SECURED CONVERTIBLE PROMISSORY NOTE
THIS
NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 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 OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO INROB TECH LTD. THAT SUCH REGISTRATION IS NOT
REQUIRED.
| Principal $_________________ |
Issue
Date: November 15,
2006
|
FOR
VALUE
RECEIVED, INROB TECH LTD., a Nevada corporation (hereinafter called "Borrower"),
hereby promises to pay to __________________________________, Fax: ( )
___________, (the "Holder") or its registered assigns or successors in interest
or order, without demand, the sum of ____________________________________
($________ ) (“Principal Amount”), with simple and unpaid interest thereon, on
November 15, 2008 (the "Maturity Date"), if not sooner paid.
This
Note
has been entered into pursuant to the terms of a subscription agreement between
the Borrower, the Holder and certain other holders (the “Other Holders”) of
secured convertible promissory notes (the “Other Notes”), dated of even date
herewith (the “Subscription Agreement”), and shall be governed by the terms of
such Subscription Agreement. Unless otherwise separately defined herein, all
capitalized terms used in this Note shall have the same meaning as is set forth
in the Subscription Agreement. The following terms shall apply to this
Note:
ARTICLE
I
INTEREST;
AMORTIZATION; SECURITY AGREEMENT
1.1. Interest
Rate.
Subject
to Section 6.7 hereof, interest payable on this Note shall accrue at a rate
per
annum (the "Interest Rate") of eight percent (8%). Interest on the Principal
Amount shall accrue from the date of this Note and shall be payable, in arrears,
together with Principal Amount payments as described below and on the Maturity
Date, whether by acceleration or otherwise.
1.2.
Minimum
Monthly Principal Payments.
Amortizing payments of the outstanding Principal Xxxxxx and interest of this
Note shall commence on the third month anniversary date of this Note and on
the
same day of each month thereafter (each a “Repayment Date”) until the Principal
Amount and interest have been repaid in full, whether by the payment of cash
or
by the conversion of such Principal amount and interest into Common Stock
pursuant to the terms hereof. Subject to Section 2.1 and Article 3 below, on
each Repayment Date the Borrower shall make payments to the Holder in the amount
of 4.76 percent of the initial Principal Amount, all interest accrued on the
Note as of the Repayment Date and any other amounts which are then owing under
this Note that have not been paid
(collectively, the "Monthly
Amount"). All payments of cash or amounts converted into Common Stock pursuant
to this Note by the Holder or Borrower shall
be
applied first against outstanding fees and damages, then against accrued
interest on the Principal Amount and then to Principal Amounts of not yet due
Monthly Amounts commencing with the Monthly Amount next payable and then Monthly
Amounts thereafter in reverse chronological order. Any Principal Amount,
interest and any other sum arising under the Transaction Documents that remains
outstanding on the Maturity Date shall be due and payable on the Maturity
Date.
1.3. Default
Interest Rate.
Following the occurrence and during the continuance of an Event of Default,
which, if susceptible to cure is not cured within ten (10) days, otherwise
then
from the first date of such occurrence, the annual interest rate on this Note
shall (subject to Section 6.7) automatically be increased to fifteen percent
(15%).
ARTICLE
II
CONVERSION
REPAYMENT
2.1. Payment
of Monthly Amount in Cash or Common Stock.
