Exhibit 10.6
EXHIBIT A
TO
EXCHANGE
AGREEMENT
NEITHER THIS SECURITY NOR THE ISSUANCE TO THE HOLDER OF THE SECURITIES INTO
WHICH THIS SECURITY IS CONVERTIBLE HAS BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THIS NOTE DOES NOT REQUIRE PHYSICAL SURRENDER OF THIS NOTE IN THE EVENT OF A
PARTIAL REDEMPTION, REPAYMENT OR CONVERSION. AS A RESULT, FOLLOWING ANY
REDEMPTION, REPAYMENT OR CONVERSION OF ANY PORTION OF THIS NOTE, THE OUTSTANDING
PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE MAY BE LESS THAN THE PRINCIPAL AMOUNT
SET FORTH BELOW.
7.5% SENIOR SECURED CONVERTIBLE NOTE DUE 2006
OF
KNIGHTSBRIDGE FINE WINES, INC.
NOTE NO.: G-3 ORIGINAL PRINCIPAL AMOUNT: $5,500,000
ISSUANCE DATE: APRIL 21, 0000 XXXXXX, XXXXX
FOR VALUE RECEIVED, the Company hereby promises to pay to or upon the
order of GRYPHON MASTER FUND, L.P. or its registered assigns or
successors-in-interest (the "Holder") the principal sum of Five Million Five
Hundred Thousand Dollars ($5,500,000.00), together with all accrued but unpaid
interest thereon, if any, on the second (2nd) anniversary of the Issuance Date,
to the extent such principal amount and interest have not been repaid or
converted into shares of the Company's Common Stock, $.001 par value (the
"Common Stock"), in accordance with the terms hereof. Interest on the unpaid
principal balance hereof
shall accrue at the rate of 7.5% per annum from the date of original issuance
hereof (the "Issuance Date") until the same becomes due and payable on the Final
Maturity Date, or such earlier date upon acceleration or by conversion,
repayment or redemption in accordance with the terms hereof. Interest on this
Note shall accrue daily commencing on the Issuance Date, shall be compounded
monthly and shall be computed on the basis of a 360-day year, 30-day months and
actual days elapsed and shall be payable in accordance with Section 2 hereof.
Notwithstanding anything contained herein, this Note shall bear interest on the
outstanding Principal Amount from and after the occurrence and during the
continuance of an Event of Default, at the rate (the "Default Rate") equal to
the lower of eighteen percent (18%) per annum or the highest rate permitted by
applicable law. Unless otherwise agreed or required by applicable law, payments
will be applied first to any unpaid collection costs, then to unpaid interest
and fees and any remaining amount to unpaid principal.
All payments of principal of and interest on this Note shall be made in
lawful money of the United States of America by wire transfer of immediately
available funds to such account as the Holder may from time to time designate by
written notice in accordance with the provisions of this Note. This Note may not
be prepaid in whole or in part except as specifically provided herein. Whenever
any amount expressed to be due by the terms of this Note is due on any day which
is not a Business Day (as defined below), the same shall instead be due on the
next succeeding day which is a Business Day and such extension shall be taken
into account in determining the amount of interest accrued on this Note.
This Note is secured by (i) a security interest in all of the assets
and properties of the Company pursuant to an Amended and Restated Security
Agreement dated April 21, 2004, by and between the Company and the Holder, and
(ii) a security interest in all of the current assets of Xxxxxxxx Knightsbridge
LLC, a Subsidiary of the Company ("KKLLC"), pursuant to a Security Agreement
dated April 21, 2004, by and between the Holder and KKLLC.
The following terms and conditions shall apply to this Note:
1. DEFINITIONS.
(a) Capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in the Exchange Agreement.
(b) For purposes hereof the following terms shall have the meanings
ascribed to them below:
"Aggregation Parties" shall have the meaning provided in Section 4(i).
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"Bankruptcy Event" means any of the following events: (a) the Company
or any material subsidiary commences a case or other proceeding under any
bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
relating to the Company or any material subsidiary thereof; (b) there is
commenced against the Company or any material subsidiary any such case or
proceeding that is not dismissed within 60 days after commencement; (c) the
Company or any material subsidiary thereof is adjudicated insolvent or bankrupt
or any order of relief or other order approving any such case or proceeding is
entered; (d) the Company or any material subsidiary suffers any appointment of
any trustee, custodian or the like for it or any substantial part of its
property that is not discharged or stayed within 60 days; (e) the Company or any
material subsidiary makes a general assignment for the benefit of creditors; (f)
the Company or any material subsidiary fails to pay, states that it is unable to
pay, or is unable to pay, its debts (excluding those reasonably disputed in good
faith by the Company in the case of failure to pay and for which it has reserves
on its books and financial statements) generally as they become due; (g) the
Company or any material subsidiary calls a meeting of its creditors with a view
to arranging a composition, adjustment or restructuring of its debts; or (h) the
Company or any material subsidiary, by any act or failure to act, expressly
indicates its consent to, approval of or acquiescence in any of the foregoing or
takes any corporate or other action for the purpose of effecting any of the
foregoing.
"Call Amount" means for any exercise of the Call Right pursuant to
Section 3, the sum of (1) the product of (x) the principal amount of this Note
to be prepaid by reason of such exercise of the Call Right times (y) the
applicable Call Percentage plus (2) accrued and unpaid interest on the principal
amount of this Note to be prepaid by reason of such exercise of the Call Right
to the applicable Call Date.
"Call Date" shall have the meaning provided in Section 3(b).
"Call Notice" shall have the meaning provided in Section 3(b).
"Call Percentage" means 125%.
"Call Right" shall have the meaning provided in Section 3(a).
"Cash" or "cash" means at any time such coin or currency of the United
States of America as shall at such time be legal tender for the payment of
public and private debts.
