ANNEX A
FORM OF CONVERTIBLE NOTE
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ISSUED PURSUANT TO REGULATION S
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND
HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT. SUCH SECURITIES MAY NOT BE
TRANSFERRED, OFFERED OR SOLD PRIOR TO THE END OF THE FORTY (40) DAY PERIOD (THE
"RESTRICTED PERIOD") COMMENCING ON JULY 5, 1996 UNLESS SUCH TRANSFER, OFFER OR
SALE IS MADE IN AN "OFFSHORE TRANSACTION" AND NOT TO OR FOR THE ACCOUNT OF OR
BENEFIT OF A "U.S. PERSON" (AS SUCH TERMS ARE DEFINED IN REGULATION S) AND IS
OTHERWISE IN ACCORDANCE WITH THE REQUIREMENTS OF REGULATION S. FOLLOWING THE
EXPIRATION OF THE RESTRICTED PERIOD, THE SECURITIES REPRESENTED HEREBY MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S.
PERSON UNLESS THE SECURITIES ARE REGISTERED UNDER THE 1933 ACT AND APPLICABLE
STATE SECURITIES LAWS, OR SUCH OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT TO
AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.
MANAGEMENT TECHNOLOGIES, INC.
6 3/4 % CONVERTIBLE NOTE DUE JULY 8 , 1999
THIS NOTE is one of a duly authorized issue of Convertible Notes of MANAGEMENT
TECHNOLOGIES, INC., a Corporation duly organized and existing under the laws of
the state of New York (the "Company") designated as its
6 3/4% Convertible Note Due July 5 , 1999, in an aggregate principal amount of
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$2,000,000.
FOR VALUE RECEIVED, the Company promises to pay to RBB BANK AG . or the
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registered holder hereof (the "Holder"), the principal sum of $ 2,000,000
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(United States Dollars) on July 5 , 1999 (the "Maturity Date"), and to pay
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interest on the principal sum outstanding from time to time, quarterly in
arrears on 8 October, 8 January, 8 April and 8 July (the Interest Payment Date),
at the rate of 6 3/4 % per annum accruing from the date of issuance. Accrual of
interest shall commence on the first business day to occur after the date hereof
until repayment in full of the principal sum has been made or duly provided for.
Accrued and unpaid interest shall bear interest at the same rate from the due
date of the interest payment, until paid. The interest so payable will be paid
on 8 October, 8 January, 8 April and 8 July to the person in whose name this
Note (or one or more predecessor Notes) is registered on the records of the
Company regarding registration and transfers of the Notes (the "Note Register")
on the tenth day prior to the Interest Payment Date. The principal of, and
interest on, this Note are payable in Common Stock of the Company at the address
last appearing on the Note Register of the Company as designated in writing by
the Holder from time to time. The Company will pay the principal of and
interest upon this Note on the due date, free of any withholding or deduction of
any kind, to the registered Holder of this Note as of the tenth day prior to the
due date and addressed to such Holder at the last address appearing on the Note
Register. The forwarding of such Common Stock of the Company shall constitute a
payment of principal and interest hereunder and shall satisfy and discharge the
liability for principal and interest on this Note to the extent of the Common
Stock so issued.
This Note is subject to the following additional provisions:
l.The Notes are originally issuable in denominations of $50,000 and integral
multiples thereof.
2.The Buyer agrees to file appropriate tax exemption certificates with the
appropriate authorities.
3. If at any time there occurs a transaction in which in excess of 50% of the
Company's voting power is transferred, including any consolidation or merger
of 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,
the Holders of this Note then outstanding may participate in any such
transaction as a class with common stockholders on the same basis as if this
Note had been converted one day prior to the effective date of such
transaction; provided, however, that at the option of the Holder of this
Note, such Holder may treat the effective date of any transaction that occurs
prior to July 5, 1999 as a redemption date and shall be entitled to have the
Company redeem the Notes at a price equal to 100 % of the outstanding
principal amount of this Note, plus accrued but unpaid interest. Such holder
shall be entitled to make such election at any time up to 10 days after the
effective date of the transaction. The Company shall not effect any stock
split, subdivision or combination with an effective date within three (3)
trading days of the effective date of a merger or consolidation. The Company
shall not make, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable in
additional shares of common Stock, with an effective date within three (3)
trading days of the effective date of a merger or consolidation.
