EXHIBIT 99.2
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS, AND IS A
"RESTRICTED SECURITY" AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT. THIS
NOTE MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
(ALL AMOUNTS IN U.S. DOLLARS)
X.XXXXXXX CORPORATION
7.5% CONVERTIBLE SUBORDINATED TERM NOTE
Due: November 30, 2009 ("Maturity Date")
Note Date: December 1, 2006 US $970,752.00
San Diego, California
FOR VALUE RECEIVED, x.Xxxxxxx Corporation, the undersigned Delaware
corporation (together with all successors, the "Company"), xxxxxx promises to
pay to the order of
Payee: DAVRIC CORPORATION
------------------
or its successors or assigns
(collectively, "Noteholder") at
Address: 000 Xxxxxxxx Xxxxxxx Xxxxx, #000
Xxxxxxxxx, Xxxxxx 00000
or at such other address or addresses as Noteholder may subsequently designate
in writing to the Company, the principal sum of Nine Hundred Seventy Thousand
Seven Hundred Fifty-Two and 00/100 Dollars ($970,752.00), due and payable in
thirty-six (36) monthly installments of principal and interest (in the monthly
installment payment amounts listed on Exhibit A - Amortization Table) including
simple interest thereon computed at the rate of seven and one-half percent
(7.50%) per annum, in lawful monies of the United States of America, subject to
earlier prepayment or conversion pursuant to the terms hereof. The monthly
installments of principal and interest shall be due within five (5) business
days of the last day of each month but if such due date should fall on a
national holiday, payment shall be due on the following business day (each a
"Due Date").
1. Payment. Any payment shall be deemed timely made if received by
Noteholder within ten (10) calendar days of the due date. Payments received
shall be imputed first to late or penalty charges, if any, then due, next to
interest payments then due, and next to the principal balance.
An "Event of Default" occurs if (a) the Company does not make the
payment of interest or principal of this Note when the same becomes due and
payable and such default shall continue for a period of fifteen (15) calendar
days, (b) the Company fails to comply with any of its other agreements in this
Note that do not otherwise have separate remedies or provisions and such failure
continues for the period and after the notice specified below, (c) pursuant to
or within the meaning of any Bankruptcy Law (as hereinafter defined), the
Company: (i) commences a voluntary case; (ii) consents to the entry of an order
for relief against it in an involuntary case; (iii) consents to the appointment
of a Custodian (as hereinafter defined) of it or for all or substantially all of
its property or (iv) makes a general assignment for the benefit of its creditors
or (v) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that: (A) is for relief against the Company in an involuntary
case; (B) appoints a Custodian of the Company or for all or substantially all of
its property or (C) orders the liquidation of the Company, and any order or
decree remains unstayed and in effect for a period of sixty (60) days. As used
herein, the term "Bankruptcy Law" means Title 11 of the United States Code or
any similar federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A default above is not an Event of Default until Noteholder notifies
the Company of such default and the Company does not cure it within thirty (30)
days after receipt of such notice, which must specify the default, demand that
it be remedied and state that it is a "Notice of Default." If an Event of
Default occurs and is continuing, the Noteholder hereof by notice to the
Company, may declare the principal of and accrued interest on this Note to be
due and payable immediately; provided, however, that the Noteholder, by written
notice to the Company, may rescind and annul such declaration and its
consequences.
2. Installment Payments in Cash or Shares of Common Stock. Monthly
installment payments shall be payable in cash, or starting with the February
2007 installment payment, the Company may elect to make an installment payment
either in cash or in shares of its common stock, $.001 par value per share (the
"Common Stock"), subject to Section 2.3. Payment in cash shall be payable on the
Due Date to the address of the Noteholder.
2.1. Payment in Shares of Common Stock. As long as the requirements
of Section 2.3 are met, the Company may elect by written notice to the
Noteholder on or before the Due Date of a monthly installment date to make the
payment in shares of Common Stock of the Company. The number of fully paid and
nonassessable shares of Common Stock to be issued shall be determined by
dividing the monthly installment payment amount for the applicable month
specified in Exhibit A by the Monthly Share Price (as defined below) rounded
down to the nearest full share (the "Monthly Installment Shares"). As promptly
as practicable after the monthly installment Due Date, the Company at its
expense will issue and deliver to the Noteholder a certificate for the Monthly
Installment Shares.
