Active Link Communications, Inc.
Form 8-K
Exhibit 10(b)
This Note has not been registered under the Securities Act of 1933, as amended
(the "Act'), and is a "restricted security," as that term is defined in Rule 144
under the Act. This Note may not be offered for sale, sold, or otherwise
transferred except pursuant to an effective Registration Statement under the
Act, or pursuant to an exemption from registration under the Act, the
availability of which is to be established to the satisfaction of the Company.
CONVERTIBLE PROMISSORY NOTE
$3,000,000 Date: November 12, 2002
Due: November 12, 2005
FOR VALUE RECEIVED, Active Link Communications, Inc., a Colorado corporation
(the "Company") hereby promises to pay to Donnette L. Hall (the "Payee") at 180
E. Pearson Street, Unit 3301, Chicago, Illinois or such other place of payment
as Payee may specify from time to time in writing, in lawful money of the United
States of America, the principal amount of Three Million Dollars ($3,000,000)
together with interest at 5% per annum from the date of this Convertible
Promissory Note (the "Note"), on November 12, 2005. The Additional Terms and
Conditions attached hereto are a part of this Note. The Company shall make
payments of interest only on the then outstanding principal amount to Payee on a
monthly basis, commencing December 1, 2002.
Payments shall be applied first to accrued interest and then to unpaid
principal. Interest shall be computed on the basis of a year consisting of
twelve months of thirty days each.
IN WITNESS WHEREOF, the Company has executed this Note on the day and year first
above written.
ACTIVE LINK COMMUNICATIONS, INC.
1840 Centre Point Circle
Naperville, IL 60563
Signature: /s/ Timothy A. Ells
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Print Name:
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Title: President & C.E.O.
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ACTIVE LINK COMMUNICATIONS, INC.
CONVERTIBLE PROMISSORY NOTE
ADDITIONAL TERMS AND CONDITIONS
These Additional Terms and Conditions are attached to and shall be made
a part of the Convertible Promissory Note of Active Link Communications, Inc.
(the "Company") payable to Donnette L. Hall (the "Payee") dated November 12,
2002 (the "Note"), as if incorporated therein:
1. Advances; Maturity Date. As provided in the Letter Agreement
in connection with this Note, the Payee will make periodic advances to the
Company in mutually agreed upon amounts, but not to exceed $3,000,000 in total.
The Note will mature on November 12, 2005.
2. Prepayment. The principal amount of this Note may be prepaid
by the Company, in whole or in part, without premium or penalty, at any time
upon 20 days prior notice to the Payee of the Note. Any prepayment shall be
applied first to unpaid accrued interest and then to the unpaid principal
balance.
3. No Security. The Company's obligations pursuant to this Note
are not secured by any assets of the Company.
4. Events of Default. If one or more of the following events
shall occur:
(a) Default in the payment of any principal of or interest on
the Note and the continuation of such default for a period of ten days
or more after written notice thereof by the Payee to the Company;
(b) The Company files or is served with any petition for
relief under the Bankruptcy Code or any similar federal or state
statute (the "Code") or the entry by a court of competent jurisdiction
of a decree or order adjudging the Company a bankrupt or insolvent or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under the Code or appointing a receiver, trustee or other similar
official of the Company of all or substantially all of its assets, or
ordering up the winding up or liquidation of its affairs, and the
continuation of such decree or order unstayed and in effect for a
period of 60 consecutive days; or
(c) The institution by the Company or the consent to the
institution by the Company of proceedings to adjudicate the Company a
bankrupt or insolvent or the filing or consent by the Company to the
filing of a petition or answer seeking reorganization or relief under
the Code, the consent by the Company to the appointment of a receiver,
trustee or other similar official of the Company or of any substantial
part of its property, or an assignment by the Company for the benefit
of creditors;
then the Payee of this Note may, by written notice to the
Company, declare the entire unpaid principal of and accrued and unpaid interest
on this Note to be due and payable and, upon such declaration, the same shall
become due and payable forthwith without further demand or notice.
5. Transferability. No sale or transfer of this Note may be made
unless such sale or transfer has been registered under the Act and applicable
state securities laws or unless the Company has received an opinion of counsel
or other evidence satisfactory to counsel to the Company to the effect that such
registration is not required because an exemption from such registration is
available.
6. Conversion. (a) The Payee shall have the right at the Payee's
option, at any time prior to payment of the Note, to convert all, or any part,
of this Note into such number of fully paid and non-assessable shares of the no
par value common stock (the "Common Stock") of the Company as shall be provided
herein. The Payee may exercise the conversion right provided in this Section 6
by giving written notice (the "Conversion Notice") to the Company of the
exercise of such right and stating the address to which the certificates
evidencing the Common Stock shall be delivered. The Conversion Notice shall be
accompanied by this Note. Except as provided below in this Section 6, the
Company will issue one share of Common Stock for each $.25 of then outstanding
principal balance of and interest accrued on this Note upon conversion of the
Note (the "Conversion Price"). Conversion shall be deemed to have been effected
on the
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date the Conversion Notice is given; provided, however, the conversion privilege
of this Note may not be exercised by, and the Common Stock shall not be issued
to, the Payee if such conversion would be unlawful. As a condition to
conversion, the Company may require the Payee to sign a representation of
investment intent letter confirming compliance with applicable federal and state
securities laws and other applicable laws, and receive satisfactory assurance
that issuance of the Common Stock will not violate law. Promptly after receipt
of the Conversion Notice and confirmation of compliance with law, the Company
shall issue a stock certificate of the Company representing the number of shares
of Common Stock to which such Payee is entitled and a check in payment of all
accrued interest unpaid on the Note up to and including the date of the
Conversion Notice unless the Payee has indicated that it also wishes to convert
the accrued interest into shares of Common Stock.
(b) If the Common Stock issuable upon conversion of this Note
shall be changed into the same or different number of shares of any other class
or classes of stock, whether by capital reorganization, reclassification or
otherwise, appropriate adjustment shall be made to the conversion rate. Similar
adjustment shall be made in the event of any reorganization, merger or
consolidation.
7. Notices. Any notice or other communication given hereunder
shall be given in writing and sent by overnight courier or registered or
certified mail, return receipt requested, addressed to the Company or the Payee
at their respective addresses as set forth in the Note. Notices shall be deemed
to have been given four business days after the date of mailing or one business
day after delivery to an overnight courier. The address for notices for any
party may be changed by notice given pursuant to this Section 7. For purposes of
this Note, "business day" shall exclude Saturdays, Sundays and legal holidays in
the State of Colorado.
8. Governing Law. This Note and its validity, construction and
performance shall be governed in all respects by the laws of the State of
Colorado.
9. Miscellaneous. All powers and remedies given by this Note to
the Payee shall, to the extent permitted by law, be deemed cumulative and not
exclusive of any power or remedy or of any other powers and remedies available
to the Payee, by judicial proceedings or otherwise, to enforce the performance
or observance of the agreements contained in this Note. No delay or omission of
the Payee to exercise any right or power accruing upon any default shall impair
any such right or power or shall be construed to be a waiver of any such default
or any acquiescence thereof. The Company waives presentment for payment,
protest, the filing of suit or the taking of any other action for the purpose of
fixing its liability for payment of the Note.
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