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Exhibit 4.4
NEITHER THIS NOTE NOR THE SECURITIES UNDERLYING THIS NOTE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). NEITHER
THIS NOTE, NOR ANY PORTION THEREOF, NOR ANY INTEREST THEREIN, NOR THE SECURITIES
UNDERLYING THIS NOTE, MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT, OR (II) AN AVAILABLE EXEMPTION FROM
REGISTRATION UNDER THE ACT, PROVIDED THE HOLDER HAS FURNISHED TO PAYOR AN
OPINION OF ITS COUNSEL SATISFACTORY TO PAYOR TO THE EFFECT THAT AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
SUBMICRON SYSTEMS CORPORATION
8% CONVERTIBLE SUBORDINATED PROMISSORY NOTE DUE MARCH 26, 2002
$___________________ March 26, 1997
FOR VALUE RECEIVED, the undersigned, SubMicron Systems Corporation, a
Delaware corporation ("Payor" or the "Company"), having its executive office at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, hereby promises to pay to
__________________________ or registered assigns (the "Payee"), having an
address at ______________________________, at the Payee's address set forth
hereinabove or, at such other place as the holder of this Note (the "Holder")
shall hereafter specify in writing, on March 26, 2002 (the "Maturity Date"), the
principal sum of ___________________________ ($________) Dollars, in such coin
or currency of the United States of America as at the time shall be legal tender
for the payment of public and private debt.
This Note is one of a series of promissory notes of Payor (the "New
Notes") issued in connection with the Subordinated Note and Preferred Stock
Purchase Agreements, effective March 15, 1997, between the Company and certain
existing securityholders of the Company (the "Purchase Agreements"). This Note
shall rank pari passu with all other New Notes.
1. Interest and Payment.
Section 1.1. Payment of the full amount of
principal will be due and payable on the Maturity Date unless this Note is
redeemed or converted or otherwise becomes due on an earlier date in accordance
with the terms hereof.
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Section 1.2. The unpaid principal amount of this Note
outstanding from time to time shall bear simple interest from, but not
including, the date hereof until the Maturity Date at the rate of 8% per annum.
Section 1.3. Interest pursuant to Section 1.2 is
payable in arrears on the last day of each of the months of March, June,
September and December during the term of this Note (each, an "Interest Payment
Date"), commencing June 30, 1997, to holders of record of this Note on the March
15, June 15, September 15 and December 15, as the case may be, preceding the
applicable Interest Payment Date or the next business day preceding such record
date if such March 15, June 15, September 15 or December 15, as the case may be,
is not a business day (each an "Interest Payment Record Date"). Interest is
payable at the same address designated for payment of principal. In the event of
acceleration pursuant to Section 5 below, interest accrued through the date of
acceleration shall be payable upon such acceleration.
Section 1.4. If an Event of Default set forth in
Sections 5.4, 5.5, 5.6, 5.7, 5.8 or 5.9 hereof shall occur and continue for five
(5) days, whether or not the Holder shall (if permitted hereunder) declare the
unpaid principal amount of this Note, together with accrued and unpaid interest
thereon, to be immediately due and payable, and whether or not such Event of
Default occurs after the occurrence of any other Event of Default described in
Section 5 hereof, then interest shall begin to accrue on the outstanding
principal balance of this Note from the date of such Event of Default to the
earlier of (i) the date of payment in full of the outstanding principal of this
Note and all accrued and unpaid interest hereunder or (ii) the date the Event of
Default is cured, at the rate of 16% per annum as to Events of Default under
Sections 5.4, 5.5 or 5.9 and 10% per annum as to Events of Default under
Sections 5.6, 5.7 or 5.8 (in either event, the "Default Rate").
Section 1.5. In no event shall the Holder be
entitled to receive interest, however characterized, at an effective rate in
excess of the maximum rate permitted by law. In the event that a court of
competent jurisdiction shall finally determine that such amounts paid or agreed
to be paid by the Payor in connection with this Note causes the effective
interest rate on this Note to exceed the maximum rate permitted by law, such
interest or other consideration shall automatically be reduced to a rate which
results in an effective interest rate under this Note equal to the maximum rate
permitted by law over the term hereof, and, in such event, the Holder shall
apply to the reduction of the unpaid principal balance of this Note any amounts
received by it deemed to constitute excessive interest. For purposes of this
Note, where appropriate the term "Holder" shall include the Payee.
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Section 1.6. The Company may pay principal and
interest due under this Note by Company check. The Holder must surrender this
Note to the Company to receive payment of the principal amount of the Note.
2. Replacement of Note.
Section 2.1. In case this Note is mutilated,
destroyed, lost or stolen, the Payor shall, at its sole expense, after receipt
of notice from the Holder, execute, register and deliver a new Note, in exchange
and substitution for this Note, if mutilated, or in lieu of and substitution for
this Note, if destroyed, lost or stolen. In the case of destruction, loss or
theft, the Holder shall furnish to the Payor indemnity reasonably satisfactory
to the Payor, and in any such case, and in the case of mutilation, the Holder
shall also furnish to the Payor evidence to its reasonable satisfaction of the
mutilation, destruction, loss or theft of this Note and of the ownership
thereof. Any substitute Note so issued shall be in the same outstanding
principal amount as this Note and dated the date to which interest shall have
been paid on this Note, or if no interest shall have yet been paid, dated the
date of this Note.
Section 2.2. Every Note issued pursuant to the
provisions of Section 2.1 hereof in substitution for this Note shall constitute
an additional contractual obligation of the Payor, whether or not this Note
shall be found at any time, or be enforceable by anyone.
3. Conversion.
Section 3.1.
(a) Subject to the terms and provisions of this Note,
the Holder shall have the right, at its option ("Optional Conversion"), at any
time after the Approval Date (as defined below) and until the Conversion
Termination Date (as defined below), to convert the outstanding principal amount
of this Note as of the date this Note is surrendered for conversion into shares
of Common Stock in accordance with Section 3.1(f) (the "Conversion Shares") at
the Conversion Price hereinafter provided. For purposes of this Note: "Approval
Date" means the earlier of (i) the date the Company definitively determines that
stockholder approval of the issuance by the Company of the Conversion Shares
underlying all of the New Notes is not required by the principal national
securities exchange or market on which the Company's Common Stock is traded or
(ii) the day immediately following the date the stockholders of the Company
8approve the issuance of the Conversion Shares pursuant to Section 9(a) of the
Purchase Agreements; and "Conversion Termination Date" means 5:00 p.m. New York
City Time on the earlier of (x) the Maturity Date (or such later date as all
outstanding principal and accrued and unpaid interest under this Note is paid in
full) or (y) the business day immediately preceding the Redemption Date (as
hereinafter defined).
