EXHIBIT 10.28
THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO XXXX, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.
SECURED CONVERTIBLE TERM NOTE
FOR VALUE RECEIVED, XXXX, INC., a Delaware corporation (the "Borrower"),
hereby promises to pay to LAURUS MASTER FUND, LTD., c/o M&C Corporate Services
Limited, P.O. Box 309 GT, Xxxxxx House, South Church Street, Xxxxxx Town,
Grand Cayman, Cayman Islands, Fax: 000-000-0000 (the "Holder") or its
registered assigns or successors in interest, on order, the sum of Six Hundred
Thousand Dollars ($600,000), together with any accrued and unpaid interest
hereon, on October 29, 2007 (the "Maturity Date") if not sooner paid.
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in that certain Securities Purchase Agreement dated as
of the date hereof between the Borrower and the Holder (as amended, modified
or supplemented from time to time, the "Purchase Agreement").
The following terms shall apply to this Note:
ARTICLE I
INTEREST & AMORTIZATION
1.1(a) Interest Rate. Subject to Sections 4.11 and 5.6 hereof, interest
payable on this Note shall accrue at a rate per annum (the "Interest Rate")
equal to thirteen percent (13.0%). Interest shall be (i) calculated on the
basis of a 360 day year, and (ii) payable monthly, in arrears, commencing on
December 1, 2004 and on the first business day of each consecutive calendar
month thereafter until the Maturity Date (and on the Maturity Date), whether
by acceleration or otherwise (each, a "Repayment Date").
1.1 (b) Interest Rate Adjustment. The Interest Rate shall be calculated
on the last business day of each month hereafter until the Maturity Date (each
a "Determination Date") and shall be subject to adjustment as set forth
herein. If (i) the Borrower shall have registered the shares of the
Borrower's common stock underlying each of the conversion of the Note and that
certain warrant issued to Holder on a registration statement declared
effective by the Securities and Exchange Commission (the "SEC"), and (ii) the
market price (the "Market Price") of the Common Stock as reported by
Bloomberg, L.P. on the Principal Market (as defined below) for the five (5)
trading days immediately preceding a Determination Date exceeds the then
applicable Fixed Conversion Price by at least twenty five percent (25%), the
Interest Rate for the succeeding calendar month shall automatically be reduced
by 100 basis points (100 b.p.) (1.0%) for each incremental twenty five percent
(25%) increase in the Market Price of the Common Stock above the then
applicable Fixed Conversion Price. Notwithstanding the foregoing (and anything
to the contrary contained in herein), in no event shall the Interest Rate be
less than zero percent (0%).
1.2 Minimum Monthly Principal Payments. Amortizing payments of the
aggregate principal amount outstanding under this Note at any time (the
"Principal Amount") shall begin on February 1, 2005 and shall recur on the
first business day of each succeeding month thereafter until the Maturity Date
(each, an "Amortization Date"). Subject to Article 3 below, beginning on the
first Amortization Date, the Borrower shall make monthly payments to the
Holder on each Repayment Date, each in the amount of $18,181.82, together with
any accrued and unpaid interest to date on such portion of the Principal
Amount plus any and all other amounts which are then owing under this Note,
the Purchase Agreement or any other Related Agreement but have not been paid
(collectively, the "Monthly Amount"). Any Principal Amount that remains
outstanding on the Maturity Date shall be due and payable on the Maturity
Date.
ARTICLE II
CONVERSION REPAYMENT
2.1 (a) Payment of Monthly Amount in Cash or Common Stock. If the
Monthly Amount (or a portion thereof of such Monthly Amount if such portion of
the Monthly Amount would have been converted into shares of Common Stock but
for Section 3.2) is required to be paid in cash pursuant to Section 2.1(b),
then the Borrower shall pay the Holder an amount equal to the Monthly Amount
due and owing to the Holder on the Repayment Date in cash. If the Monthly
Amount (or a portion of such Monthly Amount if not all of the Monthly Amount
may be converted into shares of Common Stock pursuant to Section 3.2) is
required to be paid in shares of Common Stock pursuant to Section 2.1(b), the
number of such shares to be issued by the Borrower to the Holder on such
Repayment Date (in respect of such portion of the Monthly Amount converted
into in shares of Common Stock pursuant to Section 2.1(b)), shall be the
number determined by dividing (x) the portion of the Monthly Amount converted
into shares of Common Stock, by (y) the then applicable Fixed Conversion
Price. For purposes hereof, the initial "Fixed Conversion Price" means
$0.073.
