EXHIBIT 6(l) Promissory Note
US$25,000.00 NOTE #01
FORM OF NOTE
SEVEN PERCENT (7%) CONVERTIBLE SUBORDINATED NOTE
DATED __________ __, 2001
THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), AND APPLICABLE STATE SECURITIES LAWS
(COLLECTIVELY, THE "LAWS"), PURSUANT TO REGISTRATION STATEMENT NO. 333-66690 ON
FILE WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION. THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED IN THE ABSENCE OF EITHER (I) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE LAWS, OR (II) AN OPINION OF COUNSEL PROVIDED TO THE
ISSUER IN FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THE ISSUER TO THE
EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE LAWS DUE TO AN AVAILABLE
EXCEPTION TO OR EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE LAWS.
THIS NOTE (this "Note") is one of the duly authorized issue of
Convertible Subordinated Notes of UPSIDE DEVELOPMENT, INC., a Delaware
corporation (the "Company"), in an aggregate principal amount of up to
US$1,000,000.00 (collectively, the "Notes"). This Note is offered, issued and
sold in part pursuant to and in accordance with the exemption from securities
registration afforded by Regulation D promulgated under the Securities Act of
1933, as amended. The Common Stock (defined below) underlying this Note has been
registered pursuant to an SB-2 Registration Statement, Registration No.
333-66690, filed in final form on , which was declared effective by the United
States Securities and Exchange Commission (the "SEC") on ___________, 200_ (the
"Registration Statement").
FOR VALUE RECEIVED, the Company promises to pay to Augustine
Associates, L.L.C., or the permitted registered holder hereof (the "Holder"),
the principal sum of US$25,000 (Twenty Five Thousand United States Dollars) (the
"Initial Principal Amount") or such lesser principal amount following the
conversion or conversions of this Note in accordance with Paragraph 4 (the
"Outstanding Principal Amount") on the first anniversary of this Note (the
"Maturity Date"), and to pay interest on the Outstanding Principal Amount from
time to time, semiannually in arrears on the first business day of December and
June (the "Interest Payment Dates"), at the rate of seven percent (7%) per annum
occurring from the date of issuance.
Accrual of interest shall commence on the first 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
until paid. The interest so payable will be paid in shares ("Interest Shares")
of the Company's common stock, $.001 par value per share ("Common Stock") at the
then applicable conversion price (computed as described in paragraph 4 below) on
the Interest Payment Dates to the Holder on the tenth day prior to the Interest
Payment Date. The principal of this Note is payable in such coin or currency of
the United States as at the time of payment is legal tender for payment of
public and private debts, 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 this Note on the due date, free
of any withholding or deduction of any kind (subject to the provisions of
paragraph 2 below), to the Holder as of the due date and addressed to the Holder
at the address appearing on the Note Register.
The forwarding of such check and/or Interest Shares 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 sum
represented by such check and/or Interest Shares.
This Note is subject to the following additional provisions:
1. These Notes are originally issuable in amounts of not less than
US$25,000.00.
2. All payments on account of the principal of this Note and all other
amounts payable under this Note (whether made by the Company or any other
person) to or for the account of the Holder hereunder shall be made free and
clear of and without reduction by reason of any present and future income,
stamp, registration and other taxes, levies, duties, cost, and charges
whatsoever imposed, assessed, levied or collected by the United States or any
political subdivision or taxing authority thereof or therein, together with
interest thereon and penalties with respect thereto, if any, on or in respect of
this Note (such taxes, levies, duties, costs and charges being herein
collectively called "US Taxes").
3. If at any time there occurs a transaction in which in excess of 50%
of the Company's voting power is transferred (excluding any public or private
offering of Company equity securities) on any consolidation or merger of the
Company into any other or other entity or person (whether of not the Company is
the surviving Corporation), or any other corporate reorganization or transaction
or series of related transactions, the Holder 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 September __, 2002, as a redemption date and shall be entitled
to have the Company redeem this Note at a price equal to 120% of the Outstanding
Principal Amount of this Note. The Holder shall be entitled to make such
election at any time up to ten (10) day prior to 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 preceding 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 Common Stock,
within an effective date within three (3) trading days prior to the effective
date of a merger or consolidation.
