Exhibit 4.2
THIS SECURITY IS SUBJECT TO SUBSTANTIAL RESTRICTIONS ON
TRANSFER, AS SET FORTH IN THE RESTRICTIVE TRANSFER LEGENDS
CONTAINED ON PAGES R-10 AND R-11 ON THE REVERSE HEREOF.
CREDITRUST CORPORATION
Senior Subordinated Note, 1998 Series
$5,000,000 No. G-1
Creditrust Corporation, a corporation duly organized and existing under
the laws of the State of Maryland (herein called the "Company," which term
includes any successor to the Company by merger, consolidation, or operation of
law), for value received, hereby promises to pay to the order of Xxxxxx, Xxxxx
Xxxxx, Incorporated, or its registered assigns, the principal sum of Five
Million Dollars ($5,000,000), by making equal quarterly principal repayments in
the amount of $625,000 on the last business day of each calendar quarter
commencing March 31, 1999 and concluding on December 31, 2000 (at which time
this Note will be surrendered to the Company), and to pay interest on the unpaid
principal balance thereon from April 2, 1998 or from and including the most
recent date to which interest has been paid or duly provided for, quarterly
during 1998 on the last business day of June, September, and December,
commencing June 30, 1998, at the rate of 10% per annum, and thereafter monthly,
on the last business day of each month, at the rate of 15% per annum until this
Note has been paid in full. Interest will be paid to the person in whose name
this Note is registered at the close of business on the 15th calendar day of the
month in which the interest is payable. Payment of the principal of and interest
on this Note will be made in same day funds on or prior to the respective
payment dates.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions are incorporated herein
and shall for all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under seal.
Dated: April 2, 1998
ATTEST: CREDITRUST CORPORATION
By: (seal)
--------------------------- ---------------------------
Name: Name:
---------------------- ----------------------------
Title: Title:
---------------------- ----------------------------
F-1
CREDITRUST CORPORATION
Senior Subordinated Note, 1998 Series
Reverse of Security
Preliminary Statement
$5,000,000 principal amount of Company's Senior Subordinated Notes,
1998 Series (the "Notes") have been issued pursuant to a Senior Subordinated
Note and Warrant Purchase Agreement dated as of April 2, 1998, among Creditrust
Corporation, Xxxxxx, Xxxxx Xxxxx, Incorporated, Boenning & Scattergood, Inc.,
and the Purchasers listed on Exhibit A attached thereto (the "Agreement"). The
Notes are issued subject to the following terms and conditions. Reference is
made to the Agreement for a description of certain additional terms and
conditions pursuant to which the Notes have been issued. Any capitalized term
used herein without a definition shall have the meaning set forth in the
Agreement.
Mandatory Redemption by Company
Subject to the Subordination provisions of this Note, the Notes shall
be redeemed by the Company in full at a redemption price of 100% of the
principal amount and all unpaid interest accrued to but not including the
redemption date upon: (a) the closing of an initial public offering of the
Company's Common Stock pursuant to a registration statement filed with the
Securities and Exchange Commission, or (ii) a "Change-in-Control" of the
Company.
