THIS CONVERTIBLE SUBORDINATED NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND ARE NOT TRANSFERABLE EXCEPT UPON THE CONDITIONS SPECIFIED IN THE
PURCHASE AGREEMENT REFERRED TO HEREIN.
XXXXXX, INC.
4% CONVERTIBLE SUBORDINATED NOTE DUE AUGUST 31, 2006
Dated: October 31, 0000
Xxxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, the undersigned, XXXXXX, INC. (the
"Company"), a New York corporation, hereby promises to pay to _________________
or registered assigns, the principal sum of ________________ ($________) on
August 31, 2006, with interest (computed on the basis of a 360-day year of
twelve 30-day months) on the unpaid balance of such principal sum from the date
hereof at the interest rate of 4% per annum, payable semi-annually on the last
day of June and December in each year, commencing on December 31, 2001 (which
first interest payment shall be for the period from the date hereof through
December 31, 2001), until the principal hereof shall have become due and
payable, whether at maturity or by acceleration or otherwise.
Payments of principal and interest shall be made in lawful
money of the United States of America at the principal office of the Company in
Deer Park, New York or at such other place as the Company shall have designated
for such purpose to the holder hereof in writing and may be paid by check
mailed, or wire transfer as provided in the Purchase Agreement referred to
below, to the registered address designated by the holder hereof for such
purpose.
This Convertible Note is one of a duly authorized issue of
Convertible Notes, aggregating $________ in principal amount issued pursuant to
a certain Convertible Subordinated Note Purchase Agreement (hereinafter called
the "Purchase Agreement") dated as of October 31, 2001, 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 Convertible 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 Convertible 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
Convertible Note, by accepting the same, agrees to and shall be bound by the
provisions of the Purchase Agreement.
This Convertible Note is transferable only upon the conditions
specified in the Purchase Agreement. Notwithstanding the foregoing, however,
this Note is registered with the Company as to both principal and interest and
transfer of this Convertible Note can be effected only by surrender of this
Convertible Note and either reissuance by the Company of this Convertible Note
or by issuance by the Company of a new Convertible Note. The Company shall
maintain a register for the registration and transfer of this Convertible Note
(the "Schedule"), containing the name and address of any holder(s) of this
Convertible Note. All transfers of this Convertible Note and/or transferees of
this Convertible Note shall be registered in the Schedule. This Convertible Note
may be assigned only upon the surrender thereof at the address of the Company
set forth in the Purchase Agreement. Thereupon, the Company shall execute in the
name of the assignee either a reissued Convertible Note or a new Convertible
Note, shall register such transfer in the Schedule and shall deliver either a
reissued Convertible Note or a new Convertible Note to the holder. Upon
surrender or presentation of this Convertible Note to the Company for transfer,
this Convertible Note shall be duly endorsed and shall specify the name and
address of the transferee.
This Convertible Note is convertible into Common Stock of the
Company (as set forth in Articles 11 and 12 of the Purchase Agreement) in the
manner, and upon the terms and conditions, including without limitation, the
anti-dilution provisions, provided in the Purchase Agreement.
In case an Event of Default, as defined in the Purchase
Agreement, shall occur and be continuing, the principal of this Convertible Note
may be declared due and payable in the manner and with the effect provided in
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.
This Convertible Note is delivered in and shall be construed
and enforced in accordance with and governed by the laws of the State of New
York, without giving effect to its conflict of laws rules.
2
Subject to the provisions of Article 19 of the Purchase
Agreement, the Company may treat the person in whose name this Convertible Note
is registered as the owner and holder of this Convertible Note for the purpose
of receiving payment of principal and interest on this Convertible Note and for
all other purposes whatsoever and the Company shall not be affected by any
notice to the contrary.
3
IN WITNESS WHEREOF, XXXXXX, INC. has caused this Convertible
Note to be dated, and to be executed on its behalf by its officer thereunto duly
authorized.
XXXXXX, INC.
By:
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Name:
Title:
4
REGISTER FOR TRANSFERS
Holder Name and Address
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