2.2. Monthly Share Price. The "Monthly Share Price" for any monthly
installment that the Company elects to pay in shares of Common Stock rather than
cash shall be computed as the arithmetic average of the closing prices for the
last five (5) trading days of the applicable month. This average shall be
rounded to the nearest one-tenth of a cent for computation of the number of
shares in Section 2.1.
2.3. Requirements and Limitations. If the Note is in default
payments may only be made in cash and not in shares. If the computed Monthly
Share Price is less than $0.10 per share (as adjusted comparable with the
Conversion Price adjustment set forth in Section 4.6 herein) then such monthly
installment payment must be paid in cash and not in shares of Common Stock. The
Company may only elect share payment if its shares of Common Stock are regular
trading on the over-the-counter market or on an exchange where the Common Stock
of the Company is then traded and the shares have not been suspended or halted
from trading at any time during the respective installment payment month.
3. Prepayment. The Company may prepay this Note at any time and from
time to time, in whole or in part, minimum prepayment of Fifty Thousand Dollars
($50,000), without the prior written agreement of Noteholder, upon ten (10) day
written notice to Noteholder. Any prepayment of this Note shall be applied first
to any installment payment then due, then to any other accrued interest and then
against principal. Any partial prepayment shall not modify the timing or amount
of scheduled monthly installments until the Note is fully paid. The Company
shall furnish the Noteholder an amended Exhibit A upon each partial prepayment.
Upon payment in full of the principal amount of this Note and interest thereon,
the Noteholder shall surrender this Note for cancellation.
4. Conversion.
4.1 Voluntary Conversion. The Noteholder has the right, at the
Noteholder's option, at any time beginning February 1, 2007, and prior to
payment in full of the principal balance of this Note at Maturity or any
prepayment date, to convert this Note, in accordance with the provisions of
Section 5.2.1 hereof, in whole or in part, into shares of Common Stock. The
number of shares of Common Stock into which this Note may be converted
("Conversion Shares") shall be determined by dividing the aggregate principal
amount of the Note by the Conversion Price (as defined below) in effect at the
time of such conversion. The initial Conversion Price shall be equal to thirty
cents ($0.30).
-2-
4.2 Conversion Procedure.
4.2.1 Notice of Conversion Pursuant to Section 4.1. Before the
Noteholder shall be entitled to voluntarily convert this Note into shares of
Common Stock, it shall give five day advance written notice by mail, postage
prepaid or courier, to the Company at its principal corporate office, of the
election to convert the same pursuant to this Section 4.2, and shall state
therein the name or names in which the certificate or certificates for shares of
Common Stock are to be issued. Unless waived by the Company in its sole
discretion, the minimum conversion amount accepted by the Company for conversion
hereunder shall be the lesser of: a Fifty Thousand Dollars ($50,000) principal
balance on the Note, or the remaining principal balance on the Note. The Company
shall, as soon as practicable after the fifth day from the date of the written
notice, issue and deliver at such office to the Noteholder of this Note a
certificate or certificates for the number of shares of Common Stock to which
the Noteholder of this Note shall be entitled as aforesaid. Such conversion
shall be deemed to have been made on the close of business on the fifth day from
the date of written notice, and the person or persons entitled to receive the
shares of Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock as of
such date. Any partial conversion shall not modify the timing or amount of
scheduled monthly installments until the Note is fully paid. The Company shall
furnish the Noteholder an amended Exhibit A upon each partial conversion.
4.2.2 Delivery of Stock Certificates. As promptly as practicable
after the conversion of this Note, the Company at its expense will issue and
deliver to the Noteholder of this Note a certificate or certificates for the
number of full shares of Common Stock issuable upon such conversion.
4.3 Mechanics and Effect of Conversion. No fractional shares of Common
Stock shall be issued upon conversion of this Note. In lieu of the Company
issuing any fractional shares to the Noteholder upon the conversion of this
Note, the Company shall pay to the Noteholder the amount of outstanding
principal that is not so converted, such payment to be in the form as provided
below. Upon the full conversion of this Note pursuant to Section 5.1 above, the
Noteholder shall surrender this Note, duly endorsed, at the principal office of
the Company. At its expense, the Company shall, as soon as practicable after the
notice period, issue and deliver to such Noteholder at such principal office a
certificate or certificates for the number of shares of such Common Stock to
which the Noteholder shall be entitled upon such conversion (bearing such
legends as are required hereby and by applicable state and federal securities
laws in the opinion of counsel to the Company)..
