Exhibit 10.3
[FORM OF SENIOR SECURED
CONVERTIBLE NOTE]
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE 1933 ACT, OR (B) AN OPINION OF COUNSEL,
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT (II) UNLESS SOLD OR TRANSFERRED TO A
“QUALIFIED INSTITUTIONAL BUYER” WITHIN THE MEANING OF
RULE 144A UNDER THE 1933 ACT OR (III) UNLESS SOLD PURSUANT TO
RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES. ANY TRANSFEREE OF THIS NOTE SHOULD
CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS
3(c)(iii) AND 18(a) HEREOF. THE HOLDER OF THIS NOTE
AGREES TO THE TERMS AND PROVISIONS SET FORTH IN
SECTION 4(p) OF THE SECURITIES PURCHASE AGREEMENT
REGARDING THE COLLATERAL AGENT (AS DEFINED IN THE SECURITIES
PURCHASE AGREEMENT). THE PRINCIPAL AMOUNT REPRESENTED BY THIS
NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION
HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE
HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS
NOTE.
MAUI LAND & PINEAPPLE
COMPANY, INC.
SENIOR SECURED CONVERTIBLE
NOTE
|
Issuance Date: July 28, 2008
|
|
Original Principal Amount: $[
·
]
|
FOR VALUE RECEIVED,
Maui Land & Pineapple
Company, Inc., a Hawaii corporation (the “
Company ”), hereby promises to pay to
or registered assigns (“ Holder ”) the amount
set out above as the Original Principal Amount (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 applicable Interest Rate (as defined
below), from the date set out above as the Issuance Date (the
“ Issuance Date ”) until the same becomes
due and payable, whether upon an Interest Date (as defined below)
or the Maturity Date, acceleration, conversion, redemption or
otherwise (in each case in accordance with the terms hereof).
This Senior Secured Convertible Note (including all Senior Secured
Convertible Notes issued in exchange, transfer or replacement
hereof, this “ Note ”) is one of an issue of
Senior Secured Convertible Notes issued pursuant to the Securities
Purchase Agreement (as defined below) on the Closing Date
(collectively, the “ Notes ” and such other
Senior Secured Convertible Notes, the “ Other
Notes ”). Certain capitalized terms used herein
are defined in Section 29.
(1)
PAYMENTS OF
PRINCIPAL . On the Maturity Date,
(a) the Company shall pay to the Holder an amount in cash
representing all outstanding Principal, accrued and unpaid Interest
and accrued and unpaid Late Charges, if any, on such Principal and
Interest and (b) the Holder shall surrender this Note to the
Holder’s counsel for delivery to the Company upon receipt of
all payments required under this Note. The “
Maturity Date ” shall be
July 15, 2013, as may be extended at the option of the Holder
(i) 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 on the Maturity Date (as may be extended pursuant to
this Section 1) or any event that shall have occurred and be
continuing that with the passage of time and the failure to cure
would result in an Event of Default and (ii) through the date
that is up to twenty-five (25) Business Days after the consummation
of a Change of Control in the event that a Change of Control is
publicly announced or a Change of Control Notice (as defined in
Section 5(b)) is delivered prior to the Maturity Date.
Other than as specifically permitted by this Note, the Company may
not prepay any portion of the outstanding Principal, accrued and
unpaid Interest or accrued and unpaid Late Charges on Principal and
Interest, if any.
(2)
INTEREST;
INTEREST RATE . Interest on this Note
shall commence accruing on the Issuance Date and shall be computed
on the basis of a 360-day year comprised of twelve (12) thirty (30)
day months and shall be payable in arrears on each January 15,
April 15, July 15 and October 15 of each year (each,
an “ Interest
Date ”) with the first
Interest Date being October 15, 2008. Interest shall be
payable on each Interest Date, to the record holder of this Note on
the applicable Interest Date, in cash. Prior to the payment
of Interest on an Interest Date, Interest on this Note shall accrue
at the Interest Rate and be payable by way of inclusion of the
Interest in the Conversion Amount in accordance with
Section 3(b)(i). From and after the occurrence and
during the continuance of an Event of Default, the Interest Rate
shall be increased to thirteen percent (13.0%) per annum. In
the event that such Event of Default is subsequently cured, the
adjustment referred to in the preceding sentence shall cease to be
effective as of the date of such cure; provided that the Interest
as calculated and unpaid at such increased rate during the
continuance of such Event of Default shall continue to apply to the
extent relating to the days after the occurrence of such Event of
Default through and including the date of cure of such Event of
Default.
(3)
CONVERSION OF
NOTES . This Note shall be
convertible into shares of the Company’s common stock, no par
value per share (the “ Common Stock ”), on the terms and
conditions set forth in this Section 3.
(a)
Conversion
Right . Subject to the
provisions of Section 3(d), at any time or times on or after
the Issuance Date, the Holder shall be entitled to convert any
portion of the outstanding and unpaid Conversion Amount (as defined
below) into fully paid and nonassessable shares of Common Stock in
accordance with Section 3(c), at the Conversion Rate (as
defined below). The Company shall not issue any fraction of a
share of Common Stock upon any conversion. If the issuance
would result in the issuance of a fraction of a share of Common
Stock, the Company shall round such fraction of a share of Common
Stock up to the nearest whole share. The Company shall pay
any and all transfer, stamp and similar taxes that may be payable
with respect to the issuance and delivery of Common Stock to the
Holder upon conversion of any Conversion Amount.
2
(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 sum of (A) the portion of the Principal to be converted,
redeemed or otherwise with respect to which this determination is
being made, (B) accrued and unpaid Interest with respect to
such Principal, and (C) accrued and unpaid Late Charges with
respect to such Principal and Interest.
(ii)
“
Conversion Price ” means, as of any
Conversion Date (as defined below) or other date of determination,
$33.50, subject to adjustment as provided herein.