"Change in Control Transaction" will be deemed to exist if (i) there
occurs any consolidation, merger, amalgamation or other business combination of
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the Company with or into any other corporation or other entity or person
(whether or not the Company is the surviving corporation), or any other
corporate reorganization or transaction or series of related transactions in
which in any of such events the persons who are holders of the voting stock of
the Company immediately prior to such event cease to own 50% or more of the
voting stock, or corresponding voting equity interests, of the surviving
corporation or other entity immediately after such event (including without
limitation any "going private" transaction under Rule 13e-3 promulgated pursuant
to the Exchange Act or tender offer by the Company under Rule 13e-4 promulgated
pursuant to the Exchange Act for 20% or more of the Company's Common Stock),
(ii) any person (as defined in Section 13(d) of the Exchange Act), together with
its affiliates and associates (as such terms are defined in Rule 405 under the
Securities Act), beneficially owns or is deemed to beneficially own (as
described in Rule 13d-3 under the Exchange Act without regard to the 60-day
exercise period) in excess of 50% of the voting power of the Company's
outstanding securities, (iii) there is a replacement of more than one-half of
the members of the Company's Board of Directors which is not approved by those
individuals who are members of the Company's Board of Directors on the date
thereof or (iv) in one or a series of related transactions, there is a sale or
transfer of all or substantially all of the assets of the Company, determined on
a consolidated basis.
"Conversion Date" shall have the meaning provided in Section 4(b).
"Conversion Delay Payments" shall have the meaning provided in Section
4(b)(ii).
"Conversion Notice" shall have the meaning provided in Section 4(a).
"Conversion Price" means $1.80, subject to anti-dilution adjustment as
set forth herein.
"Conversion Ratio" means, at any time, a fraction, of which the
numerator is the entire outstanding Principal Amount of this Note (or such
portion thereof that is being redeemed or repurchased), and of which the
denominator is the then applicable Conversion Price.
"DTC" shall have the meaning provided in Section 4(b)(ii).
"Effective Date" means the date on which a Registration Statement
covering all the Underlying Shares and other Registrable Securities (as defined
in the Registration Rights Agreement) is declared effective by the SEC.
"Effective Registration" means (i) the Company has complied in all
material respects with its obligations under all the Transaction Documents where
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the failure to comply by the Company would have a material adverse effect on the
ability of the Holder to publicly resell the Underlying Shares and the Warrant
Shares and no Event of Default shall have occurred and be continuing; (ii) the
resale of all Registrable Securities (as defined in the Registration Rights
Agreement) is covered by an effective Registration Statement in accordance with
the terms of the Registration Rights Agreement and such Registration Statement
is not subject to any suspension or stop order and is expected to remain
effective and available for use by the selling stockholders named therein or in
any related prospectus supplement for at least 20 Trading Days thereafter; (iii)
the resale of such Registrable Securities may be effected pursuant to a current
and deliverable prospectus that is not subject to any blackout or similar
circumstance; (iv) such Registrable Securities are listed, or approved for
listing prior to issuance, on an Approved Market and are not subject to any
trading suspension (nor shall trading generally have been suspended on such
exchanges or markets), and the Company shall not have been notified of any
pending or threatened proceeding or other action to delist or suspend the Common
Stock on the Approved Market on which the Common Stock is then traded or listed;
(v) the requisite number of shares of Common Stock shall have been duly
authorized and shall be available for issuance as required by the terms of the
Transaction Documents; (vi) the Holder is not identified as an underwriter in
the Registration Statement; and (vii) the Company is not subject to any
Bankruptcy Event.
"Event of Default" shall have the meaning provided in Section 5(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Agreement" means the Securities Exchange Agreement, dated as
of April 21, 2004, by and between the Company and Gryphon Master Fund, L.P., a
Bermuda limited partnership, pursuant to which this Note was originally issued.
"Final Maturity Date" means April 21, 2006.
"Holder Share Notice" shall have the meaning provided in Section
4(b)(ii).
"Newly Issued Shares" shall have the meaning provided in Section
4(c)(iii).
"Principal Amount" means at any time the sum of (i) the outstanding
principal amount of this Note at such time, (ii) all accrued but unpaid interest
hereunder to such time, and (iii) any default payments owing at such time to the
Holder under the Transaction Documents but not theretofore paid or added to the
Principal Amount.
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"Principal Market" means the OTC Bulletin Board or such other U.S.
market or exchange which is the principal market on which the Common Stock is
then listed for trading.
"QIB" means a qualified institutional buyer as defined in Rule 144A.
"Post-Notice Period" shall have the meaning provided in Section 3(b).
"Restricted Ownership Percentage" shall have the meaning provided in
Section 4(i).
"Rule 144A" means Rule 144A as promulgated by the SEC under the
Securities Act or any successor thereto.
"Securities Act" means the Securities Act of 1933, as amended.
"Semi-Annual Interest Payment Date" means each January 1 and July 1,
commencing July 1, 2004, and the Final Maturity Date.
"Trading Day" means a day on which the Principal Market is open for the
general trading of securities.
"Underlying Shares" means the shares of Common Stock issued or issuable
upon conversion of, in lieu of cash payment of principal of, or interest on, as
repayment of principal under, or otherwise pursuant to, this Note in accordance
with the terms hereof and the Exchange Agreement.
"Warrants" means the Company's (i) Common Stock Purchase Warrant
(Primary Warrant) dated April 21, 2004, issued to the Holder and representing
the right to purchase an aggregate of 3,055,556 shares of Common Stock, and (ii)
Common Stock Purchase Warrant (Green Shoe Warrant) dated April 21, 2004, issued
to the Holder and representing the right to purchase an aggregate of 5,000,000
shares of Common Stock.
"Warrant Shares" means the shares of Common Stock issuable upon
exercise of or otherwise pursuant to the Warrants.
SECTION 2. PAYMENTS OF PRINCIPAL AND INTEREST.
(a) INTEREST. The Company shall pay interest accruing on this Note
(from the date hereof) on all principal outstanding, semi-annually on the
Semi-Annual Interest Payment Dates, commencing on July 1, 2004, in cash.
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(b) PRINCIPAL. The entire Principal Amount of this Note, plus any and
all default payments owing under the Transaction Documents but not previously
paid, shall become due and payable on the Final Maturity Date. Any principal of
this Note that is prepaid by the Company pursuant to Section 3 or converted by
the Holder pursuant to Section 4 shall be applied to reduce the principal
payable under this Section 2(b).
