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EXHIBIT 4.7
THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT
OR AN OPINION OF COUNSEL SATISFACTORY TO COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
$__________ UNSECURED SUBORDINATED CONVERTIBLE PROMISSORY NOTE
$___________ October ___, 1999
Note __ Newbury Park, California
FOR VALUE RECEIVED, XXXXXXX-XXXXX.XXX, INC., a Delaware corporation
("Company"), promises to pay to __________ ("Holder"), or ___ registered
assigns, the principal sum of __________ Dollars ($________), or such lesser
amount as shall equal the outstanding principal amount hereof, together with
interest from the date of this Note on the unpaid principal balance at a rate
equal to eight percent (8.00%) per annum, computed on the basis of the actual
number of days elapsed and a year of 365 days (366 days in the event of a leap
year).
The following is a statement of the rights of Xxxxxx and the conditions
to which this Note is subject, and to which Holder, by the acceptance of this
Note, agrees:
1. DEFINITIONS. As used in this Note, the following capitalized terms
have the following meanings:
(a) "Company" includes the corporation initially executing this Note
and any Person which shall succeed to or assume the Obligations of Company under
this Note.
(b) "Common Stock" shall mean the common stock, $.001 par value per
share of Company.
(c) "Event of Default" has the meaning given in Section 3 hereof.
(d) "Holder" shall mean the Person specified in the introductory
paragraph of this Note or any Person who shall at the time be the registered
holder of this Note.
(e) "Maturity Date" shall mean the earlier to occur of December 31,
2000 or three business days following the effective date of a registered initial
public offering of Company's Common Stock.
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(f) "Obligations" shall mean and include all loans, advances, debts,
liabilities and obligations, howsoever arising, owed by Company to Holder of
every kind and description (whether or not evidenced by any note or instrument
and whether or not for the payment of money), now existing or hereafter arising
under or pursuant to the terms of this Note, including all interest, fees,
charges, expenses, attorneys' fees and costs and accountants' fees and Costs
chargeable to and payable by Company hereunder and thereunder, in each case,
whether direct or indirect absolute or contingent, due or to become due, and
whether or not arising after the commencement of a proceeding under Title 11 of
the United States Code (11 U.S.C. Section 101 et seq.), as amended from time to
time (including post-petition interest) and whether or not allowed or allowable
as a claim in such proceeding.
(g) "Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, a limited
liability company, an unincorporated association, a joint venture or other
entity or a governmental authority.
2. PAYMENTS. The principal amount outstanding, plus any accrued but
unpaid interest, shall be paid on the Maturity Date, but is payable at Company's
option at any time prior to the Maturity Date without any prepayment penalty or
premium.
3. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" under this Note and the other Transaction
Documents:
(a) Failure to Pay. Company shall fail to pay the principal amount
outstanding, plus any accrued but unpaid interest on the Maturity Date and such
payment shall not have been made within five (5) business days of the Maturity
Date.
(b) Voluntary Bankruptcy or Insolvency Proceedings. Company shall (i)
apply for or consent to the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of its property, (ii) be
unable, or admit in writing its inability, to pay its debts generally as they
mature, (iii) make a general assignment for the benefit of its or any of its
creditors, (iv) be dissolved or liquidated, (v) become insolvent (as such term
may be defined or interpreted under any applicable statute), (vi) commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or consent to any such relief or to
the appointment of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it, or (vii) take any
action for the purpose of effecting any of the foregoing; or
(c) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for
the appointment of a receiver, trustee, liquidator or custodian of Company or of
all or a substantial part of the property thereof or an involuntary case or
other proceedings seeking liquidation, reorganization or other relief with
respect to Company or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and
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an order for relief entered or such proceeding shall not be dismissed or
discharged within thirty (30) days of commencement.
4. RIGHTS OF HOLDER UPON DEFAULT. Upon the occurrence or existence of
any Event of Default and at any time thereafter during the continuance of such
Event of Default, the rate of interest equal to the maximum rate permitted by
law shall be imposed on the unpaid principal balance under the Note. To the
extent permitted by applicable law, the maximum rate of interest permitted by
law shall also be imposed on all accrued but unpaid interest existing under the
Note on the date of an Event of Default.
5. CONVERSION. If the principal and unpaid accrued interest is not paid
in full by June 30, 2001, Xxxxxx may convert this Note into one share of Common
Stock for every dollar of principal and accrued but unpaid interest owing under
the Note on the date of conversion. No fractional share shall be issued by
Company and any fractional share owing as a result of the conversion of the Note
shall be paid by Company in cash. Upon conversion of this Note, the Note shall
be delivered to Company for cancellation and all Company indebtedness to Holder
as a result of this Note shall upon delivery of this Note and delivery of such
shares of Common Stock, be discharged.
