Exhibit 10.3
$1,000,000 May 24, 2002
THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE
COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO VALCOM, INC. AND VALENCIA ENTERTAINMENT, L.L.C., THAT SUCH
REGISTRATION IS NOT REQUIRED.
CONVERTIBLE NOTE SECURED BY
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
FIXTURES, AND SECURITY AGREEMENT
FOR VALUE RECEIVED, VALCOM, INC., a Delaware corporation ("ValCom") and
Valencia Entertainment International, L.L.C., a California limited liability
company and a wholly owned subsidiary of ValCom ("Valencia" and, collectively
with ValCom, the "Borrower"), jointly and severally, hereby promises to pay to
LAURUS MASTER FUND, LTD., c/o Ironshore Corporate Services Ltd., P.O. Box 1234
G.T., Queensgate House, South Church Street, Grand Cayman, Cayman Islands, Fax:
345-949-9877 (the "Holder" or "Lender") on order, without demand, the sum of One
Million Dollars ($1,000,000), with any accrued and unpaid interest on May 24,
2004 (the "Maturity Date").
Five Hundred Thousand Dollars ($500,000) of this Note shall be held back by
the Lender until receipt by the Lender of the fully executed Subordination and
Nondisturbance Agreements, pursuant to Section 4.9 of the Purchase Agreement (as
defined below). In the event the Lender does not receive the fully executed
Subordination and Nondisturbance Agreements then the Lender shall not provide
the Borrower with the additional Five Hundred Thousand Dollars ($500,000) and
the principal amount of this note shall be reduced by such amount. The interest
on the additional Five Hundred Thousand Dollars ($500,000) shall not accrue
until the Borrower has received such funds.
The following terms shall apply to this Note:
ARTICLE I
DEFAULT RELATED PROVISIONS
1.1 Payment Grace Period. The Borrower shall have a seven (7)
day grace period to pay any monetary amounts due under this Note, after which
grace period a default interest rate of five percent (5%) per annum above the
then applicable interest rate hereunder shall apply to the amounts owed
hereunder.
1.2 Conversion Privileges. The Conversion Privileges set forth
in Article II shall remain in full force and effect immediately from the date
hereof and until the Note is paid in full.
1.3 Interest Rate. Interest payable on this Note shall accrue
at the annual rate of twelve percent (12%) for the first twelve months, thirteen
percent (13%) for months thirteen through eighteen and fourteen percent (14%)
for months nineteen through twenty four, and be payable in arrears commencing
one month from the date hereof and on the successive one month anniversary dates
of the date hereof thereafter, and on the Maturity Date, accelerated or
otherwise, due and payable as described below. In an Event of Default, the
default rate set forth in Section 1.1 above shall apply (the "Default Rate.")
ARTICLE II
PAYMENTS OF PRINCIPAL AND INTEREST
2.1Monthly Payments. Subject to the terms of this Article II,
the Borrower shall repay one-twenty-second (1/22nd) of the original principal
amount of this Note (to the extent such amount has not been converted pursuant
to Article III below), together with interest accrued to date on such portion of
the original principal amount plus any and all default payments owing under the
Purchase Agreement but not previously paid (collectively the "Monthly Amount"),
in accordance with Section 2.2 below, on the first business day of each
consecutive calendar month (each, a "Repayment Date"), beginning on the first
such day which occurs following sixty (60) days from the date hereof.
Notwithstanding the foregoing, the Holder will have the option to delay the
start of the amortization for up to 90 days from the date hereof and the Monthly
Amount will then become one-twenty-one (1/21) of the original principal amount
of the Note.
