Exhibit 3
ANNEX I
TO
NOTE PURCHASE
AGREEMENT
(ADVANTAGE)
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR AN OPINION OF COUNSEL, IN FORM, SCOPE AND SUBSTANCE
REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT.
CONVERTIBLE NOTE
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West Conshohocken, Pennsylvania $7,000,000.00
December 6, 1995
FOR VALUE RECEIVED, U.S. BIOSCIENCE, INC., a Delaware corporation
(hereinafter called the "Borrower"), hereby promises to pay to GFL Advantage
Fund Limited or registered assigns (the "Holder") or order, the sum of Seven
Million Dollars ($7,000,000.00), on December 6, 1998, and to pay interest on the
unpaid principal balance hereof at the rate of four percent (4%) per annum from
the date hereof until the same becomes due and payable, whether at maturity or
upon acceleration or by prepayment or otherwise. Any amount of principal of or
interest on this Note which is not paid when due shall bear interest at the rate
of ten percent (10%) per annum from the due date thereof until the same is paid.
Interest shall commence accruing on the date hereof and shall be payable on the
1st day of each March, June, September and December, commencing March 1, 1996,
and at maturity. All payments of principal shall be made in lawful money of the
United States of America, and all payments of interest shall be made in lawful
money of the United States of America or, at the option of the Borrower and
subject to the provisions of this Note, in whole or in part in fully paid and
nonassessable shares of Common Stock, $.005 par value, of the Borrower as such
stock exists on the date of issuance of this Note, or any shares of capital
stock of Borrower into which such stock shall hereafter be changed or
reclassified (the "Common Stock"). All payments shall be made by wire transfer
of immediately available funds to such account as the Holder shall specify from
time to time to the Borrower by written notice given in accordance with the
provisions of this Note.
The following terms shall apply to this Note:
ARTICLE I
PREPAYMENT
1.1 PREPAYMENT. So long as no Event of Default (as defined herein)
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shall have occurred and be continuing, the Borrower shall have the right,
exercisable on not less than 15 days or more than 20 days written notice to the
Holder, at any time after the date hereof to prepay this Note in whole or in any
part of not less than $500,000 principal amount (or such lesser principal amount
as shall remain unpaid at the time of exercise of such right), in accordance
with this Section 1.1. Any notice of prepayment shall be delivered to the Holder
at its registered address appearing on the records of the Borrower and shall
state (1) that the Borrower is exercising its right to prepay all or a portion
of the principal amount of this Note, (2) the principal amount to be prepaid and
(3) the date of prepayment. On the date fixed for prepayment, the Borrower shall
make payment of the Prepayment Amount (as hereinafter defined), and accrued and
unpaid interest on the principal amount to be prepaid, to or upon the order of
the Holder as specified by the Holder in writing to the Borrower at least one
business day prior to the prepayment date. If the Borrower exercises its right
to prepay all or a portion of this Note, the Borrower shall make payment to the
Holder of an amount equal to the sum of (1) the principal amount of this Note to
be prepaid plus (2) an amount equal to 21.21 percent of the principal amount to
be prepaid (such sum being referred to as the "Prepayment Amount"), plus in each
case accrued and unpaid interest on the principal amount being prepaid to the
prepayment date. Upon the prepayment of less than the entire unpaid principal
amount of this Note, a new Note containing the same date and provisions as this
Note shall be issued by the Borrower to the Holder for the principal balance of
this Note which shall not have been prepaid.
1.2 ISSUANCE OF COMMON STOCK IN LIEU OF CASH INTEREST. (a) If the
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Borrower desires to exercise its option to make a payment of interest on this
Note wholly or partly in shares of Common Stock (hereinafter sometimes called
the "Stock Payment Option"), the issuance of shares of Common Stock upon such
exercise of the Stock Payment Option shall have been authorized by the Board of
Directors of the Company.