(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 11:59 p.m., New York Time, on such date, a copy
of an executed notice of conversion in the form attached hereto as
Exhibit I (the “ Conversion Notice ”) to the Company,
(B) if required by Section 3(c)(iii), surrender this Note
to a common carrier for delivery to the Company as soon as
practicable on or following such date (or an indemnification
undertaking with respect to this Note in the case of its loss,
theft or destruction), and (C) pay any transfer taxes or other
applicable taxes or duties, if any, required in connection with the
issuance of shares of Common Stock in the name of someone other
than the Holder. On or before the second (2 nd )
Trading Day following the date of receipt of a Conversion Notice,
the Company shall transmit by facsimile a confirmation (the
“ Conversion
Confirmation ”) of receipt of such
Conversion Notice to the Holder and the Transfer Agent. On or
before the third (3 rd ) Trading Day following the date
of receipt of a Conversion Notice (the “ Share Delivery Date ”), the Company shall
(X) provided that the Company’s transfer agent (the
“ Transfer Agent
”) is
participating in the Depository Trust Company (“
DTC ”) Fast Automated
Securities Transfer Program, credit such aggregate number of shares
of Common Stock to which the Holder shall be entitled to the
Holder’s or its designee’s balance account with DTC
through its Deposit Withdrawal Agent Commission system or
(Y) if the Transfer Agent is not participating in the DTC Fast
Automated Securities Transfer Program, issue and deliver to the
address as specified in the Conversion Notice, a certificate,
registered in the name of the Holder or its designee, for the
number of shares of Common Stock to which the Holder shall be
entitled. If this Note is physically surrendered for
conversion as required by Section 3(c)(iii) and the
outstanding Principal of this Note is greater than the Principal
portion of the Conversion Amount being converted, then the Company
shall as soon as practicable and in no event later than three
(3) Trading Days after receipt of this Note and at its own
expense, issue and deliver to the holder a new Note (in accordance
with Section 18(d)) representing the outstanding Principal not
converted. The Person or Persons entitled to receive the
shares of Common Stock issuable upon a conversion of this Note
shall be treated for all purposes as the record holder or holders
of such shares of Common Stock on the Conversion Date.
3
(ii)
Company’s Failure to
Timely Convert . If the Company shall
fail to issue a certificate to the Holder or credit the
Holder’s balance account with DTC, as applicable, for the
number of shares of Common Stock to which the Holder is entitled
upon conversion of any Conversion Amount on or prior to the date
which is three (3) Trading Days after the Conversion Date (a
“ Conversion
Failure ”), then the Holder,
upon written notice to the Company, may void its Conversion Notice
with respect to, and retain or have returned, as the case may be,
any portion of this Note that has not been converted pursuant to
such Conversion Notice. In addition to the foregoing, if
within three (3) Trading Days after the Company’s
receipt of the facsimile copy of a Conversion Notice the Company
shall fail to issue and deliver a certificate to the Holder or
credit the Holder’s balance account with DTC for the number
of shares of Common Stock to which the Holder is entitled upon such
holder’s conversion of any Conversion Amount, and if on or
after such Trading Day the Holder purchases (in an open market
transaction or otherwise) Common Stock to deliver in satisfaction
of a sale by the Holder of Common Stock issuable upon such
conversion that the Holder anticipated receiving from the Company
(a “ Buy-In
”) or on
any date of the Company’s obligation to deliver shares of
Common Stock as contemplated pursuant to clause (B) below,
then the Company shall, within three (3) Business Days after
the Holder’s request and in the Holder’s discretion,
either (A) pay cash to the Holder in an amount equal to the
Holder’s total purchase price (including brokerage
commissions and other out of pocket expenses, if any) for the
shares of Common Stock so purchased (the “Buy-In Price” ), at which point the
Company’s obligation to issue and deliver such certificate or
to credit the Holder’s balance account with DTC for the
number of shares of Common Stock to which the Holder is entitled
upon such Holder’s conversion of any Conversion Amount shall
terminate, or (B) promptly honor its obligation to deliver to
the Holder a certificate or certificates representing such Common
Stock and pay cash to the Holder in an amount equal to the excess
(if any) of the Buy-In Price over the product of (1) such
number of shares of Common Stock, times (2) the Closing Bid
Price on the Conversion Date.
(iii)
Registration;
Book-Entry . The Company shall
maintain a register (the “ Register ”) for the recordation
of the names and addresses of the holders of each Note and the
principal amount of the Notes held by such holders (the
“ Registered
Notes ”). The entries
in the Register shall be conclusive and binding for all purposes
absent manifest error. The Company and the holders of the
Notes shall treat each Person whose name is recorded in the
Register as the owner of a Note for all purposes, including,
without limitation, the right to receive payments of Principal and
Interest hereunder, notwithstanding notice to the contrary. A
Registered Note may be assigned or sold in whole or in part only by
registration of such assignment or sale on the Register. Upon
its receipt of a request to assign or sell all or part of any
Registered Note by a Holder, the Company shall record the
information contained therein in the Register and issue one or more
new Registered Notes in the same aggregate principal amount as the
principal amount of the surrendered Registered Note to the
designated assignee or transferee pursuant to
Section 18. Notwithstanding anything to the contrary set
forth herein, upon conversion or redemption 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 redeemed or (B) the Holder has provided the
Company with prior written notice (which notice may be included in
a
4
Conversion Notice)
requesting reissuance of this Note upon physical surrender of this
Note. The Holder and the Company shall maintain records
showing the Principal, Interest and Late Charges, if any, converted
and redeemed and the dates of such conversions and redemptions 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 or redemption.
(iv)
Pro Rata
Conversion; Disputes . In the event that the
Company receives a Conversion Notice from more than one holder of
Notes for the same Conversion Date and the Company can convert
some, but not all, of such portions of the Notes submitted for
conversion, the Company, subject to Section 3(d), shall
convert from each holder of Notes electing to have Notes converted
on such date a pro rata amount of such holder’s portion of
its Notes submitted for conversion based on the principal amount of
Notes submitted for conversion on such date by such holder relative
to the aggregate principal amount of all Notes submitted for
conversion on such date. In the event of a dispute as to the
number of shares of Common Stock issuable to the Holder in
connection with a conversion of this Note, the Company shall issue
to the Holder the number of shares of Common Stock not in dispute
and resolve such dispute in accordance with
Section 23.