Notwithstanding the transfer of 50% of the Company's voting power, the
Company shall have the unequivocal right to redeem this Note at any time prior
to the Maturity Date at a price equal to 120% of the Outstanding Principal
Amount of this Note, provided that the Company shall give to the Holder five (5)
days written notice of its intention to do so and the Holder has not faxed a
Notice of Conversion with respect to the Note (or portion thereof) sought to be
redeemed. Upon notice of its right and intention to redeem the Note, the Company
shall immediately (but in any event within three (3) business days) transfer the
full redemption price to the Holder. Notwithstanding anything herein to the
contrary, the Company may not redeem any portion of this Note with respect to
which the Holder has delivered a Notice of Conversion (via facsimile or
otherwise) to the Company prior to the Holder's receipt of a redemption notice.
The date of facsimile delivery of the Notice of Conversion to the Company as
herein provided shall be referred to herein as the "Conversion Date."
4. The Holder of this Note is entitled, at its option, at any time
after the date of this Note, to convert all or any lesser portion of the Initial
Principal Amount into Common Stock at a conversion price (the "Conversion
Price") for each share of Common Stock equal to ninety percent (90%) (the
"Applicable Discount Rate") of the lowest of the closing bid prices for the
Common Stock for the five (5) trading days immediately prior to the Conversion
Date. In the event of any stock split, dividend, combination or similar event
occurring after a Conversion Date and prior to the issuance of the respective
stock certificates, the Conversion Price will be subject to appropriate
adjustment. For purpose of this section, the closing bid price of the Common
Stock shall be the closing bid price as reported by the Nasdaq Stock Market, or
the closing bid price in the over-the-counter market or, if the Common Stock is
listed on another stock market or exchange, the closing bid price on such
exchange as reported in the Wall Street Journal. Conversion of this Note into
Common Stock shall be effectuated by surrendering the Note to be converted to
the Company, with the form of conversion notice attached to the Note as Exhibit
I, executed by the Holder of the Note evidencing such Holder's intention to
convert the Note. Interest accrued or accruing from the date of issuance to the
Conversion Date (but not previously paid in cash or Interest Shares) on the
amounts so converted shall be paid in Interest Shares, calculated at the same
Conversion Price (as determined above) as would apply on the Conversion Date for
the principal amount being converted but using the discount percentage
applicable as of such date 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.
Notwithstanding anything herein to the contrary, if at any time this
Note is outstanding the Registration Statement (as defined in the Note Purchase
Agreement) is not effective, then with respect to any portion of the Note not
previously converted into Common Stock, the Applicable Discount Rate shall
decrease by two percent (2%) for each thirty (30) day period (pro-rated for
partial periods and rounded to the nearest half-month) beginning on the date the
Registration Statement becomes no longer effective and ending on the date the
Registration Statement (or a new registration statement registering all of the
Common Stock into which this Note is convertible) is declared effective by the
SEC. As an example, and not by way of limitation, if the Registration Statement
is declared effective by the SEC thirty days after its effectiveness was
suspended, then the Applicable Discount Rate will be equal to eighty eight
percent (88%) [10% less {2% X 1 month}].
No fractional shares or scrip representing fractions of shares of
Common Stock will be issued on conversion, but the number of shares of Common
Stock issuable shall be rounded to the nearest whole share. The date on which a
Notice of Conversion is given shall be deemed to be the date on which the Holder
notifies the Company of its intention to so convert by delivery, by facsimile
transmission or otherwise, of a copy of the Notice of Conversion. Notice of
Conversion may be given by facsimile to the Company at 262.334.4502, attn: Mr.