(b) The Borrower shall not be permitted to exercise the Stock Payment
Option with respect to any payment of interest on this Note if:
(i) the number of shares of Common Stock authorized, unissued
and unreserved for all purposes, or held in the Borrower's treasury, is
insufficient to pay the portion of such interest to be paid in Common
Stock;
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(ii) the issuance or delivery of shares of Common Stock pursuant
to the Stock Payment Option or the public resale of such shares by the
Holder would require registration with or approval of any governmental
authority under any law or regulation, and such registration or approval
has not been effected or obtained; provided, however, that with respect to
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compliance with the securities or blue sky laws of the states of the United
States, the requirements of this clause (ii) shall be deemed satisfied if
at the applicable time the Company is in compliance with Section 3(d) of
the Registration Rights Agreement, dated as of November 30, 1995 (the
"Registration Rights Agreement"), by and between the Borrower and GFL
Advantage Fund Limited, a British Virgin Islands corporation ("Advantage");
(iii) the shares of Common Stock to be issued upon exercise of
the Stock Payment Option have not been authorized for listing, upon
official notice of issuance, on any national or regional securities
exchange on which the Common Stock is then listed; or have not been
approved for quotation if traded in the over-the-counter market;
(iv) the Computed Price is less than the par value of the Common
Stock;
(v) an Event of Default has occurred and is continuing or has
not been waived; or
(vi) the Common Stock is neither (i) listed or admitted for
trading on a national securities exchange nor (ii) quoted in the Nasdaq
National Market.
(c) If the Stock Payment Option is elected, the Borrower shall issue
and dispatch or cause to be dispatched to the Holder one or more certificates
for the aggregate number of whole shares of Common Stock determined by dividing
the per share Computed Price of the Common Stock into the total amount of lawful
money of the United States of America which the Holder would receive if the
aggregate amount of interest on this Note which is being paid in shares of
Common Stock were being paid in such lawful money. No fractional shares will be
issued in payment of interest on this Note. In lieu thereof, the Borrower may
issue a number of shares of Common Stock which reflects a rounding up to the
next whole number or may pay lawful money of the United States of America. The
shares of Common Stock issued or to be issued by the Borrower in payment of
interest on this Note are sometimes referred to hereinafter as the "Payment
Shares."
(d) If the Borrower exercises the Stock Payment Option with respect
to a payment of interest on this Note, the Borrower shall deliver to the Holder,
on or prior to the date on which Payment Shares for such payment of interest on
this Note are to be dispatched to the Holder, an Officers' Certificate setting
forth
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(i) the total amount of the interest payment to which the Holder is entitled,
(ii) the portion of the interest payment being made in Payment Shares, (iii) the
number of Payment Shares allocable to such payment, as calculated pursuant to
this Section 1.2, (iv) any rounding adjustment to such number or any payment
necessary to be made pursuant to Section 1.2(c), (v) a brief statement of the
facts requiring such adjustment, (vi) the number of Payment Shares issuable with
respect to each $100 of interest on this Note after such adjustment and (vii) a
brief statement that none of the conditions set forth in Section 1.2(b) has
occurred and is existing. Such Officer's Certificate shall be accompanied by the
certificates and instruments, each duly issued in the name of the Holder,
representing the Payment Shares. Such Officers' Certificate shall be conclusive
evidence of the correctness of the calculation of the number of Payment Shares
allocable to the payments to which such Officers' Certificate relates and of any
adjustments to such number made pursuant to this Section 1.2. In addition, on or
before the pertinent payment date, the Borrower shall cause the transfer agent
for the Common Stock to prepare and issue the certificates representing the
Payment Shares in the name of the Holder before being so delivered by the
Borrower.
(e) The Payment Shares, when dispatched pursuant to and in compliance
with this Section 1.2, shall be, and for all purposes shall be deemed to be,
validly issued, fully paid and nonassessable shares of Common Stock; the
issuance and delivery thereof is in all respects hereby authorized; and the
dispatch thereof, together with lawful money of the United States of America, if
any, paid in lieu of fractional shares of such Common Stock, will be, and for
all purposes shall be deemed to be, in full discharge and satisfaction of the
Borrower's obligation to pay the interest on this Note to which such Payment
Shares relate.
(f) As used in this Section 1.2 of this Note, the following terms
shall have the meanings provided herein:
(1) "Computed Price" means the price equal to the arithmetic
average of the per share Bid Price of the Common Stock for the five (5)
consecutive trading days ending on the third trading day prior to the
applicable payment date.
(2) "Officer" means the Chairman or Vice Chairman of the Board,
the President, any Vice President, the Chief Financial Officer, the
Treasurer, the Secretary or the Controller of the Company.