(v)
The Holder, as
such, is not entitled to any rights of a holder of Common Stock
until the Holder has converted this Note into Common Stock, and
only to the extent this Note is deemed to have been converted into
Common Stock pursuant to this Section 3.
(vi)
This Note shall
be deemed to have been converted immediately prior to the close of
business on the Conversion Date, and at such time the rights of the
Holder of this Note as the Holder hereof shall cease (unless the
Company defaults on its obligations in connection with any such
conversion) with respect to the portion of this Note converted on
such Conversion Date, and the Person or Persons entitled to receive
the shares of Common Stock issuable upon conversion shall be deemed
to be a stockholder of record on the Conversion Date.
(d)
Limitations on
Conversions .
(i)
Beneficial
Ownership . The Company shall not
effect any conversion of this Note, and the Holder of this Note
shall not have the right to convert any portion of this Note
pursuant to Section 3(a), to the extent that after giving
effect to such conversion (including any Make-Whole Premium), the
Holder (together with the Holder’s affiliates) would
beneficially own in excess of 4.99% (the “
Maximum Percentage
”) of the
number of shares of Common Stock outstanding immediately after
giving effect to such conversion. For purposes of the
foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its affiliates shall include
the number of shares of Common Stock issuable upon conversion of
this Note with respect to which the determination of such sentence
is being made, but shall exclude the number of shares of Common
Stock which would be issuable upon (A) conversion of the
remaining, nonconverted portion of this Note beneficially owned by
the Holder or any of its affiliates and (B) exercise or
conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any Other
Notes) subject to a limitation on conversion or exercise analogous
to the
5
limitation contained herein
beneficially owned by the Holder or any of its affiliates.
Except as set forth in the preceding sentence, for purposes of this
Section 3(d)(i), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended (the “ 1934 Act ”). For purposes
of this Section 3(d)(i), in determining the number of
outstanding shares of Common Stock, the Holder may rely on the
number of outstanding shares of Common Stock as reflected in
(x) the Company’s most recent Form 10-K,
Form 10-Q, Form 8-K or other public filing with the SEC,
as the case may be, (y) a more recent public announcement by
the Company or (z) any other notice by the Company or the
Transfer Agent setting forth the number of shares of Common Stock
outstanding. For any reason at any time, upon the written or
oral request of the Holder, the Company shall within two
(2) Business Days confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding. In any
case, the number of outstanding shares of Common Stock shall be
determined after giving effect to the conversion or exercise of
securities of the Company, including this Note, by the Holder or
its affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. By written
notice to the Company, the Holder may increase or decrease the
Maximum Percentage to any other percentage not in excess of 9.99%
specified in such notice; provided that (i) any such increase
will not be effective until the sixty-first (61 st ) day
after such notice is delivered to the Company, and (ii) any
such increase or decrease will apply only to the Holder and not to
any other holder of Notes. The provisions of this paragraph
shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this
Section 3(d)(i) to correct this paragraph (or any portion
hereof) which may be defective or inconsistent with the intended
beneficial ownership limitation herein contained or to make changes
or supplements necessary or desirable to properly give effect to
such limitation.
(ii)
Principal
Market Regulation . The Company shall not
be obligated to issue any shares of Common Stock upon conversion of
this Note (including Make-Whole Premium Shares, if any) if the
issuance of such shares of Common Stock would exceed the aggregate
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 any applicable
Eligible 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 such Eligible Market for issuances of
Common Stock in excess of such amount 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
Required Holders. Until such approval or written opinion is
obtained, no purchaser of the Notes pursuant to the Securities
Purchase Agreement (each, a “ Purchaser ” and collectively the
“ Purchasers
”) shall
be issued in the aggregate, upon conversion or otherwise 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 any Purchaser pursuant to
the Securities Purchase Agreement on the Closing Date and the
denominator of which is the aggregate principal amount of all Notes
issued to all of the Purchasers pursuant to the Securities Purchase
Agreement on the Closing 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. In the
6
event that any holder of
Notes shall convert all of such holder’s Notes into a number
of shares of Common Stock which, in the aggregate, is less than
such holder’s Exchange Cap Allocation, then the difference
between such holder’s Exchange Cap Allocation and the number
of shares of Common Stock actually issued to such holder shall be
allocated to the respective Exchange Cap Allocations of the
remaining holders of Notes on a pro rata basis in proportion to the
aggregate principal amount of the Notes then held by each such
holder.
(e)
Mandatory
Conversion .
(i)
General
. If at any
time from and after the two (2) year anniversary of the
Issuance Date (the “ Mandatory Conversion Eligibility Date
”),
(A) the arithmetic average of the Weighted Average Price of
the Common Stock for any twenty (20) Trading Days in any thirty
(30) consecutive Trading Day period occurring following the
Mandatory Conversion Eligibility Date (the “
Mandatory Conversion Measuring
Period ”) exceeds 175% of the
then applicable Conversion Price and (B) there is no Equity
Conditions Failure on each day during the period commencing on the
Mandatory Conversion Notice Date and ending on the Mandatory
Conversion Date (each, as defined below), the Company shall have
the right to require the Holder to convert all or any portion of
the Conversion Amount then remaining under this Note, in each
case as
designated in the Mandatory Conversion Notice (as defined below)
into fully paid, validly issued and nonassessable shares of Common
Stock in accordance with Section 3(c) hereof at the
Conversion Rate as of the Mandatory Conversion Date (a
“ Mandatory
Conversion ”). The Company
may exercise its right to require conversion under this
Section 3(e) by delivering within not more than three
(3) Trading Days following the end of such Mandatory
Conversion Measuring Period a written notice thereof by facsimile
and overnight courier to all, but not less than all, of the holders
of Notes and the Transfer Agent (the “Mandatory Conversion Notice”
and the date all
of the holders received such notice by facsimile is referred to as
the “ Mandatory
Conversion Notice Date ”). The Mandatory
Conversion Notice shall be irrevocable. The Mandatory
Conversion Notice shall (x) state (I) the Trading Day
selected for the Mandatory Conversion, which Trading Day shall be
no sooner than ten (10) Trading Days nor later than sixty (60)
Trading Days following the Mandatory Conversion Notice Date (the
“ Mandatory Conversion
Date ”), (II) the
aggregate Conversion Amount of the Notes subject to Mandatory
Conversion from the Holder and all of the holders of the Notes
pursuant to this Section 3(e) (and analogous provisions
under the Other Notes), (III) the number of shares of Common
Stock to be issued to the Holder on the Mandatory Conversion Date
and (y) certify that there
has been no Equity Conditions Failure.
