CONVERTIBLE NOTE
------------------------- Irvine, California
FOR VALUE RECEIVED, on or before February 28, 1999, the undersigned, Grip
Technologies, Inc., a California corporation ("Borrower"), promises to pay to
the order of The Xxxxxxxx Company, LLC or its successors or assigns ("Holder"),
at Post Office Box 260001, Conway, South Carolina 29526-2601 the principal sum
of One Hundred Thirty-Seven Thousand and Five Hundred dollars ($137,500) and
accrued interest to date of Four Thousand Seven Hundred and Twenty-Six dollars
($4,726) ("Accrued Interest"), together with simple interest at the rate of
eight percent (8%) per annum. The entire principal, Accrued Interest and
interest thereon shall be due and payable on February 28, 1999. Borrower may
prepay any or all amounts due under this Note at any time without penalty:
provided, however, Borrower, as a condition to repayment of some or all of the
balance hereof, shall deliver written notice of its intention to prepay at least
30 calendar days prior to the date of such prepayment ("Prepayment Date") and
cooperate with Holder in Holder's exercise of Holder's convertibility rights, as
set forth below, if Holder elects to exercise such rights. Said payments shall
first be applied to accrued interest and then to principal. All payments shall
be made in lawful money of the United States.
This Note is executed pursuant to a Subscription Agreement dated March 10,
1997, executed by Xxxxxxxx and Xxxxxx.
The principal, Accrued Interest and accrued interest thereon on this Note
are convertible, at the option and in the discretion of the Holder, wholly or in
part for shares of Borrower's common stock at a conversion price of $1.50 per
share until February 28, 1999 ("Expiration Date"). To exercise Holder's
conversion rights, Holder shall deliver written notice to Borrower no later than
10:00 a.m. Pacific time on the Expiration or the Prepayment Date, whichever is
earlier, indicating the amount of principal and accrued interest to be converted
to shares of common stock. Such shares shall be "restricted securities", as
defined in Rule 144 under the Securities Act of 1933, and shall bear a legend
indicating their restricted nature. However, Holder shall have "piggyback"
registration rights with respect to said shares in any registration statement
filed by Xxxxxx on or prior to February 28, 1999, unless such registration
statement is not suitable for the sale of such shares, for example, and not by
limitation, the registration of transactions in connection with Xxxxxxxx's
benefit plans. Borrower shall give Holder written notice of the opportunity to
exercise such registration rights at least ten (10) days prior to the effective
date of such registration statement.
Notwithstanding any other provisions of this note, if at the time of
conversion, Borrower is obligated to withhold any amount of the interest to be
converted for either federal or state income tax purposes, then, at Borrower's
option, Borrower may either (i) require Holder to pay the entire amount of such
withholding as a condition to the exercise by Holder of its conversion right, or
(ii) require that Holder not convert that portion of the interest which is
required to be withheld.
The undersigned and each endorser, surety, and guarantor, if any, to the
extend permitted by law, hereby jointly and severally waive presentment for
payment, demand, notice of nonpayment, notice of dishonor, protest of any
dishonor, notice of protest, and protest of this Note and all other notices in
connection with the delivery, assignment, acceptance, performance,
default, or any manner be affected by any indulgence, extension of time,
renewal, waiver, or modification granted endorsers may become parties hereto
without affecting the liability of any of them hereunder.
The Holder hereof shall not, by any act of omission or commission, be
deemed to waive any of the Holder's rights, remedies, or powers hereunder or
otherwise unless such waiver is in writing and signed by the Holder hereof, and
then only to the extent specifically set forth therein. A waiver of one event
of default shall not be construed as continuing or as a bar to or waiver of such
right, remedy, or power on a subsequent event of default.
If the Borrower fails to pay the full amount of unpaid principal, Accrued
Interest and accrued interest thereon when due and payable, Borrower shall pay
default interest at the rate of ten percent (10%) plus all expenses of
collection with or without suit, including reasonable attorney's fees as may be
permitted by law. The Holder may pursue any remedies singly, successively, or
together against the undersigned, such remedies being cumulative and concurrent.
The validity and interpretation of this Note shall be governed by the laws
of the State of California.
Executed this 12th day of March, 1997.
GRIP TECHNOLOGIES, INC.
By: /s/ Xxx X. Xxxxxxx
-------------------------------
Xxx X. Xxxxxxx, President