Subject
to Section 3.2 hereof, the Borrower, at the Borrower’s election, shall pay the
Monthly Amount (i) in cash in an amount equal to 115% of the Principal Amount
component of the Monthly Amount and 100% of all other components of the Monthly
Amount, within three (3) business days after the applicable Repayment Date,
or
(ii) in registered Common Stock at an applied conversion rate equal to the
lesser of (A) the Fixed Conversion Price (as defined in section 3.1 hereof),
or
(B) seventy-five percent (75%) of the average of the closing bid price of the
common stock as reported by Bloomberg L.P. for the Principal Market for the
five
trading days preceding the date a Notice of Conversion, if any, [as described
in
Section 3(a)] is given to the Borrower by Holder after Borrower notifies Holder
of its election to pay the Monthly Amount with shares of Common Stock pursuant
to the following sentence. The Borrower must send notice to the Holder by
confirmed telecopier not later than 6:00 P.M., New York City time on the
twenty-second trading day preceding a Repayment Date notifying Holder of
Borrower’s election to pay the Monthly Redemption Amount in cash or Common
Stock. The Notice must state the amount of cash to be paid and include
supporting calculations. If the Borrower elects to pay the Monthly Amount with
Common Stock and if the Holder does not give Notice of Conversion then the
Repayment Date shall be deemed the Conversion Date and the Conversion Price
shall be the lessor of (A) the Fixed Conversion Price (as defined in section
3.1
hereof) or (B) seventy five (75%) of the average of the closing bid price for
the five trading days preceding the Repayment Date. Until fifteen (15) trading
days after notice is given by the Borrower that the Borrower has elected to
pay
the Monthly Amount with Common Stock, the holder may elect to defer such payment
of Common Stock until the Holder has elected to deliver a Notice of Conversion
with respect to such Monthly Amount. The Conversion Price with respect to such
deferred Monthly Amount shall be the Conversion Price set forth above in
subsection (ii) of this Section 2.1. Amounts paid with shares of Common Stock
must be delivered to the Holder as described in Section 3.3(b). Elections by
the
Borrower must be made to all Other Holders in proportion to the relative Note
principal held by the Holder and the Other Holders. If such notice is not timely
sent or if the Monthly Redemption Amount is not timely delivered, then Holder
shall have the right, instead of the Company, to elect at any time from when
such notice was required to be given until the applicable Repayment Date whether
to be paid in cash or Common Stock. Such Holder’s election shall not be
construed to be a waiver of any default by Borrower relating to non-timely
compliance by Borrower with any of its obligations under this Note. Borrower
hereby notifies the Holder that until further notice the Monthly Amount shall
be
paid to Holder with shares of Common Stock.
2.2. No
Effective Registration.
Notwithstanding anything to the contrary herein, no amount payable hereunder
may
be
paid in
shares
of Common
Stock by
the Borrower without the Holder’s consent unless (a) either (i) an effective
current Registration Statement covering the shares of Common Stock to be issued
in satisfaction of such obligations exists, or (ii) an exemption from
registration of the Common Stock is available pursuant to Rule 144(k) of the
1933 Act, and (b) no Event of Default hereunder (or
an
event that with the passage of time or the giving of notice could become an
Event of Default),
exists
and is continuing, unless such event or 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 of Principal Amount.
Provided an Event of Default or an event which with the passage of time or
the
giving of notice could become an Event of Default has not occurred, whether
or
not such Event of Default has been cured, the Borrower will have the option
of
prepaying the outstanding Principal amount of this Note ("Optional Redemption"),
in whole or in part, by paying to the Holder a sum of money equal to one hundred
and twenty percent (120%) of the Principal amount to be redeemed, together
with
accrued but unpaid interest thereon and any and all other sums due, accrued
or
payable to the Holder arising under this Note or any Transaction Document
through the Redemption Payment Date as defined below (the "Redemption Amount").
Xxxxxxxx’s election to exercise its right to prepay must be by notice in writing
(“Notice of Redemption”). The Notice of Redemption shall specify the date for
such Optional Redemption (the "Redemption Payment Date"), which date shall
be
thirty (30) 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 the Principal Amount for which the Holder has a pending
election to convert, or for conversions initiated or made by the Holder during
the Redemption Period. On the Redemption Payment Date, the Redemption Amount,
less any portion of the Redemption Amount against which the Holder has exercised
its conversion rights, shall 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 (i) such Notice of Redemption will be null and void,
(ii) Borrower will have no right to deliver another Notice of Redemption, and
(iii) Borrower’s failure may be deemed by Holder to be a non-curable Event of
Default. A Redemption Notice may be given only at a time a Registration
Statement is effective. A Notice of Redemption may not be given nor may the
Borrower effectuate a Redemption without the consent of the Holder, if at any
time during the Redemption Period an Event of Default or an Event which with
the
passage of time or giving of notice could become an Event of Default (whether
or
not such Event of Default has been cured), has occurred or the Registration
Statement registering the Registrable Securities is not effective each day
during the Redemption Period.
ARTICLE
III
CONVERSION
RIGHTS
3.1. Holder's
Conversion Rights.