Michael Porter, Chief Executive Officer, or, if by physical delivery of the
Notice of Conversion to the Company, at the address for the Company contained in
the Note Purchase Agreement. At the Maturity Date, any unconverted principal
amount and accrued interest thereon shall at the Maturity Date be paid, at the
option of the Company, in either (a) cash or (b) Common Stock valued at a price
equal to the Conversion Price determined as if the Note was converted in
accordance with its terms into Common Stock on the Maturity Date. Upon
conversion of all of the outstanding principal amount of this Note, the Holder
shall submit this original Note to the Company for cancellation.
Upon the delivery by the Holder of a Notice of Conversion in the form
attached hereto as Exhibit A, properly completed and duly executed by the
Holder, the Company shall issue and, within five (5) business days after actual
delivery to the Company of the Notice of Conversion (the "Deadline"), deliver to
or upon the order of the Holder one or more certificates (the "Certificates"),
with no restrictive legends of any kind, representing that number of shares of
Common Stock into which the portion of the Note converted is convertible, as
shall be determined in accordance herewith.
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 Certificates (without restrictive legend of any kind or
stop transfer order affecting the Common Stock represented by the Certificates)
issuable upon conversion of this Note is more than one (1) day after the
Deadline, the Company shall pay to the Holder $100 per each $10,000 in principal
amount per day in cash, for the first day beyond the deadline and $100 per each
$10,000 in principal amount per day for each day thereafter that the Company
fails to deliver the Certificates. Such cash amount shall be paid to the Holder
upon Holder's written demand therefor. In addition, and again 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 the Shares issuable upon
conversion of this Note are delivered more than one (1) day after the Deadline,
the Holder shall have the right (but not the obligation) to adjust the
Conversion Price, by using the date of the Holder's receipt of the Certificates
as the Conversion Date and recalculating the Conversion Price based upon such
new Conversion Date. If such recalculation results in the Holder being entitled
to more shares of Common Stock than was stated in the applicable Notice of
Conversion, then the Company shall deliver additional shares of Common Stock to
the Holder, without restrictive legend, registered pursuant to the Registration
Statement, within three (3) days after the Holder's written demand therefor
delivered to the Company via facsimile. Notwithstanding anything herein to the
contrary, the Company shall not be responsible for any delay in delivery of
Certificates or Common Stock owed to the Holder upon conversion of this Note, so
long as the delay is solely the responsibility of the Escrow Agent (as defined
in the Note Purchase Agreement under which this Note was issued and sold).
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
amount of the Note to be converted at such time, plus the dollar amount of all
interest that has accrued on that portion of the Note then being converted but
which has not previously been paid, by the Conversion Price in effect on the
date the Notice of Conversion is delivered via facsimile to the Company by the
Holder. The number of Interest Shares shall be determined utilizing the
following equation: [(the principal amount of the Note to be converted,
multiplied by 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 is
365) multiplied by .07; the resulting number shall be divided by the Conversion
Price then in effect to determine the number of Interest Shares.
5. No provision of this Note shall alter or impair the obligation of
the Company, which is absolute and unconditional, to the payment of the
principal of this Note at the time, place and rate, and in the coin or currency
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 or superior to 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 not be subordinate in any respect to
any other indebtedness of the Company outstanding as of the date of this Note or
hereafter incurred by the Company.
Such non-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
Note in all respects, so long as issued prior to the date hereof.
6. The Company hereby expressly waives demand and presentment for
payment, notice of nonpayment, 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 notice, diligence, act or omission as or with respect
to the collection of any amount called for hereunder.
7. If the Company at any time or from time to time after the date of
this Note makes a dividend or other distribution to holders of Common Stock
payable in securities of the Company other than the Interest Shares, then in
each such event provision shall be made so that the Holder shall receive upon
conversion of this Note pursuant to Paragraph 4 hereof, in addition to the
number of Interest Shares receivable thereupon, the amount of such other
securities of the Company to which the Holder on the relevant record of payment
date, as applicable, of the number of Interest Shares so receivable upon
conversion would have been entitled, plus any dividends or other distributions
would have been received with respect to such securities had the Holder
thereafter, during the period from the date of such event to and including the
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
Holder.