2.2 Cash or Common Stock. Subject to the terms hereof, the
Borrower has the sole option to determine whether to satisfy payment of the
Monthly Amount in full on each Repayment Date either in cash or in shares of
ValCom's Common Stock (the "Common Stock"), or a combination of both . The
Borrower shall deliver to the Holder a written irrevocable notice in the form of
Exhibit B attached hereto electing to pay such Monthly Amount in full on such
Repayment Date in either cash or Common Stock, or a combination of both
("Repayment Election Notice"). Such Repayment Election Notice shall be delivered
at least ten (10) days prior to the applicable Repayment Date (the date of such
notice being hereinafter referred to as the "Notice Date"). The Holder shall
have the right to defer for any period of time the payment of the Monthly Amount
in shares of Common Stock in its sole discretion. If such Repayment Election
Notice is not delivered within the prescribed period set forth in the preceding
sentence, then the repayment shall be made in either cash or shares of Common
Stock on the same terms hereunder at the Holder's sole option. If the Borrower
elects or is required to repay all or a portion of the Monthly Amount in cash on
a Repayment Date, then on such Repayment Date the Borrower shall pay to the
Holder such amount in satisfaction of such obligation. If the Borrower repays
any portion of the Monthly Amount in shares of Common Stock, the number of such
shares to be issued for such Repayment Date, or the date when all or part of the
Monthly Amount is paid after a deferral by the Holder, shall be the number
determined by dividing (x) the portion of the Monthly Amount to be paid in
shares of Common Stock, by (y) the Conversion Price as of such date.
2.3 No Effective Registration. Notwithstanding anything to the
contrary herein, the Borrower shall be prohibited from exercising its right to
repay the Monthly Amount in shares of Common Stock (and must deliver cash in
respect thereof) on the applicable Repayment Date if at any time from the Notice
Date until the time at which the Holder receives such shares there fails to
exist an effective registration statement or an Event of Default hereunder
exists or occurs, unless otherwise waived in writing by the Holder in whole or
in part at the Holder's option.
2.4 Share Price/Issuance Limitations. Notwithstanding anything
to the contrary herein, if the closing price of the Common Stock as reported by
Bloomberg, L.P. on the Principal Market for any of the 11 trading days preceding
a Repayment Date was less than 125% of the Fixed Price, and the Borrower has
elected to pay all or a portion of the Monthly Amount in shares of Common Stock,
then, instead of the Borrower delivering the required number of shares of Common
Stock on the Repayment Date, the Holder will be permitted to convert up to the
Monthly Amount that is payable in shares of Common Stock at a Conversion Price
of 80% of the three (3) lowest closing prices during the thirty (30) trading
days immediately preceding the Conversion Date. Any part of the Monthly Amount
not converted into shares of Common Stock by the following Repayment Date shall
be paid by the Borrower in cash on such following Repayment Date. At any time
during the relevant month, the Borrower has the option to pay the Monthly
Amount, or the unconverted part thereof, in cash and the Conversion Price set
forth in this Section 2.4 shall no longer be applicable.
By way of example, for the Repayment Date of September 1, if
the Borrower delivers a Repayment Election Notice on August 15 to pay the
Monthly Amount in shares of Common Stock and if on August 10, the stock price
was $1.10, the Holder will be permitted to convert the portion of the Monthly
Amount that the Borrower has determined is payable in shares of Common Stock at
the following Conversion Price: 80% of the three (3) lowest closing prices
during the thirty (30) trading days immediately preceding the Conversion Date.
Any portion of the Monthly Amount originally due September 1 that the Holder has
not converted into shares of Common Stock by October 1 shall be due in cash on
October 1.
2.5 Deemed Conversions. Any repayment of the Monthly Amount in
shares of Common Stock pursuant to the terms hereof shall constitute and be
deemed a conversion of such portion of the applicable principal amount of this
Note for all purposes under this Note and the Purchase Agreement (except as
otherwise provided herein).