6. SECURITY AND SUBORDINATION. This Note shall be an unsecured
obligation of Company and shall be subordinated to any bank debt or subsequent
bank debt, or debt similar to bank debt.
7. RESERVATION OF SHARES. Until the Obligations arising under this Note
are discharged, Company shall reserve a sufficient number of shares of Common
Stock for delivery to Holder upon conversion of this Note in accordance with
Section 5.
8. SUCCESSORS AND ASSIGNS. Subject to the restrictions on transfer
described in Sections 10 and 11 below, the rights and Obligations of Company and
Holder of this Note shall be binding upon and benefit the successors, assigns,
heirs, administrators and transferees of the parties.
9. WAIVER AND AMENDMENT. Any provision of this Note may be amended,
waived or modified upon the written consent of Company and Holder.
10. TRANSFER OF THIS NOTE OR SECURITIES ISSUABLE ON CONVERSION HEREOF.
With respect to any offer, sale or other disposition of this Note or securities
into which such Note may be converted, Holder will give written notice to
Company prior thereto, describing briefly the manner thereof, together with a
written opinion of Xxxxxx's counsel, to the effect that such offer, sale or
other distribution may be effected without registration or qualification (under
any federal or state law then in effect). Promptly upon receiving such written
notice and reasonably satisfactory opinion, if so requested, Company, as
promptly as practicable, shall notify Holder that Holder may sell or otherwise
dispose of this Note or such securities in accordance with the
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terms of the notice delivered to Company. If a determination has been made
pursuant to this Section 10 that the opinion of counsel for Xxxxxx is not
reasonably satisfactory to Company, Company shall so notify Holder promptly
after such determination has been made. Each Note thus transferred and each
certificate representing the securities thus transferred shall bear a legend as
to the applicable restrictions on transferability in order to ensure compliance
with any federal or state securities laws, unless in the opinion of counsel for
Company such legend is not required in order to ensure compliance with such
securities laws. Company may issue stop transfer instructions to its transfer
agent in connection with such restrictions. Subject to the foregoing transfers
of this Note shall be registered upon registration books maintained for such
purpose by or on behalf of Company. Prior to presentation of this Note for
registration of transfer, Company shall treat the registered holder hereof as
the owner and holder of this Note for the purpose of receiving all payments of
principal and interest hereon and for all other purposes whatsoever, whether or
not this Note shall be overdue and Company shall not be affected by notice to
the contrary.
11. ASSIGNMENT BY COMPANY. Neither this Note nor any of the rights,
interests or Obligations hereunder may be assigned, by operation of law or
otherwise, in whole or in part, by Company without the prior written consent of
Holder except in connection with an assignment in whole to a successor
corporation to Company, provided that such successor corporation acquires all or
substantially all of Company's property and assets and Xxxxxx's rights hereunder
are not impaired.
12. NOTICES. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or mailed by registered or certified mail, postage
prepaid, or by recognized overnight courier or personal delivery at the
respective addresses of the parties as set forth on the register maintained by
Company. Any party hereto may by notice so given change its address for future
notice hereunder. Notice shall conclusively be deemed to have been given when
received.
13. PAYMENT. Payment shall be made in lawful tender of the United
States.
14. EXPENSES; WAIVERS. If action is instituted to collect this Note,
Company promises to pay all costs and expenses, including, without limitation,
reasonable attorneys' fee, and costs, incurred in connection with such action.
Company hereby waives notice of default, presentment or demand for payment,
protest or notice of nonpayment or dishonor and all other notices or demands
relative to this instrument.
15. GOVERNING LAW. This Note and all actions arising out of or in
connection with this Note shall be governed by and construed in accordance with
the laws of the State of California, without regard to the conflicts of law
provisions of the State of California, or of any other state.
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16. WAIVER OF JURY TRIAL. To the fullest extent permitted by applicable
law, Company and the Secured Party hereby irrevocably and expressly waive all
right to a trial by jury in any action, proceeding, counterclaim (whether based
upon contract, tort or otherwise) arising out of or relating to this Agreement,
or other documents entered in connection herewith or the transactions
contemplated hereby.
17. HEADINGS. The headings of the sections and subsections of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
18. SEVERABILITY. In case any one or more of the provisions contained in
this Agreement shall be deemed invalid, illegal, or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
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IN WITNESS WHEREOF, Company has caused this Note to be issued as of the
date first written above.
XXXXXXX-XXXXX.XXX, INC.
By:
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Name: Xxxxx Xxxxx
Title: Chief Executive Officer
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