(ii)
Pro Rata
Conversion Requirement . If the Company elects
to cause a conversion of any Conversion Amount of this Note
pursuant to Section 3(e)(i), then it must simultaneously take
the same action in the same proportion with respect to the Other
Notes. If the Company elects a Mandatory Conversion of this
Note pursuant to Section 3(e)(i) (or similar provisions
under the Other Notes) with respect to less than all of the
Conversion Amounts of the Notes then outstanding, then the Company
shall require conversion of a Conversion Amount from each of the
holders of the Notes equal to the product of (1) the aggregate
Conversion Amount of Notes which the Company has elected to cause
to be converted pursuant to Section 3(e)(i), multiplied by
(2) the fraction, the numerator of which is the sum of the
aggregate Original Principal Amount of the Notes purchased by such
holder of outstanding Notes and the denominator of which is the sum
of the aggregate Original Principal Amount of
7
the Notes purchased by all
holders holding outstanding Notes (such fraction with respect to
each holder is referred to as its “ Conversion Allocation Percentage ,” and such amount with
respect to each holder is referred to as its “
Pro Rata Conversion Amount
”);
provided, however, that in the event that any holder’s Pro
Rata Conversion Amount exceeds the outstanding Principal amount of
such holder’s Note, then such excess Pro Rata Conversion
Amount shall be allocated amongst the remaining holders of Notes in
accordance with the foregoing formula. In the event that the
initial holder of any Notes shall sell or otherwise transfer any of
such holder’s Notes, the transferee shall be allocated a pro
rata portion of such holder’s Conversion Allocation
Percentage and the Pro Rata Conversion Amount.
(f)
Private
Company Change of Control . If at any time the
Holder converts this Note after a Change of Control, unless
(i) at least 90% of the consideration, excluding cash payments
for fractional shares, in such Change of Control consists of shares
of capital stock of the Successor Entity that are listed on, or
immediately after the transaction or event will be listed on, an
Eligible Exchange and as a result of such transaction or
transactions the Notes become convertible into or exchangeable or
exercisable for such capital stock of the Successor Entity and the
Successor Entity has assumed the obligations under this Note
pursuant to Section 5(a) hereof or (ii) the Company
continues to be the Successor Entity and the Common Stock continues
to be listed on an Eligible Exchange, then the Company shall pay to
the Holder in cash, in lieu of Conversion Shares, in an amount
equal to the product of (x) the applicable number of
Conversion Shares and (y) the consideration that the holders
of shares of Common Stock in connection with the consummation of
such Change of Control received for each share of Common
Stock.
(4)
RIGHTS UPON
EVENT OF DEFAULT .
(a)
Event of
Default . Each of the following
events shall constitute an “ Event of Default ”:
(i)
the failure of
the applicable Registration Statement required to be filed pursuant
to the Registration Rights Agreement to be declared effective by
the SEC on or prior to the date that is sixty (60) days after the
applicable Effectiveness Deadline (as defined in the Registration
Rights Agreement), or, while the applicable Registration Statement
is required to be maintained effective pursuant to the terms of the
Registration Rights Agreement, the effectiveness of the applicable
Registration Statement lapses for any reason (including, without
limitation, the issuance of a stop order) or is unavailable to any
holder of the Notes for sale of all of such holder’s
Registrable Securities (as defined in the Registration Rights
Agreement) in accordance with the terms of the Registration Rights
Agreement, and such lapse or unavailability continues for a period
of seven (7) consecutive days or for more than an aggregate of
twenty-five (25) days in any 365-day period (other than days during
an Allowable Grace Period (as defined in the Registration Rights
Agreement));
(ii)
the suspension
from trading or failure of the Common Stock to be listed on an
Eligible Market for a period of five (5) consecutive Trading
Days or for more than an aggregate of ten (10) Trading Days in
any 365-day period;
8
(iii)
the
Company’s (A) failure to cure a Conversion Failure by
delivery of the required number of shares of Common Stock or
Make-Whole Premium Shares within fifteen (15) Business Days after
the applicable Conversion Date or Change of Control Settlement
Date, as the case may be, or (B) notice, written or oral, to
any holder of the Notes, including by way of public announcement or
through any of its agents, at any time, of its intention not to
comply with a request for conversion of any Notes into shares of
Common Stock that is tendered in accordance with the provisions of
the Notes;
(iv)
at any time
following the tenth (10 th ) consecutive Business Day
that the Holder’s Authorized Share Allocation is less than
the number of shares of Common Stock that the Holder would be
entitled to receive upon a conversion of the full Conversion Amount
of this Note (without regard to any limitations on conversion set
forth in Section 3(d) or otherwise);
(v)
the
Company’s failure to pay to the Holder any amount of
Principal, Interest, Late Charges or other amounts when and as due
under this Note (including, without limitation, the Company’s
failure to pay any redemption payments or amounts hereunder) or any
other Transaction Document (as defined in the Securities Purchase
Agreement) or any other agreement, document, certificate or other
instrument delivered in connection with the transactions
contemplated hereby and thereby to which the Holder is a party,
except, in the case of a failure to pay Interest and Late Charges
when and as due, in which case only if such failure continues for a
period of at least five (5) Business Days;
(vi)
(A) the
Company or any Subsidiary Guarantor (as defined below) or any
Significant Subsidiary shall fail to pay any principal of or
interest or premium on any of its Indebtedness secured by the
Collateral (excluding Indebtedness evidenced by this Note or the
Other Notes), to the extent that the aggregate principal amount of
all such Indebtedness exceeds $250,000, when due (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise) and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument
relating to such Indebtedness, or (B) any other default under
any agreement or instrument relating to any such Indebtedness, or
any other Indebtedness by the Company or any of its Subsidiaries
for borrowed money in excess of an aggregate principal amount of
$500,000, or any other event, shall occur and shall continue after
the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of any
such Indebtedness or any such Indebtedness shall be declared to be
due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), redeemed, purchased or
defeased or an offer to prepay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case, prior to
the stated maturity thereof;
(vii)
the Company or
any of its Subsidiaries party to a Guarantee (as defined in the
Securities Purchase Agreement) (such Subsidiary, a “
Subsidiary Guarantor ”) or any Subsidiary
constituting a “ significant subsidiary” under
Rule 1-02 of Regulation S-X (such Subsidiary, a “
Significant Subsidiary
”),
pursuant to or within the meaning of Title 11, U.S. Code, or any
similar Federal, foreign or state law for the relief of debtors
(collectively, “ Bankruptcy Law ”), (A) commences
a voluntary case, (B) consents to the entry of an order for
relief against it in an involuntary case, (C) consents to the
appointment of a receiver, trustee, assignee, liquidator or similar
official (a “ Custodian ”), (D) makes a
general assignment for the benefit of its creditors or
(E) admits in writing that it is generally unable to pay its
debts as they become due;
9
(viii)
a court of
competent jurisdiction enters an order or decree under any
Bankruptcy Law that (A) is for relief against the Company or
any of its Subsidiaries in an involuntary case,
(B) appoints a Custodian of the Company or any of its
Subsidiaries or (C) orders the liquidation of the Company or
any of its Subsidiaries;
(ix)
a final judgment
or judgments for the payment of money aggregating in excess of (A)
$100,000 are rendered against the Company or any of the Subsidiary
Guarantors or Significant Subsidiaries or (B) $50,000 are
rendered against any of the officers or directors of the Company or
any of the Subsidiary Guarantors or Significant Subsidiaries, and
which judgments are not, within sixty (60) days after the entry
thereof, bonded, discharged or stayed pending appeal, or are not
discharged within sixty (60) days after the expiration of such
stay; provided, however, that any judgment which is covered by
insurance or an indemnity from a credit worthy party shall not be
included in calculating the amounts set forth above so long as the
Company receives the proceeds of such insurance or indemnity within
sixty (60) days of the issuance of such judgment;
(x)
the Company
breaches any material warranty, covenant or other term or condition
of any Transaction Document (other than those specified elsewhere
in this Section 4(a)), except, in the case of a breach of a
covenant or other term or condition of any Transaction Document
which is curable, only if such breach continues for a period of at
least twenty (20) days;
(xi)
if any of the
Transaction Documents shall be cancelled, terminated, revoked or
rescinded, in each case otherwise than in accordance with the terms
thereof or with the express prior written agreement, consent or
approval of the holders of the Notes, or any action at law, suit or
in equity or other legal proceeding to cancel, revoke or rescind
any of the Transaction Documents or contest the Collateral
Agent’s security interests and liens in any portion of the
Collateral or the priority of the Collateral Agent’s security
interests and liens in any portion of the Collateral contemplated
by the Security Documents, shall be commenced by or on behalf of
the Company or any of its Subsidiaries party thereto, or any court
or any other governmental or regulatory authority or agency of
competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or
more of the Transaction Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;
(xii)
any breach or
failure in any respect to comply with the covenants contained in
Section 4(s) of the Securities Purchase
Agreement;
(xiii)
any breach or
failure in any respect to comply with Section 14 of this Note,
which breach or failure, in the case of Sections 14(h),
(i) and (j) of this Note, continues for a period of at
least twenty (20) days;
10
(xiv)
the Company or
any Subsidiary Guarantor shall fail to perform or comply with
(i) any material covenant or agreement contained in any
Security Agreement to which it is a party (other than the
Collateral Account Agreement) or (ii) any covenant or
agreement contained in the Collateral Account Agreement, which
failure to perform or comply, as the case may be, continues for a
period of at least twenty (20) days;
(xv)
any provision of
any Security Document (as determined by the Collateral Agent) shall
at any time for any reason (other than pursuant to the express
terms thereof) cease to be valid and binding on or enforceable
against the Company or any Subsidiary intended to be a party
thereto, or the validity or enforceability thereof shall be
contested by any party thereto, or a proceeding shall be commenced
by the Company or any Subsidiary or any governmental authority
having jurisdiction over any of them, seeking to establish the
invalidity or unenforceability thereof, or the Company or any
Subsidiary shall deny in writing that it has any liability or
obligation purported to be created under any Security
Document;
(xvi)
any Security
Agreement or any other security document, after delivery thereof
pursuant hereto, shall for any reason fail or cease to create a
valid and perfected and, except to the extent permitted by the
terms hereof or thereof, first priority Lien in favor of the
Collateral Agent for the benefit of the holders of the Notes on any
Collateral (as defined in the Security Documents) purported to be
covered thereby;
(xvii)
any bank at which
any Collateral Account is maintained shall fail to comply with any
material term contained in the Collateral Account
Agreement;
(xviii)
any damage to, or
loss, theft or destruction of, any Collateral, whether or not
insured, if any such damage, or loss, theft or destruction could
reasonably be expected to have a Material Adverse Effect (as
defined in the Securities Purchase Agreement); or
(xix)
any Event of
Default (as defined in the Other Notes) occurs with respect to any
Other Notes.