SECTION 3. PREPAYMENT AT THE COMPANY'S OPTION.
(a) The Company shall have the right, subject to the conditions set
forth below (the "Call Right"), to prepay all or any portion (in increments of
$100,000) of this Note, in cash, at the applicable Call Amount.
(b) The Call Right may be exercised by the Company by delivering to the
Holder an irrevocable, written notice (the "Call Notice"), which notice shall
specify the date for the Company's prepayment of this Note (as the same may be
extended as herein provided, the "Call Date"), which date shall be not less than
30 nor more than 40 days after the date the Call Notice is delivered to the
Holder (the "Post-Notice Period").
(c) Notwithstanding the foregoing, the Company may not give a Call
Notice or effect a prepayment pursuant to Section 3(a) above unless, at all
times from the date that is 20 Trading Days prior to the date the Company gives
such Call Notice to and including the applicable Call Date:
(i) there is Effective Registration and it is expected that
Effective Registration will continue for at least 20 Trading Days
after the Call Date; and
(ii) conversion by the Holder pursuant to Section 4 of the
portions of this Note that is being called contemporaneously therewith
would not cause the Holder's beneficial ownership of shares of Common
Stock to exceed the limits set forth in Section 4(i)(a).
If such conversion would cause the Holder to exceed such beneficial ownership
limitation, the prepayment of that portion of this Note the conversion of which
would cause such beneficial ownership limitation to be exceeded shall be
deferred until the date that is 20 Trading Days after the date the conversion
thereof would not exceed such limitations, and this Note shall continue to
accrue interest on the amount being called until the same is paid or converted
pursuant to Section 4.
(d) If the Company gives a Call Notice, the Holder shall continue to
have the right to convert the portion of this Note to which the Call Notice
relates pursuant to Section 4 until the prepayment of such portion of this Note
pursuant to this Section 3. A prepayment pursuant to this Section shall occur on
the applicable Call Date. If the Company fails to pay the Call Amount in full on
the applicable Call
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Date in immediately available funds, (i) the Company shall lose its right to
prepay this Note by reason of such Call Notice or thereafter in accordance with
this Section 3, and (ii) in addition to any other rights or remedies it may
have, the Holder shall have the right to require the Company to repurchase this
Note (or any portion hereof as selected by the Holder) at a price equal to the
sum of 125% of the Principal Amount, plus accrued interest thereon to the date
of such repurchase.
(e) Except as specifically provided herein, this Note may not be
prepaid, redeemed or repurchased at the option of the Company prior to the Final
Maturity Date.
SECTION 4. CONVERSION.
(b) CONVERSION RIGHT. Upon the terms and subject to the conditions
hereof, the Holder shall have the right, at the Holder's option, to convert the
outstanding Principal Amount and accrued and unpaid interest thereon, in whole
at any time or in part from time to time, by delivering to the Company a duly
executed notice of conversion in the form attached hereto as EXHIBIT A (the
"Conversion Notice"), which may be transmitted by telephone line facsimile
transmission. Notwithstanding anything to the contrary herein, this Note and the
outstanding Principal Amount hereunder shall not be convertible into Common
Stock at any time to the extent, and only to the extent, that such conversion at
such time would result in the Holder exceeding the limitation contained in, or
otherwise violating the provisions of, Section 4(i)(a) below.
(b) COMMON STOCK ISSUANCE UPON CONVERSION.
(i) CONVERSION PROCEDURES. Upon any conversion of this Note
pursuant to Section 4(a) above, the outstanding Principal Amount being
converted and accrued and unpaid interest thereon to the applicable
Conversion Date shall be converted into such number of fully paid,
validly issued and non-assessable shares of Common Stock, free of any
liens, claims and encumbrances, as is determined by dividing the
outstanding Principal Amount being converted and accrued and unpaid
interest thereon to the applicable Conversion Date by the then
applicable Conversion Price. The date of any Conversion Notice
hereunder shall be referred to herein as the "Conversion Date". If a
conversion under this Note cannot be effected in full for any reason,
or if the Holder is converting less than all of the outstanding
Principal Amount hereunder pursuant to a Conversion Notice, the
Company shall, upon request of the Holder, promptly deliver to the
Holder (but no later than five Trading Days after the surrender of
this Note to the Company) a new Note having a Principal Amount equal
to the amount of such outstanding Principal Amount as has not been
converted. The Holder shall not be required physically to surrender
this Note to the Company upon any conversion unless the full
outstanding Principal Amount of this Note is being
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converted or repaid. The Holder and the Company shall maintain records
showing the outstanding Principal Amount so converted and repaid and
the dates of such conversions or repayments or shall use such other
method, reasonably satisfactory to the Holder and the Company, so as
not to require physical surrender of this Note upon each such
conversion or repayment. The Holder agrees that, if the outstanding
Principal Amount of this Note is less than the Principal Amount stated
on the face of this Note, the Holder will not voluntarily transfer
this Note at any time when no Event of Default has occurred and is
continuing without first surrendering this Note to the Company for
issuance, without charge to the Holder, of a replacement instrument
that reflects the outstanding Principal Amount of this Note. The
Company will deliver such replacement instrument to the Holder as
promptly as practical, but in no event later than three Trading Days,
after surrender by the Holder.