For purposes hereof, a "Change-in-Control" shall occur when: (i) all or
substantially all of the Company's assets are sold (other than in the ordinary
course of business, which shall include, without limitation, any financing or
securitization of, and/or master servicing or seller servicing arrangement
covering, any or all of the Company's assets), as an entirety to any person or
related group of persons other than Xxxxxx X. Xxxxxx or a corporation,
partnership, limited liability company or other business entity in which Xxxxxx
X. Xxxxxx, individually or in concert with others, has a controlling interest;
(ii) there shall be consummated any consolidation or merger of the Company (A)
in which the Company is not the continuing or surviving corporation (other than
a consolidation or merger with a wholly owned subsidiary of the Company in which
all shares of Common Stock outstanding immediately prior to the effectiveness
thereof are changed into or exchanged for the same consideration) or (B)
pursuant to which the Company's Common Stock would be converted into cash,
securities or other property, in each case, other than a consolidation or merger
of the Company in which the holders of the Company's Common Stock immediately
prior to the consolidation or merger have, directly or indirectly, at least a
majority of the total voting power of all classes of capital stock entitled to
vote generally in the election of directors of the continuing or surviving
corporation immediately after such consolidation or merger in substantially the
same proportion as their ownership of common stock
R-1
immediately before such transaction; or (iii) any person, or any persons acting
together which would constitute a "group" for purposes of Section 13(d) of the
Exchange Act (a "Group"), together with any Affiliates thereof, shall
beneficially own (as defined in Rule 13d-3 under the Exchange Act) at least 50%
of the total voting power of all classes of capital stock of the Company
entitled to vote generally in the election of directors of the Company, except
for a person or Group in which Xxxxxx X. Xxxxxx, individually or in connection
with others, has a controlling interest.
Subordination; Restrictions Concerning Subordinated Indebtedness
The indebtedness evidenced by this Note is, in all respects,
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness of the Company, and this Note is issued subject to the
following provisions respect thereto. Each Holder of this Note by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs Xxxxxx, Xxxxx Xxxxx Incorporated on his behalf to take such action as
may be necessary or appropriate to effectuate or confirm the subordination so
provided, and (c) appoints Xxxxxx, Xxxxx Xxxxx Incorporated his attorney-in-fact
for any and all such purposes, including without limitation the execution and
delivery of any consents or instruments that may be required by the Company's
existing or future holders of Senior Indebtedness with respect to this
indebtedness.
For purposes hereof, "Senior Indebtedness" means (a) the principal of
and premium, if any, and interest and any other amounts due (including without
limitation, any interest or fees accruing with respect to the Senior
Indebtedness in accordance with the documents evidencing such Senior
Indebtedness after the commencement or filing of any bankruptcy or other
reorganization, liquidation or insolvency case or proceeding involving Company,
whether or not such interest or fees would be allowable or payable by Company in
such case or proceeding) on (i) all indebtedness of the Company for money
borrowed under the Company's bank credit facilities whether outstanding as of
the date of this Note or thereafter created, incurred or assumed, including
without limitation the Company's existing credit facilities with First Union
National Bank ("First Union"), as the same may from time to time be amended,
extended, renewed or replaced, and any bank credit facility entered into after
the date of this Note and (ii) all indebtedness of the Company for money
borrowed not described in clause (a)(i), whether outstanding on April 2, 1998 or
thereafter created, incurred or assumed, except any such other indebtedness that
by the terms of the instrument or instruments by which such indebtedness was
created or incurred expressly provides that (A) it is junior in right of payment
to the Notes or (B) it ranks pari passu in right of payment with the Notes, (b)
all obligations of the Company (whether directly or as a guarantor) to Persons
other than Company Affiliates with respect to the purchase, sale and/or
servicing of Company assets, the assets of Company Affiliates, or the assets of
others, whether now existing or hereafter incurred, including obligations to
indemnify and to repurchase assets, (c) all reimbursement and other obligations
of the Company with respect to letters of credit issued for the account of the
Company, both now existing and hereafter arising, and (d) any amendments,
renewals, extensions, modifications, refinancings and
R-2
refundings of the foregoing. For the purposes of this definition, "indebtedness
for money borrowed" when used with respect to the Company means (i) any
obligation of, or any obligation guaranteed by, the Company for the repayment of
borrowed money (including without limitation fees, penalties or other
obligations in respect thereof), whether or not evidenced by bonds, debentures,
notes or other written instruments, (ii) any deferred payment obligation of, or
any such obligation guaranteed by, the Company for the payment of the purchase
price of property or assets evidenced by a note or similar instrument, but not
including accounts payable or other liabilities to trade creditors arising in
the ordinary course of business, whether or not evidenced by instruments, and
(iii) any obligation of, or any such obligation guaranteed by, the Company for
the payment of rent or other amounts under a lease of property or assets which
obligation is required to be classified and accounted for as a capitalized lease
on the balance sheet of the Company under generally accepted accounting
principles. The holder of this Note hereby waives notice of acceptance of this
Agreement with respect to all Senior Indebtedness that may now exist or may
hereafter come into existence.