(b)
Redemption
Right . Upon the occurrence
of an Event of Default, the Company shall within one
(1) Business Day after the Company is aware of (or should have
been aware of) such occurrence, deliver written notice thereof via
facsimile and overnight courier (an “ Event of Default Notice ”) to the
Holder. At any time after the earlier of the Holder’s
receipt of an Event of Default Notice and the Holder becoming aware
of an Event of Default, the Holder may require the Company to
redeem all or any portion of this Note by delivering written notice
thereof (the “ Event of
Default Redemption Notice ”) to the Company,
which Event of Default Redemption Notice shall indicate the portion
of this Note the Holder is electing to redeem (the “
Event of Default Redemption
”).
Each portion of this Note subject to redemption by the Company
pursuant to this Section 4(b) shall be redeemed by the
Company in cash at a price (the “ Event of Default Redemption Price ”) equal to the greater
of (i) the product of (A) the Conversion Amount to be
redeemed and (B) the Redemption Premium and (ii) the
product of (A) the Conversion Rate with respect to such
Conversion Amount in effect at such time as the Holder delivers an
Event of Default Redemption Notice and (B) the product of
(1) the Redemption Premium and (2) the greatest Closing
Sale Price of the Common Stock during the
11
period beginning on the date
immediately preceding such Event of Default and ending on the date
the Holder delivers the Event of Default Redemption Notice.
Redemptions required by this Section 4(b) shall be made
in accordance with the provisions of Section 12. To the
extent redemptions required by this Section 4(b) are
deemed or determined by a court of competent jurisdiction to be
prepayments of the Note by the Company, such redemptions shall be
deemed to be voluntary prepayments. The parties hereto agree
that in the event of the Company’s redemption of any portion
of the Note under this Section 4(b), the Holder’s
damages would be uncertain and difficult to estimate because of the
parties’ inability to predict future interest rates and the
uncertainty of the availability of a suitable substitute investment
opportunity for the Holder. Accordingly, any redemption
premium due under this Section 4(b) is intended by the
parties to be, and shall be deemed, a reasonable estimate of the
Holder’s actual loss of its investment opportunity and not as
a penalty.
(5)
RIGHTS UPON
FUNDAMENTAL TRANSACTION AND CHANGE OF CONTROL
.
(a)
Assumption
. The
Company shall not enter into or be party to a Fundamental
Transaction unless the Successor Entity assumes in writing all of
the obligations of the Company under this Note and the other
Transaction Documents in accordance with the provisions of this
Section 5(a) pursuant to written agreements, including
agreements to deliver to each holder of Notes in exchange for such
Notes a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to the
Notes, including, without limitation, having a principal amount and
interest rate equal to the principal amounts then outstanding and
the interest rates of the Notes held by such holder, having similar
conversion rights and having similar ranking to the Notes.
Upon the occurrence of any Fundamental Transaction, the Successor
Entity shall succeed to, and be substituted for (so that from and
after the date of such Fundamental Transaction, the provisions of
this Note referring to the “Company” shall refer
instead to the Successor Entity), and may exercise every right and
power of the Company and shall assume all of the obligations of the
Company under this Note with the same effect as if such Successor
Entity had been named as the Company herein. Upon
consummation of the Fundamental Transaction, the Successor Entity
shall deliver to the Holder confirmation that there shall be issued
upon conversion of this Note at any time after the consummation of
the Fundamental Transaction, in lieu of the shares of the
Company’s Common Stock (or other securities, cash, assets or
other property) issuable upon the conversion of the Notes prior to
such Fundamental Transaction, such shares of the common stock (or
their equivalent) of the Successor Entity (including its Parent
Entity), as adjusted in accordance with the provisions of this
Note. The provisions of this Section shall apply
similarly and equally to successive Fundamental Transactions and
shall be applied without regard to any limitations on the
conversion of this Note.
(b)
Redemption
Right . No sooner than
fifteen (15) Trading Days nor later than ten (10) Trading Days
prior to the consummation of a Change of Control, but not prior to
the public announcement of such Change of Control, the Company
shall deliver written notice thereof via facsimile and overnight
courier to the Holder (a “ Change of Control Notice ”). At any time
during the period beginning after the Holder’s receipt of a
Change of Control Notice and ending twenty (20) Trading Days after
the date of the consummation of such Change of Control (the
“ Change of Control
Conversion/Redemption Period ”), the Holder may
require
12
the Company to redeem all or
any portion of this Note by delivering written notice thereof
(“ Change of Control
Redemption Notice ”) to the Company,
which Change of Control Redemption Notice shall indicate the
Conversion Amount the Holder is electing to require the Company to
redeem. The portion of this Note subject to redemption
pursuant to this Section 5(b) shall be redeemed by the
Company in cash at a price (the “ Change of Control Redemption Price
”) equal to
100% of the Conversion Amount being redeemed. Redemptions
required by this Section 5 shall be made in accordance with
the provisions of Section 9 and shall have priority to
payments to stockholders in connection with a Change of
Control. To the extent redemptions required by this
Section 5(b) are deemed or determined by a court of
competent jurisdiction to be prepayments of the Note by the
Company, such redemptions shall be deemed to be voluntary
prepayments. Notwithstanding anything to the contrary in this
Section 5, but subject to Section 3(d), until the Change
of Control Redemption Price (together with any interest thereon) is
paid in full, the Conversion Amount submitted for redemption under
this Section 5(c) (together with any interest thereon)
may be converted, in whole or in part, by the Holder into Common
Stock pursuant to Section 3. The parties hereto agree
that in the event of the Company’s redemption of any portion
of the Note under this Section 5(b), the Holder’s
damages would be uncertain and difficult to estimate because of the
parties’ inability to predict future interest rates and the
uncertainty of the availability of a suitable substitute investment
opportunity for the Holder. Accordingly, any Change of
Control redemption premium due under this Section 5(b) is
intended by the parties to be, and shall be deemed, a reasonable
estimate of the Holder’s actual loss of its investment
opportunity and not as a penalty.