(ii) STOCK CERTIFICATES OR DWAC. The Company will deliver to the
Holder not later than five (5) Trading Days after a particular
Conversion Date, a certificate or certificates, which shall be free of
restrictive legends and trading restrictions (except to the extent
permitted under Section 6.12 of the Exchange Agreement), for the
number of shares of Common Stock issuable upon such conversion of this
Note. In lieu of delivering physical certificates for the shares of
Common Stock issuable upon any conversion of this Note, provided the
Company's transfer agent is participating in the Depository Trust
Company ("DTC") Fast Automated Securities Transfer ("FAST") program,
upon request of the Holder, the Company shall use commercially
reasonable efforts to cause its transfer agent electronically to
transmit such shares issuable upon conversion to the Holder (or its
designee), by crediting the account of the Holder's (or such
designee's) broker with DTC through its Deposit Withdrawal Agent
Commission system (provided that the same time periods herein as for
stock certificates shall apply). If in the case of any conversion
hereunder, such shares are not delivered to or as directed by the
Holder by the third Trading Day after the applicable Conversion Date,
the Holder shall be entitled by written notice to the Company at any
time on or before its receipt of such shares, to rescind such
conversion, in which event the Company shall immediately return this
Note to the Holder if the Holder has tendered it to the Company in
connection with such conversion. If the Holder notifies the Company
that the Holder has not received such shares (free of any restrictions
on transfer or legends except as permitted by Section 6.12 of the
Exchange Agreement) within three Trading Days after a particular
Conversion Date (each, a "Holder Share Notice") and the Holder does
not receive such shares (free of any restrictions on transfer or
legends except as permitted by Section 6.12 of the Exchange Agreement)
within two Trading Days after giving such Holder Share Notice, then,
in addition to any other liability the Company may have, the Company
shall pay to the Holder, in
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cash, an amount, computed at the rate of 2% of the outstanding
Principal Amount per month, for the period such failure continues (the
"Conversion Delay Payments"), without duplication of any amount
payable to the Holder pursuant to clause (f) of Section 2(c)(i) of the
Registration Rights Agreement. A Holder Share Notice may be given by
telephone or e-mail to the Company's Chief Financial Officer or
General Counsel. The Company's obligation to issue and deliver such
shares of Common Stock upon conversion of this Note shall be absolute
and unconditional, irrespective of the absence of any action by the
Holder to enforce the same, of any waiver or consent with respect to
any provision hereof, the recovery of any judgment against any Person
or any action to enforce the same, any failure or delay in the
enforcement of any other obligation of the Company to the Holder, or
any setoff, counterclaim, recoupment, limitation or termination, or
any breach or alleged breach by the Holder or any other Person of any
obligation to the Company or any violation or alleged violation of law
by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the
Company to the Holder in connection with such exercise.
(iii) LIABILITY FOR LATE DELIVERY; FORCE MAJEURE. If in any case
the Company shall fail to issue and deliver the shares of Common Stock
to the Holder pursuant to this Note on the due date therefor, in
addition to any other liabilities the Company may have hereunder and
under applicable law (a) the Company shall pay or reimburse the Holder
on demand for all out-of-pocket expenses, including, without
limitation, reasonable fees and expenses of legal counsel, incurred by
the Holder as a result of such failure, so long as the Holder shall
have given the Company a Holder Share Notice with respect to such
shares of Common Stock, (b) if as a result of such failure the Holder
shall suffer any direct damages or liabilities from such failure
(including, without limitation, margin interest and the cost of
purchasing securities to cover a sale (whether by the Holder or the
Holder's securities broker) or borrowing of shares of Common Stock by
the Holder for purposes of settling any trade involving a sale of
shares of Common Stock made by the Holder during the period beginning
on the Issuance Date and ending on the date the Company delivers or
causes to be delivered to the Holder such shares of Common Stock),
then the Company shall upon demand of the Holder pay to the Holder an
amount equal to the actual, direct out-of-pocket damages and
liabilities suffered by the Holder by reason thereof which the Holder
documents to the reasonable satisfaction of the Company, so long as
the Holder shall have given the Company a Holder Share Notice with
respect to such shares of Common Stock, and (c) the Holder may by
written notice (which may be given by mail, courier, personal service
or telephone line facsimile transmission) or oral notice (promptly
confirmed in writing), given at any time prior to delivery to the
Holder of the shares of Common Stock issuable in connection with any
exercise of the Holder's rights by reason of which such shares are
deliverable, rescind such exercise in whole or in part,
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in which case the Holder shall thereafter be entitled to exercise its
rights with respect to that portion of this Note as to which such
exercise is so rescinded and to exercise its other rights and remedies
with respect to such failure by the Company. Notwithstanding the
foregoing and Section 4(b)(ii), (x) the Company shall not be liable to
the Holder under clauses (a) and (b) of the immediately preceding
sentence or (y) for Conversion Delay Payments, in either such case of
the preceding clause (x) or (y) to the extent the failure of the
Company to deliver or to cause to be delivered such shares of Common
Stock results from fire, flood, storm, earthquake, shipwreck, strike,
war, acts of terrorism, crash involving facilities of a common
carrier, acts of God, or any similar event outside the control of the
Company (it being understood that the action or failure to act of the
Company's Transfer Agent shall not be deemed an event outside the
control of the Company except to the extent resulting from fire,
flood, storm, earthquake, shipwreck, strike, war, acts of terrorism,
crash involving facilities of a common carrier, acts of God, or any
similar event outside the control of such Transfer Agent or the
bankruptcy, liquidation or reorganization of such Transfer Agent under
any bankruptcy, insolvency or other similar law). The Holder shall
notify the Company in writing (or by telephone conversation, confirmed
in writing) as promptly as practicable following the third Trading Day
after the due date for delivery to it of shares of Common Stock under
this Note if the Holder becomes aware that such shares of Common Stock
so issuable have not been received as provided herein, but any failure
so to give such notice shall not affect the Holder's rights under this
Note or otherwise. If pursuant to this Section 4(b)(iii) the Company
is relieved of its obligation to make Conversion Delay Payments, then
the Principal Amount of this Note for which a Conversion Notice has
been given and for which the Company has not issued the shares of
Common Stock within the period provided in Section 4(b)(ii) shall
continue to bear interest at the applicable rate provided in this Note
from the applicable Conversion Date to the date the Company so issues
such shares of Common Stock.
(c) CONVERSION PRICE ADJUSTMENTS.
(i) STOCK DIVIDENDS, SPLITS AND COMBINATIONS. If the Company or
any of its subsidiaries, at any time while this Note is outstanding,
shall (a) pay a stock dividend or otherwise make a distribution or
distributions on any equity securities (including Common Stock
Equivalents) in shares of Common Stock, (b) subdivide outstanding
Common Stock into a larger number of shares, or (c) combine
outstanding Common Stock into a smaller number of shares, then the
Conversion Price shall be multiplied by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding before
such event and the denominator of which shall be the number of shares
of Common Stock outstanding after such event. Any adjustment made
pursuant to this Section 4(c)(i) shall
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become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the
effective date in the case of a subdivision or combination.