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In the event this Note is redeemed in part, the Conversion Termination Date with
respect to such partial redemption shall only apply to the principal amount of
this Note which is called for redemption.
(b) Subject to the terms and provisions of this Note,
if at any time the Closing Bid Price (as defined below) of the Company's Common
Stock is at least $5.10 per share (as such price shall be adjusted from time to
time pursuant to Sections 3.3, 3.4 or 3.5 to the same extent and in the same
relative proportion as the Conversion Price), for a period of twenty (20)
consecutive trading days (provided that the Approval Date and the Registration
Date (as defined in Section 5.8) each have occurred on or before such twentieth
day), then the Holder shall, if notice is given pursuant to Section 3.1(d)
below, be required to convert (the "Mandatory Conversion") the outstanding
principal amount of this Note as of the date this Note is surrendered for
conversion into Conversion Shares at the Conversion Price in effect on the last
trading day of the 20-day period referred to above (such day hereinafter
referred to as the "Trigger Date"). As of the Trigger Date, the Holder shall
have no further rights under this Note (including, without limitation, any
rights under Section 3 of this Note), except as provided in subsection 3.1(d) or
3.1(e) below. "Closing Bid Price" for the purpose of this Note shall mean (i)
the last reported bid price, on the primary exchange on which the Common Stock
is traded, if the Common Stock is traded on a national securities exchange,
including the Nasdaq National Market, or (ii) the closing bid price of the
Common Stock as reported by the Nasdaq Small Cap Market, or (iii) if the Common
Stock is not traded on a national securities exchange or Nasdaq, the closing bid
price of the Common Stock as reported by the National Quotation Bureau, Inc.
(c) To convert this Note, in whole or in part in
connection with an Optional Conversion after the Approval Date, the Holder shall
surrender this Note to the Payor during usual business hours at the Payor's
principal executive office, accompanied by written notice to the Payor in form
reasonably satisfactory to the Payor of the Holder's intention to convert,
stating the portion of the Note that is to be converted and the name and address
of each person in whose name a share or shares of Common Stock issuable upon
such conversion is to be registered. When surrendered for conversion in
connection with an Optional Conversion, this Note shall, unless the shares
issuable on conversion are to be issued in the same name as the name in which
this Note is then registered, be duly endorsed, or accompanied by instruments of
transfer in form reasonably satisfactory to the Payor duly executed, by the
Holder or his or its duly authorized attorney. As promptly as practical after
the surrender and giving of notice to convert as herein provided, the Payor
shall deliver or cause to be delivered at its office or agency maintained for
that purpose to or upon written order of the Holder of the Note, certificates
representing the number of fully paid and nonassessable Conversion Shares into
which said Note is converted and, in the event of partial conversion, a new Note
in an aggregate principal amount equal to the unconverted
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portion of said Note, dated as of the date to which interest has been paid, and
if no interest has been paid, dated as of the date of the Note converted in
part, and in all other respects identical to the Note converted.
(d) If there shall be a Mandatory Conversion, at the
election of the Company, the Holder shall be given ten (10) days prior written
notice of the date on which the Company shall effect such Mandatory Conversion
(the "Mandatory Conversion Date). On or before the Mandatory Conversion Date,
the Holder shall surrender this Note to the Payor at the Payor's principal
executive office, together with written notice to the Payor of the name and
address of each person in whose name a share or shares of Common Stock issued
upon such conversion is to be registered. When surrendered for conversion upon a
Mandatory Conversion, this Note shall, unless the shares issuable on conversion
are to be issued in the same name as the name in which this Note is then
registered, be duly endorsed, or accompanied by instruments of transfer in form
reasonably satisfactory to the Payor duly executed, by the Holder or his or its
duly authorized attorney. On the Mandatory Conversion Date, the Payor shall have
prepared and ready to deliver or cause to be delivered at its office or agency
maintained for that purpose to the Holder of the Note, certificates representing
the number of fully paid and nonassessable Conversion Shares into which said
Note is converted. Such Conversion Shares shall be delivered only upon receipt
by the Company of the certificates for the Notes being converted. From and after
the Mandatory Conversion Date, interest on this Note will cease to accrue and
the sole right of the Holder of this Note shall be to receive the Conversion
Shares and accrued and unpaid interest on the Note up to the Mandatory
Conversion Date.
(e) Upon either an Optional Conversion or a Mandatory
Conversion, the Payor shall pay to the Payee any unpaid interest accrued on the
converted portion of the Note through the date of conversion. If a Note is
surrendered for conversion during the period from the close of business on any
Interest Payment Record Date to the opening of business on the succeeding
Interest Payment Date, Holder must surrender this Note accompanied by payment by
check or other method reasonably acceptable to the Payor of an amount equal to
the interest payable from the date of conversion to such Interest Payment Date;
provided, however, that no such payment need be made if there shall exist at the
time of conversion a default in the payment of interest on the Notes.
(f) Upon conversion as provided herein, this Note (or
any Note(s) issued upon transfer or exchange) shall convert into such number of
shares of Common Stock equal to the outstanding principal amount of this Note or
portion thereof which is being converted, divided by $3.70 (the "Conversion
Price"); provided, however, that the Conversion Price shall be adjusted to an
amount equal to the greater of (i) $2.50 per share (as adjusted from time to
time pursuant to Section 3.5 to the same extent and in the same relative
proportion as the Conversion Price) and (ii) the average
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Closing Bid Price for the twenty (20) consecutive trading days beginning on
March 15, 1999; provided that in no event shall the adjusted Conversion Price as
aforesaid be greater than the Conversion Price in effect immediately prior to
such adjustment. In addition to the foregoing, the Conversion Price may be
adjusted from the time in accordance with Sections 3.3, 3.4 and 3.5 hereof;
provided, however, that in no event (other than pursuant to Section 3.5) shall
the Conversion Price be reduced, upon any adjustment, to less than $2.50.
Section 3.2
(a) The Payor covenants and agrees that it has
reserved and shall at all times reserve and keep available out of its authorized
but unissued Common Stock, solely for the purpose of issuing such shares upon
the conversion of this Note, the full number of Conversion Shares then
deliverable upon the conversion hereof, free of preemptive rights. The Payor
covenants and agrees that the Conversion Shares shall, at the time of delivery
of the certificates for such shares of Common Stock, be duly authorized, validly
issued and fully paid and nonassessable shares of Common Stock.