In the event of (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding, relative to the Company or to its creditors, as such, or to a
substantial part of its assets, or (b) any proceeding for the liquidation,
dissolution or other winding up of the Company, whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy, or (c) any general
assignment for the benefit of creditors or any other marshaling of assets and
liabilities of the Company, then and in any such event the holders of Senior
Indebtedness shall be entitled to receive payment in full of all amounts due or
to become due on or in respect of all Senior Indebtedness, or provision shall be
made for such payment in money or money's worth, before the Holders of the Notes
are entitled to receive any payment or distribution of any kind or character,
whether in cash, property or securities, on account of principal of or premium,
if any, or interest on the Notes, and to that end the holders of Senior
Indebtedness shall be entitled to receive, for application to the payment
thereof, any payment or distribution of any kind or character, whether in cash,
property or securities, including any such payment or distribution which may be
payable or deliverable by reason of the payment of any other indebtedness of the
Company being subordinated to the payment of the Notes, which may be payable or
deliverable in respect of the Notes in any such case, proceeding, dissolution,
liquidation or other winding up or event.
No payment, directly or indirectly, by way of setoff, by reason of any
other obligation, indebtedness or liabilities of the Company being subordinated
to this Note, or in any other manner, shall be made by the Company or collected
or received by the Holder of this Note with respect to the principal of or
interest on any Note, (including, but not limited to, the redemption price in
the case of a mandatory redemption referred to above), if a default in the
payment of principal, premium, interest, rent, fees, indemnification or
reimbursement obligations or other amount due on any Designated Senior
Indebtedness (as hereinafter defined) occurs and is continuing, whether as
originally scheduled, following acceleration, or otherwise, unless and until
such default shall have been cured or waived or shall have ceased to exist.
R-3
The Company may and shall resume payments on and distributions in respect of the
Notes on the date upon which the default is cured or waived.
Notwithstanding anything in this Note to the contrary, no optional or
mandatory prepayment, redemption or accelerated payment on account of this Note
shall be made by the Company or collected or received by the Holder of this Note
while First Union remains the holder of any Senior Indebtedness, or while any
other person is the holder of Senior Indebtedness if the Company has agreed with
such holder of Senior Indebtedness not to make such payments. The foregoing
shall not restrict payment by the Company of scheduled installments of principal
and interest in accordance with the original terms of this Note (including
without limitation the provisions of the immediately preceding paragraph).
Should any payment, distribution or other amount be received by the
Holder of this Note (directly or indirectly, by way of setoff, by reason of any
other obligation, indebtedness or liabilities of the Company being subordinated
to this Note, or in any other manner) upon or with respect to any of the Senior
Indebtedness in contravention of the provisions of this Note, the Holder of this
Note shall promptly pay over and deliver the same to First Union, with respect
to the Senior Indebtedness of which it is the holder, and to the other holders
of Senior Indebtedness as their interests may appear, for application on account
of the respective Senior Indebtedness held by First Union or (if applicable)
such other persons, and, until so delivered, the same shall be held in trust by
such Holder of this Note for the benefit of First Union or such other persons.
Notwithstanding any partial or entire payment of all or any of the Senior
Indebtedness, the subordination provisions of this Note shall remain in effect
or be reinstated, as the case may be, as though such payment had never been
made, with respect to any such payment which is rescinded or recovered from or
restored or returned by the holder of any Senior Indebtedness under authority of
any law, rule, regulation, order of court or governmental agency, or in
connection with any compromise or settlement relating thereto or relating to any
action, suit or proceeding relating thereto, whether arising out of any
proceedings of the United States Bankruptcy Code or otherwise.