(ii) DISTRIBUTIONS. Neither the Company nor any of its
subsidiaries, at any time this Note is outstanding, shall distribute
to all or substantially all holders of Common Stock (a) evidences of
its indebtedness or (b) assets or (c) cash or (d) rights (other than
rights issued pursuant to a shareholder rights plan adopted for the
benefit of stockholders generally, the rights under which are attached
to shares of Common Stock until a trigger event such as a tender
offer, change of control, accumulation of a specified percentage of
the outstanding shares of Common Stock or similar events) or (e)
warrants to subscribe for or purchase any security of the Company or
any of its subsidiaries (excluding those referred to in Section
4(c)(i) above) without obtaining the prior written consent of the
Holder.
(iii) ADJUSTMENT FOR CERTAIN ISSUANCES.
(A) If, at any time (or from time to time) during the period
beginning on the Issuance Date and ending on the second
anniversary of the Issuance Date, the Company issues shares of
Common Stock or Common Stock Equivalents (collectively, the
"Newly Issued Shares") at a price per share at which the Company
sells such shares of Common Stock, or the price per share at
which the holders of such Common Stock Equivalents are entitled
to acquire shares of Common Stock upon conversion or exercise
thereof, which is less than the Conversion Price in effect at the
time of such issuance, then following such issuance the
Conversion Price shall be reduced to the price per share that
equals the price per share (or weighted average price per share,
if such shares are issued, or such Common Stock Equivalents may
be converted or exercised, at different prices) at which such
shares of Common Stock are issued or at which such Common Stock
Equivalents may be converted or exercised. The provisions of this
Section 4(c)(iii) shall be applicable to successive issuances of
Common Stock and Common Stock Equivalents.
(B) Notwithstanding the foregoing, no adjustment shall be
made under Section 4(c)(iii)(a) by reason of:
(1) the issuance by the Company of shares of Common Stock
pro rata to all holders of the Common Stock so long as (i) any
adjustment required by Section 4(c)(i) is made and (ii) the
Company shall have given notice thereof to the Holder pursuant to
Section 4(c)(vii);
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(2) the issuance by the Company of this Note pursuant to the
Exchange Agreement or the issuance by the Company of shares of
Common Stock upon conversion of this Note in accordance with its
terms or upon exercise of the Warrants in accordance with its
terms; or
(3) the issuance by the Company of Common Stock or options
to purchase Common Stock to employees, directors and consultants
(or the exercise of such options by employees, directors and
consultants) under the Company's non-qualified and incentive
stock option plans existing as of the date hereof, as amended
from time to time hereafter or any other stock compensation plan
duly adopted by the Board of Directors.
For the purposes of the adjustments in this Section 4(c)(iii), in the case of
the issuance of any Common Stock Equivalents, the maximum number of shares of
Common Stock issuable upon exercise, exchange or conversion of such Common Stock
Equivalents shall be deemed to be outstanding, provided that no further
adjustment shall be made upon the actual issuance of Common Stock upon exercise,
exchange or conversion of such Common Stock Equivalents.
(iv) ROUNDING OF ADJUSTMENTS. All calculations under this Section
4 or Section 2 shall be made to the nearest cent or the nearest
1/100th of a share, as the case may be.
(v) NOTICE OF ADJUSTMENTS. Whenever the Conversion Price is
adjusted pursuant to Section 4(c)(i), (ii) or (iii) above, the Company
shall promptly deliver to the Holder a notice setting forth the
Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment, provided that any
failure to so provide such notice shall not affect the automatic
adjustment hereunder.
(vi) CHANGE IN CONTROL TRANSACTIONS. In case of any Change in
Control Transaction, the Holder shall have the right thereafter, at
its option, (a) to convert this Note, in whole or in part, at the then
applicable Conversion Price into the shares of stock and other
securities, cash and/or property receivable upon or deemed to be held
by holders of Common Stock following such Change in Control
Transaction, and the Holder shall be entitled upon such event to
receive such amount of securities, cash or property as the shares of
the Common Stock of the Company into which this Note could have been
converted immediately prior to such Change in Control Transaction
would have been entitled if such conversion were permitted (determined
without regard to any limitations contained in Section 4(i) hereof or
equivalent provisions in the other Transaction Documents), subject to
such further applicable adjustments set forth in this Section 4, or
(b) to require the Company or its successor to redeem this Note, in
whole or in part, at a redemption price equal to 125% of the
outstanding Principal Amount being redeemed, plus accrued interest
thereon. The terms of any such Change in Control Transaction shall
include such terms so as to continue to give to the Holder the right
to receive
-13-
the amount of securities, cash and/or property upon any conversion or
redemption following such Change in Control Transaction to which a
holder of the number of shares of Common Stock deliverable upon
conversion of this Note immediately prior to such Change in Control
Transaction would have been entitled to receive in such Change in
Control Transaction and if such Holder had continued to hold such
securities, cash and/or property until the date of such conversion or
redemption, and interest payable hereunder after such Change in
Control Transaction shall be paid in cash or such new securities
and/or property, at the Holder's option. This provision shall
similarly apply to successive reclassifications, consolidations,
mergers, amalgamations, sales, transfers or share exchanges.