4.The Holder of this Note is entitled, at its option, at any time commencing
forty-one (41) days after the Closing Date as defined in the Offshore
Securities Subscription Agreement until maturity hereof to convert one-half
(1/2) or any portion of the principal amount hereof which is at least $50,000
into shares of common stock of the Company ("Shares") at a conversion price
for each share of common stock equal to the lesser of (i) one hundred percent
(100%) of the average closing bid price for the five (5) days immediately
preceding the Closing Date or (ii) seventy percent (70%) of the average
closing bid price for the five (5) trading days immediately preceding the
Conversion Date. The remaining one-half (1/2) of the original principal
amount of this Note will be subject to the above noted terms with the
exception that it will not be convertible into Shares of common stock until
the expiration of sixty-five (65) days after the Closing Date (i.e. one-
half{1/2} of the original aggregate principal amount), provided, however,
that in no event shall the Holder be entitled to convert any portion of this
Note in excess of that portion of this Note upon conversion of which the sum
of (1) the number of shares of Common Stock beneficially owned by the Holder
and its affiliates (other than shares of Common Stock which may be deemed
beneficially owned as a result of the ownership of the unconverted portion
of this Note and (2) the number of shares of Common Stock issuable upon the
conversion of the portion of this Note with respect to which the
determination of this proviso is being made, would result in beneficial
ownership by the Holder and its affiliates of more than 4.9% of the
outstanding shares of Common Stock. For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13 D-G thereunder, except as otherwise provided in
clause (1) of such proviso.). In the event of any stock split, dividend,
combination or similar event, the conversion price will be subject to
appropriate adjustment. For purposes of this section, the closing bid price
of the common stock shall be the closing bid price as reported by the
National Association of Securities Dealers, Inc. Electronic Bulletin Board,
or the closing bid price in the over-the-counter market or, in the event the
common stock is listed on a stock exchange, the closing bid price on such
exchange as reported in The Wall Street Journal. Such conversion shall be
effectuated by surrendering the Notes to be converted to the Company, with
the form of conversion notice attached to the Note as Exhibit A, executed by
the Holder of the Note evidencing such Holder's intention to convert this
Note, and accompanied, if required by the Company, by proper assignment
hereof in blank. Interest accrued or accruing from the date of issuance to
the date of conversion shall be paid in shares of common stock of the
Company, calculated at the same conversion price as the principal amount as
determined above, and shall constitute payment in full of any such interest
on the same terms as would otherwise apply to the conversion of the principal
amount hereof. No fractional Shares or scrip representing fractions of
Shares will be issued on conversion, but the number of Shares issuable shall
be rounded to the nearest whole Share. The date on which notice of
conversion is given ("Conversion Date") shall be deemed to be the date on
which the Holder notifies to the Company of its intention to convert by
delivery, by facsimile transmission or otherwise, of a copy of the Conversion
Notice (as defined below). Notice may be given by facsimile to the Company
at (+-1-212-557-6967). This Note, together with the original executed copy
of the Notice of Conversion, shall be delivered to the Company as soon as
practicable following the date on which notice of conversion is given as
described above. Any unconverted principal amount and accrued interest
thereon shall at the maturity date be remitted , in shares of common stock.
Upon the surrender of this Note, accompanied by a Notice of Conversion of
Convertible Note in the form attached hereto as Exhibit A, properly completed
and duly executed by the Holder (a "Conversion Notice"), the Company shall
issue and, within three (3) business days (the "Deadline") after such
surrender of this Note with the Conversion Notice, deliver to or upon the
order of the Holder (1) that number of shares of Common Stock for the portion
of the Note converted as shall be determined in accordance herewith and (2) a
new Note in the form hereof for the balance of the principal amount hereof,
if any. Without in any way limiting the Holder's right to pursue other
remedies, including actual damages and/or equitable relief, the parties agree
that if delivery of the Common Stock issuable upon conversion of this Note is
more than one (1) business day after the Deadline (other than a failure due
to the circumstances described in the second paragraph of Section 11 below,
which failure shall be governed by such Section) the Company shall pay to the
Holder $150 per day in cash, for the first day beyond the Deadline and $500
per day for each day thereafter that the Company fails to deliver such Common
Stock. Such cash amount shall be paid to Holder by the fifth day of the
month following the month in which it has accrued or, at the option of the
Holder (by written notice to the Company by the first day of the month
following the month in which it has accrued), shall be added to the principal
amount of this Note, in which event interest shall accrue thereon in
accordance with the terms of this Note and such additional principal amount
shall be convertible into Common Stock in accordance with the terms of this
Note.
