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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 payment in full in cash of all Senior
Debt or Future Permitted Senior Debt (including interest after the
commencement of any proceeding under any Bank
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