Subject
to Section 3.2, the Holder shall have the right, but not the obligation at
all
times, to convert all or any portion of the then aggregate outstanding Principal
Amount of this Note, into shares of Common Stock, subject to the terms and
conditions set forth in this Article III at the rate of $0.25 per share of
Common Stock (“Fixed Conversion Price”) as same may be adjusted pursuant to this
Note and the Subscription Agreement. The Holder may exercise such right by
delivery to the Borrower of a written Notice of Conversion pursuant to Section
3.3. After the occurrence of an Event of Default, the Fixed Conversion Price
shall be the lesser of the Fixed Conversion Price or 75% of the average of
the
closing bid prices of the Common Stock for the five trading days prior to a
Conversion Date.
3.2. Conversion
Limitation.
The
Holder shall not be entitled to convert on a Conversion Date that amount of
the
Note in connection with that number of shares of Common Stock which would be
in
excess of the sum of (i) the number of shares of common stock beneficially
owned
by the Holder and its Affiliates on a Conversion Date, and (ii) the number
of
shares of Common Stock issuable upon the conversion of the Note with respect
to
which the determination of this provision is being made on a Conversion Date,
which would result in beneficial ownership by the Holder and its Affiliates
of
more than 4.99% of the outstanding shares of common stock of the Company on
such
Conversion Date. Beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited
to
aggregate conversions of only 4.99% and aggregate conversions by the Subscriber
may exceed 4.99%. The Subscriber may waive the conversion limitation described
in this Section 7.3, in whole or in part, upon and effective after 61 days
prior
written notice to the Company to increase such percentage to up to 9.99%. The
Subscriber may decide whether to convert a Note or exercise Warrants to achieve
an actual 4.99% or up to 9.99% ownership position as described
above.
3.3. Mechanics
of Xxxxxx's Conversion.
(a) In
the
event that the Holder elects to convert any amounts outstanding under this
Note
into Common Stock, the Holder shall give notice of such election by delivering
an executed and completed notice of conversion (a "Notice of Conversion") to
the
Borrower, which Notice of Conversion shall provide a breakdown in reasonable
detail of the Principal Amount, accrued interest and amounts being converted.
The original Note is not
required
to be surrendered to the Borrower
until
all sums due under the Note have been paid. 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. 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." A form of Notice of Conversion
to be employed by the Holder is annexed hereto as Exhibit A.
(b) Pursuant
to the terms of a Notice of Conversion, the Borrower will issue instructions
to
the transfer agent accompanied by an opinion of counsel, if so required by
the
Borrower's transfer agent 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
four (4) 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 shares
of
Common Stock, unless the Holder provides the Borrower written instructions
to
the contrary. Notwithstanding
the foregoing to the contrary, the Borrower or its transfer agent shall only
be
obligated to issue and deliver the shares to the DTC on the Holder’s behalf via
DWAC (or certificates free of restrictive legends) if the registration statement
providing for the resale of the shares of Common Stock issuable upon the
conversion of this Note is effective and the Holder has complied with all
applicable securities laws in connection with the sale of the Common Stock,
including, without limitation, the prospectus delivery requirements. In the
event that Conversion Shares cannot be delivered to the Holder via DWAC, the
Borrower shall deliver physical certificates representing the Conversion Shares
by the Delivery Date.
3.4. Conversion
Mechanics.
(a) The
number of shares of Common Stock to be issued upon each conversion of this
Note
pursuant to this Article III shall be determined by dividing that portion of
the
Principal Amount and interest and fees to be converted, if any, by the then
applicable Fixed Conversion Price.
(b) The
Fixed
Conversion Price and number and kind of shares or other securities to be issued
upon conversion shall be subject to adjustment from time to time upon the
happening of certain events while this conversion right remains outstanding,
as
follows:
X. Xxxxxx,
Sale of Assets, etc.