4.4 Limitation on Issuance of Voluntary Conversion Shares: The
Noteholder may not convert the Note into shares of Common Stock to the extent
such conversion would result in the Noteholder, together with any affiliate
thereof, beneficially owning (as determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the
rules thereunder) in excess of 4.999% of the then issued and outstanding shares
of Common Stock. The Noteholder shall have the sole authority and obligation to
determine whether the restriction contained in this Section applies and to the
extent that the Noteholder determines that the limitation contained in this
Section applies, the determination of the number of shares convertible shall be
in the sole discretion of the Noteholder. The provisions of this Section may be
waived by the Noteholder upon not less than 61 days prior notice to the Company.
4.5 Mandatory Conversion. The Company has the right, at the Company's
option, at any time after February 1, 2007 but prior to the payment in full of
the principal balance of this Note, to require that Noteholder convert the
entire principal balance of this Note and related interest due, into Common
Stock of the Company in the event that the closing sales price of the Common
Stock of the Company is at least $0.40 per share (as adjusted in accordance with
the Conversion Price adjustment set forth in Sections 4.6 herein) for ten (10)
consecutive days of regular trading on the over-the-counter market or on an
exchange where the Common Stock of the Company is then traded, at the Conversion
Price then in effect on the last trading day of such ten (10) day period. Any
notice shall be provided within ten (10) days after the end of any such ten (10)
day period. The failure of the Company to exercise this Mandatory Conversion
right for any such trading period shall not preclude the exercise of this right
for any future such trading period. The mandatory conversion shall be effected
on the 90th day after notice with all interest and principal payments abated
during such 90 day period. The person or persons entitled to receive the shares
of Common Stock issuable upon such Mandatory Conversion shall not be treated as
the record holder or holders of such shares of Common Stock until the end of
such 90 day period. However, the parties may mutually waive such ninety (90) day
period and the Company shall then issue such shares in the manner otherwise
provided in this Section 4.
-3-
4.6 Conversion Price Adjustments.
4.6.1 Adjustments for Stock Splits and Subdivisions. In the event
the Company should at any time or from time to time after the date of issuance
hereof fix a record date for the effectuation of a split or subdivision of the
outstanding shares of Common Stock or the determination of holders of Common
Stock entitled to receive a dividend or other distribution payable in additional
shares of Common Stock or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly, additional
shares of Common Stock (hereinafter referred to as "Common Stock Equivalents")
without payment of any consideration by such holder for the additional shares of
Common Stock or the Common Stock Equivalents (including the additional shares of
Common Stock issuable upon conversion or exercise thereof), then, as of such
record date (or the date of such dividend distribution, split or subdivision if
no record date is fixed), the Conversion Price of this Note shall be
appropriately decreased so that the number of shares of Common Stock issuable
upon conversion of this Note shall be increased in proportion to such increase
of outstanding shares.
4.6.2 Adjustment for Reverse Stock Splits. If the number of shares
of Common Stock outstanding at any time after the date hereof is decreased by a
combination of the outstanding shares of Common Stock, then, following the
record date of such combination, the Conversion Price for this Note shall be
appropriately increased so that the number of shares of Common Stock issuable on
conversion hereof shall be decreased in proportion to such decrease in
outstanding shares.
5. Subordination. The indebtedness evidenced by this Note is hereby
expressly subordinated, to the extent and in the manner hereinafter set forth,
in right of payment to the prior payment in full of all of the Company's Senior
Indebtedness, as hereinafter defined; provided, however, that the maximum
aggregate amount of the Company's Senior Indebtedness to which the indebtedness
evidenced by this Note shall be subordinated shall not exceed Two Million
Dollars ($2,000,000). The Company may, however, in its sole and absolute
discretion, incur and/or have outstanding from time to time Senior Indebtedness
in excess of the amount stated in the immediately preceding sentence, and the
existence of such Senior Indebtedness shall not diminish in any way the
subordination of the indebtedness evidenced by this Note.
As used in this Note, the term "Senior Indebtedness" shall mean the
principal of and unpaid accrued interest on: (a) all indebtedness of the Company
to banks, insurance companies or other financial institutions regularly engaged
in the business of lending money, which is for money borrowed by the Company
(whether or not secured and whether or not existing as of the date of this Note
or hereafter incurred); and (b) any such indebtedness issued in exchange for
such Senior Indebtedness, or any indebtedness arising from the satisfaction of
such Senior Indebtedness by a guarantor.