ARTICLE III
CONVERSION RIGHTS
3.1. Conversion into the Borrower's Common Stock.
(a) Subject to the provisions set forth above, the Holder
shall have the right, but not the obligation, from and after the date hereof,
and then at any time until this Note is fully paid, to convert the principal
portion of this Note and/or interest or fees due and payable into fully paid and
nonassessable shares of ValCom's Common Stock as such stock exists on the date
of issuance of this Note, or any shares of capital stock of the Borrower into
which such stock shall hereafter be changed or reclassified at the conversion
price as defined in Section 3.1(b) hereof (the "Conversion Price"), determined
as provided herein. Upon delivery to the Borrower of a Notice of Conversion as
described in Section 8 of the Securities Purchase Agreement entered into between
the Borrower and certain persons who are signatories thereto, including the
Holder, relating to this Note (the "Purchase Agreement") of the Holder's written
request for conversion (the date of giving such notice of conversion being a
"Conversion Date"), the Borrower shall issue and deliver to the Holder within
three business days from the Conversion Date that number of shares of Common
Stock for the portion of the Note converted in accordance with the foregoing. At
the election of the Holder, the Borrower will deliver accrued but unpaid
interest on the Note through the Conversion Date directly to the Holder on or
before the Delivery Date (as defined in the Purchase Agreement). The number of
shares of Common Stock to be issued upon each conversion of this Note shall be
determined by dividing that portion of the principal of the Note to be converted
and interest, if any, by the Conversion Price. In the event of any conversions
of outstanding principal amount under this Note in part pursuant to this Article
III, such conversions shall be deemed to constitute conversions of outstanding
principal amount applying to Monthly Amounts for the Repayment Dates in
chronological order. By way of example, if the original principal amount of this
Note is $2,000,000 and the Holder converted $181,818 of such original principal
amount prior to the first Repayment Date, then (1) the principal amount of the
Monthly Amount due on the first Repayment Date would equal $0, (2) the principal
amount of the Monthly Amount due on the second Repayment Date would equal $0 and
(3) the principal amount of the Monthly Amount due on each of the remaining
Repayment Dates would be $90,909.
(b) Subject to adjustment as provided in Section 3.1(c)
hereof, the Conversion Price per share shall be $.95 (the "Fixed Price"). If an
Event of Default has occurred and be continuing hereunder then the Conversion
Price shall be equal to the lower of (i) the Fixed Price; or (ii) seventy
percent (70%) of the average of the three lowest closing prices for the Common
Stock on NASD OTC Bulletin Board, NASDAQ SmallCap Market, NASDAQ National Market
System, American Stock Exchange, or New York Stock Exchange (whichever of the
foregoing is at the time the principal trading exchange or market for the Common
Stock, the "Principal Market"), or on any securities exchange or other
securities market on which the Common Stock is then being listed or traded, for
the thirty (30) trading days prior to but not including the Conversion Date.
(c) The Fixed Price and number and kind of shares or other
securities to be issued upon conversion determined pursuant to Section 3.1(a)
and 3.1(b), shall be subject to adjustment from time to time upon the happening
of certain events while this conversion right remains outstanding, as follows:
A. Merger, Sale of Assets, etc. If the Borrower at any
time shall consolidate with or merge into or sell or convey all or substantially
all its assets to any other corporation, this Note, as to the unpaid principal
portion thereof and accrued interest thereon, shall thereafter be deemed to
evidence the right to purchase such number and kind of shares or other
securities and property as would have been issuable or distributable on account
of such consolidation, merger, sale or conveyance, upon or with respect to the
securities subject to the conversion or purchase right immediately prior to such
consolidation, merger, sale or conveyance. The foregoing provision shall
similarly apply to successive transactions of a similar nature by any such
successor or purchaser. Without limiting the generality of the foregoing, the
anti-dilution provisions of this Section shall apply to such securities of such
successor or purchaser after any such consolidation, merger, sale or conveyance.
B. Reclassification, etc. If the Borrower at any time
shall, by reclassification or otherwise, change the Common Stock into the same
or a different number of securities of any class or classes, this Note, as to
the unpaid principal portion thereof and accrued interest thereon, shall
thereafter be deemed to evidence the right to purchase an adjusted number of
such securities and kind of securities as would have been issuable as the result
of such change with respect to the Common Stock immediately prior to such
reclassification or other change.
C. Stock Splits, Combinations and Dividends. If the
shares of Common Stock are subdivided or combined into a greater or smaller
number of shares of Common Stock, or if a dividend is paid on the Common Stock
in shares of Common Stock, the Conversion Price shall be proportionately reduced
in case of subdivision of shares or stock dividend or proportionately increased
in the case of combination of shares, in each such case by the ratio which the
total number of shares of Common Stock outstanding immediately after such event
bears to the total number of shares of Common Stock outstanding immediately
prior to such event.