8. If at any time or from time to time after the date of this Note, the
Common Stock issuable upon the conversion of the Note is changed into the same
or different numbers of shares of any class or classes of stock, whether by
recapitalization or otherwise (other than subdivision or combination of shares
of Common Stock or stock dividend or reorganization provided for elsewhere in
this Note or a merger or consolidation, provided for in Paragraph 3), then in
each such event the Holder shall have the right thereafter to convert the Note
into the kind of security receivable in such recapitalization, reclassification
or other change by holders 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 date of this Note
there is a capital reorganization of the Common Stock (other than a
recapitalization, subdivision, combination, reclassification, or exchange of
shares provided for elsewhere in this Note) then, as a part of such
reorganization, provision shall be made so that the Holder shall thereafter to
be entitled to receive upon conversion of this Note the number of shares of
stock or other securities or property to which a holder of the number of Shares
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
Holder 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 attorney's fees, which may be incurred by the Holder in collecting
any amount due under, or enforcing any terms of, this Note.
11. If more than one of the following described "Events of Default"
shall occur:
(a) The Company shall default in the timely payment of principal or
interest; or
(b) Any of the representations or warranties made by the Company herein
or in the Note Purchase Agreement between the Company and Holder with respect to
this Note, or in any certificate or financial or other document heretofore or
hereafter furnished by or on behalf of the Company in connection with the
execution and delivery of this Note, shall be false or misleading any material
respect at the time made; or
(c) The Company shall fail to perform or observe any other covenant,
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 (except that no cure period other than
that described in Paragraph 4 above shall be had for any violation or breach of
Paragraph 4 by the Company); 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, lien or similar
process in excess of Three Hundred Thousand Dollars (US$300,000) in the
aggregate shall be entered or filed against the Company or any of its properties
or other assets and shall remain unsatisfied, unvacated, unbounded or unstayed
for a period of thirty (30) days (unless such order provided for delayed
payment) 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
of the Nasdaq Stock Market (including without limitation the OTC Bulletin Board
Market);
Then, or at any time thereafter, and in each and in 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), the
Holder may consider this Note immediately due or payable, without presentment,
demand, protest or notice of any kind, all of which are expressly waived,
anything herein or in any note or other instruments contained to the contrary
notwithstanding, and the Holder may immediately demand 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 120% of the Outstanding Principal Amount due hereunder.
12. If at any time on or after the date hereof and prior to conversion
of all of this Note into Common Stock as described in Paragraph 4 above, trading
of the Common Stock is suspended on the principal market or exchange for such
shares (including The Nasdaq Stock Market) for a period of five (5) consecutive
trading days, other than as a result of the suspension or trading of securities
in general, or if the Common Stock at any time becomes ineligible for trading,
then, at the Holder's option, the Company shall redeem the Note at a redemption
date designated by the Holder, and for the redemption price provided in
Paragraph 11.
13. Notwithstanding anything to the contrary contained herein, each
Notice of Conversion shall contain representations to the effect that (I) the
Holder is an "accredited investor" as such term is defined in Rule 501(a) of
Regulation D promulgated by the SEC under the 1933 Act, and (II) the Conversion
Shares are being acquired for the Holder's own account and not as a nominee for
any other party.
14. (Intentionally omitted.)