(vii) NOTICE OF CERTAIN EVENTS. If:
A. the Company shall declare a dividend (or any other
distribution) on its Common Stock; or
B. the Company shall declare a special nonrecurring cash
dividend on or a tender offer for, offer to purchase or
redemption of its Common Stock; or
C. the Company shall authorize the granting to all holders
of the Common Stock rights or warrants to subscribe for
or purchase any shares of capital stock of any class or
of any rights; or
D. the approval of any stockholders of the Company shall
be required in connection with any reclassification of
the Common Stock of the Company, any consolidation,
amalgamation or merger to which the Company is a party,
any sale or transfer of all or substantially all of the
assets of the Company, of any compulsory share of
exchange whereby the Common Stock is converted into
other securities, cash or property; or
E. the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of
the affairs of the Company; or
F. there exists an agreement to which the Company is a
party or by which it is bound providing for a Change in
Control Transaction, or a Change in Control Transaction
has occurred;
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of this Note, and shall cause to be mailed to the
Holder at its
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last address as it shall appear upon the books of the Company, on or prior to
the date notice of such matter to the Company's stockholders generally is given,
a notice stating (x) the date on which a record is to be taken for the purpose
of such dividend, distribution, tender offer, offer to purchase, redemption,
rights or warrants, or if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend,
distributions, tender offer, offer to purchase, redemption, rights or warrants
are to be determined or (y) the date on which such reclassification,
consolidation, amalgamation, merger, sale, transfer, share exchange or Change in
Control Transaction is expected to become effective or close, and the date as of
which it is expected that holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, amalgamation, merger,
sale, transfer, share exchange or Change in Control Transaction.
(d) RESERVATION AND ISSUANCE OF UNDERLYING SECURITIES. The Company
covenants that it will at all times reserve from its authorized and unissued
Common Stock a sufficient number of shares solely for the purpose of issuance
upon conversion in full of this Note and exercise in full of the Warrants, free
from preemptive rights or any other actual contingent purchase rights of persons
other than the Holder (subject to any additional requirements of the Company as
to reservation of such shares set forth in the Exchange Agreement and taking
into account the adjustments under this Section 4, but determined without regard
to any ownership limitations contained in this Note, the Warrants or the
Exchange Agreement). The Company represents, warrants and covenants that all
shares of Common Stock that shall be so issuable shall, upon issue, be duly
authorized, validly issued, fully paid, and nonassessable.
(e) NO FRACTIONS. Upon a conversion hereunder the Company shall not be
required to issue stock certificates for a fraction of a share of Common Stock,
but may, if otherwise permitted, make a cash payment in respect of any fraction
of a share based on the closing price of a share of Common Stock at such time.
If the Company elects not, or is unable, to make such a cash payment, the Holder
shall be entitled to receive, in lieu of the fraction of a share, one whole
share of Common Stock.
(f) CHARGES, TAXES AND EXPENSES. Issuance of shares of Common Stock
upon the conversion of this Note shall be made without charge to the Holder for
any issue or transfer tax or other incidental expense in respect of the issuance
of such shares, all of which taxes and expenses shall be paid by the Company,
and such shares shall be issued in the name of the Holder or in such name or
names as may be directed by the Holder; provided, however, that in the event
certificates for shares of Common Stock are to be issued in a name other than
the name of the Holder, the applicable Conversion Notice, when given for such
conversion shall be accompanied or followed by an assignment form for the
applicable portion of this Note or such shares, as the case may be; and provided
further, that the Company
-15-
shall not be required to pay any tax or taxes which may be payable in respect of
any such transfer.
(g) CANCELLATION. After the entire Principal Amount (including accrued
but unpaid interest and default payments at any time owed on this Note) has been
paid in full or converted into Common Stock, this Note shall automatically be
deemed canceled and the Holder shall promptly surrender this Note to the Company
at the Company's principal executive offices; provided, however, that the
failure to surrender this Note shall not delay or limit such cancellation.
(h) NOTICE PROCEDURES. Any and all notices or other communications or
deliveries to be provided by the Holder under this Note, including, without
limitation, any Conversion Notice, shall be in writing and delivered personally,
by confirmed facsimile, or by a nationally recognized overnight courier service
to the Company at the facsimile telephone number or address of the principal
place of business of the Company as set forth in, or provided pursuant to, the
Exchange Agreement. Any and all notices or other communications or deliveries to
be provided by the Company hereunder shall be in writing and delivered
personally, by facsimile, or by a nationally recognized overnight courier
service addressed to the Holder at the facsimile telephone number or address of
the Holder appearing on the books of the Company, or if no such facsimile
telephone number or address appears, at the principal place of business of the
Holder. Any notice or other communication or deliveries hereunder shall be
deemed delivered (i) upon receipt, when delivered personally, (ii) when sent by
facsimile, upon receipt if received on a Business Day prior to 5:00 p.m.
(Central Time), or on the first Business Day following such receipt if received
on a Business Day after 5:00 p.m. (Central Time) or on a day that is not a
Business Day or (iii) upon receipt, when deposited with a nationally recognized
overnight courier service.
(i) 9.99% LIMITATIONS.
(A) Notwithstanding anything to the contrary contained herein,
the number of shares of Common Stock that the Holder shall have the
right to acquire upon conversion of this Note shall not exceed a
number that, when added to the total number of shares of Common Stock
deemed beneficially owned by the Holder (other than by virtue of the
ownership of securities or rights to acquire securities (including
this Note and the Warrants) that have limitations on the Holder's
right to convert, exercise or purchase similar to the limitation set
forth herein), together with all shares of Common Stock deemed
beneficially owned at such time (other than by virtue of the ownership
of securities or rights to acquire securities that have limitations on
the right to convert, exercise or purchase similar to the limitation
set forth herein) by the Holder's "affiliates" at such time (as
defined in Rule 144 of the Securities Act) (the "Aggregation Parties")
that would be aggregated for purposes of determining whether a group
exists or
-16-
for purposes of determining the Holder's beneficial ownership, in
either such case for purposes of Section 13(d) of the Exchange Act and
Regulation 13D-G thereunder, would result in beneficial ownership by
the Holder or such group of more than 9.99% of the outstanding shares
of Common Stock (the "Restricted Ownership Percentage"). The Holder
shall have the right at any time and from time to time to reduce its
Restricted Ownership Percentage immediately upon notice to the Company
in the event and only to the extent that Section 16 of the Exchange
Act or the rules promulgated thereunder (or any successor statute or
rules) is changed to reduce the beneficial ownership percentage
limitation thereunder from 10%. If at any time the limits in this
Section 4(i) make this Note inconvertible in whole or in part, the
Company shall not by reason thereof be relieved of its obligation to
issue shares of Common Stock at any time or from time to time
thereafter as shares of Common Stock may be issued in compliance with
such restrictions.