The number of shares of Common Stock to be issued upon each conversion of
this Note shall be determined by dividing (i) the sum of (A) that portion of
the principal amount of the Note to be converted plus (B) the "Conversion
Date Interest" (as defined below), by (ii) the Conversion Price in effect on
the date the Conversion Notice is delivered to the Company by the Holder.
Conversion Date Interest means the product of (i) the principal amount of the
Note to be converted, multiplied by (ii) a fraction (A) the numerator of
which is the number of days elapsed since the date of issuance of this Note
and (B) the denominator of which is 365, multiplied by (iii) .0675.
5.No provision of this Note shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, and
interest on, this Note at the time, place, and rate, herein prescribed. This
Note and all other Notes now or hereafter issued on similar terms are direct
obligations of the Company. This Note ranks equally with all other Notes now
or hereafter issued under the terms set forth herein. In the event of any
liquidation, reorganization, winding up or dissolution repayment of this Note
shall be subordinate in all respects to any other indebtedness for borrowed
money of the Company, whether outstanding as of the date of this Note or
hereafter incurred. Such subordination shall extend without limiting the
generality of the foregoing, to all indebtedness of the Company to banks,
financial institutions, other secured lenders, equipment lessors and
equipment finance companies, but shall exclude trade debts; and any warrants,
options or other securities convertible into stock of the Company shall rank
pari passu with the Notes in all respects.
6.The Company hereby expressly waives demand and presentment for payment,
notice of nonpayment, protest, notice of protest, notice of dishonor, notice
of acceleration or intent to accelerate, bringing of suit and diligence in
taking any action to collect amounts called for hereunder and shall be
directly and primarily liable for the payment of all sums owing and to be
owing hereon, regardless of and without any notice, diligence, act or
omission as or with respect to the collection of any amount called for
hereunder.
7.In the event the Company at any time or from time to time after the Closing
Date makes, a dividend or other distribution to Holders of Common Stock
payable in securities of the Company other than shares of Common Stock, then
and in each such event provision shall be made so that the Holders of Notes
shall receive upon conversion thereof pursuant to Paragraph 4 hereof, in
addition to the number of shares of common Stock receivable thereupon, the
amount of such other securities of the Company to which a Holder on the
relevant record or payment date, as applicable, of the number of shares of
Common Stock so receivable upon conversion would have been entitled, plus any
dividends or other distributions which would have been received with respect
to such securities had such Holder thereafter, during the period from the
date of such event to and including the holder conversion date retained such
securities, subject to all other adjustments called for during such period
under this Note with respect to the rights of the Holders of the Notes.
8.In the event that at any time or from time to time after the Closing Date,
the Common Stock issuable upon the conversion of the Note is changed into the
same or different number of shares of any class or classes of stock, whether
by re-capitalization, reclassification or otherwise (other than a subdivision
or combination of shares or stock dividend or reorganization provided for
elsewhere in this Note or a merger or consolidation, provided for in
Paragraph 3), then and in each such event each Holder of Notes shall have the
right thereafter to convert such Note into the kind of stock receivable upon
such re-capitalization, reclassification or other change by holders of shares
of Common Stock, all subject to further adjustment as provided herein. In
such event, the formulae set forth herein for conversion and redemption shall
be equitably adjusted to reflect such change in number of shares or, if
shares of a new class of stock are issued, to reflect the market price of the
class or classes of stock issued in connection with the above described
transaction.
