Exhibit 4.4
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THIS NOTE, AND THE SECURITIES INTO WHICH IT IS CONVERTIBLE (COLLECTIVELY, THE
"SECURITIES"), HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THE SECURITIES
ARE BEING OFFERED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION D
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE
SECURITIES ARE "RESTRICTED" AND MAY NOT BE OFFERED OR SOLD UNLESS THE SECURITIES
ARE REGISTERED UNDER THE ACT OR SOLD PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND IN SUCH CASE THE COMPANY WILL BE
PROVIDED WITH AN OPINION OF COUNSEL AND OTHER SUCH INFORMATION AS IT MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTIONS ARE AVAILABLE.
CONVERTIBLE NOTE DATED SEPTEMBER 12, 2005
ATC HEALTHCARE, INC.
12% Convertible Note
Due September 14, 2006
No. _______ $_______________________
This Convertible Note is issued by ATC HEALTHCARE, INC., a Delaware corporation
(the "Company"), to ________________________________ (together with its
permitted successors and assigns, the "Holder") pursuant to exemptions from
registration under the Securities Act of 1933, as amended. Section 1.01
Principal and Interest. For value received, on September 12, 2006, the Company
hereby promises to pay to the order of the Holder in lawful money of the United
States of America and in immediately available funds the principal sum of
____________________Dollars (US $______________), together with interest on the
unpaid principal of this Note at the rate of twelve percent (12%) per year
(computed on the basis of a 365-day year and the actual days elapsed) from the
date of this Note until paid, with such interest only being paid in the
Company's stock as provided herein. At the Holder's option, the entire principal
amount and all accrued interest shall be either (a) paid to the Holder on the
First (1st) anniversary from the date hereof or (b) converted in accordance with
Section 1.02 herein. This Note is one of a series of Notes having an aggregate
principal amount of not more than One Million Two Hundred Fifty Thousand and
No/100 Dollars ($1,250,000.00) which are identical except as to the principal
amount and date of issuance thereof. Such Notes are referred to herein
collectively as the "Notes."
Section 1.02 Optional Conversion. The Holder is entitled, at its option,
at any time to convert all, but not less than all, of the outstanding principal
amount of this Note, plus accrued but unpaid interest, into shares (the
"Conversion Shares") of the Company's Class A common stock, $.01 par value per
share ("Common Stock"), at the price per share (the "Conversion Price") equal to
Thirty-Seven Cents ($0.37). No fraction of shares or scrip representing
fractions of shares will be issued on conversion, but the number of shares
issuable shall be rounded to the nearest whole share. To convert this Note in
whole or part, the Holder shall deliver written notice thereof, substantially in
the form of Exhibit A to this Note, with appropriate insertions (the "Conversion
Notice"), to the Company at its address as set forth herein together with the
original of this Note. The date upon which the conversion shall be effective
(the "Conversion Date") shall be deemed to be the date set forth in the
Conversion Notice, which shall be no earlier than the date the notice is
delivered to the Company.
Section 1.03 Mandatory Conversion. The Notes will be automatically
converted in full (both principal and accrued but unpaid interest), at the
Conversion Price, upon the effectiveness of a registration statement filed by
the Company that registers the shares of Common Stock underlying the Notes,
without any action on the part of the Holder. Following automatic conversion in
accordance with this Section, this Note shall solely evidence the right of the
Holder to receive the stock into which this Note has been converted, which
shares shall be delivered to the Holder promptly following delivery of this Note
by the Holder to the Company.
Section 1.04 Reservation of Common Stock. The Company shall reserve and
keep available out of its authorized but un-issued shares of Common Stock,
solely for the purpose of effecting the conversion of this Note, such number of
shares of Common Stock as shall from time to time be sufficient to effect such
conversion. All certificates evidencing shares of Common Stock issued hereunder
shall bear a legend substantially similar to the one at the top of this Note.
Section 1.05 Registration Rights. The Company is obligated to register
the resale of the Conversion Shares under the Securities Act of 1933, as
amended, pursuant to the terms of a Registration Rights Agreement, between the
Company and the Holder of even date herewith (the "Registration Rights
Agreement").
Section 1.06 Interest Payments. The interest payable hereunder will be
paid at the time of maturity to the person in whose name this Note is registered
and only in the form of shares of Common Stock valued at the Conversion Price.
No fractional shares will be issued under this Section; therefore, in the event
that the value of the Common Stock per share does not equal the total interest
due, the Company will pay the balance in cash.
Section 1.07 Paying Agent and Registrar. Initially, the Company will act
as paying agent and registrar. The Company may change any paying agent,
registrar, or Company-registrar by giving the Holder not less than ten (10)
business days' written notice of its election to do so, specifying the name,
address, telephone number and facsimile number of the paying agent or registrar.
The Company may act in any such capacity.
