CONVERTIBLE NOTE
----------------
S600,000.00 December 16, 2006
--------------------------------------------------------------------------------
FOR VALUE RECEIVED, BRIDGETECH HOLDINGS INTERNATIONAL, INC. (the "Borrower"
or the "Company") hereby promises to pay to the order of Xxxx Xxxxxxxx (the
"Lender"), on or before June 15, 2007 (the "Due Date"), the principal sum of
Six Hundred Thousand dollars ($600,000.00), together with interest on the unpaid
principal balance at the rate of eight (8%) percent per annum, as provided
below.
1. Payment/Conversion Terms. Principal and Interest. All unpaid
--------------------------
principal and accrued interest shall be due and payable not later than the Due
Date. In the event that the Borrower receives & total of $10,000,000 in equity
financing prior to the Due Date, then repayment of all unpaid principal and
accrued interest shall be due within one week of the receipt of such financing.
Lender, at his sole option, may convert the unpaid principal and accrued
interest to Borrower's Common Stock, at any time, at a conversion price of $1.50
per share.
2. Additional Consideration. In addition to the amounts due to Lender
--------------------------
from Borrower under Section 1, Borrower shall issue to Lender warrants to
purchase 400,000 shares of Borrower's Common Stock at an exercise price of $1.50
per share (the "Warrants"). The Warrants shall have a term of two (2) years,
and the agreement governing the Warrants shall contain such terms as are
normally contained in such an agreement, including a provision for the cashless
exercise of the Warrants.
2. Events of Default. The entire unpaid principal amount of this Note,
------------------
together with all accrued interest thereon, shall, at the option of the Lender,
forthwith become due and payable, without notice or demand of any kind, all of
which are hereby expressly waived, upon the occurrence of any of the following
events:
(a) if there is a default in the payment of the principal of
and/or interest on the Note in accordance with the terms hereof or in the due
observance or performance of any of the conditions, covenants or agreements
contained herein;
(b) if the Company shall admit in writing its inability to pay its
debts generally as they become due;
(c) if the Company shall become insolvent, or shall be adjudicated
bankrupt;
(d) if bankruptcy, insolvency, arrangement, debt adjustment, or
receivership proceedings, in which the Company is alleged to be insolvent or
unable to pay its debts as they mature, shall be instituted by or against the
Company, and the Company shall consent to the same or admit in writing the
material allegations of the petition filed in such proceedings; or if such
proceedings shall not be dismissed within 30 days after their institution or
within such additional period of time as the Company shall reasonably request,
provided the Company is diligently and in good faith prosecuting such dismissal;
(e) if the Company shall make an assignment for the benefit of
creditors;
(f) if there is a material and adverse change in the Company's
financial position or business and affairs; or
(g) if there is a default under any of the documents creating any
indebtedness of the Company and by reason of such default such indebtedness is
accelerated or the Company is required to make any payments other than those
which would have been due in the absence of such default.
3. Remedies. In case any one or more of the events specified in Section
--------
2 hereof shall have occurred and be continuing, the Lender may proceed to
protect and enforce its rights cither by suit in equity and/or by action at law,
whether for the specific performance of any covenant or agreement contained in
this Note or in aid of the exercise of any power granted in this Note, or the
Company may proceed to enforce the payment of all sums due upon this Note or to
enforce any other legal or equitable right of the Company.
4. Payment of Costs and Expenses. The Borrower shall pay all costs and
-----------------------------
expenses (including, without limitation, reasonable attorneys' fees) incurred by
the Lender in order to collect the amounts due hereunder or to protect its
interests hereunder.
5. Waiver of Presentment and Notice of Dishonor. The Borrower and all
--------------------------------------------
others who may at any time be liable hereon in any capacity, jointly and
severally, waive any requirement of presentment, demand for payment, protest,
notice of dishonor, notice of acceleration, notice of protest, or further notice
or demand of any kind.
6. Notices. All notices, requests, consents and other communications
-------
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or duly sent by overnight courier,
facsimile transmission or first class registered or certified mail, return
receipt requested, postage prepaid, addressed to such party at the address set
forth below or such other address as may hereafter be designated in writing by
the addressee to the addressor listing all parties:
(a) If to the Company, to:
Bridgetech Holdings International, Inc
000 X. Xxxxxxxx, 00xx Xxxxx
Xxx Xxxxx, XX 00000
Fax:000-000-0000
Attn: Xxxxxx X. Xxxx III
(b) If to the Lender:
Walco Securities Co,
00 Xxxxxxxx Xxxx, 0xx Xxxxx Xx. 00
Xxxxxxxxx Xxxxxx, Xxxxxxxx Xxxxxx
Xxxx Xxxx
Attn: Xxxx Xxxxxxxx
All such notices and communications shall be deemed to have been given in the
case of (a) facsimile transmission on the date sent, (b) personal delivery on
the date of such delivery, (c) overnight courier on the day following delivery
to such courier and (d) mailing on the third day after the posting thereof.
7. Governing Law. This Note shall be governed by and construed in
--------------
accordance with the laws of the State of New York.
8. Binding Effect. Successor and Assigns. This Note shall be binding
---------------
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto, provided that the Borrower may not sell or
assign or transfer any of its interest hereunder without the prior written
consent of the Lender, its successors or assigns.
9. Severability. If any term, condition, or provision of this Note
------------
shall be held to be invalid, illegal or unenforceable in any respect, then in
such event the remainder of this Note shall not be affected thereby and it shall
remain in full force and effect except with respect to such term, condition, or
provision.
10. Amendments: No Waiver. Failure of the Lender to insist upon the
-----------------------
strict performance of any term, provision or covenant of this Note, or to
exercise any option or election conferred, shall not be deemed to be a waiver or
relinquishment of any future breach of any such term, covenant, condition,
election or option. No provision of this Note may be waived, modified or
discharged orally, by course of dealing or otherwise, without a writing signed
by the party to be charged with such waiver, modification or discharge.
11. Piggyback Registration Rights. In the event that the Lender chooses
-----------------------------
to exercise his conversion rights in lieu of cash, Borrower agrees to provide
piggyback registration rights to such converted shares.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and
delivered by its agent thereunto duly authorized, as of the date first written
above.
BRIDGETECH HOLDINGS INTERNATIONAL, INC.
BY: /s/ Xxxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Chairman and Chief Executive Officer