(b) Monthly Amount Conversion Guidelines. Subject to Sections
2.1(a), 2.2, and 3.2 hereof, the Holder shall convert into shares of Common
Stock all or a portion of the Monthly Amount due on each Repayment Date
according to the following guidelines (the "Conversion Criteria"): (i) the
average closing price of the Common Stock as reported by Bloomberg, L.P. on
the Principal Market for the five (5) trading days immediately preceding such
Repayment Date shall be greater than or equal to 125% of the Fixed Conversion
Price and (ii) the amount of such conversion does not exceed twenty five
percent (25%) of the aggregate dollar trading volume of the Common Stock for
the twenty two (22) day trading period immediately preceding the applicable
Repayment Date. If the Conversion Criteria are not met, the Holder shall
convert only such part of the Monthly Amount that meets the Conversion
Criteria. Any part of the Monthly Amount due on a Repayment Date that the
Holder has not been able to convert into shares of Common Stock due to failure
to meet the Conversion Criteria, shall be paid by the Borrower in cash the
Monthly Amount otherwise due on such Repayment Date, within three (3) business
days of the applicable Repayment Date.
(c) Subject to Section 2.2 and 3.2, if all or any portion of the
Monthly Amount is not required to be converted pursuant to Section 2.1(b), the
Borrower may elect to make a payment of the Monthly Amount in shares of Common
Stock on the Repayment Date at a Fixed Conversion Price equal to 80% of the
average of the three (3) lowest closing prices of the Common Stock on the
Principal Market (as defined herein) for the thirty (30) trading day period
immediately preceding the Repayment Date, provided, however, that such
conversion of the Monthly Amount pursuant to this Section 2.1(c) does not
exceed twenty five percent (25%) of the aggregate dollar trading volume of the
Common Stock for the twenty two (22) day trading period immediately preceding
the Repayment Date. Notwithstanding the foregoing, in no event shall any
conversion be permitted pursuant to this Section 2.1(c) if the Fixed
Conversion Price for the purposes of this Section 2.1(c) would be less than
$0.03.
2.2 No Effective Registration. Notwithstanding anything to the contrary
herein, none of the Borrower's obligations to the Holder may be converted
into Common Stock unless (i) either (x) an effective current Registration
Statement (as defined in the Registration Rights Agreement) covering the
shares of Common Stock to be issued in connection with satisfaction of such
obligations exists or (y) an exemption from registration of the Common Stock
is available to pursuant to Rule 144 of the Securities Act and (ii) no
Event of Default hereunder exists and is continuing, unless such Event of
Default is cured within any applicable cure period or is otherwise waived in
writing by the Holder in whole or in part at the Holder's option.
2.3 Optional Redemption in Cash. The Borrower will have the option of
prepaying this Note ("Optional Redemption") by paying to the Holder a sum of
money equal to one hundred twenty percent (120%) of the principal amount of
this Note outstanding on the date of such Optional Redemption together with
accrued but unpaid interest thereon and any and all other sums due, accrued or
payable to the Holder arising under this Note, the Purchase Agreement, or any
Related Agreement (the "Redemption Amount") outstanding on the Redemption
Payment Date (as defined below). The Borrower shall deliver to the Holder a
written notice of redemption (the "Notice of Redemption") specifiying the date
for such Optional Redemption (the "Redemption Payment Date"), which date shall
be seven (7) business days after the date of the Notice of Redemption (the
"Redemption Period"). A Notice of Redemption shall not be effective with
respect to any portion of this Note for which the Holder has a pending
election to convert pursuant to Section 3.1, or for conversions initiated or
made by the Holder pursuant to Section 3.1 during the Redemption Period. The
Redemption Amount shall be determined as if such Xxxxxx's conversion elections
had been completed immediately prior to the date of the Notice of Redemption.