(B) For purposes of this Section 4(i), in determining the number of
outstanding shares of Common Stock at any time, the Holder may rely on
the number of outstanding shares of Common Stock as reflected in (1)
the Company's then most recent Form 10-Q, Form 10-K or other public
filing with the SEC, as the case may be, (2) a public announcement by
the Company that is later than any such filing referred to in the
preceding clause (1), or (3) any other notice by the Company or its
transfer agent setting forth the number of shares of Common Stock
outstanding. Upon the written or oral request of the Holder, the
Company shall within one Business Day confirm orally and in writing to
the Holder the number of shares of Common Stock then outstanding. In
any case, the number of outstanding shares of Common Stock shall be
determined after giving effect to the conversion or exercise of Common
Stock Equivalents, including this Note and the Warrants, by the Holder
or its Aggregation Parties, in each such case subsequent to, the date
as of which such number of outstanding shares of Common Stock was
reported.
SECTION 5. DEFAULTS AND REMEDIES.
(a) EVENTS OF DEFAULT. An "Event of Default" is: (i) a failure to pay
any Principal Amount or accrued but unpaid interest thereon of this Note on the
date such payment is due (to the extent such principal and/or amount has not
been converted into Common Stock in accordance with the terms hereof), which
failure continues for two Business Days after written notice of such non-payment
has been received by the Company from the Holder; (ii) a failure timely to issue
Underlying Shares upon and in accordance with terms hereof, which failure
continues for ten Business Days after the Company has received written notice
from the Holder informing the Company that it has failed to issue shares or
deliver stock certificates prior to the fifth Business Day following the
applicable Conversion Date; (iii) failure by the Company or any Subsidiary for
twenty (20) days after written
-17-
notice has been received by the Company from the Holder to comply with any
material provision (other than as provided in the immediately preceding clauses
(i) and (ii)) of any of this Note, the Exchange Agreement, the Registration
Rights Agreement, the Security Agreement, the Subsidiary Security Agreement, the
Warrants or any other agreement or instrument of the Company or any Subsidiary
or between the Company or any Subsidiary and the Holder relating thereto
(including, without limitation the failure to redeem this Note upon the Holder's
request following a Change in Control Transaction pursuant to Section 4(c)(vi));
(iv) a material breach by the Company or KKLLC of its representations or
warranties in this Note, the Exchange Agreement, the Registration Rights
Agreement, the Security Agreement, the Subsidiary Security Agreement, or the
Warrants; (v) any default after any cure period under, or acceleration prior to
maturity of, any note, mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any indebtedness for
money borrowed by the Company or KKLLC for in excess of $1 million, or for money
borrowed the repayment of which is guaranteed by the Company or KKLLC for in
excess of $1 million, whether such indebtedness or guarantee now exists or shall
be created hereafter; (vi) if the Company or KKLLC is subject to any Bankruptcy
Event; (vii) if (x) the Company fails to obtain the stockholder approval
contemplated by Section 6.1(a) of the Exchange Agreement as and when required
thereby, (y) under the rules of Nasdaq the 20% Cap is applicable to the
Company's issuance of shares of Common Stock upon conversion of and issuance of
shares of Common Stock upon exercise of the Warrants without such stockholder
approval, and (z) the Company is unable to issue additional shares of Common
Stock upon conversion of this Note within the 20% Cap; or (viii) if the
Registration Statement required by Section 2(a)(i) of the Registration Rights
Agreement is not filed with the SEC by April 30, 2004, or declared effective by
the SEC by June 15, 2004, or if the Registration Statement required by Section
2(a)(ii) of the Registration Rights Agreement is not declared effective by the
SEC within ninety (90) days following demand of the Holder pursuant to the
Registration Rights Agreement.
(b) REMEDIES. If an Event of Default occurs and is continuing, the
Holder may declare all of the then outstanding Principal Amount of this Note,
and any accrued and unpaid interest thereon, to be due and payable immediately
in cash, except that in the case of an Event of Default arising from events
described in clauses (v) and (vi) of Section 5(a), this Note shall become
automatically due and payable without further action or notice, and the Holder
may exercise all other rights and remedies available at law or in equity. In the
event of such acceleration, the amount due and owing to the Holder shall be 125%
of the outstanding Principal Amount of this Note (plus all accrued and unpaid
interest, if any). In any event the Company shall pay interest on such amount in
cash at the Default Rate to the Holder if such amount is not paid within one
Business Day after such acceleration. The remedies under this Note shall be
cumulative.
-18-
SECTION 6. CERTAIN COVENANTS; GENERAL.
(a) RULE 144A INFORMATION REQUIREMENT. Within the period prior to the
expiration of the holding period applicable to sales hereof under Rule 144(k)
under the Securities Act (or any successor provision), the Company covenants and
agrees that it shall, during any period in which it is not subject to Section 13
or 15(d) under the Exchange Act, make available to the Holder and any
prospective purchaser of this Note from the Holder, the information required
pursuant to Rule 144A(d)(4) under the Securities Act upon the request of the
Holder and it will take such further action as the Holder may reasonably
request, all to the extent required from time to time to enable the Holder to
sell this Note without registration under the Securities Act within the
limitations of the exemption provided by Rule 144A, as Rule 144A may be amended
from time to time. Upon the request of the Holder, the Company will deliver to
the Holder a written statement as to whether it has complied with such
requirements.
(b) PAYMENT OF EXPENSES. The Company agrees to pay all reasonable
charges and expenses, including attorneys' fees and expenses, which may be
incurred by the Holder in seeking to enforce this Note.
(c) SAVINGS CLAUSE. In case any provision of this Note is held by a
court of competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent possible, and the validity and
enforceability of the remaining provisions of this Note will not in any way be
affected or impaired thereby. In no event shall the amount of interest paid
hereunder exceed the maximum rate of interest on the unpaid principal balance
hereof allowable by applicable law. If any sum is collected in excess of the
applicable maximum rate, the excess collected shall be applied to reduce the
principal debt. If the interest actually collected hereunder is still in excess
of the applicable maximum rate, the interest rate shall be reduced so as not to
exceed the maximum allowable under law.