Section 1.08 Holder's Consent for Prepayment. The Company shall not be
entitled to prepay this Note in whole or in part without the consent of the
Holder.
Section 2.01 Notice. Notices regarding this Note shall be sent to the
parties at the following addresses, unless a party notifies the other parties,
in writing, of a change of address:
If to the Company, to: ATC Healthcare, Inc.
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: DKW Law Group, LLC
US Steel Tower -- 58th Floor
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Holder: The address set forth in the Subscription
Agreement relating to this Note.
Section 2.02 Defaults and Remedies
(a) Events of Default. An "Event of Default" occurs if (i) the Company
does not make the payment of the principal of, and interest on, this Note when
the same becomes due and payable at maturity or otherwise, (ii) the Company
fails to comply with any of its other obligations under this Note, and such
failure continues for the period and after the notice specified below, (iii) the
Company, pursuant to or within the meaning of any Bankruptcy Law (as hereinafter
defined): (1) commences a voluntary case; (2) consents to the entry of an order
for relief against it in an involuntary case; (3) consents to the appointment of
a Custodian (as hereinafter defined) of it or for all or substantially all of
its property; (4) makes a general assignment for the benefit of its creditors;
or (5) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that: (A) is for relief against the Company in an involuntary
case; (B) appoints a Custodian of the Company for all or substantially all of
its property, or (C) orders the liquidation of the Company, and the order or
decree remains unstayed and in effect for 90 days.
(b) As used in this Section 2.02, the term "Bankruptcy Law" means Title
11 of the United States Code or any similar federal or state law for the relief
of debtors. The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
(c) A default under clause 2.02(a)(ii) above is not an Event of Default
until the holders of at least 25% of the aggregate principal amount of the Notes
notify the Company of such default and the Company does not cure it within ten
(10) days after the receipt of such notice, which must specify the default,
demand that it be remedied and state that it is a "Notice of Default."
(d) Acceleration upon Event of Default, Right to Maintain an Action. If
an Event of Default occurs and is continuing, the holders of at least 25% of the
aggregate principal amount of the Notes may, by notice given to the Company,
declare the principal of and accrued interest on this Note and the other Notes
to be due and payable immediately. Nothing herein shall prevent the Holder from
bringing a lawsuit to recover unpaid interest or seek other appropriate remedies
upon the occurrence of an Event of Default, whether or not the Note is
accelerated.
Section 2.03 Governing Law. This Note shall be deemed to be made under and
shall be construed in accordance with the laws of the State of Delaware without
giving effect to the principals of conflict of laws thereof. Each of the parties
consents to the jurisdiction of the U.S. District Court sitting in the District
of the State of New York or the state courts of the State of New York sitting in
Nassau County, New York in connection with any dispute arising under this Note
and hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on forum non conveniens to the bringing of any
such proceeding in such jurisdictions. The Holder shall be entitled to
reimbursement from the Company of the reasonable collection costs incurred by
the Holder under this Note, including, but not limited to, reasonable attorneys'
fees.
Section 2.04 Amendment; Waiver. This Note may not be amended without the
written consent of the Holder. To the fullest extent permitted by law and except
as otherwise provided herein, the Company waives demand, presentment, protest,
notice of dishonor, suit against or joinder of any other person, and all other
requirements necessary to charge or hold the Company liable with respect to this
Note.
Section 2.05 Severability. The invalidity of any of the provisions of this
Note shall not invalidate or otherwise affect any of the other provisions of
this Note, which shall remain in full force and effect.
Section 2.06 Entire Agreement and Amendments. This Note represents the
entire agreement between the parties hereto with respect to the subject matter
hereof and there are no representations, warranties or commitments, except as
set forth herein. This Note may be amended only by an instrument in writing
executed by the parties hereto.
IN WITNESS WHEREOF, with the intent to be legally bound hereby, the Company
as executed this 12% Convertible Note as of the date first written above.
ATC HEALTHCARE, INC.
By:
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Name:
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Title:
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EXHIBIT A
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NOTICE OF CONVERSION
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(To be executed by the Holder in order to Convert the Note)
TO:
The undersigned hereby irrevocably elects to convert all of the principal amount
of the above Note into Shares of Class A Common Stock of ATC Healthcare, Inc. in
accordance with the provisions therein.
Conversion Date:
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Conversion Price per share: $
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Number of shares of Common Stock to be
issued:
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Please issue the shares of Common Stock
in the following name and to the
following address:
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Issue to:
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Address:
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Authorized Signature:
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Name:
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Title:
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Phone Number:
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Conversion Date:
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Conversion Price per share: $
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Number of shares of Common Stock to be
issued:
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Please issue the shares of Common Stock
in the following name and to the
following address:
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Issue to:
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Address:
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Authorized Signature:
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Name:
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Title:
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Phone Number:
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