D. Share Issuance. Subject to the provisions of this
Section, if the Borrower at any time shall issue any shares of Common Stock
prior to the conversion of the entire principal amount of the Note (otherwise
than as: (i) provided in Sections 2.1(c)A, 2.1(c)B or 2.1(c)C or this
subparagraph D; or (ii) pursuant to options, warrants, or other obligations to
issue shares, outstanding on the date hereof as set forth in the Schedules to
the Purchase Agreement (which agreement is incorporated herein by this
reference); ((i) and (ii) above, are hereinafter referred to as the "Existing
Option Obligations") for a consideration less than the Conversion Price that
would be in effect at the time of such issue, then, and thereafter
successively upon each such issue, the Conversion Price shall be reduced to the
per share purchase price of such issue of additional shares of Common Stock. The
resulting quotient shall be the adjusted conversion price. Except for the
Existing Option Obligations and options that may be issued under any employee
incentive stock option and/or any qualified stock option plan adopted by the
Borrower, for purposes of this adjustment, the issuance of any security of the
Borrower carrying the right to convert such security into shares of Common Stock
or of any warrant, right or option to purchase Common Stock shall result in an
adjustment to the Conversion Price upon the issuance of shares of Common Stock
upon exercise of such conversion or purchase rights.
(d) During the period the conversion right exists, the
Borrower will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of Common Stock upon the full
conversion of this Note. The Borrower represents that upon issuance, such shares
will be duly and validly issued, fully paid and non-assessable. The Borrower
agrees that its issuance of this Note shall constitute full authority to its
officers, agents, and transfer agents who are charged with the duty of executing
and issuing stock certificates to execute and issue the necessary certificates
for shares of Common Stock upon the conversion of this Note.
3.2 Method of Conversion. This Note may be converted by the
Holder in whole or in part as described in Section 3.1(a) hereof and the
Purchase Agreement. Upon partial conversion of this Note, a new Note containing
the same date and provisions of this Note shall, at the request of the Holder,
be issued by the Borrower to the Holder for the principal balance of this Note
and interest which shall not have been converted or paid.
ARTICLE IV
EVENT OF DEFAULT
The occurrence of any of the following events is an Event of
Default ("Event of Default"):
4.1 Failure to Pay Principal, Interest or other Fees. The
Borrower fails to pay any installment of principal, interest or other fees
hereon or on any other promissory note issued pursuant to the Purchase
Agreement, when due and such failure continues for a period of thirty (30 days
after the due date.
4.2 Breach of Covenant. The Borrower breaches any material
covenant or other term or condition of this Note, the Purchase Agreement, that
certain Deed of Trust, Assignment of Leases and Rents, Fixtures, and Security
Agreement ("Deed of Trust") of even date executed by Valcom, as sole member of
and on behalf of Valencia, as trustor, for the benefit of Holder/Lender as
beneficiary (without regard to materiality of any breach or default and subject
to any applicable cure provisions as set forth therein) in any material respect
and such breach, if subject to cure, continues for a period of seven (7) days
after written notice to the Borrower from the Holder.
4.3 Breach of Representations and Warranties. Any material
representation or warranty of the Borrower made herein, in the Purchase
Agreement, or in any agreement, statement or certificate given in writing
pursuant hereto or in connection therewith shall be false or misleading.
4.4 Receiver or Trustee. The Borrower shall make an assignment
for the benefit of creditors, or apply for or consent to the appointment of a
receiver or trustee for it or for a substantial part of its property or
business; or such a receiver or trustee shall otherwise be appointed.
4.5 Judgments. Any money judgment, writ or similar final
process shall be entered or filed against the Borrower or any of its property or
other assets for more than $1,000,000, and shall remain unvacated, unbonded or
unstayed for a period of forty-five (45) days.
4.6 Bankruptcy. Bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings or relief under any bankruptcy law
or any law for the relief of debtors shall be instituted by or against the
Borrower.