9.If at any time or from time to time after the Closing Date there is a capital
reorganization of the Common Stock (other than a re-capitalization,
subdivision, combination, reclassification exchange of shares provided for
elsewhere in this Note) then, as a part of such reorganization, provision
shall be made so that the Holders of the Notes shall thereafter be entitled
to receive upon conversion of the Notes the number of shares of stock or
other securities or property to which a holder of the number of shares of
Common Stock deliverable upon conversion would have been entitled on such
capital reorganization. In any such case, appropriate adjustment shall be
made in the application of the provisions of this Note with respect to the
rights of the Holders of the Notes after the reorganization to the end that
the provisions of this Note shall be applicable after that event and be as
nearly equivalent as may be practicable, including, by way of illustration
and not limitation, by equitably adjusting the formulae set forth herein for
conversion and redemption to reflect the market price of the securities or
property issued in connection with the above described transaction.
10. If one or more of the "Events of Default" as described in paragraph 11
shall occur, the Company agrees to pay all costs and expenses, including
reasonable attorneys' fees, which may be incurred by Holder in collecting any
amount due under this Note.
11. If one or more of the following described "Events of Default" shall occur:
(a) The Company shall default in the payment of principal or interest on
this Note; or
(b) Any of the representations or warranties made by the Company herein,
in the Offshore Securities Subscription Agreement dated as of July 5, 1996
between the Company and the Holder (the "Subscription Agreement"), or in
any certificate or financial or other statements heretofore or hereafter
furnished by or on behalf of the Company in connection with the execution
and delivery of this Note or the Subscription Agreement shall be false or
misleading in any material respect at the time made; or
(c) The Company shall fail to perform or observe any other covenant, term,
provision, condition, agreement or obligation of the Company under this
Note and such failure shall continue uncured for a period of thirty (30)
days after notice from the Holder of such failure; or
(d) The Company shall (1) become insolvent; (2) admit in writing its
inability to pay its debts as they mature; (3) make an assignment for the
benefit of creditors or commence proceedings for its dissolution; or (4)
apply for or consent to the appointment of a trustee, liquidator or
receiver for it or for a substantial part of its property or business; or
(e) A trustee, liquidator or receiver shall be appointed for the Company
or for a substantial part of its property or business without its consent
and shall not be discharged within thirty (30) days after such appointment;
or
(f) Any governmental agency or any court of competent jurisdiction at the
instance of any governmental agency shall assume custody or control of the
whole or any substantial portion of the properties or assets of the Company
and shall not be dismissed within thirty (30) days thereafter; or
(g) Any money judgment, writ or warrant of attachment, or similar process
except mechanics and materialmen's liens incurred in the ordinary course of
business in excess of Two Hundred Thousand Dollars ($200,000) in the
aggregate shall be entered or filed against the Company or any of its
properties or other assets and shall remain unvacated, unbonded or unstayed
for a period of fifteen (15) days or in any event later than five (5) days
prior to the date of any proposed sale thereunder; or
(h) Bankruptcy, reorganization, insolvency or liquidation proceedings or
other proceedings for relief under any bankruptcy law or any law for the
relief of debtors shall be instituted by or against the Company and, if
instituted against the Company, shall not be dismissed, stayed or bonded
within sixty (60) days after such institution or the Company shall by any
action or answer approve of, consent to, or acquiesce in any such
proceedings or admit the material allegations of, or default in answering a
petition filed in any such proceeding; or
(i) The company shall have its common stock delisted from an exchange or
NASDAQ.
Then, or at any time thereafter, and in each and every such case, unless
such Event of Default shall have been waived in writing by the Holder
(which waiver shall not be deemed to be a waiver of any subsequent default)
at the option of the Holder and in the Holder's sole discretion, the Holder
may consider this Note immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby expressly
waived, anything herein or in any note or other instruments contained to
the contrary notwithstanding, and the Holder may immediately, and without
expiration of any period of grace, enforce any and all of the Holder's
rights and remedies provided herein or any other rights or remedies
afforded by law. In such event, this Note shall be redeemed by the Company
at a redemption price per Note equal to 130% of the entire outstanding
principal amount due hereunder plus accrued but unpaid interest.
