AGREEMENT TO CONVERT NOTES
This Agreement is entered into as of the ___day of March 2000, by
and between Training Devices International Inc., a Colorado corporation
("TDI"), and the noteholder whose name appears at the bottom of this
Agreement ("Noteholder").
WHEREAS, TDI issued Noteholder its promissory note (the "Note")
dated the date set forth at the bottom of this Agreement; and
WHEREAS, TDI is preparing to file an amendment to its Registration
Statement (the "Registration Statement") for its Initial Public Offering
("IPO"); and
WHEREAS, the total being raised in the IPO is less than TDI had
originally contemplated; and
WHEREAS, in order to increase the proceeds from the IPO that TDI
will be able to use for its business, TDI would like the Noteholder to forego
repayment of the Note from the IPO proceeds and convert the Note to common
stock.
NOW THEREFORE, in consideration of the mutual promises contained
herein, and other good and valuable consideration, TDI and Noteholder agree
as follows:
1. Upon the closing of the IPO of TDI, the Note shall automatically
convert to shares of TDI's common stock. The number of shares to be received
upon conversion of the Note shall equal the principal and accrued interest on
the Note divided by a number that will be equal to 50% of the IPO price to
investors, before underwriters' discounts. The shares received upon this
conversion of the Note are called "Conversion Shares."
2. TDI shall promptly notify Noteholder of the closing of the IPO.
Noteholder shall deliver the Note to TDI or its transfer agent, and promptly
after such delivery, TDI shall issue the Conversion Shares. The Conversion
Shares will contain a restrictive legend, indicating that the shares have not
been registered with the SEC and can be resold only pursuant to an exemption
from registration or a registration statement under applicable securities
laws. Noteholder is aware that the holding period for the Conversion Shares
shall commence on the Effective Date of the Registration Statement, for the
purposes of SEC Rule 144.
3. Noteholder agrees that upon conversion of the Note Noteholder
will waive the provisions of paragraph 4 of the Note that provides for
additional cash payments over a five-year period.
4. If the IPO does not close for any reason, the Note shall remain
outstanding under its original terms.
NOTEHOLDER TRAINING DEVICES
INTERNATIONAL INC.
By:
----------------------------- -----------------------------
< < Name > > Its:
----------------------------
NOTE PRINCIPAL: < < $ Amt > >
DATE OF NOTE: < < Date of Note > >
