EXHIBIT 10.2
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 UNITED ENERGY CORP. THAT SUCH REGISTRATION IS NOT REQUIRED.
SECURED CONVERTIBLE TERM NOTE
FOR VALUE RECEIVED, UNITED ENERGY CORP., a Nevada corporation (the
"BORROWER"), hereby promises to pay to LAURUS MASTER FUND, LTD., c/o Ironshore
Corporate Services Ltd., P.O. Box 1234 G.T., Queensgate House, South Church
Street, Grand Cayman, Cayman Islands, Fax: 000-000-0000 (the "HOLDER") or its
registered assigns or successors in interest, on order, the sum of ONE MILLION
SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($1,750,000.00), together with any accrued
and unpaid interest hereon, on March 24, 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 (the "PURCHASE AGREEMENT").
The following terms shall apply to this Note:
ARTICLE I
INTEREST & AMORTIZATION
1.1 Interest Rate and Payment. (a) Subject to Sections 4.10 and 5.6 hereof,
interest payable on this Note shall accrue at a rate per annum (the "Interest
Rate") equal to the "prime rate" published in The Wall Street Journal from time
to time. The prime rate shall be increased or decreased as the case may be for
each increase or decrease in the prime rate in an amount equal to such increase
or decrease in the prime rate; each change to be effective as of the day of the
change in such rate. The Interest Rate shall not be less than four percent (4%)
unless the Company shall be in compliance with Section 2.2 hereof. If the
Company has satisfied the requirements of Section 2.2 hereof, the Interest Rate
will be subject to adjustment as set forth in Section 1.1(b). In no event,
however, shall the Interest Rate be less than zero percent (0.0%). Interest
shall be payable monthly in arrears commencing on May 1, 2004, on the first day
of each consecutive calendar month thereafter (each, a "REPAYMENT DATE"), and on
the Maturity Date, whether by acceleration or otherwise.
(b) On the last business day of each month hereafter until the Maturity
Date (each a "Determination Date"), the Interest Rate shall be adjusted: if (i)
the Company shall have registered the shares of the Company's common stock
underlying the conversion of the Note and that certain warrant issued to Holder
on a registration statement declared effective by the SEC, and (ii) the volume
weighted average price of the Common Stock as reported by Bloomberg, L.P. on the
Principal Market for the five (5) trading days immediately preceding a
Determination Date exceeds the then applicable Fixed
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Conversion Price, the Interest Rate for the succeeding calendar month shall
automatically be reduced by the greater of (i) one percent (1.0%) or (ii) two
percent (2.0%) if there is an effective Registration Statement (as defined in
the Registration Rights Agreement), for each incremental twenty five percent
(25%) increase in the market price of the Common Stock above the then applicable
Fixed Conversion Price.
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 October 1, 2004 and shall recur on the first
calendar day of each succeeding month thereafter until the Maturity Date (each,
an "AMORTIZATION Date"). Subject to Section 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 $58,333.00 (the "MONTHLY
AMORTIZATION"), 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 but have not been paid (collectively, the "MONTHLY
AMOUNT").
ARTICLE II
CONVERSION REPAYMENT OPTION
2.1 (a) Payment of Monthly Amount in Cash or Common Stock. Subject to the
terms hereof, the Holder shall have the sole option to determine whether to
elect to accept payment of the Monthly Amount on each Repayment Date either in
cash or in shares of Common Stock (as defined in the Purchase Agreement), or a
combination of both. Each month by the fifth (5th) business day prior to each
Amortization Date (the "NOTICE Date"), the Holder shall deliver to Borrower a
written notice in the form of Exhibit B attached hereto electing to convert the
Monthly Amount payable on the next Repayment Date in either cash or Common
Stock, or a combination of both (each, a "REPAYMENT ELECTION NOTICE"). If a
Repayment Election Notice is not delivered by the Holder on or before the
applicable Notice Date for such Repayment Date, then the Borrower shall pay the
Monthly Amount due on such Repayment Date in cash. Any portion of the Monthly
Amount paid in cash on a Repayment Date, shall be paid to the Holder in an
amount equal to 100% of the principal portion of the Monthly Amount due and
owing to Holder on the Repayment Date. If the Holder converts all or a portion
of the Monthly Amount in shares of Common Stock, the number of such shares to be
issued by the Borrower to the Holder on such Repayment Date shall be the number
determined by dividing (x) the portion of the Monthly Amount to be paid in
shares of Common Stock, by (y) the then applicable Fixed Conversion Price. For
purposes hereof, the initial "FIXED CONVERSION PRICE" means $1.00 (which is the
greater of $1.00 or 105% of the average closing price for the ten trading days
immediately prior to the date of this Note).