For purposes hereof, "Designated Senior Indebtedness" means (a) the
Senior Indebtedness described in clauses (a)(i), (b), (c) and (d) of the
definition of Senior Indebtedness, and (b) any other Senior Indebtedness the
principal amount of which is $1.0 million or more and that has been or may
hereafter be designated by the Company as "Designated Senior Indebtedness".
The Company shall not incur any indebtedness for money borrowed if such
indebtedness for money borrowed is subordinated or junior in ranking to any
Senior Indebtedness, unless such indebtedness for money borrowed is Senior
Subordinated Debt or is expressly subordinated in right of payment to Senior
Subordinated Debt. For these purposes, "Senior Subordinated Debt" means the
Notes and any other indebtedness for money borrowed of the Company that
specifically provides that such indebtedness for money borrowed is to rank pari
passu with the Notes in right of payment and is not subordinated by its terms in
right of payment to any
R-4
indebtedness for money borrowed or other obligation of the Company which is not
Senior Indebtedness.
Notwithstanding anything in this Note to the contrary, the provisions
of this Note under this Section entitled "Subordination; Restrictions Concerning
Subordinated Indebtedness" may not be modified without the express prior written
consent of the holders of all Designated Senior Indebtedness outstanding at the
time of any such modification. No waiver of the provisions of this Note under
this Section by a holder of Designated Senior Indebtedness shall be effective
unless the same shall be in writing and signed by the holder of such Designated
Senior Indebtedness.
Events of Default; Acceleration
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the subordination or other provisions hereof or be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body): (1) default in the payment of the
principal of the Notes at the maturity date of any installment of principal or
upon the mandatory redemption of the Notes in accordance with their terms and,
except with respect to the final installment of principal hereunder or upon
mandatory redemption, such default continues for a period of 5 days; (2) default
in the payment of any interest upon the Notes when it becomes due and payable,
and such default continues for a period of 15 days; or (3) default under one or
more bonds, debentures, notes or other evidences of indebtedness for money
borrowed by the Company or any Subsidiary or under one or more mortgages,
indentures or instruments under which there may be issued or by which there may
be secured or evidenced any indebtedness for money borrowed by the Company or
any Subsidiary, whether such indebtedness now exists or shall hereafter be
created, which default shall have resulted in such indebtedness in excess of
$5,000,000 becoming or being declared due and payable prior to the date on which
it would otherwise have become due and payable, without such indebtedness having
been discharged, or such acceleration having been rescinded or annulled, within
a period of 30 days after there shall have been given, by registered or
certified mail, to the Company by the Agent or to the Company and the Agent by
the Holders of at least 51% in principal amount of the Outstanding Notes a
written notice specifying such default and requiring the Company to cause such
indebtedness to be discharged or cause such acceleration to be rescinded or
annulled; or (4) default in Sections 5.2, 5.3(a), 5.3(d), 5.5(a), 5.5(f), 5.6,
5.14(b) or 5.15 of the Agreement, and such default continues for a period of 30
days; or (5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or any Subsidiary in an
involuntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging the Company or any Subsidiary as bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Subsidiary under any
applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee,
R-5
trustee, sequestrator or other similar official of the Company or any Subsidiary
or of any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for a period of
90 consecutive days; or (6) the commencement by the Company or any Subsidiary of
a voluntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to
the entry of a decree or order for relief in respect of the Company or any
Subsidiary in an involuntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or
the filing by it of a petition or answer or consent seeking reorganization or
relief under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Subsidiary or of any substantial part of
its property, or the making by it of a general assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the Company
or any Subsidiary in furtherance of any such action.