(b) Each person in whose name any certificate for the
Conversion Shares is issuable upon the conversion of this Note shall for all
purposes be deemed to have become the holder of record of the Common Stock
represented thereby on, and such certificate shall be dated, with respect to an
Optional Conversion, the date upon which the Note was duly surrendered and
notice of conversion was given in accordance with the provisions of this Note,
and with respect to a Mandatory Conversion, the Mandatory Conversion Date;
provided, however, that if the date of such surrender and notice is a date upon
which the stock transfer books of the Payor are closed, such person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next business day on which the stock transfer books of the
Payor are open.
Section 3.3. Except as hereinafter provided, in case
the Payor shall at any time after the date hereof issue or sell any shares of
Common Stock (other than the issuances or sales referred to in Section 3.5 or
3.7 hereof), including shares held in the Payor's treasury and shares of Common
Stock issued upon the exercise of any options, rights or warrants to subscribe
for shares of Common Stock (other than the issuances or sales of Common Stock
pursuant to rights to subscribe for such Common Stock distributed to all the
stockholders of the Payor) and shares of Common Stock issued upon the direct or
indirect conversion or exchange of securities for shares of Common Stock, for a
consideration per share less than the Conversion Price in effect immediately
prior to the issuance or sale of such shares, or without consideration, then
forthwith upon such issuance or sale, the Conversion Price shall (until another
such issuance or sale or other adjustment) be reduced to the price (calculated
to the nearest full cent)
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determined by dividing (I) an amount equal to the sum of (A) the product of (X)
the total number of shares of Common Stock outstanding immediately prior to such
issuance or sale, multiplied by (Y) the Conversion Price in effect on the date
immediately prior to the issuance or sale of such shares, plus (B) the aggregate
amount of all consideration, if any, received by the Payor upon such issuance or
sale, by (II) the total number of shares of Common Stock outstanding immediately
after such issuance or sale; provided, however, that in no event shall the
Conversion Price be adjusted pursuant to this computation to an amount in excess
of the Conversion Price in effect immediately prior to such computation.
For the purposes of any computation to be made in accordance
with this Section 3.3, the following provisions shall be applicable:
(i) In case of the issuance or sale of
shares of Common Stock for a consideration part or all of which shall be cash,
the amount of the cash consideration therefor shall be deemed to be the amount
of cash received by the Payor for such shares (or, if shares of Common Stock are
offered by the Payor for subscription, the subscription price, or, if such
securities shall be sold to underwriters or dealers for public offering without
a subscription offering, the initial public offering price) before deducting
therefrom any compensation paid or discount allowed in the sale, underwriting or
purchase thereof by underwriters or dealers or others performing similar
services, or any expenses incurred in connection therewith.
(ii) In case of the issuance or sale
(otherwise than as a dividend or other distribution on any stock of the Payor)
of shares of Common Stock for a consideration part or all of which shall be
other than cash, the amount of the consideration therefor other than cash shall
be deemed to be the value of such consideration as determined in good faith by
the Board of Directors of the Payor.
(iii) Shares of Common Stock issuable by way
of dividend or other distribution on any stock of the Payor shall be deemed to
have been issued immediately after the opening of business on the day following
the record date for the determination of stockholders entitled to receive such
dividend or other distribution and shall be deemed to have been issued without
consideration.
(iv) The reclassification of securities of
the Payor, other than shares of Common Stock, into securities including shares
of Common Stock shall be deemed to involve the issuance of such shares of Common
Stock for a consideration other than cash immediately prior to the close of
business on the date fixed for the determination of security holders entitled to
receive such shares, and the value of the consideration allocable to such shares
of Common Stock shall be determined as provided in subsection (ii) of this
Section 3.3.
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(v) The number of shares of Common Stock at
any one time outstanding shall include the aggregate number of shares issued or
issuable upon the exercise of options, rights or warrants and upon the
conversion or exchange of convertible or exchangeable securities.
Section 3.4. Except in the case of the Payor issuing
rights to subscribe for shares of Common Stock to all the stockholders of the
Payor or issuances or sales referred to in Section 3.7, if the Payor shall at
any time after the date hereof issue options, rights or warrants to subscribe
for shares of Common Stock, or issue any securities convertible into or
exchangeable for shares of Common Stock, (i) for a consideration per share less
than the Conversion Price in effect immediately prior to the issuance of such
options, rights, or warrants, or (ii) without consideration, the Conversion
Price in effect immediately prior to the issuance of such options, rights or
warrants, or such convertible or exchangeable securities, as the case may be,
shall be reduced to a price determined by making a computation in accordance
with the provisions of Section 3.3 hereof, provided that:
(a) The aggregate maximum number of shares of Common
Stock, as the case may be, issuable under all the options, rights or warrants so
issued shall be deemed to be issued and outstanding at the time all such
options, rights or warrants were issued (without giving effect to any additional
shares of Common Stock that may be issued after the date of issuance of such
options, rights or warrants pursuant to future adjustments resulting from the
anti-dilution provisions contained in such options, rights or warrants ("Future
Adjustments")), and for a consideration equal to the minimum purchase price per
share (without giving effect to any Future Adjustments) provided for in the
options, rights or warrants at the time of issuance, plus the consideration
(determined in the same manner as consideration received on the issue or sale of
shares in accordance with the terms of such options, rights or warrants), if
any, received by the Payor for the options, rights or warrants, and if no
minimum price is provided in such options, rights or warrants, then the
consideration shall be equal to zero; provided, however, that upon the
expiration or other termination of the options, rights or warrants, if any
thereof shall not have been exercised, the number of shares of Common Stock
deemed to be issued and outstanding pursuant to this subsection (a) (and for the
purposes of subsection (v) of Section 3.3 hereof) shall be reduced by such
number of shares as to which options, warrants and/or rights shall have expired
or terminated unexercised, and such number of shares shall no longer be deemed
to be issued and outstanding, and the Conversion Price then in effect shall
forthwith be readjusted in such event (and also if the options, rights or
warrants are exercised for a price in excess of the minimum price provided in
such securities) and thereafter be the Conversion Price which it would have been
had adjustment been made on the basis of the issuance only of shares actually
issued or issuable upon the exercise of those options, rights or warrants as to
which the
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exercise rights shall not have expired or terminated unexercised; provided,
further, that no such readjustment to the Conversion Price, if any, shall affect
any portion of this Note that is converted or redeemed prior to the effective
date of such readjustment.