If the
Borrower at any time shall consolidate with or merge into or sell or convey
all
or substantially all its assets to any other corporation, this Note, as to
the
unpaid principal portion thereof and accrued interest thereon, shall thereafter
be deemed to evidence the right to purchase such number and kind of shares
or
other securities and property as would have been issuable or distributable
on
account of such consolidation, merger, sale or conveyance, upon or with respect
to the securities subject to the conversion or purchase right immediately prior
to such consolidation, merger, sale or conveyance. The foregoing provision
shall
similarly apply to successive transactions of a similar nature by any such
successor or purchaser. Without limiting the generality of the foregoing, the
anti-dilution provisions of this Section shall apply to such securities of
such
successor or purchaser after any such consolidation, merger, sale or
conveyance.
B. 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 portion thereof 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.
C. 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 Conversion Price 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.
D. Share
Issuance.
So long
as this Note is outstanding, if the Borrower shall issue any Common Stock except
for the Excepted Issuances (as defined in the Subscription Agreement), prior
to
the complete conversion or payment of this Note, for a consideration less than
the Fixed Conversion Price that would be in effect at the time of such issue,
then, and thereafter successively upon each such issuance, the Fixed Conversion
Price shall be reduced to such other lower issue price. For purposes of this
adjustment, the issuance of any security or debt instrument of the Borrower
carrying the right to convert such security or debt instrument into Common
Stock
or of any warrant, right or option to purchase Common Stock shall result in
an
adjustment to the Fixed Conversion Price upon the issuance of the
above-described security, debt instrument, warrant, right, or option and again
upon the issuance of shares of Common Stock upon exercise of such conversion
or
purchase rights if such issuance is at a price lower than the then applicable
Conversion Price. The reduction of the Fixed Conversion Price described in
this
paragraph is in addition to the other rights of the Holder described in the
Subscription Agreement.
(c) Whenever
the Conversion Price is adjusted pursuant to Section 3.4(b) above, the Borrower
shall promptly mail to the Holder a notice setting forth the Conversion Price
after such adjustment and setting forth a statement of the facts requiring
such
adjustment.
3.5. Reservation.
Borrower shall reserve Common Stock issuable upon conversion of this Note as
described in the Subscription Agreement. Borrower
represents that upon issuance, such shares will be duly and validly issued,
fully
paid and
non-assessable. Xxxxxxxx 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.
3.6 Issuance
of Replacement Note.
Upon
any partial conversion of this Note, a replacement Note containing the same
date
and provisions of this Note shall,
at the
written request of the Holder, be
issued
by the Borrower to the Holder for the outstanding Principal Amount of this
Note
and accrued interest which shall not have been converted or paid, provided
Xxxxxx has surrendered an original Note to the Company. In the event that the
Holder elects not to surrender a Note for reissuance upon partial payment or
conversion, the Holder hereby indemnifies the Borrower against any and all
loss
or damage attributable to a third-party claim in an amount in excess of the
actual amount then due under the Note.
ARTICLE
IV
SECURITY
INTEREST
4. Security
Interest/Waiver of Automatic Stay.
This
Note is secured by a security interest granted to the Collateral Agent for
the
benefit of the Holder pursuant to a Security Agreement, as delivered by Borrower
to Holder. The Borrower acknowledges and agrees that should a proceeding under
any bankruptcy or insolvency law be commenced by or against the Borrower, or
if
any of the Collateral (as defined in the Security Agreement) should become
the
subject of any bankruptcy or insolvency proceeding, then the Holder should
be
entitled to, among other relief to which the Holder may be entitled under the
Transaction Documents and any other agreement to which the Borrower and Holder
are parties (collectively, "Loan Documents") and/or applicable law, an order
from the court granting immediate relief from the automatic stay pursuant to
11
U.S.C. Section 362 to permit the Holder to exercise all of its rights and
remedies pursuant to the Loan Documents and/or applicable law. TO THE EXTENT
PERMITTED BY LAW, THE BORROWER EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC
STAY IMPOSED BY 11 U.S.C. SECTION 362. FURTHERMORE, THE BORROWER EXPRESSLY
ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION
OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION,
11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT
IN
ANY WAY THE ABILITY OF THE HOLDER TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES
UNDER THE LOAN DOCUMENTS AND/OR APPLICABLE LAW. The Borrower hereby consents
to
any motion for relief from stay that may be filed by the Holder in any
bankruptcy or insolvency proceeding initiated by or against the Borrower and,
further, agrees not to file any opposition to any motion for relief from stay
filed by the Holder. The Borrower represents, acknowledges and agrees that
this
provision is a specific and material aspect of the Loan Documents, and that
the
Holder would not agree to the terms of the Loan Documents if this waiver were
not a part of this Note. The Borrower further represents, acknowledges and
agrees that this waiver is knowingly, intelligently and voluntarily made, that
neither the Holder nor any person acting on behalf of the Holder has made any
representations to induce this waiver, that the Borrower has been represented
(or has had the opportunity to he represented) in the signing of this Note
and
the Loan Documents and in the making of this waiver by independent legal counsel
selected by the Borrower and that the Borrower has discussed this waiver with
counsel.
