FORM OF
BRIDGE NOTE EXTENSION AND CONVERSION
March 15, 1999
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Ladies and Gentlemen:
This letter agreement sets forth our mutual agreement with respect the
Convertible Promissory Note, dated October 9, 1997, in the principal amount of
$25,000.00 issued by LSC, Incorporated (the "Company") to you (the "Note"),
pursuant to the Bridge Loan Agreement, dated September 11, 1997, among the
Company and the other purchasers of Convertible Promissory Notes (the
"Agreement"). As you will recall, on July 15, 1998, you agreed to amend the Note
and the Agreement. The Company is requesting that you agree to further amend the
Note and the Agreement as set forth in this letter agreement.
1. MATURITY DATE. Section 2 of the Agreement and the first paragraph of
the Note are each hereby amended to the extent necessary to provide
that the Note will be due and payable on the earlier of (a) thirty (30)
days after the initial closing of the Financing, as defined in the
Agreement, or (b) December 31, 1999.
2. WARRANT. In exchange for your agreement to extend the Note, the Company
will grant to you a warrant (the "Warrant") to purchase ________ shares
of Common Stock (which is equal to 50% of the principal amount of the
Note, divided by $3.20 per share, which is 80% of the anticipated per
share price in the financing that the Company has been conducting. The
Warrant will be exercisable for a period of five years from the date of
issuance at an exercise price equal to the lesser of (a) $3.20 per
share or (b) 80% of the per share price of the Company's next equity
financing that raises gross proceeds of at least two hundred fifty
thousand dollars ($250,000), if such financing occurs on or before
December 31, 2000. The Warrant again will be in the same form as the
warrant attached as Exhibit B to the Agreement. The Company will issue
the Warrant to you promptly after receipt of a signed copy of this
letter agreement from you.
3. CONVERSION. Section 2 of the Agreement and Section 2.1 of the Note are
each hereby amended to the extent necessary to provide that the
conversion price of the Note will not exceed $4.00 per share.
March 15, 1999
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Please execute a copy of this letter agreement and return it to us acknowledging
your agreement to amend the Note and the Agreement and convert principal and
interest under the Note into shares of Common Stock of the Company, as set forth
above.
LSC, INCORPORATED
By:
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X. X. (Xxxx) Xxxxxx,
President and Chief Executive Officer
ACKNOWLEDGED AND AGREED TO
AS OF ____________________, 1999
By:
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