Upon receipt by the Company of any Notice of Default pursuant hereto
and if requested by the party delivering the Notice of Default, a record date
shall automatically and without any other action by any Person be set for the
purpose of determining the Holders of outstanding Notes entitled to join in such
Notice of Default, which record date shall be the close of business on the day
the Company receives such Notice of Default. The Holders of outstanding Notes on
such record date (or their duly appointed agents), and only such Persons, shall
be entitled to join in such Notice of Default, whether or not such Holders
remain Holders after such record date; provided, that unless such Notice of
Default shall have become effective by virtue of the Holders of the requisite
principal amount of Outstanding Notes on such record date (or their duly
appointed agents) having joined therein on or prior to the 30th day after such
record date, such Notice of Default shall automatically and without any action
by any Person be canceled and of no further force or effect. If the Holders of
at least 25% in principal amount of outstanding Notes shall join in a Notice of
Default, such Notice of Default shall automatically be effective and shall be
deemed to join all Holders.
If an Event of Default (other than as specified in subparagraph (5) or
(6) of the foregoing definition) occurs and is continuing, then and in every
such case the Agent or the Holders of not less than 51% in principal amount of
the Outstanding Notes may declare the principal of all the Notes to be due and
payable immediately, by a notice in writing to the Company, and upon any such
declaration such principal plus any interest accrued on the Notes to the date of
declaration shall become immediately due and payable. If an Event of Default
specified in subparagraph (5) or (6) of the foregoing definition occurs and is
continuing, then the principal of, and accrued and unpaid interest, if any, on
all of the Notes shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Agent or any Holder of
Notes.
R-6
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Agent as hereinafter in this Note provided, the Holders of not less than 51%
in principal amount of the Outstanding Notes, by written notice to the Company
and the Agent, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited in trust a sum sufficient to pay (A) all
overdue interest on all Notes, (B) the principal of any Notes which have become
due (otherwise than by such declaration of acceleration) and interest thereon at
the rate borne by the Notes, (C) all sums paid or advanced by the Agent and its
agents and counsel hereunder; and (2) all Events of Default, other than the
nonpayment of the principal of and interest on the Notes that has become due
solely by such declaration of acceleration, have been cured or waived. No such
rescission and waiver shall affect any subsequent default or impair any right
consequent thereon.
If an Event of Default occurs and is continuing, the Agent may, subject
to the subordination provisions herein contained, pursue any available remedy to
collect the payment of principal and interest on the Notes or to enforce the
performance of any provision of the Notes. The Agent may maintain a proceeding
even if it does not possess any of the Notes or does not produce any such Notes
in the proceeding. A delay or omission by the Agent or any Holder of a Note in
exercising any right or remedy accruing upon any Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in such
Event of Default. No remedy shall be exclusive of any other remedy. All remedies
shall be cumulative to the extent permitted by law. Holders of a majority in
principal amount of the Notes then Outstanding may direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Agent or exercising any trust or power conferred on the Agent. However, the
Agent may refuse to follow any direction that conflicts with law or the terms of
the Notes or the Agreement if the Agent reasonably determines that such action,
if taken, would be unduly prejudicial to the rights of other Holders of Notes or
may subject the Agent to personal liability.
The Company shall reimburse the Agent for all reasonable out-of-pocket
expenses incurred or made by it in the course of its services hereunder. Such
expenses shall include the reasonable compensation and expenses, disbursements
and advances of the Agent's agents, counsel, accountants and experts.