(3) "Officers' Certificate" means a certificate signed by the
Chairman or Vice Chairman of the Board, the President or any Vice President
and by any other Officer or an Assistant Treasurer or Assistant Secretary
of the Company.
(4) "Bid Price" means the closing bid price for one share of the
Common Stock, as reported, quoted or determined by the first applicable
among the following: (a)
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the principal national stock exchange on which the shares of Common Stock
are listed or (b) the Nasdaq National Market.
ARTICLE II
CONVERSION AND PURCHASE RIGHTS
2.1 CONVERSION RIGHT. The Holder shall have the right from and
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after the date of this Note and then at any time on or prior to the day this
Note is paid in full, to convert at any time all or from time to time any part
of the outstanding and unpaid principal amount of this Note of at least $50,000,
or such lesser amount as shall remain unpaid at the time of the conversion, into
fully paid and nonassessable shares of Common Stock at the conversion price
determined as provided herein (the "Conversion Price"); provided, however, that
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one-third of the original principal amount of this Note shall first become
convertible on the date which is 15 days after the date on which the
Registration Statement (the "Registration Statement") filed under the Securities
Act of 1933, as amended (the "Act"), contemplated by Section 2(b) of the
Registration Rights Agreement is first ordered effective by the Securities and
Exchange Commission (the "Effective Date"), another one-third of the original
principal amount of this Note shall first become convertible on the date which
is 45 days after the Effective Date and another one-third of the original
principal amount of this Note shall first become convertible on the date which
is 65 days after the Effective Date; and provided further, however, that in no
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event shall Advantage be entitled to convert any portion of the principal amount
of this Note in excess of that portion of the principal amount of this Note upon
conversion of which the sum of (1) the number of shares of Common Stock
beneficially owned by Advantage, by GFL Performance Fund Limited
("Performance"), by Genesee Fund Limited-Portfolio B ("GFL-B") and by any person
associated with, or serving as an adviser to, any thereof (each a "GFL Person"
and collectively, the "GFL Persons") (other than shares of Common Stock deemed
beneficially owned through the ownership of the unconverted portion of the
principal amount of this Note or the convertible notes of like tenor purchased
by Performance and GFL-B) and (2) the number of shares of Common Stock issuable
upon the conversion of the portion of the principal amount of this Note with
respect to which the determination in this proviso is being made, would result
in beneficial ownership by any GFL Person of more than 4.9% of the outstanding
shares of Common Stock. For purposes of the second proviso to the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13D-G thereunder, except as otherwise provided in clause (1) of the second
proviso to the immediately preceding sentence. Upon the surrender of this Note,
accompanied by a Notice of Conversion of Convertible Note in the form attached
hereto as EXHIBIT A, properly completed and
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duly executed by the Holder (a "Conversion Notice"), the Borrower shall issue
and, within three business days after such surrender of this Note with the
Conversion Notice, deliver to or upon the order of the Holder (1) that number of
shares of Common Stock for the portion of the Note converted as shall be
determined in accordance herewith, (2) a new Note in the form hereof for the
balance of the principal amount hereof, if any, and (3) payment of the accrued
and unpaid interest on the portion of the principal amount of this Note so
converted (which payment of interest may be made in accordance with Section 1.2
of this Note if the Company satisfies the requirements thereof). The number of
shares of Common Stock to be issued upon each conversion of this Note shall be
determined by dividing that portion of the principal amount of the Note to be
converted by the Conversion Price in effect on the date the Conversion Notice is
delivered to the Borrower by the Holder.
2.2 CONVERSION PRICE. The Conversion Price shall be 82.5% of the
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Average Market Price for the Common Stock for the five (5) consecutive trading
days ending one trading day prior to the date the Conversion Notice is received
by the Borrower, subject to adjustment as provided herein. If the Registration
Statement covering the Registrable Securities required to be filed by the
Company pursuant to Section 2(a) of the Registration Rights Agreement is not
effective within 90 days after the Closing Date, then the Conversion Price will
be reduced on each Computation Date by an amount equal to one percent (1%) of
the Average Market Price for the Common Stock for the five (5) consecutive
trading days ending one trading day prior to such Computation Date.