On the Redemption Payment Date, the Redemption Amount must be paid in good
funds to the Holder. In the event the Borrower fails to pay the Redemption
Amount on the Redemption Payment Date as set forth herein, then such
Redemption Notice will be null and void.
ARTICLE III
CONVERSION RIGHTS
3.1 Holder's Conversion Rights. The Holder shall have the right, but
not the obligation, to convert all or any portion of the then aggregate
outstanding principal amount of this Note, together with interest and fees due
hereon, into shares of Common Stock subject to the terms and conditions set
forth in this Article III. The Holder may exercise such right by delivery to
the Borrower of a written notice of conversion not less than one (1) day prior
to the date upon which such conversion shall occur. The shares of Common
Stock to be issued upon such conversion are herein referred to as the
"Conversion Shares."
3.2 Conversion Limitation. Notwithstanding anything contained herein to
the contrary, the Holder shall not be entitled to convert pursuant to the
terms of this Note an amount that would be convertible into that number of
Conversion Shares which would exceed the difference between 4.99% of the
outstanding shares of Common Stock of the Borrower and the number of shares of
Common Stock beneficially owned by such Holder or issuable upon exercise of
warrants held by such Holder. For the purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act and Regulation 13d-3 thereunder. The Holder may void
the Conversion Share limitation described in this Section 3.2 upon 75 days
prior notice to the Borrower or without any notice requirement upon an Event
of Default.
3.3 Mechanics of Xxxxxx's Conversion. (a) In the event that the Holder
elects to convert this Note into Common Stock, the Holder shall give notice of
such election by delivering an executed and completed notice of conversion
("Notice of Conversion") to the Borrower and such Notice of Conversion shall
provide a breakdown in reasonable detail of the Principal Amount, accrued
interest and fees being converted. On each Conversion Date (as hereinafter
defined) and in accordance with its Notice of Conversion, the Holder shall
make the appropriate reduction to the Principal Amount, accrued interest and
fees as entered in its records and shall provide written notice thereof to the
Borrower within two (2) business days after the Conversion Date. Each date on
which a Notice of Conversion is delivered or telecopied to the Borrower in
accordance with the provisions hereof shall be deemed a Conversion Date (the
"Conversion Date"). A form of Notice of Conversion to be employed by the
Holder is annexed hereto as Exhibit A.
(b) Pursuant to the terms of the Notice of Conversion, the Borrower
will issue instructions to the transfer agent accompanied by an opinion of
counsel within one (1) business day of the date of the delivery to Borrower of
the Notice of Conversion and shall cause the transfer agent to transmit the
certificates representing the Conversion Shares to the Holder by crediting the
account of the Holder's designated broker with the Depository Trust
Corporation ("DTC") through its Deposit Withdrawal Agent Commission ("DWAC")
system within three (3) business days after receipt by the Borrower of the
Notice of Conversion (the "Delivery Date"). In the case of the exercise of
the conversion rights set forth herein the conversion privilege shall be
deemed to have been exercised and the Conversion Shares issuable upon such
conversion shall be deemed to have been issued upon the date of receipt by the
Borrower of the Notice of Conversion. The Holder shall be treated for all
purposes as the record holder of such Common Stock, unless the Holder provides
the Borrower written instructions to the contrary.
3.4 Conversion Mechanics.
(a) The number of shares of Common Stock to be issued upon each
conversion of this Note shall be determined by dividing that portion of the
principal and interest and fees to be converted, if any, by the then
applicable Fixed Conversion Price. In the event of any conversions of
outstanding principal amount under this Note in part pursuant to this Article
III, such conversions shall be deemed to constitute conversions of outstanding
principal amount applying to Monthly Amounts for the remaining Repayment Dates
in chronological order.