15. The Company covenants that until all amounts due under this Note
have been paid in full, by conversion or otherwise, unless the Holder or
subsequent Holder waives compliance in writing, the Company shall:
(a) give prompt written notice to the Holder of any Event of Default 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 (as defined in the Note Purchase
Agreement) on the financial condition of the Company;
(c) at all times reserve and keep available out of its authorized but
unissued Common Stock, for the purpose of effecting the conversion of this Note
into Common Stock, 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 Common Stock. If the Company
does not have a sufficient number of shares of Common Stock available to satisfy
the Company's obligations to the Holder upon receipt of a Notice of Conversion
or is otherwise unable to issue such shares in accordance with the terms of this
Note (a "Conversion Default"), from and after the tenth day following a
Conversion Default (which for all purposes shall be deemed to have occurred upon
the Company's facsimile receipt of the applicable Conversion Notice), the Holder
shall have the right to demand from the Company the immediate redemption of this
Note in cash at a redemption price equal to 120% of the then outstanding
Principal Amount; provided, however, that no Redemption Notice may be delivered
by the Holder subsequent to the Holder's receipt of notice from the Company
(sent by overnight or 2-day courier with a copy sent by facsimile) of
availability of sufficient shares to permit conversion (a "Post-Default
Conversion") of the Note; 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 in accordance with applicable provision of Paragraph 4
hereof with respect thereto within five (5) business days of delivery of the
notice of Post-Default Conversion. In addition to the foregoing, upon the
Conversion Default, the rate of interest on the Note shall to the maximum extent
permitted by law be increased by two percent (2%) 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 second such (30)
day periods (or part thereof); and 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 Note as to which the Conversion Default has occurred.
(d) Upon receipt by the Company of evidence from the Holder reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Note,
(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,
then the Company at its expense will execute and deliver to the Holder a new
Note, dated the date of the lost, stolen, destroyed or mutilated Note, and
evidencing the outstanding and unpaid principal amount of the lost, stolen,
destroyed or mutilated Note.
16. The Holder, by acceptance hereof, acknowledges that this Note is
being acquired for investment and that the Holder will not offer, sell or
otherwise dispose of this Note or the Common Stock issuable upon conversion
hereof except under circumstances which will not result in a violation of the
1933 Act or any applicable state securities laws.
17. In the 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 its 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 impaired thereby.
18. The Note and the Note Purchase Agreement between the Company and
the Holder (including all Exhibits thereto) constitute 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.
19. This Note shall be governed by and construed in accordance with
the internal laws of the State of Illinois.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated: __________ __, 200_
UPSIDE DEVELOPMENT, INC.
By:____________________________________
Mr. Michael Porter, Chief Executive Officer
EXHIBIT A
NOTICE OF CONVERSION
(To Be Executed by the Registered Holder in Order to Convert the Note)
The Undersigned hereby irrevocably elects to convert $ of the Seven
Percent (7%) Convertible Note Due May 15, 2002, No. 01, into shares of Common
Stock of Upside Development, Inc. (the "Company"), according to the terms and
conditions set forth in the Note, as of the date written below. If securities
are to be issued to a person other than the Undersigned, the Undersigned agrees
to pay all applicable transfer taxes with respect thereto.
The Undersigned represents that it, as of this date, is an "accredited
investor" as such term is defined in Rule 501(a) of Regulation D promulgated by
the SEC under the 1933 Act.
The Undersigned also represents that the Conversion Shares are being
acquired for the Holder's own account and not as a nominee for any other party.
The Undersigned represents and warrants that all offers and sales by the
Undersigned of the Conversion Shares shall be made pursuant to either an
effective registration statement or an exemption from registration under the
1933 Act. The Undersigned understands that pursuant to the representations of
the Company regarding the registration with the SEC of the Common Stock pursuant
to the Registration Statement, the shares of Common Stock to be received upon
conversion of the Note shall not contain any restrictive legend of any kind.
Conversion Date: * ________________________
Applicable Conversion Price: __________________________
Holder (Print True Legal Name): Augustine Associates, L.L.C.
- -----------------------------------------------------
(Signature of Duly Authorized Representative of Holder)
Address of Holder: 141 W. Jackson Boulevard, Suite 2182
Chicago, Illinois 60604
Attn: Thomas F. Duszynski
This Notice of Conversion (whether by facsimile or otherwise as permitted
in the Note) must be received by the Company by the first business day
following the Conversion Date.