(d) AMENDMENT. Neither this Note nor any term hereof may be amended,
waived, discharged or terminated other than by a written instrument signed by
the Company and Holder.
(e) ASSIGNMENT, ETC. The Holder may assign or transfer this Note,
subject to compliance with applicable securities laws, without the consent of
the Company, except that the Holder may not assign or transfer this Note to a
Person who is a business competitor of the Company in any significant respect
without the Company's prior written consent, which the Company may withhold in
its sole discretion. The Holder shall notify the Company of any such assignment
or transfer promptly. The Company may not assign its rights or obligations under
this Note. This
-19-
Note shall be binding upon the Company and its successors and shall inure to the
benefit of the Holder and its successors and permitted assigns.
(f) NO WAIVER. No failure on the part of the Holder to exercise, and no
delay in exercising any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Holder of any
right, remedy or power hereunder preclude any other or future exercise of any
other right, remedy or power. Each and every right, remedy or power hereby
granted to the Holder or allowed it by law or other agreement shall be
cumulative and not exclusive of any other, and may be exercised by the Holder
from time to time.
(g) GOVERNING LAW; JURISDICTION.
(i) GOVERNING LAW. THIS NOTE WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA WITHOUT REGARD TO ANY
CONFLICTS OF LAWS PROVISIONS THEREOF THAT WOULD OTHERWISE REQUIRE THE
APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.
(ii) JURISDICTION. The Company irrevocably submits to the
exclusive jurisdiction of the United States District Court for the
Northern District of Texas located in Dallas County, Dallas, Texas
(such consent shall not be deemed a general consent to jurisdiction
and service for any third party) over any suit, action, or proceeding
arising out of or relating to this Note. The Company irrevocably
waives, to the fullest extent permitted by law, any objection which it
may now or hereafter have to the laying of the venue of any such suit,
action, or proceeding brought in such a court and any claim that such
suit, action, or proceeding has been brought in an inconvenient forum.
The Company agrees that the service of process upon it mailed by
certified or registered mail (and service so made shall be deemed
complete five Business Days after the same has been posted as
aforesaid) by personal service shall be deemed in every respect
effective service of process upon it in any such suit or proceeding.
Nothing herein shall affect Holder's right to serve process in any
other manner permitted by law. The Company agrees that a final
non-appealable judgment in any such suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on such
judgment or in any other lawful manner.
(iii) NO JURY TRIAL. The Company knowingly and voluntarily waives
any and all rights it may have to a trial by jury with respect to any
litigation based on, or arising out of, under, or in connection with,
this Note.
(i) REPLACEMENT NOTES. This Note may be exchanged by Holder at any time
and from time to time for a Note or Notes with different denominations
-20-
representing an equal aggregate outstanding Principal Amount, as reasonably
requested by Holder, upon surrendering the same. No service charge will be made
for such registration or exchange. In the event that Holder notifies the Company
that this Note has been lost, stolen or destroyed, a replacement Note identical
in all respects to the original Note (except for registration number and
Principal Amount, if different than that shown on the original Note), shall be
issued to the Holder, without requirement for any surety bond, provided that the
Holder executes and delivers to the Company an agreement reasonably satisfactory
to the Company to indemnify the Company from any loss incurred by it in
connection with this Note.
[Signature Page Follows]
-21-
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed on the day and in the year first above written.
KNIGHTSBRIDGE FINE WINES, INC.
By:
--------------------------------
Name: Xxxx Xxxxxxx
Title: President & CEO
-22-
ASSIGNMENT
For value received _______________ hereby sell(s), assign(s) and
transfer(s) unto _______________ (Please insert social security or other
Taxpayer Identification Number of assignee: _______________) the within Note,
and hereby irrevocably constitutes and appoints _______________________ attorney
to transfer the said Note on the books of Knightsbridge Fine Wines, Inc., a
Nevada corporation (the "Company"), with full power of substitution in the
premises.
In connection with any transfer of the Note within the period prior to
the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision) (other than any
transfer pursuant to a registration statement that has been declared effective
under the Securities Act), the undersigned confirms that such Note is being
transferred:
[ ] To the Company or a subsidiary thereof; or
[ ] To a QIB pursuant to and in compliance with Rule 144A; or
[ ] To an "accredited investor" pursuant to and in compliance with
the Securities Act; or
[ ] Pursuant to and in compliance with Rule 144 under the Securities
Act;
and unless the box below is checked, the undersigned confirms that, to the
knowledge of the undersigned, such Note is not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"Affiliate").
[ ] The transferee is an Affiliate of the Company.
Capitalized terms used in this Assignment and not defined in this
Assignment shall have the respective meanings provided in the Note.
Dated: NAME:
--------------------- ---------------------------------------
--------------------------------------------
Signature(s)
-23-
EXHIBIT A
FORM OF CONVERSION NOTICE
(To be executed by the Holder in order to convert 7.5% Senior Secured
Convertible Note Due 2006)
Re: 7.5% Senior Secured Convertible Note Due 2006 issued by
KNIGHTSBRIDGE FINE WINES, INC. identified below (the "Note")
The undersigned hereby elects to convert the outstanding Principal Amount (as
defined in the Note) indicated below of the Note into shares of Common Stock of
KNIGHTSBRIDGE FINE WINES, INC., a Nevada corporation (the "Company"), according
to the terms hereof and of the Note, as of the date written below. If shares are
to be issued in the name of a person other than undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by the Company
in accordance therewith. No fee will be charged to the Holder for any
conversion, except for such transfer taxes, if any. The undersigned represents
as of the date hereof that, after giving effect to the conversion of the Note
pursuant to this Conversion Notice, the undersigned will not exceed the
"Restricted Ownership Percentage" contained in Section 4(i)(a) of the Note.
Conversion information:
-----------------------------------------
Note Number
-----------------------------------------
Conversion Date
-----------------------------------------
Principal Amount of Note Being Converted
-----------------------------------------
Number of Shares of Common Stock to Be
Issued
-----------------------------------------
Applicable Conversion Price
-----------------------------------------
Signature
-----------------------------------------
Name
-----------------------------------------
Address
A-1
