Exhibit 4.2
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED, IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR UNLESS THE ISSUER HAS RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION UNDER
SAID ACT IS NOT REQUIRED
XXXXXX, INC.
7% Senior Subordinated Note due September 30, 2007
September 30, 2004 $
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XXXXXX, INC., a Delaware corporation (the "Company"), hereby promises
to pay to the order of ________________ (the "Purchaser"), or its assigns (the
Purchaser and each of its assigns is a "Holder"), the principal amount of
____________ ($_________), (the "Principal Amount").
This Senior Subordinated Note ("Note") is one of a duly authorized
issue of Senior Subordinated Notes, aggregating $5,500,000 in principal amount,
issued pursuant to a certain Note and Warrant Purchase Agreement (hereinafter
called the "Purchase Agreement") dated as of September 30, 2004, between the
Company and the Purchasers named in said Purchase Agreement (capitalized terms
not otherwise defined herein shall have their respective meanings as set forth
in the Purchase Agreement).
This Note is subject to the provisions of and is entitled to the
benefits of the Purchase Agreement. In addition, the payment of the principal
and interest on this Note is subordinated in right of payment to the prior
payment in full of certain other obligations of the Company to the extent and in
the manner set forth in the Purchase Agreement. Each holder of this Note, by
accepting the same, agrees to and shall be bound by the provisions of the
Purchase Agreement.
No reference herein to the Purchase Agreement and no provision hereof
or thereof shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal hereof and interest hereon at
the respective times and places set forth herein and in the Purchase Agreement.
1. Payment of Principal. The Company shall repay the entire Principal
Amount outstanding on or before the earliest of (a) September 30, 2007 (the
"Maturity Date"), (b) a sale or transfer (in one or more transactions or series
of transactions) of (i) all or substantially all of the assets of the Company or
its successors or assigns or (ii) a majority of the then-issued and outstanding
capital stock of the Company or its successors or assigns, or (c) a merger,
consolidation, share exchange or any other business combination involving the
Company or its successors or assigns whereby the holders of all of the issued
and outstanding capital stock of the Company prior to such transaction do not
hold at least a majority of the
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voting stock or other voting equity of the surviving or resulting entity in the
transaction immediately after consummation thereof.
2. Payment of Interest. Interest shall accrue at the rate of seven
percent (7%) per annum (based on a 360 day year comprised of twelve 30 day
months) on the unpaid Principal Amount outstanding and be payable semi-annually
in arrears on the last day of June and December in each year until the Maturity
Date, at which time all unpaid principal and interest shall be due and payable
to the Holder in cash.
3. Time of Payment. If any payment of principal or interest on this
Note shall become due on a Saturday, Sunday, or legal holiday under the laws of
the State of New York, such payment shall be made on the next succeeding day
that is not a Saturday, Sunday or such legal holiday (a "Business Day") and such
extension of time shall in such case be included in computing interest in
connection with such payment.
4. Prepayment. The Company shall have the right to prepay this Note, in
whole or in part, at any time or from time to time, without premium or penalty
but with interest accrued and unpaid to the date of prepayment.
5. Events of Default.
(a) Definition. For purposes of this Note, an "Event of Default"
shall be deemed to have occurred if:
(i) the Company shall default in the payment of any amount due
under this Note on the date when due, whether at maturity or other time, by
acceleration or otherwise and such default shall continue for ten (10) days
after written notice thereof ;
(ii) any dissolution, winding up, liquidation, reorganization,
arrangement, adjustment, protection, relief or composition of the Company or its
debts, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership, arrangement, reorganization, relief or other proceedings or upon
an assignment for the benefit of creditors or any other marshalling of the
assets and liabilities of the Company, and in the case of an involuntary
proceeding, it is not dismissed within sixty (60) days (each, an "Insolvency
Event"); or
(iii) the Company fails to perform or observe any other
covenant or agreement of the Company contained in this Note or any material
covenant or material agreement contained in the Purchase Agreement or the
Related Documents which remain uncured for more than ten (10) days after written
notice thereof.
(b) Consequences of Events of Default. Subject in all respects to
Article VI of the Purchase Agreement,
(i) If an Event of Default (other than an Insolvency Event)
has occurred and is continuing, the Holders of the Notes, by notice to the
Company from the Holders of more than 50% of the principal amount of the Notes
than outstanding, may declare all or any portion of the outstanding Principal
Amount due and payable and demand immediate payment of all or any portion of the
outstanding Principal Amount. If the Holder demands immediate
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payment of all or any portion of the Note, the Company shall immediately pay to
such Holder the Principal Xxxxxx requested to be paid together with all accrued
and unpaid interest thereon.
(ii) If an Insolvency Event has occurred, all of the
outstanding Principal Amount shall automatically be immediately due and payable
without any notice or other action on the part of the Holder.
(iii) If any Event of Default has occurred, interest shall
accrue on the Principal Amount of this Note in accordance with the terms of
Section 2 of this Note.
(iv) If any Event of Default has occurred, each Holder shall
also have any other rights or remedies which such Person may have pursuant to
applicable law or equity.
6. Loss, Theft, Destruction or Mutilation of Note. Upon receipt of
evidence of the loss, theft, destruction or mutilation of this Note, and, in the
case of any such loss, theft or destruction, upon receipt of an affidavit of
loss from the Holder in form reasonably satisfactory to the Company, the Company
will make and deliver, in lieu of this Note, a new Note of like tenor.
7. Place of Payment; Notices. Payments of principal and any notice
hereunder are to be delivered to the Holder at the following address:
______________, Attn: _____ or to such other address as specified in a written
notice delivered to the Company by Xxxxxx. Notices sent by the Company shall be
deemed received when delivered personally or one (1) Business Day after being
sent by Federal Express or other nationally recognized overnight carrier or
three (3) Business Days after being sent by certified or registered mail to the
following address:
Xxxxxx, Inc.
000 Xxxxxxx Xxxx
Xxxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
Xxxxxxxxx: (000) 000-0000
with a copy to:
Xxxx Xxxxxxx, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000 0000
8. Jurisdiction. This Note shall be subject to the exclusive
jurisdiction of the courts of New York County, New York. The Company and the
Holder, for themselves and their successors, irrevocably and expressly agree to
submit to the exclusive jurisdiction of the courts of the State of New York for
the purpose of enforcing the terms of this Note or the transactions contemplated
hereby. The Company and the Holder irrevocably waive (for
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themselves and their successors), to the fullest extent permitted by law, any
objection which they may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Note or any
judgment entered by any court located in New York County, New York, and further
irrevocably waive any claim that any suit, action or proceeding brought in New
York County, New York has been brought in an inconvenient forum.
9. Governing Law. The validity, construction, and interpretation of
this Note shall be governed by the internal laws of the State of New York
without respect to the principles of conflicts of laws of the State of New York
or any other jurisdiction.
[SIGNATURE PAGE FOLLOWS; REMAINDER OF XXXX INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Company has executed and delivered this Note on
the date first above written.
XXXXXX, INC.
By:
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Name:
Title:
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