12. In the event that at any time on or after the date hereof and prior to the
anniversary of the Closing Date, trading in the shares on the Company's
Common Stock is suspended on the principal market or exchange for such shares
(including the NASDAQ Stock Market), for a period of five consecutive trading
days, other than as a result of the suspension or trading in securities in
general, or if such Shares are delisted, then, at a Holder's option, the
company shall redeem such Holder's Notes at a redemption date designated by
such Holder, and the redemption price provided in Paragraph 11.
13. Notwithstanding anything to the contrary contained herein, each conversion
notice shall contain a representation that, after giving effect to the shares
of the Company's Common Stock to be issued pursuant to such conversion
notice, the total number of shares of the Company's Common Stock deemed
beneficially owned by the Holder, together with all shares of the Company's
Common Stock deemed beneficially owned by the Holder's "affiliates" as
defined in Rule 144 of the Act, will not exceed 4.9% of the total issued and
outstanding shares of the Company's Common Stock. In addition,
notwithstanding anything to the contrary contained herein, the amount of
securities converted during any three month period shall not exceed the
amount provided in Rule 144(e)(1) of the Act.
14. The Holder may, subject to compliance with the Offshore Securities
Subscription Agreement and the provisions of Regulation S, without notice,
transfer or assign this Note or any interest herein and may mortgage,
encumber or transfer any of its rights or interest in and to this Note or any
part hereof and, without limitation, each assignee, transferee and mortgagee
(which may include any affiliate of the Holder) shall have the right to
transfer or assign its interest. Each such assignee, transferee and
mortgagee shall have all of the rights of the Holder under this note.
15. For so long as any amount payable under this Note remains unpaid, the
Company shall furnish to the Holder the following information:
(a) No later than ninety (90) days following the end of each fiscal year,
beginning with the fiscal year ending April 30, 1996, consolidated
balance sheets, statements of income and statements of cash flow and
shareholders' equity of the Company and its subsidiaries, if any,
prepared in accordance with generally accepted accounting principles
("GAAP"), and audited by a firm of independent public accountants.
The Company may satisfy this requirement by delivering its report on
form 10-K for each such year.
(b) Within forty-five (45) days after the end of each quarter (except the
fourth quarter) of each fiscal year, consolidated balance sheets,
statements of income and statements of cash flow and shareholders'
equity of the Company and its subsidiaries. The Company may satisfy
this requirement by delivering its report on form 10-Q for each such
quarter.
16. The Company covenants and agrees that until all amounts due under this Note
have been paid in full, by conversion or otherwise, unless the Holder waives
compliance in writing, the Company shall:
(a) Give prompt written notice to the Holder of any Event of Default as
defined in this Note or of any other matter which has resulted in, or
could reasonably be expected to result in, a materially adverse change
in its financial condition or operations.
(b) Give prompt notice to the Holder of any claim, action or proceeding
which, in the event of any unfavorable outcome, would or could
reasonably be expected to have a material adverse effect on the
financial condition of the Company.