4.7 Delisting. Delisting of the Common Stock from a Principal
Market; the Borrower's failure to comply with the conditions for listing; or
notification that the Borrower is not in compliance with the conditions for such
continued listing.
4.8 Stop Trade. An SEC stop trade order or Principal Market
trading suspension.
4.9 Failure to Deliver Common Stock or Replacement Note. The
Borrower's failure to timely deliver Common Stock to the Holder pursuant to and
in the form required by this Note and Section 8 of the Purchase Agreement, or if
required a replacement Note.
4.10 Registration Default. The occurrence of a
Non-Registration Event as described in Section 9.4 of the Purchase Agreement,
except that with respect to a Non-Registration Event in connection with the
required declared effectiveness of the Registration Statement (as defined in the
Purchase Agreement) on or before the Effective Date (as defined in the Purchase
Agreement) such Non-Registration Event must be continuing on or occur after a
date which is one hundred and twenty (120) days after the Closing Date (as
defined in the Purchase Agreement).
4.11 Default Under Related Agreements. An Event of Default
occurs under and as defined in any one or more of the following agreements which
is not cured during any applicable cure or grace period: (a) the Security
Agreement dated as of the date hereof between Borrower and Holder, or (b) the
Deed of Trust dated as of the date hereof between Holder and Valencia, as each
such agreement may be amended, modified and supplemented from time to time.
If an Event of Default occurs and is continuing, the Holder
may make all sums of principal, interest and other fees then remaining unpaid
hereon and all other amounts payable hereunder immediately due and payable, all
without demand, presentment or notice, or grace period, all of which hereby are
expressly waived. In the event of an acceleration, the amount due and owing to
the Holder shall be 130% of the outstanding principal amount of the Note (plus
accrued and unpaid interest and fees, if any).
ARTICLE V
MISCELLANEOUS
5.1 Failure or Indulgence Not Waiver. No failure or delay on
the part of the Holder hereof in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege; nor shall any delay
or failure constitute a waiver of any breach, default, or failure of a condition
under this Note. All rights and remedies existing hereunder are cumulative to,
and not exclusive of, any rights or remedies otherwise available. No waiver by
Lender of any of its rights or of any breach, default, or failure of a condition
shall become effective unless such waiver is made expressly in writing and
signed by the Lender. Each Borrower, jointly and severally, endorser and all
other who are or may become liable on this Note waive presentment, protest,
demand; notice of protest, demand, and dishonor; and all other notices or
matters of a like nature.
5.2 Notices. Any notice herein required or permitted to be
given shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party notified, (b) when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient, if not, then on
the next business day, (c) five days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications shall be sent
to the Borrower at the address as set forth on the signature page to the
Purchase Agreement executed in connection herewith and to the Holder at the
address set forth on the signature page to the Purchase Agreement for such
Holder, with a copy to Daniel M. Laifer, Esq., 152 West 57th Street, 4th Floor,
New York, New York 10019, facsimile number (212) 541-4434, or at such other
address as the Borrower or the Holder may designate by ten days advance written
notice to the other parties hereto. A Notice of Conversion shall be deemed given
when made to the Borrower pursuant to the Purchase Agreement.
5.3 Amendment Provision. The term "Note" and all reference
thereto, as used throughout this instrument, shall mean this instrument as
originally executed, or if later amended or supplemented, then as so amended or
supplemented.
5.4 Assignability. This Note shall be binding upon the
Borrower and its successors and assigns, and shall inure to the benefit of the
Holder and its successors and assigns, and may be assigned by the Holder.
5.5 Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of California, without regard
to principles of conflicts of laws. Any action brought by either party against
the other concerning the transactions contemplated by this Agreement shall be
brought only in the state courts of California or in the federal courts located
in the state of California. Both parties and the individual signing this Note on
behalf of the Borrower agree to submit to the jurisdiction of such courts. The
prevailing party shall be entitled to recover from the other party its
reasonable attorney's fees and costs. In the event that any provision of this
Note is invalid or unenforceable under any applicable statute or rule of law,
then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any such provision which may prove invalid or unenforceable under
any law shall not affect the validity or unenforceability of any other provision
of this Note.