As used in this Section 2.2, the following terms shall have the
following meanings:
"Average Market Price" of any security for any period shall be
computed as the arithmetic average of the closing bid prices for such security
for each trading day in such period on the American Stock Exchange, Inc. (the
"AMEX"), or, if the AMEX is not the principal trading market for such security,
on the principal trading market for such security, as reported by AMEX.
"Computation Date" means the date which is 90 days after the Closing
Date and, if the Registration Statement required to be filed by the Company
pursuant to the Registration Rights Agreement has not theretofore been declared
effective by the Securities and Exchange Commission (the "SEC"), each date which
is 30 days after a Computation Date and, if the Registration Statement required
to be filed by the Company pursuant to Section 2(a) of the Registration Rights
Agreement is not declared effective by the SEC within 90 days after the Closing
Date, the date on which such Registration Statement is declared effective.
Notwithstanding any other provision of this Section 2.2, if as a
result of limitations on budgetary authority of the
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federal government, the operations of the SEC are suspended or although not
suspended, are continued on a materially limited basis for an entire day, after
the date of this Note (an "SEC Shutdown"), then, so long as the Company shall
have filed the Registration Statement required by Section 2(a) of the
Registration Rights Agreement as and when required by that Section, shall have
used its best efforts to cause such Registration Statement to become effective
as soon as possible after such filing and shall have otherwise complied in all
material respects with the Registration Rights Agreement, then for each regular
SEC business day in excess of an aggregate of 20 regular SEC business days
occurring prior to such effectiveness of the Registration Statement during which
an SEC Shutdown has occurred, the period of 90 days provided in this Section 2.2
shall be extended by one day.
2.3 AUTHORIZED SHARES. The Borrower covenants that during the
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period the conversion right exists, the Borrower will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of Common Stock upon the full conversion of this Note. The
Borrower represents that upon issuance, such shares will be duly and validly
issued, fully paid and non-assessable. The Borrower agrees that its issuance of
this Note shall constitute full authority to its officers and agents who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for shares of Common Stock upon the conversion of this
Note.
2.4 METHOD OF CONVERSION. Except as otherwise provided in this Note
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or agreed by the Holder, this Note may be converted by the Holder in whole at
any time or in part from time to time by (1) submitting to the Borrower a
Conversion Notice and (ii) surrendering this Note at the principal office of the
Borrower. Upon partial exercise of the conversion rights provided hereby, a new
Note containing the same date and provisions as this Note shall be issued by the
Borrower to the Holder for the principal balance of this Note which shall not
have been converted. This Note has been issued pursuant to a Note Purchase
Agreement, dated as of November 30, 1995, between the Borrower and the original
Holder of this Note (the "Note Purchase Agreement"). By its acceptance of this
Note, each Holder agrees to be bound by the terms of the Note Purchase
Agreement. This Note has been issued by the Borrower pursuant to the exemption
from registration under the Act provided by Regulation D thereunder.
2.5 CONCERNING THE SHARES. The Shares of Common Stock issuable upon
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conversion of this Note may not be sold or transferred unless either (i) they
first shall have been registered under the Act and applicable state securities
laws or (ii) the Borrower shall have been furnished with an opinion of legal
counsel, in form, scope and substance reasonably satisfactory to the Company, to
the effect that such sale or transfer is exempt from the registration
requirements of the Act
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and all applicable state securities laws. Each certificate for shares of Common
Stock issuable upon conversion of this Note that have not been so registered and
that have not been sold pursuant to an exemption that permits removal of the
legend, shall bear a legend substantially in the following form, as appropriate:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR AN OPINION OF COUNSEL, IN FORM SCOPE AND SUBSTANCE
REASONABLY SATISFACTORY TO THE COMPANY, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT.
Upon the request of a holder of a certificate representing any shares of Common
Stock issuable upon conversion of this Note, the Borrower shall remove the
foregoing legend from the certificate or issue to such holder a new certificate
therefor free of any transfer legend, if, with such request, the Borrower shall
have received either (i) an opinion of counsel, in form, scope and substance
reasonably satisfactory to the Company, to the effect that any such legend may
be removed from such certificate, or (ii) if the present paragraph (k) of Rule
144 or a substantially similar successor rule remains in force and effect,
satisfactory representations from the holder that such holder is not then, and
has not been during the preceding three (3) months, an affiliate of the
Borrower, and that a period of at least three (3) years has elapsed since the
later of the date the securities were acquired (as determined under Rule 144)
from the Borrower or an affiliate of the Borrower.
