FORM OF SECURED PURCHASE NOTE
Exhibit
4.4
FORM
OF SECURED PURCHASE NOTE
This
Secured Purchase Note (the “Purchase Note”) is
executed _______, 2010, by and between ___________, (the “Company”) and
________________, (the “Investor”).
All
capitalized terms not otherwise defined herein shall have the same meaning
ascribed to them in the Securities Purchase Agreement dated of even date
herewith.
R E C I T A L S:
WHEREAS, the Company has
authorized the sale and issuance of a non-interest bearing note, a warrant and
common stock issuable upon full or partial satisfaction of the note or exercise
of the warrant (collectively, the Debenture, the Warrant and the Underlying
Shares shall be referred to as the “Securities”) in
exchange for a loan by the Investor to the Company of _________________ Dollars
($____________) (the “Loan
Amount”);
WHEREAS, as an inducement to
enter into this Transaction Documents and as collateral for the Debenture, a
certain Affiliate has agreed to pledge _________ shares of common stock of the
Company, which shall have been issued as of a date ________ months or more prior
to the date hereof;
WHEREAS, the Investor has paid
$___________ in cash and issued to the Company ________ secured notes in the
amount of $____________ each, in exchange for the delivery of the Securities and
the Collateral Shares;
WHEREAS, at the Closing, the
Company desires to sell, and the Investor desires to purchase, the Warrant and
the Debenture upon the terms and conditions stated in this Purchase Note;
and
NOW, THEREFORE, in
consideration of the foregoing recitals and the mutual promises,
representations, warranties and covenants hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. The Note
(a) Amount. This Purchase
Note shall be in the amount of $___________ (the “Loan”), which the
Investor shall deliver to the Company at the Closing.
(b) Interest. The
Loan shall bear interest at a rate of ________% per year and the interest will
be payable in full upon the maturity date unless sooner prepaid.
(c) Maturity
Date. The Purchase Note shall be due and payable in full and
in cash on the date that is ___________ months from the date hereof or May __,
2014 or such earlier date as described in subsection 1(d), below (the “Maturity
Date”). The Investor shall be required to pay the full amount
of the Loan in cash, unless Investor is permitted to offset the amount then due
by any amount owed under the Debenture as provided by Section 3
below.
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(d) Mandatory Prepayment
Date. Unless this Purchase Note has previously been satisfied
or offset by either the Company or Investor with another liability, the Investor
shall be required to satisfy the payment under this note at such time when the
following items occur: (i) the shares of common stock deliverable in full or
partial satisfaction of the Debenture may be sold pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended, without limitation;
(ii) the _______ month anniversary from the date hereof has elapsed; (iii) the
amount outstanding under the Debenture is less than ______________________; and
(iv) there is no Event of Default under the Debenture.
(e) Recourse. On
or after a Mandatory Prepayment Date, the Company shall have full recourse
against the Investor in the event that this Note is not paid when
due.
2. Security
Interest. The re-payment of this Note will be secured, at
least thirty (30) days prior to the Mandatory Prepayment Date by Collateral
having a fair Market Value equal to amount of the Loan.
The
Investor shall have the authority to, with the prior written consent of the
Company, provided that such consent is not unreasonably withheld, to add
additional collateral or substitute collateral as it deems fit provided that the
fair market value of the collateral is not diminished.
3. Offset of Loan with
Debenture. In the occurrence of an Event of Default under the Debenture,
at either the Investor’s or the Company’s sole option, such party, shall be
entitled to satisfy all or any part of the amount owed under this Loan by
offsetting the amount owed against a portion of the amount outstanding under the
Debenture equal to ________% of the amount owed under this Note which amount
will satisfy a corresponding portion of the Debenture. Such
satisfaction of the Loan shall be considered an offset of liabilities and shall
be considered, in full or partial, payment and satisfaction of the
Loan.
4. Investor’s Representations
and Warranties. Investor warrants and represents as follows (and
acknowledges that all of these warranties and representations are material): (a)
The matters contained in this Purchase Note were true and complete in all
material respects as of the date of filing and remain true and complete as of
the date hereof; (b) Investor is authorized and legally and validly permitted to
participate in this transaction; (c) Investor has the authority to enter into
this Purchase Note; (d) all representations and warranties made in this Purchase
Note shall survive for a period of six (6) months following the Maturity Date;
and (e) the value of the assets pledged as security for the Investor’s
obligations hereunder is not less than the Loan.