Amendments and Modifications
With the consent of the Holders of not less than 25% in principal
amount of the Outstanding Notes, by written instrument in form and content
reasonably satisfactory to the Company and its counsel, the Holders, the Agent,
and the Company may enter into a supplemental agreement or instrument for the
purposes of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Note or the continuing covenants in the Agreement
or of modifying in any manner the rights of the Holders under this Note;
provided, however, that (a) no such supplemental agreement or instrument shall,
without the consent of the Holder of each Outstanding Note affected thereby: (1)
change the stated maturity
R-7
of the principal of, or any installment of interest on, any Note, or reduce the
principal amount thereof or the rate of interest thereon, or change the place of
payment where, or the coin or currency in which, any Note or any interest
thereon is payable, or impair the right to institute suit for the enforcement of
any such payment on or after the stated maturity thereof, or any provisions with
respect to the subordination of the Notes, in a manner adverse to the Holders,
or (2) reduce the percentage in principal amount of the outstanding Notes, the
consent of whose Holders is required for any such supplemental instrument or
agreement, or the consent of whose Holders is required for any waiver of
compliance with certain provisions hereof or certain defaults hereunder and
their consequences provided for herein, or (3) modify any of the provisions of
this paragraph or any ability of the Holders of Notes to waive past defaults,
except to increase any such percentage. It shall not be necessary for any action
of Holders under this paragraph to approve the particular form of any proposed
supplemental instrument or agreement, but it shall be sufficient if such action
shall approve the substance thereof and (b) the provisions of this Note under
the Section entitled "Subordination; Restrictions Concerning Subordinated
Indebtedness" may not be modified except in accordance with the provisions of
the final paragraph of such Section.
No provision of this Note or of the Agreement shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency, herein prescribed (but subject to the subordination provisions
herein contained).
Maryland law shall govern the Notes and the Agreement without giving
effect to Maryland's conflicts of law principles.
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[ASSIGNMENT FORM]
If you the holder want to assign this Note, fill in the form below and have your
signature guaranteed:
I or we assign and transfer this Note to
--------------------------------------------------------------------------------
(Insert assignee's social security or tax ID number)
----------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code) and irrevocably appoint
--------------------------------------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
--------------------------------------------------------------------------------
Date: Your signature:
----------------------------- -----------------------
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee:
------------------------------------------------------------
The signature to this assignment should be guaranteed by an eligible
guarantor institution (banks, stockbrokers, savings and loan associations and
credit unions with membership in an approved signature guarantee medallion
program) pursuant to S.E.C. Rule 17Ad-15.
R-9
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY XXXXXX, XXXXX
XXXXX INCORPORATED (THE "AGENT") TO ITS NOMINEE OR TO ANOTHER NOMINEE OF THE
AGENT OR TO A SUCCESSOR AGENT WHICH HAS BEEN APPROVED BY THE COMPANY, OR ANY
NOMINEE OF SUCH SUCCESSOR AGENT. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF XXXXXX, XXXXX XXXXX INCORPORATED (000 XXXXX XXXXXX, 0XX XXXXX,
XXXXXXXXX, XXXXXXXX 00000) TO THE COMPANY OR ITS DESIGNEE FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
THE AGENT, OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE AGENT, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, XXXXXX, XXXXX
XXXXX INCORPORATED, HAS AN INTEREST HEREIN.
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, NEITHER THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS NOTE, BY ITS ACQUISITION HEREOF, AGREES THAT IT WILL
NOT, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), RESELL OR
OTHERWISE TRANSFER ITS INTEREST IN THIS NOTE EXCEPT (A) TO THE COMPANY, OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE COMPANY AND ITS COUNSEL A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE NOTE AND ANY INTEREST THEREIN (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM THE COMPANY), (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER (THE
COMPANY BEING UNDER NO OBLIGATION TO PREPARE AND FILE ANY SUCH REGISTRATION
STATEMENT); AND AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
R-10
CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF SUCH NOTE, THE HOLDER MUST FURNISH INFORMATION SATISFACTORY TO THE
COMPANY AND ITS COUNSEL IN THEIR SOLE DISCRETION TO EVIDENCE COMPLIANCE WITH
APPLICABLE SECURITIES LAWS AND/OR EXEMPTIONS THEREFROM. IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE COMPANY AND ITS COUNSEL, SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS MAY BE REASONABLY REQUIRED TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THIS LEGEND WILL BE REMOVED UPON ANY TRANSFER OF THE NOTE EVIDENCED HEREBY,
AFTER THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE
EVIDENCED HEREBY.
R-11