2.6 CERTAIN PAYMENTS IN LIEU OF CONVERSION. In no event shall the
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Borrower issue more than 8,142,578 shares of Common Stock, less the aggregate
number of shares of Common Stock issued by the Company issued pursuant to the
Subscription Agreement, dated as of November 30, 1995, by and between the
Borrower and Advantage and the Subscription Agreement, dated as of November 30,
1995, by and between the Borrower and Performance, such difference to be subject
to adjustment from time to time for stock splits, stock dividends, combinations,
capital reorganizations and similar events relating to the Common Stock
occurring after the date hereof (as so adjusted, the "Maximum Share Amount")
upon conversion of this Note, the Convertible Note, dated the date hereof, in
the original principal amount of $3,500,000.00 issued by the Company to
Performance (the "Performance Note") and the Convertible Note, dated the date
hereof, in the original principal amount of $6,000,000.00 issued by the Company
to GFL-B (the "GFL-B Note"). Once the Maximum Share Amount has been issued, the
remaining outstanding principal amount of this Note shall be immediately due and
payable and the Borrower shall pay to the Holder in immediately available funds
an
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amount equal to the sum of (1) the outstanding principal amount of this Note
plus (2) an amount equal to 14 percent of the outstanding principal amount of
this Note, together with accrued and unpaid interest on such principal amount to
the payment date. As among this Note, the Performance Note and the GFL-B Note,
the Borrower shall give effect to Conversion Notices and notices of conversion
under the Performance Note and the GFL-B Note in the order in which given by the
Holder and the holders of such notes.
2.7 CONVERSION AT OPTION OF BORROWER. So long as no Event of
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Default shall have occurred and be continuing and so long as the Registration
Statement shall be effective, the Borrower shall have the right, exercisable at
any time or from time to time after the date which is 65 days after the
Effective Date by at least ten business days but not more than 15 business days
prior notice (a "Borrower Conversion Notice") to the Holder, to require the
Holder to convert, in accordance with the provisions, and subject to the
limitations, of this Article II, all or any part of the outstanding principal
amount of this Note into shares of Common Stock to the extent the same is at
such time convertible into shares of Common Stock. The Borrower Conversion
Notice shall state (1) the principal amount of this Note which the Borrower
seeks to require to be converted into shares of Common Stock and (2) the
conversion date (which shall not be less than ten business days or more than 15
business days after the date the Borrower Conversion Notice is given). If the
Borrower shall give a Borrower Conversion Notice, then, unless theretofore
converted by the Holder in accordance herewith or repaid by the Borrower or the
same shall have become due and payable (whether at maturity, upon acceleration
or otherwise), and, so long as the Registration Statement shall remain effective
on such conversion date and the Borrower shall be in compliance in all material
respects with its obligations under the Registration Rights Agreement on such
conversion date, on the conversion date properly set forth therein, the lesser
of (A) the principal amount of this Note which the Borrower seeks to require to
be converted, as set forth in such Borrower Conversion Notice or (B) the maximum
principal amount of this Note which on such conversion date is convertible in
accordance with Section 2.1 of this Note, shall be converted into such number of
shares of Common Stock as shall be determined pursuant to Section 2.1 and 2.2 of
this Note as if the conversion of such principal amount of this Note were made
by the Holder in accordance therewith. Upon the surrender of this Note by the
Holder after a Borrower Conversion Notice is given, the Borrower shall issue
and, within three trading days after such surrender of this Note, deliver to or
upon the order of the Holder (1) that number of shares of Common Stock for the
portion of the Note converted as shall be determined in accordance herewith, (2)
a new Note in the form hereof for the balance of the principal amount hereof, if
any, and (3) payment of the accrued and unpaid interest on the portion of the
principal amount of this Note so converted (which payment of interest may be
made in accordance with Section
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1.2 of this Note if the Company satisfies the requirements thereof).