If there should occur any receivership, insolvency, assignment for the
benefit of creditors, bankruptcy, reorganization or arrangement with creditors
(whether or not pursuant to bankruptcy or other insolvency laws), sale of all or
substantially all of the assets, dissolution, liquidation or any other
marshalling of the assets and liabilities of the Company, or if this Note shall
be declared due and payable upon the occurrence of an event of default with
respect to any Senior Indebtedness, then (a) no amount shall be paid by the
Company in respect of the principal of or interest on this Note at the time
outstanding, unless and until the principal and interest on the Senior
Indebtedness then outstanding shall be paid in full; and (b) no claim or proof
of claim shall be filed with the Company by or on behalf of the Noteholder that
shall assert any right to receive any payments in respect of the principal of
and interest on this Note, except subject to the payment in full of the
principal of and interest on all of the Senior Indebtedness then outstanding. If
there occurs an event of default that has been declared in writing with respect
to any Senior Indebtedness, or in the instrument under which any Senior
Indebtedness is outstanding, permitting the holder of such Senior Indebtedness
to accelerate the maturity thereof, then, unless and until such event of default
shall have been cured and waived or shall have ceased to exist, or all Senior
Indebtedness shall have been paid in full, no payment shall be made in respect
of the principal of or interest on this Note, unless within three (3) months
after the happening of such event of default, the maturity of such Senior
Indebtedness shall not have been accelerated.
-4-
Subject to the rights, if any, of the holders of Senior Indebtedness
under this Section 5 to receive cash, securities and other properties otherwise
payable or deliverable to the Noteholder, nothing contained in this Section 6
shall impair, as between the Company and the Noteholder, the obligation of the
Company, subject to the terms and conditions hereof, to pay to the Noteholder
the principal hereof and interest hereon as and when the same become due and
payable, or shall prevent the Noteholder, upon default hereunder, from
exercising all rights, powers and remedies otherwise provided herein or by
applicable law.
Subject to the payment in full of all Senior Indebtedness and until
this Note shall be paid in full, the Noteholder shall be subrogated to the
rights of the holders of Senior Indebtedness (to the extent of payments or
distributions previously made to such holders of Senior Indebtedness pursuant to
the provisions of this Section 5) to receive payments or distributions of assets
of the Company applicable to the Senior Indebtedness. No such payments or
distributions applicable to the Senior Indebtedness shall, as between the
Company and its creditors, other than the holders of Senior Indebtedness and the
Noteholder, be deemed to be a payment by the Company to or on account of this
Note; and for the purposes of such subrogation, no payments or distributions to
the holders of Senior Indebtedness to which the Noteholder would be entitled
except for the provisions of this Section 6 shall, as between the Company and
its creditors, other than the holders of Senior Indebtedness and the Noteholder,
be deemed to be a payment by the Company to or on account of the Senior
Indebtedness.
By its acceptance of this Note, the Noteholder agrees to execute and
deliver such documents as may be requested from time to time by the Company or
the lender of any Senior Indebtedness in order to implement the foregoing
provisions of this Section 5.
6. Representations and Warranties of Noteholder.
6.1. Noteholder Bears Economic Risk. Noteholder has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company and can afford a complete loss of
its investment. Noteholder must bear the economic risk of this investment
indefinitely unless the Note or the Conversion Shares or the Monthly Installment
Shares are registered pursuant to the Securities Act or an exemption from
registration is available. Noteholder understands that the Company has no
intention or obligation of registering the Note, the Conversion Shares, the
Monthly Installment Shares or any shares of its Common Stock. Noteholder also
understands that there is no assurance that any exemption from registration
under the Securities Act will be available and that, even if available, such
exemption may not allow Noteholder to transfer all or any portion of the
Conversion Shares, the Monthly Installment Shares or the Note under the
circumstances, in the amounts or at the times Noteholder might propose.
6.2. Acquisition for Own Account. Noteholder is acquiring the Note
and the Conversion Shares and any Monthly Installment Shares for Noteholder's
own account for investment only, and not with a view towards their distribution.
6.3. Noteholder Can Protect Its Interest. Noteholder represents that
it has such knowledge and experience in business and financial matters as to be
capable of evaluating the merits and risks of the investment and has the ability
to bear the economic risks of its investment, and by reason of its, or of its
management's, business or financial experience, Noteholder has the capacity to
protect its own interests in connection with the transactions contemplated in
this Note agreement.
6.4. Accredited Investor. Noteholder represents that it is an
accredited investor within the meaning of Regulation D under the Securities Act.