(b) Monthly Amount Conversion Guidelines. Subject to Sections 2.1(a), 2.2,
and 3.2 hereof, the Holder shall elect to convert all or a portion of the
Monthly Amount due on each Repayment Date in shares of Common Stock if the
average closing price of the Common Stock as reported by Bloomberg, L.P. on the
Principal Market (as defined in Section 4.7 hereof) for the five (5) trading
days immediately preceding such Repayment Date was greater than 110% of the
Fixed Conversion Price. Any part of the Monthly Amount due on a Repayment Date
that the Holder has not elected to convert into shares of Common Stock shall be
paid by the Borrower in cash on such Repayment Date. Any part of the Monthly
Amount due on such Repayment Date which the Holder has elected to convert into
shares of Common Stock but which must be paid in cash (as a result of the
closing price of the Common Stock on one or more of the five (5) trading days
immediately preceding the applicable Repayment Date was less than 110% of the
Fixed Conversion Price) shall be paid in cash at the rate of 100% of the Monthly
Amount otherwise due on the Repayment Date within three (3) business days of the
applicable Repayment Date.
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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 (a) either (i) 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 (ii) an exemption from registration of the Common Stock is available to
pursuant to Rule 144 of the Securities Act and (b) 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.
Any amounts converted by the Holder pursuant to this Section 2 shall be
deemed to constitute payments of outstanding principal applying to Monthly
Amounts for the remaining Repayment Dates in chronological order.
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 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 Security
Agreement, or any Ancillary Agreement (as defined in the Security Agreement)
(the "REDEMPTION AMOUNT") outstanding on the day written notice of redemption
(the "NOTICE OF REDEMPTION") is given to the Holder. The Notice of Redemption
shall specify the date for such Optional Redemption (the "REDEMPTION PAYMENT
DATE") which date shall be ten (10) 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 elected
to be 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, 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 date upon which such conversion shall
occur is the "CONVERSION DATE".
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 the number of shares of Common
Stock beneficially owned by such Holder or issuable upon exercise of warrants
held by such Holder and 4.99% of the outstanding shares of Common Stock of the
Borrower. 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.
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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 use its best efforts to 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
use its best efforts to 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. By way of example, if the original principal amount of this Note is
$1,750,000, the Holder converted $100,000 of such original principal amount
prior to the first Repayment Date, then (1) the principal amount of the Monthly
Amount due on the first Repayment Date would equal $0.00, (2) the principal
amount of the Monthly Amount due on the second Repayment Date would equal
$16,667.00 and (3) the principal amount of the Monthly Amount due on the third
Repayment Date would be $58,333.00.
(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:
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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 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; (iii) pursuant to options that may be
issued under any employee incentive stock option and/or any qualified and non
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. 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
due and payable within five (5) days after written notice from Holder to
Borrower (each occurrence being a "DEFAULT NOTICE PERIOD"). In the event of such
an
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acceleration, the amount due and owing to the Holder shall be 120% of the
outstanding principal amount of the Note (plus accrued and unpaid interest and
fees, if any). If, with respect to any Event of Default other than a payment
default described in Section 4.1 below, within the Default Notice Period the
Borrower cures the Event of Default, the Event of Default will be deemed to no
longer exist and any rights and remedies of Holder pertaining to such Event of
Default will be of no further force or effect.
The occurrence of any of the following events 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 such failure continues for a
period of three (3) business days after such payment is the due.
4.2 Breach of Covenant. The Borrower breaches any material covenant or
other term or condition of this Note or the Purchase Agreement in any material
respect and such breach, if subject to cure, continues for a period of thirty
(30) days after the occurrence thereof, except where a longer cure period has
been provided.