ARTICLE III
EVENTS OF DEFAULT
If any of the following events of default (each, an "Event of
Default") shall occur:
3.1 FAILURE TO PAY PRINCIPAL OR INTEREST. The Borrower fails (a) to
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pay the principal hereof when due, whether at maturity, upon redemption, upon
acceleration or otherwise or (b) to pay any installment of interest hereon when
due and, in the case of this clause (b) only, such failure continues for a
period of two (2) days after the due date thereof;
3.2 CONVERSION AND THE SHARES. The Borrower fails to issue shares
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of Common Stock to the Holder upon exercise by the Holder of the conversion
rights of the Holder in accordance with the terms of this Note, fails to
transfer any certificate for shares of Common Stock issued to the Holder upon
conversion of this Note and when required by this Note or the Registration
Rights Agreement, or fails to remove any restrictive legend on any certificate
or any shares of Common Stock issued to the Holder upon conversion of this Note
as and when required by this Note, the Agreement or the Registration Rights
Agreement;
3.3 BREACH OF COVENANT. The Borrower breaches any material covenant
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or other material term or condition of this Note (other than as specifically
provided in Sections 3.1 and 3.2 hereof), the Note Purchase Agreement or the
Registration Rights Agreement and such breach continues for a period of ten
business (10) days after written notice thereof to the Borrower from the Holder;
3.4 BREACH OF REPRESENTATIONS AND WARRANTIES. Any representation or
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warranty of the Borrower made herein or in any agreement, statement or
certificate given in writing pursuant hereto or in connection herewith
(including, without limitation, the Note Purchase Agreement and the Registration
Rights Agreement), shall be false or misleading in any material respect when
made and, in the case of any such false or misleading representation or warranty
as to which the facts or events underlying such falsehood or misleading nature
are reasonably capable of cure without material adverse effect on the Holder,
the same shall not have not have been cured within ten business days;
3.5 BANKRUPTCY, RECEIVERSHIP, ETC. The Borrower, pursuant to or
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within the meaning of Title 11, U.S. Code or any similar federal or state law
for the relief of debtors (each, a "Bankruptcy Law") (a) admits in writing its
inability to pay its
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debts generally as they become due, (b) commences a voluntary case or
proceeding, (c) consents to the entry of a judgment, decree or order for relief
against it in an involuntary case or proceeding, (d) consents to the appointment
of a custodian, receiver, trustee, assignee, liquidator, sequestrator or similar
official under any Bankruptcy Law (each, a "Custodian") of it or for all or
substantially all of its property, (e) consents to the institution of bankruptcy
or insolvency proceedings against it, (f) applies for, consents to or acquiesces
in the appointment of or taking possession by a Custodian of the Company or for
any substantial part of its property, (g) makes a general assignment for the
benefit of its creditors or (h) takes any corporate action in furtherance of any
of the foregoing;
3.6 JUDGMENTS. Any money judgment, writ or similar process shall be
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entered or filed against the Borrower or any subsidiary of the Borrower or any
of its property or other assets for more than $1,000,000, and shall remain
unvacated, unbonded or unstayed for a period of twenty (20) days unless
otherwise consented to by the Holder, which consent will not be unreasonably
withheld;
3.7 CERTAIN ADJUDICATIONS AND APPOINTMENTS. A court of competent
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jurisdiction enters a judgment, decree or order for relief in respect of the
Company in an involuntary case or proceeding under any Bankruptcy Law which
shall (a) approve as properly filed a petition seeking reorganization,
arrangement, adjustment or composition in respect of the Company, (b) appoint a
Custodian of the Company or for any substantial part of its property or (c)
order the winding-up or liquidation of its affairs; and such judgment, decree or
order shall remain unstayed and in effect for a period of 60 consecutive days;
or any bankruptcy or insolvency petition or application is filed, or any
bankruptcy or insolvency proceeding is commenced, against the Company and such
petition, application or proceeding is not dismissed within 60 days; or
3.8 CROSS-DEFAULT. An "Event of Default," as defined in the
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Performance Note or the GFL-B Note, shall have occurred and be continuing;
then upon the occurrence and during the continuation of any Event of Default
specified in Section 3.1, 3.2, 3.3, 3.4, 3.6 or 3.8, at the option of the Holder
hereof, the Borrower shall, and upon the occurrence of any event of default
specified in Section 3.5 or 3.7, the Borrower shall, pay to the Holder an amount
equal to the sum of (1) the unpaid principal amount of this Note plus (2) an
amount equal to 21.21 percent of the unpaid principal amount of this Note, plus
accrued and unpaid interest on the unpaid principal amount of this Note to the
date of payment and all other amounts payable hereunder shall immediately become
due and payable, all without demand, presentment or notice, all of which hereby
are expressly waived, together with all costs, including,
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without limitation, legal fees and expenses, of collection, and the Holder shall
be entitled to exercise all other rights and remedies available at law or in
equity. If prior to or after the occurrence of any event which would be an Event
of Default the Holder shall have waived the same in writing, such event shall
not be deemed an Event of Default for any purpose.