6.5. Company Information. Noteholder has received and read the
Company's SEC filings for the last twelve months. Noteholder has also had the
opportunity to ask questions of and receive answers from the Company and its
management regarding the terms and conditions of this investment.
-5-
6.6. Rule 144. Noteholder acknowledges and agrees that the Note,
and, if issued, the Conversion Shares or Monthly Installment Shares must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. Noteholder has been advised or
is aware of the provisions of Rule 144 promulgated under the Securities Act as
in effect from time to time, which permits limited resale of shares purchased in
a private placement subject to the satisfaction of certain conditions,
including, among other things: the availability of certain current public
information about the Company, the resale occurring following the required
holding period under Rule 144 and the number of shares being sold during any
three-month period not exceeding specified limitations. Noteholder is aware that
there is no assurance there will be a public market for resale of shares or that
any resales will be eligible for resale under Rule 144 or otherwise.
6.7. Legend. The Noteholder understands and agrees that all
certificates evidencing the Conversion Shares or Monthly Installment Shares to
be issued to the Noteholder may bear the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION
IS NOT REQUIRED.
7. Replacement. If this Note becomes worn, defaced or mutilated but is
still substantially intact and recognizable, the Company or its agent may issue
a new Note in lieu hereof upon its surrender. Where the Noteholder claims that
the Note has been lost, destroyed or wrongfully taken, the Company shall issue a
new Note of like tenor in place of the original Note if the Noteholder so
requests by written notice to the Company together with an affidavit of the
Noteholder setting forth the facts concerning such loss, destruction or wrongful
taking and such other information in such form with such proof or verification
as the Company may request. The Company in addition may require, at its sole
discretion, indemnification and/or an indemnity bond in such amount and issued
by such surety as the Company deems satisfactory.
8. Attorneys Fees. If the indebtedness represented by this Note or any
part thereof is collected in bankruptcy, receivership or other judicial
proceedings or if this Note is placed in the hands of attorneys for collection
after default, the Company agrees to pay, in addition to the principal and
interest payable hereunder, reasonable attorneys' fees and costs incurred by the
Noteholder.
9. Notice. Any notice, demand, consent or other communication hereunder
shall be in writing addressed to the Company at its principal office or, in the
case of Noteholder, at Noteholder's address appearing above, or to such other
address as such party shall have theretofore furnished by like notice, and
either served personally, sent by express, registered or certified first class
mail, postage prepaid, sent by facsimile transmission, or delivered by reputable
commercial courier. Such notice shall be deemed given (a) when so personally
delivered, or (b) if mailed as aforesaid, five (5) days after the same shall
have been posted, or (c) if sent by facsimile transmission, as soon as the
sender receives written or telephonic confirmation that the message has been
received and such facsimile is followed the same day by mailing by prepaid first
class mail, or (d) if delivered by commercial courier, upon receipt.
10. Waiver. The Company hereby waives present, demand for performance,
notice of non-performance, protest, notice of protest and notice of dishonor. No
delay on the part of Noteholder in exercising any right hereunder shall operate
as a waiver of such right or any other right.
11. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
between residents of such state entered into and to be performed entirely within
such state.
12. Severability. Each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note is held to be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of this Agreement.
-6-
IN WITNESS WHEREOF, the undersigned Company has executed this Note and
has affixed hereto its corporate seal.
