive had this Note initially been issued with
conversion rights for the form of such consideration (as opposed to
shares of Common Stock) at a conversion rate for such consideration
commensurate with the Conversion Rate. Provision made pursuant to
the preceding sentence shall be in a form and substance
satisfactory to the Holders with Notes representing a majority in
interest of the Principal outstanding (the “ Required
Holders ”). The provisions of this Section shall apply
similarly and equally to successive Corporate Events and shall be
applied without regard to any limitations on the conversion or
redemption of this Note. Each of the following events shall
constitute a “Change of Control” :
(i) any sale of all or substantially
all of the assets of the Company to a third party;
(ii) any merger of the Company with
or into another corporation in which holders of Common Stock
immediately prior to the consummation of the merger do not control
50% of the voting power of the surviving corporation; or
(iii) the acquisition by any
“person” or “group” of persons (as such
terms are used in Section 13(d) and 14(d) of the Securities
and Exchange Act of 1934, as amended, and the related regulations)
who have an expressed intent to control the affairs of the Company
of more than 50% of the outstanding Common Stock of the
Company.
6. ADJUSTMENT OF CONVERSION PRICE
UPON SUBDIVISION OR COMBINATION OF COMMON STOCK . If the
Company at any time on or after the Issuance Date subdivides (by
any stock split, stock dividend, recapitalization or otherwise) one
or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Conversion Price in effect
immediately prior to such subdivision will be proportionately
reduced. If the Company at any time on or after the Issuance Date
combines (by combination, reverse stock split or otherwise) one or
more classes of its outstanding shares of Common Stock into a
smaller number of shares, the Conversion Price in effect
immediately prior to such combination will be proportionately
increased.
7. PREPAYMENT . With respect
to each Holder, this Note may only be prepaid (notwithstanding
acceleration or other remedy following an Event of Default) in
whole or in part beginning on the second anniversary of the
Issuance Date; provided, however, that if the Note is prepaid prior
to the third anniversary of the Issuance Date, the Company shall
pay to the Holder
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a fee equal to 3% of the Principal then
outstanding and prepaid (the “ Prepayment Fee ”)
with such Prepayment Fee declining 1% per year to par at
Maturity Date. The Company will provide the Holder with prior
written notice (“ Prepayment Notice ”) of its
intent to pre-pay the Note at least 20 days before the
Company’s intended date of prepayment (“ Intended
Prepayment Date ”). Upon receipt of a Prepayment Notice,
the Holder may exercise any of the conversion rights available to
the Holder pursuant to this Note by providing notice to the Company
at least 5 days before the Intended Prepayment Date.
8. NONCIRCUMVENTION . The
Company hereby covenants and agrees that the Company will not, by
amendment of its Certificate of Incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Note, and will at all times in good faith
carry out all of the provisions of this Note and take all action as
may be required to protect the rights of the Holder of this
Note.
9. RESERVATION OF AUTHORIZED
SHARES . The Company shall initially reserve out of its
authorized and unissued Common Stock a number of shares of Common
Stock for each of the Notes equal to 100% of the Conversion Rate
with respect to the Conversion Amount of each such Note as of the
Issuance Date. Thereafter, the Company, so long as any of the Notes
are outstanding, shall take all action necessary to reserve and
keep available out of its authorized and unissued Common Stock,
solely for the purpose of effecting the conversion of the Notes,
100% of the number of shares of Common Stock as shall from time to
time be necessary to effect the conversion of all of the Notes then
outstanding (the “Required Reserve Amount”
).
10. HOLDER’S
REDEMPTIONS . In the event that the Holder has sent an Event of
Default Redemption Notice to the Company pursuant to Section 4(b)
(a “Redemption Notice” ), or if the note is
deemed automatically redeemed due to a default under Section
4(a)(iii) to the Holder shall promptly submit this Note to the
Company. The Company shall deliver the applicable Event of Default
Redemption Price to the Holder within 10 Business Days after the
Company’s receipt of the Holder’s Redemption Notice. In
the event of a redemption of less than all of the Conversion Amount
of this Note, the Company shall promptly cause to be issued and
delivered to the Holder a new Note representing the outstanding
Principal which has not been redeemed. In the event that the
Company does not pay the Event of Default Redemption Price (the
“Redemption Price” ), to the Holder (or deliver
any Common Stock to be issued pursuant to a Redemption Notice)
within the time period required, at any time thereafter and until
the Company pays such unpaid Redemption Price (and issues any
Common Stock required pursuant to a Redemption Notice) in full, the
Holder shall have the option, in lieu of redemption, to require the
Company to promptly return to the Holder all or any portion of this
Note representing the Conversion Amount that was submitted for
redemption and for which the applicable Redemption Price (or any
Common Stock required to be issued pursuant to a Redemption Notice)
has not been paid. Upon the Company’s receipt of such notice:
(x) the Redemption Notice shall be null and void with respect to
such Conversion Amount; and (y) the Company shall immediately
return this Note, or issue a new Note to the Holder representing
such Conversion Amount.
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11. STATUS OF DEBT
.
(a) Agreement to Eliminate Senior
Debt to Third Parties . By issuing this Note, the Company for
itself and its successors and assigns, and for its Subsidiaries and
the successors and assigns of such Subsidiaries, agrees, and the
Holder, by its acceptance of this Note, shall be deemed to have
agreed, that this Note shall be subject to the provisions of this
Section 11 and, to the extent and in the manner hereinafter
set forth in this Section 11, the indebtedness represented by
this Note and the payment of the Principal and Interest, any
redemption amount, liquidated damages, fees, expenses or any other
amounts in respect of this Note are subordinate in right of payment
only to the prior payment in full in cash of (i) all Senior
Debt now outstanding and (ii) the Future Permitted Senior Debt
(as defined in Section 13(b) below). The Holder shall be
entitled to receive payment in full in cash before any of the
Subordinated Indebtedness or any other Indebtedness save Senior
Debt or Future Permitted Senior Debt (including interest after the
commencement of any proceeding under any Bankruptcy Law at the
agreed upon rate before any other creditor or Credit Party shall be
entitled to receive any payment with respect to any indebtedness
other than the Senior Debt or the Future Permitted Senior Debt
(“ Holder’s Rights ”).
(b) Liquidation; Dissolution;
Bankruptcy .
(i) The holders of Senior Debt and
Future Permitted Senior Debt shall be entitled to receive
paym