(b) The aggregate maximum number of shares of Common
Stock issuable upon conversion or exchange of any convertible or exchangeable
securities shall be deemed to be issued and outstanding at the time of issuance
of such securities(without giving effect to any Future Adjustments), and for a
consideration equal to the consideration received by the Payor for such
securities, plus the minimum consideration (without giving effect to any Future
Adjustments), if any, receivable by the Payor upon the conversion or exchange
thereof; provided, however, that upon the actual conversion or exchange or
termination of the right to convert or exchange such convertible or exchangeable
securities (whether by reason of redemption or otherwise), the number of shares
deemed to be issued and outstanding pursuant to this subsection (b) (and for the
purpose of subsection (v) of Section 3.3 hereof) shall be reduced by such number
of shares as to which the conversion or exchange rights shall have expired or
terminated unexercised, and such number of shares shall no longer be deemed to
be issued and outstanding and the Conversion Price then in effect shall
forthwith be readjusted in such event (and also if the options, rights or
warrants are exercised for a price in excess of the minimum price provided in
such securities) and thereafter be the price which it would have been had
adjustment been made on the basis of the issuance only of the shares actually
issued or issuable upon the conversion or exchange of those convertible or
exchangeable securities as to which the conversion or exchange rights shall not
have expired or terminated unexercised; provided, further, that no such
readjustment to the Conversion Price, if any, shall affect any portion of this
Note that is converted or redeemed prior to the effective date of such
readjustment.
(c) If any change shall occur in the price per share
provided for in any of the options, rights or warrants referred to in subsection
(a) of this Section 3.4, or in the price per share at which the securities
referred to in subsection (b) of this Section 3.4 are convertible or
exchangeable, the options, rights or warrants or conversion or exchange rights,
as the case may be, shall be deemed to have expired or terminated on the date
when such price change became effective in respect of shares not theretofore
issued pursuant to the exercise or conversion or exchange thereof, and the Payor
shall be deemed to have issued upon such date new options, rights or warrants or
convertible or exchangeable securities at the new price in respect of the number
of shares issuable upon the exercise of such options, rights or warrants or the
conversion or exchange of such convertible or exchangeable securities.
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Section 3.5.
(a) In case the Payor shall: (i) declare a dividend
of Common Stock on its Common Stock, (ii) subdivide outstanding Common Stock
into a larger number of shares of Common Stock by reclassification, stock split
or otherwise, or (iii) combine outstanding Common Stock into a smaller number of
shares of Common Stock by reclassification or otherwise, the Conversion Price
then in effect immediately prior to any such event shall be adjusted
proportionately so that thereafter the Holder shall be entitled to receive upon
conversion of this Note the number of Conversion Shares which such Holder would
have owned after the happening of any of the events described above had this
Note been converted immediately prior to the happening of such event, provided
that the Conversion Price shall in no event be reduced to less than the par
value of the shares issuable upon conversion. An adjustment made pursuant to
this Section 3.5 shall become effective immediately after the record date in the
case of a dividend or immediately after the payment date in the event no record
date is fixed to determine the stockholders entitled to receive such dividend
(and readjusted back to the Conversion Price in effect prior to such adjustment
if the dividend is not paid) and shall become effective immediately after the
effective date in the case of a subdivision or combination.
(b) In case of any reclassification or change of
outstanding shares of Common Stock issuable upon conversion of this Note (other
than change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination), or in case
of any consolidation or merger with or into another corporation (other than a
consolidation or merger in which the Payor is the continuing corporation and
which does not result in any reclassification or change of outstanding shares of
Common Stock, other than a change as a result of a subdivision or combination of
such shares or a change in par value, as aforesaid), or in case of any sale or
conveyance to another corporation of the property of the Payor as an entirety or
substantially as an entirety, the holder of this Note shall have the right
thereafter to convert this Note into the kind and amount of shares of stock and
other securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock of the Payor for which the Note might have been converted
immediately prior to such reclassification, change, consolidation, merger, sale
or conveyance.
The above provisions of this Section 3.5(a) and (b)
shall similarly apply to successive reclassifications and changes of shares of
Common Stock and to successive consolidations, mergers, sales or conveyances.
Section 3.6. In the event that the Payor shall at any
time prior to the conversion of all of the New Notes declare a dividend (other
than a dividend consisting solely of shares of
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Common Stock or a cash dividend or distribution payable out of current or
retained earnings) or otherwise distribute to its stockholders any monies,
assets, property, rights, evidences of indebtedness, securities (other than
shares of Common Stock), whether issued by the Payor or by another person or
entity, or any other thing of value, the Company shall promptly thereafter give
the Holder the notice set forth in Section 3.8 hereof. If the Payor fails to
give such notice, the Holder shall be entitled to receive, upon the conversion
of the Notes, the same monies, property, assets, rights, evidences of
indebtedness, securities or any other thing of value that such Holder would have
been entitled to receive at the time of such dividend or distribution. The Payor
shall make appropriate provisions to ensure the timely performance of the
provisions of this Subsection 3.6.
Section 3.7. Notwithstanding anything contained in
this Note to the contrary, no adjustment of the Conversion Price shall be made
(i) upon the issuance of options or stock pursuant to the Payor's stock plans in
effect on the date hereof or subsequently approved by the Payor's stockholders
and the issuance or sale by the Payor of any shares of Common Stock pursuant to
the exercise of any such option, or (ii) upon the issuance or sale by the Payor
of any shares of Common Stock pursuant to the exercise of any options or
warrants or upon conversion of any outstanding convertible security, in any such
case if previously issued and outstanding as of the date of this Note or (iii)
if the amount of such adjustment shall be less than 1% of the Conversion Price;
provided, however, that in such case any adjustment that would otherwise be
required to be made shall be carried forward and shall be made at the time of
and together with the next subsequent adjustment which, together with any
adjustment so carried forward, shall amount to at least 1% of the Conversion
Price.
Section 3.8.
(a) In case the Payor proposes to take any action
referred to in Section 3.6 above, or to effect the liquidation, dissolution or
winding up of the Payor, then the Payor shall cause notice thereof to be mailed
to the Holder, at ▇▇▇▇▇▇'s address appearing in the Payor's records, at least
thirty (30) days prior to the date on which the transfer books of the Payor
shall close or a record be taken for such stock dividend, sale or issuance or
the date when such reclassification, liquidation, dissolution or winding up
shall be effective, as the case may be. Neither the failure to give such notice
referred to in Section 3.8(a) or (b) nor any defect therein or in the mailing
thereof shall affect the validity of any action taken in connection with such
transaction.
(b) Whenever the Conversion Price shall be adjusted
as provided in Section 3.3, 3.4 or 3.5 above, the Payor shall forthwith file at
the office designated for the conversion of the Note, a statement, signed by the
Chairman of the Board, the President, any Vice President, the Treasurer or
Secretary of the Payor, showing in reasonable detail the facts requiring such
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adjustment and the Conversion Price that will be effective after such
adjustment. The Payor shall also cause a notice setting forth any such
adjustment to be sent by mail, first class, postage prepaid, to the Holder at
its address appearing on the Note register maintained by the Payor.
(c) No fractional shares of Common Stock shall be
issuable upon conversion of this Note, but a payment in cash will be made in
respect of any fraction of a share which would otherwise be issuable upon the
surrender of this Note, or portion hereof, for conversion. Such payment shall be
based on the Closing Bid Price of the Common Stock on the date of conversion.
Section 3.9. No Holder of this Note shall be entitled
to vote or receive dividends or be deemed the holder of Common Stock or any
other securities of the Payor which may at any time be issuable on the
conversion hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder of this Note, as such, any of the rights of
a stockholder of the Payor or any right to vote for the election of directors or
upon any matters submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any recapitalization,
issue of stock, reclassification of stock, change of par value or change of
stock to no par value, consolidation, merger, conveyance, or otherwise) or to
receive dividends or subscriptions rights or otherwise until the Note shall have
been converted and the Common Stock issuable upon the conversion hereof shall
have become deliverable as provided herein.
4. Redemption.
Section 4.1. On not less than fifteen (15) days
notice given at any time, if, and only if the Approval Date and the Registration
Date each have occurred on or prior to the Redemption Date, this Note may be
redeemed, in whole or in part, at the option of the Payor, at a redemption price
(the "Redemption Price") equal to (i) 100% of the principal amount of the Note
at the time outstanding and (ii) accrued interest on the Note unpaid as of the
Redemption Date. The date fixed for redemption of this Note, or a portion
thereof, is referred to herein as the "Redemption Date."
Section 4.2. In the event that not all of the New
Notes are to be redeemed, the Payor shall select the New Notes, or portions
thereof, to be redeemed on either a pro rata basis or by lot, or such other
method as is fair and appropriate. The Company may select for redemption
portions of New Notes that have denominations in integral multiples of $1,000.
Section 4.3. The notice of redemption shall specify
(i) the principal amount of the Note to be redeemed, (ii) the Redemption Price,
(iii) the Redemption Date, (iv) the place where the Note shall be delivered and
the redemption price paid, and (v) that the right to convert the Note shall have
terminated as of the business day immediately preceding the Redemption Date. No
failure
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to mail such notice nor any defect therein or in the mailing thereof shall
affect the validity of the proceedings for such redemption, except as to a
Holder (a) to whom notice was not mailed or (b) whose notice was materially
defective. An affidavit of the Secretary or an Assistant Secretary of the Payor
that notice of redemption has been mailed shall, in the absence of fraud, be
prima facie evidence of the facts stated therein.
Section 4.4. On and after the Redemption Date,
Holders of the Notes shall have no further rights with respect to the portion of
the Note redeemed except to receive, upon surrender of the Note, the Redemption
Price.
Section 4.5. From and after the Redemption Date, the
Payor shall, at the place specified in the notice of redemption, upon
presentation and surrender to the Payor by or on behalf of the Holder thereof of
one or more Notes to be redeemed, deliver or cause to be delivered to or upon
the written order of such Holder a sum in cash equal to the Redemption Price of
each such Note. From and after the Redemption Date such Notes shall expire and
become void and all rights hereunder shall cease, except the right to receive
payment of the Redemption Price and, if the Note is redeemed only in part, to
receive a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
5. Events of Default. The following shall be Events of
Default:
Section 5.1. The liquidation, dissolution or winding
up of the Payor or any vote in favor thereof by the Board of Directors and
stockholders of the Payor without making provision for the payment in full of
the New Notes in accordance with their terms; or
Section 5.2. Payor shall make an assignment for the
benefit of creditors, or shall file with a court of competent jurisdiction an
application for the appointment of a receiver for itself or a material part of
its assets, or shall commence a voluntary case or proceeding under any provision
of the Federal Bankruptcy Code or any other federal or state statute affording
relief to debtors or shall in any manner consent to the filing against it of an
involuntary case or proceeding under any such law; or there shall be commenced
against the Payor an involuntary case or proceeding under any such federal or
state statute or there shall be filed against the Payor, without the consent of
Payor, any application under any such federal or state statute for the
appointment of a receiver for itself or a material part of its assets which
case, proceeding or application is not dismissed or withdrawn within sixty (60)
days of commencement or filing thereof as the case may be; or
Section 5.3. The sale by the Payor of all or
substantially all of its assets (other than the sale of inventory in the
ordinary course of business), or the merger or consolidation
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by the Payor with or into another corporation, except for such mergers where the
Payor is the surviving entity or in which the surviving entity in such merger or
consolidation expressly assumes and agrees to pay all of the obligations of the
Payor under all of the New Notes; or
Section 5.4. The failure by the Payor to pay when due
(other than in connection with an acceleration of principal and interest due
under this Note) the principal of, or accrued interest under, this Note, or any
of the other New Notes, as and when the same shall become due and payable; or
Section 5.5. Payor or any of its subsidiaries shall
default in the payment when due (after any grace period provided therefor) of
the principal of, or interest on, any institutional indebtedness of Payor or any
such subsidiary with an aggregate principal amount in excess of $250,000
(whether such principal or interest shall become due at scheduled maturity, by
required prepayment, by acceleration, by demand or otherwise); or
Section 5.6. If the Approval Date has not occurred by
January 31, 1998; or
Section 5.7. The failure by Payor to consummate, on
or prior to September 30, 1997, the Exchange Offer (as defined in Section 9(b)
of the Purchase Agreements) due to the failure by Payor to have an effective
Registration Statement covering the Exchange Notes (as defined in Section 9(b)
of the Purchase Agreements) pursuant to the Act; provided, however, that the
foregoing default shall be deemed cured upon the date a Registration Statement
covering the Exchange Notes is declared effective pursuant to the Act; or
Section 5.8. Assuming the Approval Date has occurred,
if on or prior to January 31, 1998 the Company has failed to deliver an opinion
of its counsel to the Holder (or if the Holder is not the original Holder of
this Note, has not delivered to a prior holder of this Note) that the
Registration Date as to such person has occurred. "Registration Date" for the
purpose of this Note shall be the date upon which the Conversion Shares first
become saleable under the Act, whether pursuant to Rule 144(k) of the Act or any
successor provision, an effective Registration Statement which covers the
Exchange Notes of the Holder or would have covered such Exchange Notes had the
Holder participated in the Exchange Offer (if such Registration Statement also
permits the sale of the Conversion Shares), or an effective Registration
Statement covering the resale of the Conversion Shares; or
Section 5.9. The failure by Company to comply in any
material respect with Sections 6, 9(a), 9(b), 9(c) or 9(d) of the Purchase
Agreement signed by the Holder; provided, however, that an Event of Default
under this Section 5.9 for failure of the Company to use its best efforts shall
be deemed cured upon the date the event for which the Company was to use its
best efforts to
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cause to occur shall actually occur (by way of illustration, if the Company
failed to use its best efforts pursuant to Section 9(b) of the Purchase
Agreement to cause to be effective a Registration Statement permitting the sale
of the Conversion shares by a specified date, such default shall be deemed cured
upon the date such shares first become freely saleable under the Act, whether
pursuant to Rule 144(k) of the Act or any successor provision or an effective
Registration Statement).
If an Event of Default pursuant to Sections 5.1,
5.2, 5.3, 5.4, 5.5, 5.6 or 5.8 hereof shall occur and, other than with respect
to Sections 5.1, 5.2, 5.5, 5.6 or 5.8 shall continue uncured for five (5) days,
and at any time thereafter, while such event is continuing, the Holder shall
have the right to declare the unpaid principal amount of this Note, together
with accrued interest thereon, to be immediately due and payable, whereupon the
same shall be forthwith due and payable.
Payor shall promptly provide the Holder with written
notice after the occurrence of any Event of Default known by the Payor setting
forth the facts constituting such Event of Default.
6. Subordination.
Section 6.1. The payment of the principal of, and
accrued interest on this Note is hereby expressly subordinated in right of
payment, in the manner and to the extent hereinafter expressly set forth, to the
prior payment in full of all Senior Indebtedness (as hereinafter defined),
whether outstanding on the date hereof or hereafter created, incurred or
assumed. The Holder and the Payee, by his or its acceptance hereof, agrees to
and shall be bound by the provisions hereof.
As used in this Section 6, "Senior Indebtedness"
means (i) indebtedness consisting of the principal of, premium, if any, interest
on and any fees, charges and expenses relating to, (A) Money Borrowed, or (B)
the deferred purchase price of any business, properties or assets acquired by
the Payor or any of its subsidiaries from any third party, or (C) secured by any
mortgage, security interest, lien, pledge or encumbrance upon property of the
Payor or any of its subsidiaries; (ii) guarantees, direct or indirect, of any
indebtedness referred to in clause (i) above; and (iii) all renewals,
replacements, extensions, refundings, amendments, modifications, or increases of
any indebtedness referred to in clause (i) above.
The term, "Money Borrowed," as used in the definition
of "Senior Indebtedness," means indebtedness evidenced by bonds, debentures
notes or similar instruments, provided that such obligations have been secured
by a substantial amount of the assets of the Payor or any material subsidiary of
the Payor.
Section 6.2. In the event of any distribution,
division or application, partial or complete, voluntary or
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involuntary, by operation of law or otherwise, of all or any part of the assets
of the Payor, whether in cash or kind, upon any dissolution, winding up,
liquidation, readjustment or reorganization of the Payor or its property,
whether in bankruptcy, insolvency or receivership proceedings or at execution
sale or upon an assignment for the benefit of creditors or any other marshalling
of the assets and liabilities of the Payor or otherwise, the Payor and the
Holder, by his or its acceptance of this Note, agree that:
(a) The holders of all Senior Indebtedness shall
first be entitled to receive payment in full, in accordance with the terms of
such Senior Indebtedness, of the principal thereof and interest thereon, before
the Holder shall be entitled to receive any payment on account of the principal
of, or interest on, this Note.
(b) The Holder, by his or its acceptance of this
Note, assigns to the holders of Senior Indebtedness for the purposes and to the
extent set forth in this Section 6, all his right, title and interest to and in
any payment or distribution of assets of the Payor of any kind or character,
whether in cash, property or securities, other than securities of the Payor as
reorganized or readjusted or securities of the Payor or any other corporation
provided for by a plan of reorganization or readjustment the payment or
distribution of which is subordinate, at least to the extent provided in this
Section 6 with respect to this Note, to the payment in full of the principal of,
and interest on all Senior Indebtedness to which the Holder would be entitled
except for the provisions of this Section 6(b) ("Subordinated Securities"). The
Holder authorizes and directs the Payor (or any receiver, trustee in bankruptcy,
liquidating trustee or agent or other Person acting for the Payor) to take such
steps as may be reasonably necessary or appropriate to entitle the holders of
Senior Indebtedness to receive such payment or distribution from the liquidating
trustee or agent or other person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or otherwise, ratably
according to the aggregate amounts remaining unpaid on the Senior Indebtedness
held by each such holders, all to the extent necessary to provide for payment in
full of the principal of, and interest on, all Senior Indebtedness, in
accordance with the terms of such Senior Indebtedness, but prior to any payment
of principal of, or interest on, this Note, and in connection therewith and for
such purpose, the holders of the Senior Indebtedness are hereby authorized and
permitted to assert, file, prosecute and vote any claim or other interest on
account of this Note which may be required in order to seek and obtain payment
on account of this Note under the circumstances described in this Section 6.2;
and
(c) In the event that, notwithstanding the provisions
of Section 6.2(b) hereof, any payment or distribution of assets of the Payor of
any kind or character, whether in cash, property or securities (other than
Subordinated Securities), shall be received by the Holder before the payment in
full of the
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principal of and interest on Senior Indebtedness in accordance with the terms of
such Senior Indebtedness, such payment of distribution shall be held in trust
for the benefit of, and shall be paid over to, the holders of Senior
Indebtedness, ratably according to the aggregate amount remaining unpaid on such
Senior Indebtedness held by each such holder, to the extent necessary to pay in
full the principal of and interest on such Senior Indebtedness, in accordance
with the terms of such Senior Indebtedness.
Section 6.3. The Payor shall not make any payment of
the principal of, or interest on, this Note (a) at any time when it is in
default in the payment of principal of, or interest on, any Senior Indebtedness,
or (b) if at the time of such payment or immediately after giving effect
thereto, there shall exist any default (other than a default specified in clause
(a) above) specified in any Senior Indebtedness which shall have continued
uncured for the period of grace (or the period after notice), if any, specified
in such Senior Indebtedness if such default shall give the holders of Senior
Indebtedness the right to accelerate the maturity thereof, provided that Payor
shall have given the Holder written notice of the occurrence of any such
default, unless and until such default shall have been cured or waived or shall
have ceased to exist. Any payment of principal of, or interest on, this Note
under circumstances described in clause (a) and (b) above shall be held by the
Holder in trust for the holders of Senior Indebtedness, provided Payor shall
give the Holder written notice of the occurrence of any default referred to in
the preceding sentence.
Section 6.4. Prior to the date on which the Senior
Indebtedness shall have been paid in full, the Holder shall not:
(a) Sue for, take or receive from Payor, in cash or
other property or by set off or in any other manner, payment of all or any of
the amounts due under this Note; provided, however, that absent the occurrence
and continuance of any default under the terms of the Senior Indebtedness, the
Holder may receive payments of the principal when due at maturity without
prepayment or acceleration (and without creating a default under the Senior
Indebtedness held or agented by Corestates Bank, N.A. or any replacement lender,
the absence of such default to be evidenced by the prior written acknowledgement
of Corestates Bank, N.A. or its successors or such replacement lender, which
acknowledgement will not be unreasonably withheld), and interest on this Note,
pursuant to this Note.
(b) Foreclose or attempt to foreclose upon any of the
property of Payor, seek or obtain the appointment of a receiver for the Payor,
exercise any right or power of sale or repossession, or attempt to realize upon
any portion of the property of the Payor, any interest therein, seek relief from
any stay imposed by the Bankruptcy Code or exercise any other right or remedy
granted in connection with this Note against the Payor and/or the property of
the Payor.
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(c) Pursue any other remedies at law, in equity or
otherwise available to the Payee in connection with this Note against the Payor
and/or the property of the Payor.
(d) Accept any casualty insurance or other insurance
proceeds or condemnation aware proceeds from the Payor or otherwise on account
of this Note.
(e) Assert any demand, objection, defense and/or
counterclaim (including any rights of marshalling or equitable subordination)
relating to this Note and the Senior Indebtedness, against the holders of the
Senior Indebtedness.
Notwithstanding any provision to the contrary set
forth in this Section 6, (a) interest at the Default Rate shall commence, and
shall continue to, accrue as provided as in Section 1.4, upon the occurrence of
any of the Events of Default referred in such Sections; (b) the Holder of this
Note shall not be prevented from, to the extent permitted under this Note,
accelerating the maturity of the principal of, and accrued interest on, this
Note upon or following the occurrence of an Event of Default (other than an
Event of Default specified in Section 5.2) during any period of one hundred
eighty (180) days after written notice of the occurrence of a default specified
in any Senior Indebtedness shall have been given to Holder by Payor or any
holder of Senior Indebtedness, provided that only one such notice may be given
to the Holder pursuant to this clause in any one hundred twenty (120) day period
and no notice may be given in respect of any such Senior Indebtedness default,
the existence of which any holder of Senior Indebtedness had knowledge at the
time any other notice was delivered pursuant to this clause.
Section 6.5. Subject to the payment in full of the
principal of, and interest on, any Senior Indebtedness in accordance with the
terms of such Senior Indebtedness, the Holder shall be subrogated to the rights
of the holder or holders of such Senior Indebtedness to receive payments or
distributions of assets of the Payor applicable to such Senior Indebtedness, to
the extent of the application thereto of moneys or other assets which would have
been received by the Holder but for the provisions of this Section 6, until the
principal of, and interest on, this Note shall be paid in full; it being
understood that the provisions of this Section 6 are, and are intended, solely
for the purpose of defining the relative rights of the Holder, on the one hand,
and the holders of Senior Indebtedness, on the other hand. Except as set forth
in Sections 6.2, 6.3 and 6.4, nothing in this Section 6 or this Note is intended
to or shall impair the obligations of Payor hereunder, subject to the rights of
the Holder and creditors of the Payor other than the holders of Senior
Indebtedness, nor shall anything in this Note prevent the Holder from exercising
all remedies otherwise permitted by this Note or by applicable law upon default
under this Note, subject, in any event, to the rights, if any, under this
Section 6 of the holders of Senior Indebtedness in respect of any payment or
distribution of cash, property or
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securities of the Payor (other than Subordinated Securities) received upon the
exercise of any such remedy.
7. Restriction on Transfer. By its acceptance of this Note,
the Holder and the Payee, as the case may be, acknowledge that neither this Note
nor the securities underlying this Note has been registered under the securities
laws of the United States of America or any state thereof and represents that
this Note has been acquired for investment and, neither this Note, nor any
portion thereof, no interest in this Note nor the Conversion Shares may be
offered for sale, sold, delivered after sale, transferred, pledged, or
hypothecated in the absence of registration of this Note and such Conversion
Shares, as the case may be, under applicable federal and state securities laws
or the receipt by the Payor of an opinion of counsel of the Holder or Payee, as
the case may be, reasonably satisfactory to the Payor that such registration is
not required by reason of an available exemption from registration under such
securities laws.
8. Amendments. No amendment, modification or waiver of any
provision of this Note, and no consent to departure from performance or
compliance with any such provision, shall in any event be effective unless the
same is in writing and signed by the Holders of 51% or more in the aggregate
principal amount of the New Notes at the time outstanding, except that no such
amendment may (i) extend the Maturity Date of any New Note, or reduce the
principal amount thereof, or reduce the rate or extend the time or payment of
interest thereon, without the consent of the holder of each of the New Notes so
affected; (ii) modify the provisions of the Note with respect to the
subordination of the Notes in a manner adverse to the holders thereof or alter
the provisions in respect of the right to convert the Notes, without the consent
of the holders of 100% in aggregate principal amount of the New Notes at the
time outstanding; or (iii) reduce the aforesaid percentage of the New Notes, the
consent of the holders of which is required for any amendment, without the
consent of the holders of 100% in aggregate principal amount of the New Notes at
the time outstanding.
9. Miscellaneous.
Section 9.1. The headings of the various paragraphs
of this Note are for convenience of reference only and shall in no way modify
any of the terms or provisions of this Note.
Section 9.2. All notices required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by registered or certified mail, return
receipt requested, postage prepaid, to the address of the intended recipient set
forth in the preamble to this Note or at such other address as the intended
recipient shall have hereafter given to the other party hereto pursuant to the
provisions hereof.
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Section 9.3. If any date that may at any time be
specified in this Note as a date for the making of any payment of principal or
interest under this Note shall fall on Saturday, Sunday or on a day which in
Philadelphia, Pennsylvania shall be a legal holiday, then the date for the
making of that payment shall be the next subsequent day which is not a Saturday,
Sunday or legal holiday.
Section 9.4. This Note and the obligations of Payor
and the rights of the Holder hereunder shall be governed by, and construed in
accordance with the applicable laws of the Commonwealth of Pennsylvania without
giving effect to the choice of law principles thereof.
Section 9.5. (a) AS A SPECIFICALLY BARGAINED
INDUCEMENT FOR HOLDER TO ACCEPT THIS NOTE, AND AFTER HAVING THE OPPORTUNITY TO
CONSULT COUNSEL, PAYOR AND THE HOLDER OF THIS NOTE, BY ITS OR HIS ACCEPTANCE
HEREOF EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT IT
MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY ACTION OR PROCEEDING ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE, AND IN CONNECTION WITH ANY CLAIM,
COUNTERCLAIM, OFFSET OR DEFENSE ARISING IN CONNECTION WITH SUCH ACTION OR
PROCEEDING, WHETHER ARISING UNDER ANY STATUTE (INCLUDING ANY FEDERAL OR STATE
CONSTITUTION) OR UNDER THE LAW OF CONTRACT, TORT OR OTHERWISE AND, INCLUDING,
WITHOUT LIMITATION, ANY CHALLENGE TO THE LEGALITY, VALIDITY, BINDING EFFECT OR
ENFORCEABILITY OF THIS PROVISION OR THIS NOTE. FURTHER, PAYOR HEREBY CERTIFIES
THAT NO REPRESENTATIVE OR AGENT OF THE HOLDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE HOLDER WOULD NOT, IN THE EVENT OF ANY SUCH ACTION OR
PROCEEDING, SEEK TO ENFORCE THIS WAIVER OF JURY TRIAL PROVISION. PAYOR HEREBY
ACKNOWLEDGES THAT THE HOLDER HAS BEEN INDUCED TO ACCEPT THIS NOTE BY, INTER
ALIA, THE PROVISIONS OF THIS SECTION.
(b) PAYOR AGREES TO THE PERSONAL JURISDICTION OF ANY
STATE OR FEDERAL COURT WITHIN THE COMMONWEALTH OF PENNSYLVANIA (PHILADELPHIA
COUNTY) IN ANY LITIGATION COMMENCED BY THE HOLDER OF THIS NOTE IN RESPECT OF ANY
MATTER ARISING UNDER OR IN CONNECTION WITH THIS NOTE, AND WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT, AND CONSENTS THAT ALL SERVICE OF PROCESS
MAY BE MADE BY CERTIFIED MAIL DIRECTED TO PAYOR AT THE ADDRESS INDICATED ABOVE
AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME
SHALL HAVE BEEN DEPOSITED IN THE UNITED STATES MAIL, POSTAGE PREPAID. ▇▇▇▇▇
▇▇▇▇▇▇, AT THE OPTION OF THE HOLDER, ANY OBJECTION BASED ON FORUM NON CONVENIENS
AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO
THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT. NOTHING CONTAINED IN THIS PROVISION SHALL AFFECT THE RIGHT OF THE HOLDER
TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT ITS RIGHT
TO BRING ANY ACTION OR PROCEEDING AGAINST PAYOR OR ANY OF ITS PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTION.
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(c) PAYOR AGREES THAT ANY ACTION COMMENCED BY IT
ASSERTING ANY CLAIM OR COUNTERCLAIM ARISING UNDER OR IN CONNECTION WITH THIS
NOTE SHALL BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF PENNSYLVANIA
(PHILADELPHIA COUNTY), OR IN THE COURTS OF THE UNITED STATES OF AMERICA FOR THE
EASTERN DISTRICT OF PENNSYLVANIA AND THAT SUCH COURTS SHALL HAVE EXCLUSIVE
JURISDICTION WITH RESPECT TO ANY SUCH ACTION.
(d) ▇▇▇▇▇ agrees that in the event of any litigation
in respect of any matter arising under or in connection with this Note, Payor
will not interpose any counterclaim, setoff, recoupment, defense, rescission or
adjustment of any nature.
(e) ▇▇▇▇▇ agrees that if the Holder shall institute
any action to enforce the collection of any amount of principal of, and/or
interest on or any other amount due hereunder this Note, there shall be
immediately due and payable from the Payor, in addition to the then unpaid sum
of this Note, all reasonable costs and expenses incurred by the Holder in
connection therewith, including, without limitation, reasonable attorneys' fees
and disbursements.
(f) No forbearance, indulgence, delay or failure to
exercise any right or remedy with respect to this Note shall operate as a
waiver, nor as an acquiescence in any default, nor shall any single or partial
exercise of any right or remedy preclude any other or further exercise thereof
or the exercise of any other right or remedy.
(g) The Payor hereby expressly waives demand and
presentment for payment, notice of nonpayment, notice of dishonor, protest,
notice of protest and diligence in taking any action to collect amounts called
for hereunder, and shall be directly and primarily liable for the payment of all
sums owing and to be owing hereon, regardless of and without any notice,
diligence, act or omission with respect to the collection of any amount called
for hereunder or in connection with any right, lien, interest or property at any
and all times which the Payee had or is existing as security for any amount
called for hereunder.
10. Transfers. The transfer of this Note is registrable by the Payor,
and the registered Holder hereof, in person or by his attorney duly authorized
in writing, on the books of the Payor to be kept for that purpose at the office
of the Payor, upon surrender and cancellation of this Note and upon presentation
of a duly executed written instrument of transfer in form satisfactory to Payor,
and thereupon a new Note or Notes, of authorized denominations for the same
aggregate principal amount will be issued to the transferee or transferees in
exchange herefor with payment by the Holder of any stamp or other tax or
governmental charge in connection therewith. Prior to due presentment of this
Note for registration of transfer, the Payor may deem and treat the person in
whose name this Note is registered as the absolute owner hereof for the purpose
of receiving payment hereof or on account
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hereof or of interest hereon (subject to the provisions of the first paragraph
on the face hereof) and for all other purposes.
IN WITNESS WHEREOF, this Note has been executed and delivered
as a sealed instrument on the date first above written by the duly authorized
representative of the Payor.
SUBMICRON SYSTEMS CORPORATION
By:____________________________
Name:
Title:
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