4.3 Breach of Representations and Warranties. Any material representation
or warranty of the Borrower made herein, in the Purchase Agreement, or in any
Related Document (as defined in the Purchase Agreement) shall be materially
false or misleading and shall not be cured for a period of fifteen (15) days
after the occurrence thereof.
4.4 Receiver or Trustee. The Borrower 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 property or other assets for
more than $250,000, and shall remain unvacated, unbonded or unstayed for a
period of ninety (90) 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 which
is not vacated within ninety (90) days.
4.7 Stop Trade. An SEC stop trade order or Principal Market trading
suspension of the Common Stock shall be in effect for 5 consecutive days or 5
days during a period of 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 30 days of the notice thereof
or list the Common Stock on another Principal Market within 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, or any
securities exchange or other securities market on which the Common Stock is then
being listed or traded).
4.8 Failure to Deliver Common Stock or Replacement Note. The Borrower's
failure to timely deliver Common Stock to the Holder pursuant to and in the form
required by this Note, and Section 9 of
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the Purchase Agreement, if such failure to timely deliver Common Stock
shall not be cured within two (2) business days after written notice. If
Borrower is required to issue a replacement Note to Holder and Borrower shall
fail to deliver such replacement Note within seven (7) Business Days after
receipt of a request from the Purchaser to replace the Note.
4.9 Default Under Related Agreements. The occurrence and continuance of any
Event of Default as defined in the Related Agreements.
DEFAULT RELATED PROVISIONS
4.10 Payment Grace Period. The Borrower shall have a three (3) business day
grace period to pay any monetary amounts due under this Note or the Purchase
Agreement or any Related Document, after which grace period a default interest
rate of two percent (2%) per annum shall apply to the monetary amounts due
hereunder.
4.11 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.
4.12 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) when sent by confirmed
telex or facsimile if sent during normal business hours of the recipient, if
not, then on the next business day, (b) five days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (c)
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 shall be sent to United Energy Corp., 000
Xxxxxxxxxxx Xxxxxxx, #00 Xxxxxxxx, Xxx Xxxxxx 00000, Attention: Xxxxxx Xxxxx,
Chief Executive Officer, Facsimile: (000) 000-0000, with a copy to Xxxxxxxxx
Xxxxxxx, LLP, Metlife Building, 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxxx X. Xxxxxxx, Esq., Facsimile : (000) 000-0000, 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, xxxxxxxxx number (000) 000-0000, 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.
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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.
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. The holder of this Note has been granted a security
interest in certain assets of the Borrower more fully described in a Security
Agreement dated as of March 24, 2004.
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.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, Xxxxxxxx has caused this Convertible Term Note to be
signed in its name effective as of this 24th day of March, 2004.
UNITED ENERGY CORP.
By: /s/ Xxxxxx Xxxxx
------------------------------
Name: Xxxxxx Xxxxx
Title: Chairman and
Chief Executive Officer
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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 elects to convert $_________ of the principal due on
[specify applicable Repayment Date] under the Convertible Term Note issued by
UNITED ENERGY CORP. dated March 24, 2004 by delivery of Shares of Common Stock
of UNITED ENERGY CORP. 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:______________________________
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EXHIBIT B
CONVERSION ELECTION NOTICE
(To be executed by the Holder in order to convert all or part of a Monthly
Amount into Common Stock)
[Name and Address of Holder]
Holder hereby elects to convert $_________ of the Monthly Amount due on
[specify applicable Repayment Date] under the Convertible Term Note issued by
UNITED ENERGY CORP. dated March 24, 2004 by delivery of Shares of Common Stock
of UNITED ENERGY CORP. on and subject to the conditions set forth in Article III
of such Note.
1. Fixed Conversion Price: $_______________________
2. Amount to be paid: $_______________________
3. Shares To Be Delivered (2 divided by 1): __________________
4. Cash payment to be made by Borrower : $_____________________
Date: ____________ LAURUS MASTER FUND, LTD.
By:
----------------------------------
Name:
Title:
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