X.XXXXXXX CORPORATION,
a Delaware corporation
By: /s/ XXXXXX XXXXXX
Xxxxxx Xxxxxx
Vice President and Secretary
Acknowledged and Agreed:
DAVRIC CORPORATION
/s/ XXXXX X. XXXXX
By: Xxxxx X. Xxxxx, President
-7-
EXHIBIT A
AMORTIZATION TABLE
Principal 970,752.00
Annual Interest Rate 7.50%
Monthly Amortization Varies
Monthly Method
Month Beginning Installment of Ending
End Date Balance Interest Principal Payment Payment Balance
12/31/2006 970,752.00 6,067.20 (67.20) 6,000.00 Cash Only 970,819.20
1/31/2007 970,819.20 6,067.62 (67.62) 6,000.00 Cash Only 970,886.82
2/28/2007 970,886.82 6,068.04 8,931.96 15,000.00 Cash or Shares(1) 961,954.86
3/31/2007 961,954.86 6,012.22 8,987.78 15,000.00 Cash or Shares(1) 952,967.08
4/30/2007 952,967.08 5,956.04 9,043.96 15,000.00 Cash or Shares(1) 943,923.12
5/31/2007 943,923.12 5,899.52 9,100.48 15,000.00 Cash or Shares(1) 934,822.64
6/30/2007 934,822.64 5,842.64 9,157.36 15,000.00 Cash or Shares(1) 925,665.29
7/31/2007 925,665.29 5,785.41 9,214.59 15,000.00 Cash or Shares(1) 916,450.69
8/31/2007 916,450.69 5,727.82 9,272.18 15,000.00 Cash or Shares(1) 907,178.51
9/30/2007 907,178.51 5,669.87 9,330.13 15,000.00 Cash or Shares(1) 897,848.38
10/31/2007 897,848.38 5,611.55 9,388.45 15,000.00 Cash or Shares(1) 888,459.93
11/30/2007 888,459.93 5,552.87 9,447.13 15,000.00 Cash or Shares(1) 879,012.80
12/31/2007 879,012.80 5,493.83 24,506.17 30,000.00 Cash or Shares(1) 854,506.63
1/31/2008 854,506.63 5,340.67 24,659.33 30,000.00 Cash or Shares(1) 829,847.30
2/28/2008 829,847.30 5,186.55 24,813.45 30,000.00 Cash or Shares(1) 805,033.85
3/31/2008 805,033.85 5,031.46 24,968.54 30,000.00 Cash or Shares(1) 780,065.31
4/30/2008 780,065.31 4,875.41 25,124.59 30,000.00 Cash or Shares(1) 754,940.72
5/31/2008 754,940.72 4,718.38 25,281.62 30,000.00 Cash or Shares(1) 729,659.09
6/30/2008 729,659.09 4,560.37 25,439.63 30,000.00 Cash or Shares(1) 704,219.46
7/31/2008 704,219.46 4,401.37 25,598.63 30,000.00 Cash or Shares(1) 678,620.84
8/31/2008 678,620.84 4,241.38 25,758.62 30,000.00 Cash or Shares(1) 652,862.22
9/30/2008 652,862.22 4,080.39 25,919.61 30,000.00 Cash or Shares(1) 626,942.60
10/30/2008 626,942.60 3,918.39 26,081.61 30,000.00 Cash or Shares(1) 600,861.00
11/30/2008 600,861.00 3,755.38 26,244.62 30,000.00 Cash or Shares(1) 574,616.38
12/31/2008 574,616.38 3,591.35 46,408.65 50,000.00 Cash or Shares(1) 528,207.73
1/31/2009 528,207.73 3,301.30 46,698.70 50,000.00 Cash or Shares(1) 481,509.03
2/28/2009 481,509.03 3,009.43 46,990.57 50,000.00 Cash or Shares(1) 434,518.46
3/31/2009 434,518.46 2,715.74 47,284.26 50,000.00 Cash or Shares(1) 387,234.20
4/30/2009 387,234.20 2,420.21 47,579.79 50,000.00 Cash or Shares(1) 339,654.41
5/31/2009 339,654.41 2,122.84 47,877.16 50,000.00 Cash or Shares(1) 291,777.25
6/30/2009 291,777.25 1,823.61 48,176.39 50,000.00 Cash or Shares(1) 243,600.86
7/31/2009 243,600.86 1,522.51 48,477.49 50,000.00 Cash or Shares(1) 195,123.37
8/31/2009 195,123.37 1,219.52 48,780.48 50,000.00 Cash or Shares(1) 146,342.89
9/30/2009 146,342.89 914.64 49,085.36 50,000.00 Cash or Shares(1) 97,257.53
10/31/2009 97,257.53 607.86 49,392.14 50,000.00 Cash or Shares(1) 47,865.39
11/30/2009 47,865.39 299.16 47,865.39 48,164.55 Cash or Shares(1) -
Total Payments 149,412.55 970,752.00 1,120,164.55
=================================================
(1) subject to terms of the Note agreement.
NOTICE OF CONVERSION
x.XXXXXXX CORPORATION
7.5% CONVERTIBLE SUBORDINATED TERM NOTE
(To Be Signed Only Upon Conversion of Note)
eDIGITAL CORPORATION
The undersigned, the Noteholder of the foregoing Note, hereby surrenders such
Note for conversion into shares of Common Stock of x.XXXXXXX CORPORATION, to the
extent of $ _________ unpaid principal amount of such Note and related interest,
and requests that the certificates for such shares be issued in the name of, and
delivered to, whose address is _________________________________________________
________________________________________________________________,
Dated:
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(Signature must conform in all
respects to name of Holder as
specified on the face of the Note)
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(Address)
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