5.6 Maximum Payments. Nothing contained herein shall be deemed
to establish or require the payment of a rate of interest or other charges
(whether an advancement under the Note, acceleration of the maturity of the
unpaid balance, or otherwise) in excess of the maximum permitted by applicable
law. In the event that the rate of interest required to be paid or other charges
hereunder exceed the maximum permitted by such law, any payments in excess of
such maximum shall be credited against amounts owed by the Borrower to the
Holder and thus refunded to the Borrower.
5.7 Security Interest. This Note is secured by, among other
things, the Deed of Trust and by a security interest in certain assets of the
Borrower more fully described in a Security Agreement.
5.8 Construction. Each party acknowledges that its legal
counsel participated in the preparation of this Note and, therefore, stipulates
that the rule of construction that ambiguities are to be resolved against the
drafting party shall not be applied in the interpretation of this Note to favor
any party against the other.
5.9 Repayment of existing indebtedness. The proceeds of this
Note are being used by the Borrower to repay existing indebtedness pursuant to a
settlement agreement.
5.10 Waiver of Statutory Regulation. By signing below,
Borrower waives any right under California Civil Code ss.2954.10 or otherwise to
prepay this Note, in whole or in part, without a prepayment premium (as
described in the Purchase Agreement). Borrower acknowledges that prepayment of
this Note may result in Lender's incurring additional losses, costs, expenses,
and liabilities, including, but not limited to, lost revenue and lost profits.
Borrower therefore agrees to pay the prepayment premium if any principal amount
is prepaid, whether voluntarily or by reason of acceleration of the Maturity
Date on default (including, but not limited to, acceleration on any transfer or
conveyance of any right, title, or interest in the Mortgaged Property giving
Lender the right to accelerate the maturity of this Note as provided in the Deed
of Trust).
BORROWER AGREES THAT LENDER'S WILLINGNESS TO OFFER TO BORROWER THE
INTEREST RATE DESCRIBED ABOVE IS SUFFICIENT AND INDEPENDENT CONSIDERATION, GIVEN
INDIVIDUAL WEIGHT BY LENDER, FOR THIS WAIVER. BORROWER UNDERSTANDS THAT LENDER
WOULD NOT OFFER SUCH AN INTEREST RATE TO BORROWER ABSENT THIS WAIVER.
IN WITNESS WHEREOF, the Borrower has caused this Note to be signed in
its name effective as of this ___ day of May, 2002.
VALCOM, INC.
By:________________________________
VALENCIA ENTERTAINMENT INTERNATIONAL, L.L.C.
By:________________________________
WITNESS:
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NOTICE OF CONVERSION
(To be executed by the Holder in order to convert the Note)
The undersigned hereby elects to convert $_________ of the principal and
$_________ of the interest due on the Note issued by VALCOM, INC. and VALENCIA
ENTERTAINMENT INTERNATIONAL, L.L.C. on May ___, 2002 into Shares of Common Stock
of VALCOM, INC. according to the conditions set forth in such Note, as of the
date written below.
Date of Conversion:_____________________________________________________________
Conversion Price:_______________________________________________________________
Shares To Be Delivered:_________________________________________________________
Signature:______________________________________________________________________
Print Name:_____________________________________________________________________
Address:________________________________________________________________________
EXHIBIT B
FORM OF REPAYMENT ELECTION NOTICE
To: [HOLDER AT HOLDER'S ADDRESS]
Pursuant to Section 2.2 the Note of ValCom, Inc. issued on May __,
2002, we hereby notify you that we are irrevocably electing to repay the
outstanding Monthly Amount (as defined in the Note) due on the Repayment Date
(as defined in the Note) which occurs on ______, 20__ (CHECK ONE):
_____ In full in cash on such Repayment Date.
_____ In full in shares of the Company's Common Stock within three (3)
trading days following such Repayment Date.
ValCom, Inc.
By:
--------------------------------------
Name:
Title: