Attached files
| file | filename |
|---|---|
| 10-K - ANNUAL REPORT - BIOLARGO, INC. | biolargo_10k-123110.htm |
| EX-31.2 - EXHIBIT 31.2 - BIOLARGO, INC. | ex31-2.htm |
| EX-4.21 - EXHIBIT 4.21 - BIOLARGO, INC. | ex4-21.htm |
| EX-4.20 - EXHIBIT 4.20 - BIOLARGO, INC. | ex4-20.htm |
| EX-31.1 - EXHIBIT 31.1 - BIOLARGO, INC. | ex31-1.htm |
| EX-32.1 - EXHIBIT 32.1 - BIOLARGO, INC. | ex32-1.htm |
EXHIBIT
4.19
FORM
OF CONVERTIBLE NOTE
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR APPLICABLE STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT THERE IS AN AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
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Amount:
$XX,XXX.XX
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La
Mirada, California
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Date:
_____________, 2010
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FOR VALUE
RECEIVED, BIOLARGO,
INC., a corporation organized under the laws of the state of Delaware
(“Issuer”),
promises to pay to the order of ___XXXX____ (hereafter, together with any
subsequent holder hereof, called “Holder”), at its
office, at “Holder’s Address” (as that term is defined below), or at such other
place as Holder may direct, the “Amount” noted above (the “Loan Amount”),
payable on April 15, 2013, or at an earlier date as provided herein (the “Maturity Date”). This
convertible note is duly authorized issue of the Issuer, issued on the “Date”
noted (the “Issuance
Date”), and designated as its Convertible Note due April 15, 2013 (the
“Note”).
The
Issuer agrees to pay interest on the unpaid principal amount of the Loan Amount
from time to time outstanding hereunder at the following rates per year,
compounded annually: (i) before maturity of the Loan Amount, whether by
acceleration or otherwise, at the rate per annum equal to ten percent (10%);
(ii) after the maturity of the Loan Amount, whether by acceleration or
otherwise, until paid, at a rate per annum equal to fifteen percent
(15%).
Payments
of both principal and interest are to be made in immediately available funds in
lawful money of the United States of America, or in Common Stock of the Issuer
as set forth below.
Accrual
of interest shall commence as of the Issuance Date. Interest will accrue monthly
and be paid annually on the Note on June 1st (pro-rated based on the actual
number of days elapsed in a 365-day year), such interest to be paid, at the
Company’s option, in cash or in that number of shares of Common Stock of the
Issuer (the “Common
Stock”) at a price per share equal to the average closing price of the
Company’s common stock for the 20 business days preceding a given interest due
date. Unless otherwise agreed in writing by both parties hereto, the interest so
payable will be paid to the person in whose name this Note (or one or more
predecessor Notes) is registered on the records of the Issuer regarding
registration and transfers of the Note (the “Note Register”),
provided, however, that the Issuer’s obligation to a transferee of this Note
arises only if such transfer, sale or other disposition is made in accordance
with the terms and conditions contained in this Note and the Subscription
Agreement (the “Agreement”) that the
Holder executed at the time of making an investment in the Issuer.
1
The Note
is subject to the following additional provisions:
1. The
Issuer shall be entitled to withhold from all payments of principal and/or
interest of this Note any amounts required to be withheld under the applicable
provisions of the Internal Revenue Code of 1986, as amended, or other applicable
laws at the time of such payments.
2. This
Note has been issued subject to investment representations of the original
Holder hereof and may be transferred or exchanged only in compliance with the
Securities Act and applicable state securities laws and in compliance with the
restrictions on transfer provided in the Agreement. Prior to the due
presentment for such transfer of this Note, the Issuer and any agent of the
Issuer may treat the person in whose name this Note is duly registered in the
Note Register as the owner hereof for the purpose of receiving payment as herein
provided and all other purposes, whether or not this Note is overdue, and
neither the Issuer nor any such agent shall be affected by notice to the
contrary. The transferee shall be bound, as the original Holder by the same
representations and terms described herein and under the Agreement.
3. The
Holder may, at its option, at any time convert the principal amount of this Note
or any portion thereof, and any accrued and unpaid interest thereon, into such
number of shares of fully paid and non-assessable Common Stock of the Issuer
(“Conversion
Shares”) as is obtained by dividing the Loan Amount by $0.575 (“Conversion Price”).
The right to convert the Note may be exercised by the Issuer by telecopying,
mailing (via first class mail, postage prepaid) or personally delivering an
executed and completed notice of conversion (the “Notice of Voluntary
Conversion”) to the Issuer. The business day (a “Business Day”) on
which a Notice of Voluntary Conversion is delivered in accordance with the
provisions hereof shall be deemed the “Voluntary Conversion
Date”. The Issuer will transmit the certificates representing Conversion
Shares issuable upon such conversion of the Note (together with the certificates
representing the Note not so converted) to the Holder via express courier, by
electronic transfer (if applicable) or otherwise, within ten Business Days after
the later to occur of (i) the Voluntary Conversion Date or (ii) the Business Day
on which the Issuer has received from the Holder the original Note being so
converted.
4. The
Issuer may, at its option, (i) on or after July 31, 2010, if the Company has
received one or more written firm commitments, or has closed on one or more
transactions, or a combination of the foregoing, of at least $3 million gross
proceeds of equity or debt; or (ii) on the Maturity Date, require the Holder to convert
the Note or any portion thereof, and any accrued and unpaid interest thereon,
into such number of Conversion Shares as is obtained by dividing the Loan Amount
by the Conversion Price. The obligation of the Holder to convert the
Note may be exercised by the Company by telecopying, mailing (via first class
mail, postage prepaid) or personally delivering an executed and completed notice
of conversion (the “Notice of Mandatory
Conversion”) to the Holder’s Address maintained in the Note Register. The
Holder covenants and agrees to acknowledge a Notice of Mandatory Conversion in
writing by completing, dating and signing such Notice of Mandatory Conversion
and returning it to the Company by telecopier, first class mail (postage
prepaid) or personal delivery (the “Holder Acknowledgment Date”). The business
day on which a Notice of Mandatory Conversion is delivered in accordance with
the provisions hereof shall be deemed the “Mandatory Conversion
Date”. The Issuer will transmit the certificates representing Conversion
Shares issuable upon such conversion of the Note (together with the certificates
representing any portion of the Note not so converted) to the Holder via express
courier, by electronic transfer (if applicable) or otherwise within ten Business
Days after the later to occur of (i) the Holder Acknowledgment Date or (ii) the
date that the Issuer has received from the Holder the original Note being so
converted.
2
5. The
principal amount of this Note, and any accrued interest thereon, shall be
reduced as per that principal amount indicated on the Notice of Voluntary
Conversion or Notice of Mandatory Conversion, as the case may be, upon the
proper receipt by the Holder of such Conversion Shares due upon such Notice of
Voluntary Conversion or Notice of Mandatory Conversion.
6. The
number of Conversion Shares shall be adjusted as follows. If the Issuer shall at
any time subdivide its outstanding shares of Common Stock into a greater number
of shares of Common Stock, the number of Conversion Shares in effect immediately
prior to such subdivision shall be proportionately increased, and conversely, in
case the outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the number of Conversion Shares in effect
immediately prior to such subdivision shall be proportionately
decreased.
7. No
provision of this Note shall alter or impair the obligation of the Issuer, which
is absolute and unconditional, upon an Event of Default (as defined below), to
pay the principal of, and interest on this Note at the place, time, and rate,
and in the coin or currency herein prescribed.
8. Events
of Default. Each of the following occurrences is hereby defined as an
“Event of Default”:
a. Nonpayment. The
Issuer shall fail to make any payment of principal, interest, or other amounts
payable hereunder when and as due; or
b. Dissolutions,
etc. The Issuer or any subsidiary shall fail to comply with
any provision concerning its existence or any prohibition against dissolution,
liquidation, merger, consolidation or sale of assets; or
c. Noncompliance with this
Agreement. The Issuer shall fail to comply in any material
respect with any provision hereof, which failure does not otherwise constitute
an Event of Default, and such failure shall continue for ten (10) days after the
occurrence of such failure; or
d. Bankruptcy. Any
bankruptcy, insolvency, reorganization, arrangement, readjustment, liquidation,
dissolution, or similar proceeding, domestic or foreign, is instituted by or
against the Issuer or any of its subsidiaries, or the Issuer or any of its
subsidiaries shall take any step toward, or to authorize, such a proceeding;
or
e. Insolvency. The
Issuer shall make a general assignment for the benefit of its creditors, shall
enter into any composition or similar agreement, or shall suspend the
transaction of all or a substantial portion of its usual business.
9. If
one or more “Events of Default” shall occur, then, or at any time thereafter,
and in each and every such case, unless such Event of Default shall have been
waived in writing by the Holder (which waiver shall not be deemed to be a waiver
of any subsequent default) or cured as provided herein, at the option of the
Holder, and in the Holder's sole discretion, the Holder may elect to consider
this Note (and all interest through such date) immediately due and payable. In
order to so elect, the Holder must deliver written notice of the election and
the amount due to the Issuer via certified mail, return receipt requested, at
the Issuer’s address as set forth herein (or any other address provided to the
Holder), and thereafter the Issuer shall have ten business days upon receipt to
cure the Event of Default, pay the Note, or convert the amount due on the Note
pursuant to the conversion formula set forth above. It is agreed that in the
event of such action, such Holder shall be entitled to receive all reasonable
fees, costs and expenses incurred, including without limitation such reasonable
fees and expenses of attorneys. The parties acknowledge that a change in control
of the Issuer shall not be deemed to be an Event of Default as set forth
herein.
3
10. In
case any provision of this Note is held by a court of competent jurisdiction to
be excessive in scope or otherwise invalid or unenforceable, such provision
shall be adjusted rather than voided, if possible, so that it is enforceable to
the maximum extent possible, and the validity and enforceability of the
remaining provisions of this Note will not in any way be affected or impaired
thereby.
11 This
Note does not entitle the Holder hereof to any voting rights or other rights as
a stockholder of the Issuer prior to the conversion into Common Stock thereof,
except as provided by applicable law. If, however, at the time of the surrender
of this Note and conversion the Holder hereof shall be entitled to convert this
Note, the Conversion Shares so issued shall be and be deemed to be issued to
such holder as the record owner of such shares as of the close of business on
the Conversion Date.
12. This
Note and all other notes in this series may be subordinated to up to $10 million
of additional debt financing that the Issuer may incur prior to the Maturity
Date.
IN
WITNESS WHEREOF, the Issuer has caused this Note to be duly executed by an
officer thereunto duly authorized.
| BIOLARGO, INC. | ||||
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By:
XXXXXX
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Name:
Dennis P. Calvert, President
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| ACCEPTED: | ||||
| Signature: | ||||
| Print Name: | ||||
| Holder’s Address: | ||||
4
NOTICE
OF VOLUNTARY CONVERSION
(To be
Executed by the Registered Holder in order to convert the Note)
The
undersigned hereby irrevocably elects to convert $__________ of the principal
amount of the above Note, and $__________ of accrued and unpaid interest, into
___________ Shares of Common Stock of BioLargo, Inc. (the “Company”) according
to the conditions hereof, as of the date written below.
The
undersigned represents and warrants to the Company that, as of the date hereof,
the undersigned is an “accredited investor” as that term is defined in Rule
501(a) of Regulation D under the Securities Exchange Act of 1934, as
amended.
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Date
of Voluntary Conversion:
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Signature:
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Print
Name:
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| Holder’s Address: | ||||
| Social Security No.: |
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ACCEPTED:
BIOLARGO,
INC.
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By
(Signature)
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Print
Name:
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| Title: |
5
NOTICE
OF MANDATORY CONVERSION
(To be
Executed by the Company in order to required the Holder to convert the
Note)
The
undersigned hereby notifies you of its irrevocably election to require you to
convert $___________ of the principal amount of the above Note, and $__________
of accrued and unpaid interest, into ___________ Shares of Common Stock of
BioLargo, Inc. according to the conditions hereof, as of the date written
below.
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Date
of Mandatory Conversion:
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BIOLARGO,
INC.
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By
(Signature)
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| Print Name: | ||||
| Title: |
6