(c)
Make-Whole
Premium . Immediately prior to
the consummation of the Change of Control, the Company shall pay
the applicable Make-Whole Premium to the holders of the Notes who
effect a conversion at any time during the Change of Control
Conversion/Redemption Period unless (i) at least 90% of the
consideration, excluding cash payments for fractional shares, in
such Change of Control consists of shares of capital stock of the
Successor Entity that are listed on, or immediately after the
transaction or event will be listed on, an Eligible Exchange and as
a result of such transaction or transactions the Notes become
convertible into or exchangeable or exercisable for such capital
stock of the Successor Entity and the Successor Entity has assumed
the obligations under this Note pursuant to
Section 5(a) hereof or (ii) the Company continues to
be the Successor Entity and the Common Stock continues to be listed
on an Eligible Exchange. For any Conversion Notice delivered
during the Change of Control Conversion/Redemption Period,
(i) the Make-Whole Premium (in Make-Whole Premium Shares
and/or cash, as applicable) shall be paid to the Holder immediately
prior to the Effective Date if such Conversion Notice is delivered
prior to such Effective Date and (ii) the Make-Whole Premium
shall be paid to the Holder in cash on the third (3 rd )
Trading Day following the date of such Conversion Notice if the
Conversion Notice is delivered on or after such Effective Date
(each a “ Change of
Control Settlement Date ”).
(i)
(A) The
Make-Whole Premium shall equal an additional number of shares of
Common Stock calculated in accordance with this
Section 5(c) (the “ Make-Whole Premium Shares ”, which Make-Whole
Premium Shares for purposes of the Transaction Documents, shall be
considered Conversion Shares and shall be included within the
definition of “Conversion Shares”). The
Make-Whole Premium will be in addition to, and not in substitution
for, any cash, securities or other assets otherwise due to the
Holder upon conversion as described in this Note.
13
(B)
The “ Make-Whole
Premium ” shall be equal to
the Conversion Amount of the Notes to be converted divided by
$1,000 and multiplied by the applicable number of shares of Common
Stock determined by reference to the table below (the
“ Make-Whole Premium Table ”) and is based on the Effective Date
and the Stock Price.
14
|
Make-Whole Premium
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Price
|
|
7/31/2008
|
|
1/15/2009
|
|
7/15/2009
|
|
1/15/2010
|
|
7/15/2010
|
|
1/15/2011
|
|
7/15/2011
|
|
1/15/2012
|
|
7/15/2012
|
|
1/15/2013
|
|
7/15/2013
|
|
|
27.00
|
|
7.186
|
|
7.186
|
|
7.186
|
|
7.186
|
|
7.186
|
|
7.186
|
|
7.186
|
|
7.186
|
|
7.186
|
|
7.186
|
|
7.186
|
|
|
29.70
|
|
5.853
|
|
5.853
|
|
5.853
|
|
5.853
|
|
5.833
|
|
5.805
|
|
5.684
|
|
5.518
|
|
5.172
|
|
4.550
|
|
3.819
|
|
|
32.40
|
|
4.714
|
|
4.706
|
|
4.673
|
|
4.653
|
|
4.595
|
|
4.518
|
|
4.346
|
|
4.113
|
|
3.674
|
|
2.884
|
|
1.013
|
|
|
35.10
|
|
3.853
|
|
3.822
|
|
3.764
|
|
3.711
|
|
3.632
|
|
3.529
|
|
3.333
|
|
3.075
|
|
2.608
|
|
1.783
|
|
0.000
|
|
|
37.80
|
|
3.163
|
|
3.117
|
|
3.040
|
|
2.962
|
|
2.869
|
|
2.755
|
|
2.554
|
|
2.301
|
|
1.848
|
|
1.081
|
|
0.000
|
|
|
40.50
|
|
2.604
|
|
2.548
|
|
2.459
|
|
2.359
|
|
2.254
|
|
2.139
|
|
1.946
|
|
1.717
|
|
1.304
|
|
0.645
|
|
0.000
|
|
|
43.20
|
|
2.147
|
|
2.086
|
|
1.988
|
|
1.869
|
|
1.750
|
|
1.640
|
|
1.462
|
|
1.269
|
|
0.909
|
|
0.379
|
|
0.000
|
|
|
45.90
|
|
1.770
|
|
1.707
|
|
1.605
|
|
1.470
|
|
1.331
|
|
1.229
|
|
1.070
|
|
0.919
|
|
0.619
|
|
0.216
|
|
0.000
|
|
|
48.60
|
|
1.457
|
|
1.394
|
|
1.291
|
|
1.144
|
|
0.977
|
|
0.886
|
|
0.749
|
|
0.642
|
|
0.402
|
|
0.112
|
|
0.000
|
|
|
51.30
|
|
1.197
|
|
1.136
|
|
1.035
|
|
0.880
|
|
0.677
|
|
0.598
|
|
0.484
|
|
0.420
|
|
0.240
|
|
0.046
|
|
0.000
|
|
|
54.00
|
|
0.979
|
|
0.921
|
|
0.824
|
|
0.667
|
|
0.424
|
|
0.358
|
|
0.268
|
|
0.244
|
|
0.118
|
|
0.007
|
|
0.000
|
|
|
56.70
|
|
0.797
|
|
0.743
|
|
0.651
|
|
0.497
|
|
0.214
|
|
0.169
|
|
0.098
|
|
0.134
|
|
0.068
|
|
0.000
|
|
0.000
|
|
|
59.40
|
|
0.643
|
|
0.594
|
|
0.509
|
|
0.362
|
|
0.037
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
|
62.10
|
|
0.514
|
|
0.470
|
|
0.392
|
|
0.257
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
|
64.80
|
|
0.406
|
|
0.367
|
|
0.297
|
|
0.177
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
|
67.50
|
|
0.315
|
|
0.282
|
|
0.220
|
|
0.115
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
|
70.20
|
|
0.240
|
|
0.211
|
|
0.157
|
|
0.069
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
|
72.90
|
|
0.177
|
|
0.153
|
|
0.106
|
|
0.034
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
|
75.60
|
|
0.125
|
|
0.105
|
|
0.066
|
|
0.011
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
|
78.30
|
|
0.083
|
|
0.067
|
|
0.034
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
|
81.00
|
|
0.050
|
|
0.036
|
|
0.011
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
0.000
|
|
15
(C)
The exact Stock Price and
Effective Date may not be set forth on the Make-Whole Premium
Table, in which case, if the Stock Price is between two Stock
Prices on the Make-Whole Premium Table or the Effective Date is
between two Effective Dates on the Make-Whole Premium Table, the
Make-Whole Premium shall be determined by straight-line
interpolation between Make-Whole Premium amounts set forth for the
higher and lower Stock Prices and the two Effective Dates, as
applicable, based on a 365-day year (or a 366-day year if the
Effective Date occurs in a leap year). The Stock Prices set
forth in the column headers are subject to adjustment pursuant to
Section 5(c)(iii).