(b) The Fixed Conversion Price and number and kind of shares or
other securities to be issued upon conversion is subject to adjustment from
time to time upon the occurrence of certain events, as follows:
A. Stock Splits, Combinations and Dividends. If the shares of
Common Stock are subdivided or combined into a greater or smaller number of
shares of Common Stock, or if a dividend is paid on the Common Stock in shares
of Common Stock, the Fixed Conversion Price or the Conversion Price, as the
case may be, shall be proportionately reduced in case of subdivision of shares
or stock dividend or proportionately increased in the case of combination of
shares, in each such case by the ratio which the total number of shares of
Common Stock outstanding immediately after such event bears to the total
number of shares of Common Stock outstanding immediately prior to such event.
B. During the period the conversion right exists, the Borrower
will reserve from its authorized and unissued Common Stock a sufficient number
of shares to provide for the issuance of Common Stock upon the full conversion
of this Note. The Borrower represents that upon issuance, such shares will be
duly and validly issued, fully paid and non-assessable. The Borrower agrees
that its issuance of this Note shall constitute full authority to its
officers, agents, and transfer agents who are charged with the duty of
executing and issuing stock certificates to execute and issue the necessary
certificates for shares of Common Stock upon the conversion of this Note.
C. Share Issuances. Subject to the provisions of this Section
3.4, if the Borrower shall at any time prior to the conversion or repayment in
full of the Principal Amount issue any shares of Common Stock or securities
convertible into Common Stock to a person other than the Holder (except (i)
pursuant to Subsections A or B above; (ii) pursuant to options, warrants, or
other obligations to issue shares outstanding on the date hereof as disclosed
to Holder in writing; or (iii) pursuant to options that may be issued under
any employee incentive stock option and/or any qualified stock option plan
adopted by the Borrower) for a consideration per share (the "Offer Price")
less than the Fixed Conversion Price in effect at the time of such issuance,
then the Fixed Conversion Price shall be immediately reset to such lower Offer
Price. For purposes hereof, the issuance of any security of the Borrower
convertible into or exercisable or exchangeable for Common Stock shall result
in an adjustment to the Fixed Conversion Price at the time of issuance of such
securities.
D. Reclassification, etc. If the Borrower at any time shall,
by reclassification or otherwise, change the Common Stock into the same or a
different number of securities of any class or classes, this Note, as to the
unpaid Principal Amount and accrued interest thereon, shall thereafter be
deemed to evidence the right to purchase an adjusted number of such securities
and kind of securities as would have been issuable as the result of such
change with respect to the Common Stock immediately prior to such
reclassification or other change.
3.5 Issuance of New Note. Upon any partial conversion of this Note, a
new Note containing the same date and provisions of this Note shall, at the
request of the Holder, be issued by the Borrower to the Holder for the
principal balance of this Note and interest which shall not have been
converted or paid. Subject to the provisions of Article IV, the Borrower will
pay no costs, fees or any other consideration to the Holder for the production
and issuance of a new Note.
ARTICLE IV
EVENTS OF DEFAULT
Upon the occurrence and continuance of an Event of Default beyond any
applicable grace period, the Holder may make all sums of principal, interest
and other fees then remaining unpaid hereon and all other amounts payable
hereunder immediately due and payable. In the event of such an acceleration,
the amount due and owing to the Holder shall be one hundred thirty percent
(130%) of the outstanding principal amount of the Note (plus accrued and
unpaid interest and fees, if any) (the "Default Payment"). The Default
Payment shall be applied first to any fees due and payable to Holder pursuant
to the Note or the Related Agreements, then to accrued and unpaid interest due
on the Note and then to outstanding principal balance of the Note.