5. Event of Default. In
addition to any other “Events of Default” set forth elsewhere in this Purchase
Note, the following shall constitute Events of Default under this Purchase Note:
(a) Investor fails to satisfy its obligation under this Purchase Note on or
before the Maturity Date; or (b) Investor files or has filed against Investor
any bankruptcy proceeding and the continuance of any such proceedings unstayed
and in effect for a period of 90 days or more. If an Event of Default occurs
hereunder, the Investor will be responsible for all costs incurred by the
company in collection of this note, including reasonable legal fees, which costs
will constitute part of the obligations of the Investor
hereunder. This note constitutes one of a series of 11 notes
issued by the Investor to the Company on the date hereof.
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6. Remedies. Upon the
occurrence of an Event of Default pursuant to this Purchase Note, the Company
may, at its sole and exclusive option, do any or all of the following, either
concurrently or separately: (a) accelerate the maturity of this Purchase Note
and demand immediate payment in full, whereupon the outstanding principal amount
of the Purchase Note and all obligations of Company to Investor hereunder,
together with accrued interest thereon and accrued charges and costs, including
costs incurred by the Company with respect to the collection of this Purchase
Note (including reasonable legal fees), if any, shall become immediately due and
payable without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived; (b) offset, recoup or exercise any other
legal remedy to offset any liabilities due by the Investor, including but not
limited to any offset of this Purchase Note against the Debenture, at the 125%
rate provided under Section 3 hereof; (c) exercise all
legally available rights and privileges; and (d) take appropriate recourse on
the collateral.
7. Miscellaneous.
(a) As
used in this Purchase Note, “Investor” shall mean all persons signing this
Purchase Note and borrowing money from Company. The word “including” means
“including (but not limited to)” unless specifically stated to the
contrary.
(b) Governing Law; Consent to
Jurisdiction; Waiver of Jury Trial. This Purchase Note shall
be governed by, and construed in accordance with, the internal laws of the State
of Illinois, without reference to the choice of law provisions
thereof. The Company and, by accepting this Purchase Note, the
Investor, each irrevocably submits to the exclusive jurisdiction of the courts
of the State of Illinois located in Xxxx County and any United States District
Court for the Northern District of Illinois for the purpose of any suit, action,
proceeding or judgment relating to or arising out of this Purchase Note and the
transactions contemplated hereby. Service of process in connection
with any such suit, action or proceeding may be served on each party hereto
anywhere in the world by the same methods as are specified for the giving of
notices under this Purchase Note. The Company and, by accepting this
Purchase Note, the Investor, each irrevocably consents to the jurisdiction of
any such court in any such suit, action or proceeding and to the laying of venue
in such court. The Company and, by accepting this Purchase Note, the
Investor, each irrevocably waives any objection to the laying of venue of any
such suit, action or proceeding brought in such courts and irrevocably waives
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. EACH OF THE COMPANY AND, BY ITS
ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL
BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT
COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
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(c) All
notices required under this Purchase Note shall be in writing and addressed to
Investor at _____________, with a copy to _____________ and to Company at
____________. Notice shall be mailed by certified mail, return receipt
requested, postage properly prepaid, or hand delivered. Notice shall be deemed
given, received, and effective 3 days from the date of mailing or on the date of
delivery. Either party may change the address for notice by giving the other
party notice of the new address in compliance with this section.
(d) This
Purchase Note contains the entire agreement between the parties relating to the
subject matter of this Purchase Note.
(e) This
Purchase Note will inure to the benefit of and be binding upon the parties and
their successors, representatives, and assigns.
(f) Investor
agrees to perform any and all further acts and to execute and deliver any and
all additional documents which may be reasonably necessary to carry out the
terms of this Purchase Note or correctly set forth the terms of this Purchase
Note.
(g) Investor
may assign any right, benefit, or obligation of Investor under this Purchase
Note without Company’s prior written approval. This Note may not be assigned,
sold or transferred by the Company without the consent of the
Investor.
(h) Neither
party is an agent or representative of the other. Investor is solely responsible
for procuring and providing all personnel, facilities, materials, and services
necessary to perform Investor’s obligations under this Purchase Note. Nothing in
this Purchase Note shall be construed to create a partnership or joint venture
between the Investor and the Company, and Investor acknowledges and agrees that
the sole relationship of the parties is that of Investor and
Company.
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[SIGNATURE
PAGE TO FORM OF SECURED NOTE]
IN WITNESS WHEREOF, the
parties have executed this Purchase Note on the above date.
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INVESTOR:
Name:_________________________
COMPANY:
By:____________________________
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