(1)
If the Stock
Price is less than to $27.00 (subject to adjustment pursuant to
Section 5(c)(iii), the “ Stock Price Threshold ”), the Make-Whole
Premium shall be equal to zero shares of Common Stock.
(2)
If the Stock
Price is greater than $81.00 (subject to adjustment pursuant to
Section 5(c)(iii), the “ Stock Price Cap ”), the Make-Whole
Premium shall be equal to zero shares of Common Stock.
(3)
“
Stock Price ” means the price paid
per share of Common Stock in the transaction constituting the
Change of Control, determined as follows: (i) if holders
of Common Stock receive only cash in the transaction constituting
the Change of Control, the Stock Price shall equal the cash amount
paid per share of Common Stock; and (ii) in all other cases,
the Stock Price shall equal the arithmetic average of the Closing
Sale Price of a share of Common Stock over the five
(5) Trading Day period ending on the Trading Day immediately
preceding the Effective Date; and “ Effective Date ” means the date that
a Change of Control becomes effective.
(ii)
The Company shall
pay the Make-Whole Premium solely in shares of Common Stock (other
than cash paid in lieu of fractional shares) or in the same form of
consideration into which all or substantially all of the shares of
Common Stock have been converted or exchanged in connection with
the Change of Control. If holders of the Common Stock receive
or have the right to receive more than one form of consideration in
connection with such Change of Control, then, for purposes of the
foregoing, the forms of consideration in which the Make-Whole
Premium shall be paid shall be in proportion to the different forms
of consideration paid to holders of Common Stock in connection with
such Change of Control.
(iii)
Whenever the
Conversion Price shall be adjusted from time to time by the Company
pursuant to Section 7, the Stock Price Threshold and the Stock
Price Cap shall be adjusted and each of the Stock Prices set forth
in the Make-Whole Premium Table shall be adjusted. The
adjusted Stock Price Threshold, Stock Price Cap and Stock Prices
set forth in the Make-Whole Premium Table shall equal the Stock
Price Threshold, the Stock Price Cap and such Stock Prices, as the
case may be, immediately prior to such adjustment multiplied by a
fraction, the numerator of which is the Conversion Price as so
adjusted and the denominator of which is the Conversion Price
immediately prior to the adjustment giving rise to such
adjustment. Each of the share amounts set forth in the body
of the Make-Whole Premium Table shall also be adjusted in the same
manner and at the same time.
16
(iv)
Notwithstanding
the foregoing, if the Change of Control Notice is received prior to
the Effective Date and the Make-Whole Premium Shares required to be
delivered hereunder would result in either the Holder beneficially
owning (A) in excess of such Holder’s FIRPTA Cap
immediately after giving effect to such Make-Whole Premium Shares
on an as converted basis (without regard for any limitations of
conversion set forth in the Notes) or (B) the Exchange Cap
Allocation , then in lieu of the Make-Whole Premium Shares required
under this Section 5, the number of Make-Whole Premium
Conversion Shares will be reduced to a number of shares of Common
Stock equal to the difference between the aggregate number of
shares of Common Stock issuable in connection with the Change of
Control and the Holder’s FIRPTA Cap or the Exchange Cap
Allocation, as applicable, and the Company shall pay the Holder no
later than five (5) Business Days following the Conversion
Date an amount in cash equal to the product of (x) the Closing
Bid Price of the Common Stock on such Conversion Date and
(y) the number of shares of Common Stock in excess of the
Holder’s FIRPTA Cap or Exchange Cap Allocation, as
applicable, that would have otherwise been issuable without regard
to such limitation and any other limitations on conversion set
forth in such Note.
(v)
Notwithstanding
the foregoing, if the Change of Control Notice is received on or
after the Effective Date, then in lieu of the Make-Whole Premium
Shares required under this Section 5, the Company shall pay
the Holder no later than three (3) Business Days following the
Conversion Date an amount in cash equal to the product of
(x) the applicable number of Make-Whole Premium Shares and
(y) the consideration that the holders of shares of Common
Stock in connection with the consummation of such Change of Control
received for each share of Common Stock.
(6)
RIGHTS UPON
ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS
.
(a)
Purchase
Rights . If at any time the
Company grants, issues or sells any Options, Convertible Securities
or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of Common Stock (the
“ Purchase
Rights ”), then the Holder
will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of
Common Stock acquirable upon complete conversion of this Note
(without taking into account any limitations or restrictions on the
convertibility of this Note) immediately before the date on which a
record is taken for the grant, issuance or sale of such Purchase
Rights, or, if no such record is taken, the date as of which the
record holders of Common Stock are to be determined for the grant,
issue or sale of such Purchase Rights.
(b)
Other
Corporate Events . In addition to and
not in substitution for any other rights hereunder, prior to the
consummation of any Fundamental Transaction pursuant to which
holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for
shares of Common Stock (a “ Corporate Event ”), the Company shall
make appropriate provision to insure that the Holder will
thereafter have the right to receive upon a conversion of this
Note, at the Holder’s option, (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
17
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 shares 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 in
|
