American Radio Empire, Inc.
13210 Kerrville Folkway, Building G, Austin, Texas 78729-7522 (512) 249-9600
12% CONVERTIBLE PROMISSORY NOTE
Principal amount: $________ Date: _______________, 2003
FOR VALUE RECEIVED, the undersigned hereby promise to pay to the order of
__________, the sum of _________ Thousand and no/100 Dollars ($__________),
together with interest thereon at the rate of twelve percent (12%) per annum on
the unpaid balance. Said sum shall be paid in the manner following:
This is one of a series of 12% Convertible Promissory Notes ("Notes"),
which will be due ______________, 2004, with mandatory conversion to registered
shares of the Company's common stock (the "Common Stock").
Interest is to be paid in cash at maturity or upon earlier conversion of
the Notes, unless the holder of the Notes elects to convert accrued interest to
shares of Common Stock on the same basis as the conversion of principal.
The Notes shall be mandatorily convertible into registered shares of Common
Stock forty-five (45) days after the effectiveness of the Company's registration
statement under the Securities Act of 1933 filed with the Securities and
Exchange Commission. The conversion rate shall be at the lesser of (i) $0.80 per
share, or (ii) 80% of the average closing price of the Common Stock during its
first 30 trading days. Notwithstanding the foregoing, if, at any time after the
issuance of this Note, the Company shall issue any Common Stock, or other equity
that, as part of a unit or otherwise, includes Common Stock, the conversion
privileges of this Note shall be equitably adjusted such that, upon conversion,
the holder of $100,000 in principal amount of Notes shall receive Common Stock
representing ___% of the then-outstanding Common Stock. Upon conversion, the
holder agrees to enter into a "lockup" agreement (upon customary terms and
conditions) covering the shares of Common Stock for 9 months after the
effectiveness of the Company's registration statement.
In the event that the effectiveness of the Company's registration statement
under the Securities Act of 1933 filed with the Securities and Exchange
Commission shall not have occurred on or before November 6, 2004, this not and
accrued but unpaid interest thereon shall be due and payable in full. In the
event this note shall be in default and placed for collection, then the
undersigned agrees to pay all reasonable attorneys' fees and costs of
collection. All payments hereunder shall be made to such address as may from
time to time be designated by any holder.
No modification or indulgence by any holder hereof shall be binding unless
in writing; and any indulgence on any one occasion shall not be an indulgence
for any other or future occasion. The rights of any holder hereof shall be
cumulative and not necessarily successive. This note shall take effect as a
sealed instrument and shall be construed, governed and enforced in accordance
with the laws of the State of Nevada.
American Radio Empire, Inc.
By :
Dain Schult, President