ARTICLE
V
EVENTS
OF DEFAULT
The
occurrence of any of the following events of default ("Event of Default") shall,
at the option of the Holder hereof, make all sums of principal and interest
then
remaining unpaid hereon and all other amounts payable hereunder immediately
due
and payable, upon demand, without presentment, or grace period, all of which
hereby are expressly waived, except as set forth below:
5.1 Failure
to Pay Principal or Interest.
The
Borrower fails to pay any installment of Principal Amount, interest or other
sum
due under this Note or any Transaction Document when due and such failure
continues for a period of five (5) business days after the due
date.
5.2 Breach
of Covenant.
The
Borrower breaches any material covenant or other term or condition of the
Subscription Agreement, this Note or other Transaction Document in any material
respect and such breach, if subject to cure, continues for a period of fifteen
(15) business days after written notice to the Borrower from the
Holder.
5.3 Breach
of Representations and Warranties.
Any
material representation or warranty of the Borrower made herein, in the
Subscription Agreement, Transaction Document or in any agreement, statement
or
certificate given in writing pursuant hereto or in connection herewith or
therewith shall be false or misleading in any material respect as of the date
made and the Closing Date.
5.4 Receiver
or Trustee.
The
Borrower or any Subsidiary of Borrower shall make an assignment for the benefit
of creditors, or apply for or consent to the appointment of a receiver or
trustee for them or for a substantial part of their property or business; or
such a receiver or trustee shall otherwise be appointed.
5.5 Judgments.
Any
money judgment, writ or similar final process shall be entered or filed against
Borrower or any subsidiary of Borrower or any of their property or other assets
for more than $50,000,
and
shall remain unpaid, unvacated, unbonded or unstayed for a period of forty-five
(45) days.
5.6 Non-Payment.
A
default by the Borrower under any one or more obligations in an aggregate
monetary amount in excess of One Hundred Thousand Dollars ($100,000.00) for
more
than twenty days after the due date unless the Borrower is contesting the
validity of such obligation in good faith, beyond any applicable grace
period;
5.7 Bankruptcy.
Bankruptcy, insolvency, reorganization or liquidation proceedings or other
proceedings or relief under any bankruptcy law or any law, or the issuance
of
any notice in relation to such event, for the relief of debtors shall be
instituted by or against the Borrower or any Subsidiary of Borrower and if
instituted against them are not dismissed within forty-five (45) days
of
initiation.
5.8 Delisting.
Failure
of the Common Stock to be quoted or listed on the OTC Bulletin Board (“Bulletin
Board”) or other Principal Market; failure to comply with the requirements for
continued listing on the Bulletin Board for a period of seven consecutive
trading days; or notification from the Bulletin Board or any Principal Market
that the Borrower is not in compliance with the conditions for such continued
listing on the Bulletin Board or other Principal Market.
5.9 Stop
Trade.
An SEC
or judicial stop trade order or Principal Market trading suspension with respect
to Borrower’s Common Stock that lasts for five or more consecutive trading
days.
5.10 Failure
to Deliver Common Stock or Replacement Note.
Borrower's failure within ten (10) business days to deliver Common Stock to
the
Holder pursuant to and in the form required by this Note or the Subscription
Agreement, and, if requested by Borrower, a replacement Note,.
5.11 Non-Registration
Event.
The
occurrence of a Non-Registration Event as described in the Subscription
Agreement.
5.12 Reverse
Splits.
The
Borrower effectuates a reverse split of its Common Stock without twenty days
prior written notice to the Holder.