(c) At all times reserve and keep available out of its authorized but
unissued stock, for the purpose of effecting the conversion of this
Note such number of its duly authorized shares of common stock as
shall from time to time be sufficient to effect the conversion of the
outstanding principal balance of this Note into shares of common
stock. If the company does not have a sufficient number of shares of
Common Stock available to satisfy the Company's obligations to a
Holder of Notes upon receipt of a conversion notice or is otherwise
unable to issue such shares of Common Stock in accordance with the
terms of this Note (a "Conversion Default"), from and after the tenth
(10th) day following a Conversion Default (which for all purposes
shall be deemed to have occurred upon the Company's receipt of the
applicable conversion notice), each Holder of the Notes shall have the
right to demand from the Company immediate redemption of the Notes in
cash at a redemption price per Note equal to 130% of the outstanding
principal amount of the Note, plus accrued but unpaid interest on the
Note; provided, however, that no notice of redemption may be delivered
by a Holder subsequent to receipt by such holder of notice from the
Company (sent by overnight or 2-day courier with a copy sent by
facsimile) of availability of sufficient shares of Common Stock to
perfect conversion (a "Post-Default Conversion") of all the Notes;
provided further that such right shall be reinstated if the Company
shall thereafter fail to perfect such Post-Default Conversion by
delivery of Common Stock certificates in accordance with the
applicable provision of Paragraph 4 hereof and payment of all accrued
and unpaid interest in cash with respect thereto within five business
days of delivery of the notice of Post-Default Conversion. In
addition to the foregoing, upon a Conversion Default, the rate of
interest on all of the Notes shall, to the maximum extent of the law,
be increased by two percent (2%) (i.e., from 6 3/4% to 5 3/4%
commencing on the first day of the thirty (30) day period (or part
thereof) following a Conversion Default; an additional two percent
(2%) commencing on the first day of each of the second and third such
thirty (30) day periods (or part thereof); an additional one percent
(1%) on the first day of each consecutive thirty (30) day period (or
part thereof) thereafter until such securities have been duly
converted or redeemed as herein provided. Any such interest which is
not paid when due shall, to the maximum extent permitted by law,
accrue interest until paid at the rate from time to time applicable to
interest on the Notes as to which the Conversion Default has occurred.
(d) Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Note and
(i) in the case of loss, theft or destruction, upon provision of
indemnity reasonably satisfactory to it and/or its transfer agent, or
(ii) in the case of mutilation, upon surrender and cancellation of
this Note,
the Company at its expense will execute and deliver a new Note, dated
the date of the lost, stolen, destroyed or mutilated Note.
17. The Holder of this Note, by acceptance hereof, agrees that this Note is
being acquired for investment and that such Holder will not offer, sell or
otherwise dispose of this Note or the Shares of common stock issuable upon
exercise thereof except under circumstances which will not result in a
violation of the Act or any applicable state Blue Sky laws or similar laws
relating to the sale of securities.
18. 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.
19. This Note and the Offshore Securities Subscription Agreement between the
Company and the Holder constitutes the full and entire understanding and
agreement between the Company and the Holder with respect to the subject
hereof. 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 the Holder.
20. This Note shall be governed by and construed in accordance with the laws of
the state of New York.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
BY: MANAGEMENT TECHNOLOGIES, INC.
/s/ Peter Morris /s/ Paul Ekon
Name: Peter Morris Name: Paul Ekon
Title. President and Chief Operating Officer Title C.E.O.
BY: RBB BANK AG
/s/ Herbert Strauss
Name: Herbert Strauss
Title: Head Trader
July 8, 1996
MTCI acknowledges that RBB Bank holds the debenture for many different clients
and RBB Bank assures MTCI that on any conversion, no single holder is the
beneficial owner of more than 4.9% of the outstanding common shares,
consequently the 4.9% rule used to determine the amounts of shares issued on
conversion should apply to the end clients and not to the representative bank
RBB. With this assurance, MTCI shall grant conversion upon request after the
applicable time periods stated in the subscription agreement. Should any single
client hold more than 4.9% RBB bank will file the proper documents with the
Securities and Exchange Commission.
/s/ Herbert Strauss /s/ Peter Morris
Herbert Strauss Peter Morris
RBB Bank Management Technologies Inc.
EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Note)
RE: 6 3/4% CONVERTIBLE NOTE OF MANAGEMENT TECHNOLOGIES, INC.
IN THE PRINCIPAL AMOUNT OUTSTANDING OF $ 2,000,000 .
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The undersigned hereby irrevocably elects to convert $ of the
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outstanding principal amount of the above referenced Note No. into
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Shares of common stock of MANAGEMENT TECHNOLOGIES, INC. (the "Company")
according to the conditions hereof, as of the date written below. The
undersigned represents and warrants that (i) all of the requirements of
Regulation S promulgated under the Securities Act of 1933, as amended (the
"Securities Act") applicable to the undersigned have been complied with by the
undersigned and (ii) the undersigned has not engaged in any transaction or
series of transactions that is a part of or a plan or scheme to evade the
registration requirements of the Securities Act.
Date of Conversion*
Applicable Conversion Price
Signature
Name
Address:
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* This original Note and Notice of Conversion must be received by the Company by