The occurrence of any of the following events set forth in Sections 4.1
through 4.10, inclusive, is an "Event of Default":
4.1 Failure to Pay Principal, Interest or other Fees. The Borrower
fails to pay when due any installment of principal, interest or other fees
hereon in accordance herewith, or the Borrower fails to pay when due any
amount due under any other promissory note issued by Borrower, and in any such
case, such failure shall continue for a period of three (3) days following the
date upon which any such payment was due.
4.2 Breach of Covenant. The Borrower breaches any covenant or any other
term or condition of this Note or the Purchase Agreement in any material
respect, or the Borrower or any of its Subsidiaries breaches any covenant or
any other term or condition of any Related Agreement in any material respect
and, in any such case, such breach, if subject to cure, continues for a period
of fifteen (15) days after the occurrence thereof.
4.3 Breach of Representations and Warranties. Any representation or
warranty made by the Borrower in this Note or the Purchase Agreement, or by
the Borrower or any of its Subsidiaries in any Related Agreement, shall, in
any such case, be false or misleading in any material respect on the date that
such representation or warranty was made or deemed made.
4.4 Receiver or Trustee. The Borrower or any of its Subsidiaries shall
make an assignment for the benefit of creditors, or apply for or consent to
the appointment of a receiver or trustee for it or for a substantial part of
its property or business; or such a receiver or trustee shall otherwise be
appointed.
4.5 Judgments. Any money judgment, writ or similar final process shall
be entered or filed against the Borrower or any of its Subsidiaries or any of
their respective property or other assets for more than $50,000, and shall
remain unvacated, unbonded or unstayed for a period of thirty (30) days.
4.6 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower or
any of its Subsidiaries.
4.7 Stop Trade. An SEC stop trade order or Principal Market trading
suspension of the Common Stock shall be in effect for five (5) consecutive
days or five (5) days during a period of ten (10) consecutive days, excluding
in all cases a suspension of all trading on a Principal Market, provided that
the Borrower shall not have been able to cure such trading suspension within
thirty (30) days of the notice thereof or list the Common Stock on another
Principal Market within sixty (60) days of such notice. The "Principal
Market" for the Common Stock shall include the NASD OTC Bulletin Board, NASDAQ
SmallCap Market, NASDAQ National Market System, American Stock Exchange, or
New York Stock Exchange (whichever of the foregoing is at the time the
principal trading exchange or market for the Common Stock).
4.8 Failure to Deliver Common Stock or Replacement Note. The Borrower
shall fail (i) to timely deliver Common Stock to the Holder pursuant to and in
the form required by this Note, and Section 9 of the Purchase Agreement, if
such failure to timely deliver Common Stock shall not be cured within two (2)
business days or (ii) to deliver a replacement Note to Holder within seven (7)
business days following the required date of such issuance pursuant to this
Note, the Purchase Agreement or any Related Agreement (to the extent required
under such agreements).
4.9 Default Under Related Agreements or Other Agreements. The
occurrence and continuance of any Event of Default (as defined in each of (i)
the Purchase Agreement, (ii) any Related Agreement, that certain Securities
Purchase Agreement dated as of June 27, 2002 (as amended, modified or
supplemented from time to time, the "2002 Purchase Agreement"), all Related
Agreements referred to in the 2002 Purchase Agreement and all agreements
related to the 2002 Purchase Agreement) or any event of default (or similar
term) under any other indebtedness.
4.10 Change in Control. The occurrence of a change in the controlling
ownership of the Borrower.
DEFAULT RELATED PROVISIONS
4.11 Default Interest Rate. Following the occurrence and during the
continuance of an Event of Default, the Borrower shall pay additional interest
on this Note in an amount equal to two percent (2%) per month, and all
outstanding obligations under this Note, including unpaid interest, shall
continue to accrue such additional interest from the date of such Event of
Default until the date such Event of Default is cured or waived.
4.12 Conversion Privileges. The conversion privileges set forth in
Article III shall remain in full force and effect immediately from the date
hereof and until this Note is paid in full.
4.13 Cumulative Remedies. The remedies under this Note shall be
cumulative.
ARTICLE V
MISCELLANEOUS
5.1 Failure or Indulgence Not Waiver. No failure or delay on the part
of the Holder hereof in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing hereunder are cumulative to, and not exclusive of, any
rights or remedies otherwise available.
5.2 Notices. Any notice herein required or permitted to be given shall
be in writing and shall be deemed effectively given: (a) upon personal
delivery to the party notified, (b) when sent by confirmed telex or facsimile
if sent during normal business hours of the recipient, if not, then on the
next business day, (c) five days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall
be sent to the Borrower at the address provided in the Purchase Agreement
executed in connection herewith, and to the Holder at the address provided in
the Purchase Agreement for such Holder, with a copy to Xxxx X. Xxxxxx, Esq.,
000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile number (212)
541-4434, or at such other address as the Borrower or the Holder may designate
by ten days advance written notice to the other parties hereto. A Notice of
Conversion shall be deemed given when made to the Borrower pursuant to the
Purchase Agreement.
5.3 Amendment Provision. The term "Note" and all reference thereto, as
used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented, and any successor instrument issued pursuant to Section 3.5
hereof, as it may be amended or supplemented.
5.4 Assignability. This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder in accordance with
the requirements of the Purchase Agreement. This Note shall not be assigned
by the Borrower without the consent of the Holder.
5.5 Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to
principles of conflicts of laws. Any action brought by either party against
the other concerning the transactions contemplated by this Agreement shall be
brought only in the state courts of New York or in the federal courts located
in the state of New York. Both parties and the individual signing this Note
on behalf of the Borrower agree to submit to the jurisdiction of such courts.
The prevailing party shall be entitled to recover from the other party its
reasonable attorney's fees and costs. In the event that any provision of this
Note is invalid or unenforceable under any applicable statute or rule of law,
then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute
or rule of law. Any such provision which may prove invalid or unenforceable
under any law shall not affect the validity or unenforceability of any other
provision of this Note. Nothing contained herein shall be deemed or operate to
preclude the Holder from bringing suit or taking other legal action against
the Borrower in any other jurisdiction to collect on the Borrower's
obligations to Holder, to realize on any collateral or any other security for
such obligations, or to enforce a judgment or other court in favor of the
Holder.
5.6 Maximum Payments. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate
of interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be
credited against amounts owed by the Borrower to the Holder and thus refunded
to the Borrower.
5.7 Security Interest and Guarantee. The Holder has been granted a
security interest (i) in certain assets of the Borrower and its Subsidiaries
as more fully described in the Master Security Agreement dated as of the date
hereof and (ii) pursuant to the Stock Pledge Agreement dated as of the date
hereof. The obligations of the Borrower under this Note are guaranteed by
certain Subsidiaries of the Borrower pursuant to the Subsidiary Guaranty dated
as of the date hereof.
5.8 Construction. Each party acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that
the rule of construction that ambiguities are to be resolved against the
drafting party shall not be applied in the interpretation of this Note to
favor any party against the other.
5.9 Cost of Collection. If default is made in the payment of this Note,
the Borrower shall pay to Holder reasonable costs of collection, including
reasonable attorney's fees.
[Balance of page intentionally left blank; signature page follows.]
IN WITNESS WHEREOF, the Borrower has caused this Note to be signed in its
name effective as of this 29th day of October, 2004.
XXXX, INC.
By:________________________________
Name:______________________________
Title:_____________________________
WITNESS:
______________________________
EXHIBIT A
NOTICE OF CONVERSION
(To be executed by the Holder in order to convert all or part of the Note into
Common Stock
[Name and Address of Holder]
The Undersigned hereby converts $_________ of the principal due on [specify
applicable Repayment Date] under the Convertible Term Note issued by XXXX,
Inc. dated October 29, 2004 by delivery of Shares of Common Stock of XXXX,
Inc. on and subject to the conditions set forth in Article III of such Note.
1. Date of Conversion _______________________
2. Shares To Be Delivered: ________________________
By:_______________________________
Name:_____________________________
Title:____________________________