ARTICLE IV
MISCELLANEOUS
4.1 FAILURE OR INDULGENCY NOT WAIVER. No failure or delay on the
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part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privileges. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
4.2 NOTICES. Any notice herein required or permitted to be given
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shall be in writing and may be personally served or delivered by courier or sent
by United States mail and shall be deemed to have been given upon receipt if
personally served or sent by courier or three (3) days after being deposited in
the United States mail, certified, with postage pre-paid and properly addressed,
if sent by mail. For the purposes hereof, the address of the Holder shall be as
shown on the records of the Borrower; and the address of the Borrower shall be
One Tower Bridge, 000 Xxxxx Xxxxxx, Xxxx Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: President. Both the Holder and the Borrower may change the address
for service by service of written notice to the other as herein provided.
4.3 AMENDMENT PROVISION. The term "Note" and all reference thereto,
-------------------
as used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented.
4.4 ASSIGNABILITY. This Note shall be binding upon the Borrower and
-------------
its successors and assigns, and shall inure to be the benefit of the Holder and
its successors and assigns.
4.5 COST OF COLLECTION. If default is made in the payment of this
------------------
Note, the Borrower shall pay the Holder hereof costs of collection, including
attorneys' fees.
4.6 GOVERNING LAW. This Note shall be governed by the internal laws
-------------
of the State of New York, without regard to the principles of conflict of laws.
-12-
IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its
name by its duly authorized officer on the day and in the year first above
written.
U.S. BIOSCIENCE, INC.
By_______________________________
Name:
Title:
-13-
Exhibit A
---------
NOTICE OF CONVERSION
OF CONVERTIBLE NOTE
TO: U.S. BIOSCIENCE, INC.
(1) Pursuant to the terms of the attached Convertible Note (the "Note"),
the undersigned hereby elects to convert $________ principal amount of the Note
into shares of Common Stock of U.S. BIOSCIENCE, INC., a Delaware corporation
(the "Borrower"). Capitalized terms used herein and not otherwise defined herein
have the respective meanings provided in the Note.
(2) Please issue a certificate or certificates for the number of shares of
Common Stock into which such principal amount of the Note is convertible in the
name(s) specified immediately below or, if additional space is necessary, on an
attachment hereto:
_____________________ _____________________
Name Name
_____________________ _____________________
Address Address
_____________________ _____________________
SS or Tax ID Number SS or Tax ID Number
(3) In the event of partial exercise, please reissue an appropriate Note
for the principal balance which shall not have been converted. Capitalized terms
used in this Notice of Conversion and not otherwise defined herein shall have
the respective meanings provided in the Note.
(4) If the shares of Common Stock issuable upon conversion of the Note have
not been registered under the Securities Act of 1933, as amended (the "Act"),
the undersigned represents and warrants that (i) such shares of Common Stock are
being acquired for the account of the undersigned for investment, and not with a
view to, or for resale in connection with, the distribution thereof, and that
the undersigned has no present intention of distributing or reselling such
shares and (ii) the undersigned is an "accredited investor" as defined in
Regulation D under the Act. The undersigned further agrees that (A) such shares
shall not be sold or transferred unless either (i) they first shall have been
registered under the Act and applicable state securities laws or (ii) the
Borrower first shall have been furnished with an opinion of legal counsel, in
form, scope and substance reasonably satisfactory to the Borrower, to the effect
that such sale or transfer is exempt from the registration requirements of the
Act and (B) the Borrower may place a legend on the certificate(s) for
A-1
the shares to that effect and place a stop-transfer restriction in its records
relating to the shares.
Date _________________________ ______________________________
Signature of Registered Holder
(must be signed exactly as name
appears in the Note. The signature
must be guaranteed by a member firm
of the NYSE or the NASD or by a
commercial bank or trust company
having an office in the U.S.)
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