5.13 Reservation
Default.
Failure
by the Borrower to have reserved for issuance upon conversion of the Note the
amount of Common Stock as set forth in this Note and the Subscription
Agreement.
5.14 DTC
Default.
Failure
by the Borrower to satisfy any DTC Condition for more than ten Business Days
in
the aggregate.
5.15 Cross
Default.
A
default by the Borrower of a material term, covenant, warranty or undertaking
of
any Transaction Document or other agreement to which the Borrower and Holder
are
parties, or the occurrence of a material event of default under any such other
agreement which is not cured after any required notice and/or cure
period.
ARTICLE
VI
MISCELLANEOUS
6.1 Failure
or Indulgence Not Waiver.
No
failure or delay on the part of 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.
6.2 Notices.
All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted
to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery
by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (i) if to the Borrower to: Inrob
Tech Ltd., c/o Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP, 0000 Xxxxxx xx Xxxxxxxx, Xxx Xxxx, XX 00000, Attn:
Xxxx Xxxx, Esq., telecopier:
(000) 000-0000, and (ii) if to the Holder, to the name, address and telecopy
number set forth on the front page of this Note, with a copy by
telecopier
only to
Grushko & Xxxxxxx, P.C., 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx
00000, telecopier number: (000) 000-0000. The
Borrower and Holder may change its address and fax number upon three business
days prior notice given in accordance with this Section. Any change of address
or fax number by the Borrower must be to a domestic United States address and
fax number. In the event that notice is attempted to be given by fax and is
unsuccessful three times due to a failure not attributable to the given of
the
notice, then such notice must be given by alternate method set forth above,
but
shall be deemed given as of when such fax notice would have been deemed made
had
the fax notice been successful.
6.3 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.
6.4 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.
6.5 Cost
of Collection.
If
default is made in the payment of this Note, Borrower shall pay the Holder
hereof reasonable costs of collection, including reasonable attorneys'
fees.
6.6 Governing
Law.
This
Note
shall be governed by and construed in accordance with the laws of the State
of
New York, without regard to conflicts
of laws
principles that would result in the application of the substantive laws of
another jurisdiction. 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.
6.7 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.
6.8. 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.
6.9 Redemption.
This
Note may not be redeemed or called without the consent of the Holder except
as
described in this Note.
6.10 Shareholder
Status.
The
Holder shall not have rights as a shareholder of the Borrower with respect
to
unconverted portions of this Note. However, the Holder will have the rights
of a
shareholder of the Borrower with respect to the Shares of Common Stock to be
received after delivery by the Holder of a Conversion Notice to the
Borrower.
6.11 Force
Majeure. Any
delay
in or failure of performance by the Company or Subscribers shall not constitute
a default or give rise to any claim hereunder if such default is exclusively
a
result of acts of G-d, war, riots, fire, sustained power failure, flood, strike,
lockout, epidemics and national defense requirements, provided the party
claiming excuse makes reasonable effort under the circumstances to comply with
its obligations. No delay or failure shall be excused by this Section 6.11
later
than thirty days after the latest date for performance and applicable cure
periods.
[THIS
SPACE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF,
Xxxxxxxx has caused this Note to be signed in its name by an authorized officer
as of the ____ day of November, 2006.
| INROB TECH LTD. | ||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
| WITNESS: | ||
|
|
||
NOTICE
OF CONVERSION
(To
be
executed by the Registered Holder in order to convert the Note)
The
undersigned hereby elects to convert $_________ of the principal and $_________
of the interest due on the Note issued by Inrob Tech Ltd. on November 15, 2006
into Shares of Common Stock of Inrob Tech Ltd. (the "Borrower") according to
the
conditions set forth in such Note, as of the date written
below.
Date
of
Conversion:____________________________________________________________________
Conversion
Price:______________________________________________________________________
Number
of
Shares of Common Stock Beneficially Owned on the Conversion Date:
Less
than 5% of the outstanding Common Stock of Inrob Tech Ltd.
Shares
To
Be
Delivered:_________________________________________________________________
Signature:____________________________________________________________________________
Print
Name:__________________________________________________________________________
Address:_____________________________________________________________________________
____________________________________________________________________________
