CNS RESPONSE, INC. FORM OF SECURED CONVERTIBLE PROMISSORY NOTE
Exhibit
4.1
THIS NOTE AND ANY SHARES OF COMMON
STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THIS NOTE OR SUCH SHARES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
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$
[__________]
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__________,
2010
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Aliso
Viejo, California
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FOR VALUE
RECEIVED, CNS Response, Inc., a Delaware corporation (the “Company”), promises to pay to
[__________] (“Holder”),
or its registered assigns, in lawful money of the United States of America, the
principal sum of [__________] ($[_____]), together with a single payment of
accrued interest calculated based on the actual days outstanding and a 360 day
year at a rate of nine percent (9%). Such interest shall be paid
pursuant to Section 2 below (“Interest
Payment”). All unpaid principal, together with the accrued
interest and other amounts payable under this Secured Convertible Promissory
Note (this “Note”) shall
be due and payable, unless converted in accordance with Section 6 hereof, on the
earliest of (i) the maturity date of October 1, 2011, (ii) prepayment of this Note
pursuant to Section 3 below, or (iii) when, upon or after the occurrence of
an Event of Default (as defined below), such amounts are made due and payable in
accordance with the terms hereof. This Note is one of a series
of Notes (the “Notes”)
issued pursuant to that certain Note and Warrant Purchase Agreement, dated as of
October 1, 2010, by and among the Company and each of the entities set forth on
Schedule A
thereto (the “Agreement”).
The
following is a statement of the rights of ▇▇▇▇▇▇ and the conditions to which
this Note is subject, and to which the Company and Holder agree:
1. Definitions. As
used in this Note, the following capitalized terms have the following
meanings:
(a) “Business Day” means any day
other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed.
(b) “Closing Bid Price” and “Closing Sale Price” mean, for
any security as of any date, the last closing bid price and last closing trade
price, respectively, for such security on the Principal Market, as reported by
Bloomberg Financial Markets, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price or the closing
trade price, as the case may be, then the last bid price or last trade price,
respectively, of such security prior to 4:00 p.m., New York Time, as reported by
Bloomberg Financial Markets, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the
over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg Financial Markets, or, if no closing bid price or last
trade price, respectively, is reported for such security by Bloomberg Financial
Markets, the average of the bid prices, or the ask prices, respectively, of any
market makers for such security as reported in the “pink sheets” by Pink Sheets
LLC (formerly the National Quotations Bureau, Inc.). If the Closing
Bid Price or the Closing Sale Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Bid Price or the
Closing Sale Price, as the case may be, of such security on such date shall be
the fair market value as mutually determined by the Company and the
Holder. All such determinations to be appropriately adjusted for any
stock dividend, stock split, stock combination or other similar transaction
during the applicable calculation period.
(c) “Company” includes the
corporation initially executing this Note and any Person which shall succeed to
or assume the obligations of the Company under this Note.
(d) “Convertible Securities” means
any stock or securities (other than Options) directly or indirectly convertible
into or exercisable or exchangeable for Common Stock.
(e) “Holder” shall mean the Person
specified in the introductory paragraph of this Note or any other Person who is
the registered holder of this Note.
(f) “Majority Holders” means the
holders of Notes representing at least a majority of the aggregate principal
amount outstanding under all of the Notes issued pursuant to the
Agreement.
(g) “Options” means any rights,
warrants or options to subscribe for or purchase Common Stock or Convertible
Securities.
(h) “Outstanding Debt” shall mean,
as of a particular time, the sum of (i) the then outstanding principal amount of
this Note and (ii) the amount of interest due pursuant to the Interest
Payment.
(i)
“Person” shall mean and
include an individual, a partnership, a corporation (including a business
trust), a joint stock company, a limited liability company, an unincorporated
association, a joint venture or other entity or a governmental
authority.
(j)
“Principal Market”
means the OTC Bulletin Board or principal stock exchange or trading market for
the Common Stock, if any.
(k) “Securities Act” shall mean the
Securities Act of 1933, as amended.
(l)
“Security Agreement”
means that certain Security Agreement, dated October 1, 2010, by and between the
Company and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, as administrative agent on behalf of the Secured
Parties (as defined therein).
(m) “Subsidiary” means with respect
to any Person, any corporation, association or other business entity of which
more than 50% of the total voting power of equity entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees or other governing body thereof is at the time owned or
controlled by such Person (regardless of whether such equity is owned directly
or through one or more other Subsidiaries of such Person or a combination
thereof).
(n) “Trading Day” means any day on
which the Common Stock is traded on the Principal Market; provided that “Trading
Day” shall not include any day on which the Common Stock is scheduled to trade
on such exchange or market for less than 4.5 hours or any day that the Common
Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00 p.m., New York Time).
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2. Interest
Payment. Subject to Section 3, the Interest Payment shall be
payable at the same time the principal amount of the Note is repaid as described
in the first paragraph hereof.
3. Prepayment. This
Note may be prepaid, in whole or part, at any time by the
Company. All prepayment amounts shall first be applied to any accrued
interest with the remainder applied towards the outstanding principal (“Full Prepayment” or “Partial
Prepayment”). Holder agrees to deliver the original of this
Note (or a notice to the effect that the original Note has been lost, stolen or
destroyed along with an indemnity with respect thereto in a form satisfactory to
the Company) at the closing of the Full Prepayment for cancellation or Partial
Prepayment for the appropriate principal adjustment; provided, however, that upon
Full Prepayment of the amounts set forth above with respect to the Outstanding
Debt, the Outstanding Debt shall be deemed satisfied and paid in full and the
Company shall have no other obligation with respect to the Outstanding Debt,
whether or not this Note is delivered for cancellation as set forth in the
preceding sentence.
4. Notice of
Defaults. The Company shall furnish to Holder written notice
of the occurrence of any Event of Default hereunder promptly following the
occurrence thereof.
5. Events of
Default.
(a) The
occurrence of any of the following shall constitute an “Event of
Default”:
(i) Failure
of the Company to pay the principal or the Interest Payment on this Note when
due.
(ii) Failure
of the Company to perform or observe any covenant or agreement as required by
this Note or the Agreement and continuation of such failure for a period of ten
(10) days following written notice from Holder.
(iii) The
Company commences a voluntary bankruptcy filing.
(iv) A
court of competent jurisdiction enters an order of decree under any bankruptcy
law that is not vacated, set aside or reversed within sixty (60)
days.
(v) The
Company fails to comply with the use of proceeds as set forth in Section 4.2(e)
of the Agreement.
(vi) Any
representation or warranty of the Company made in this Note or the Agreement is
proven not to have been true and correct in any material respect as of the date
of this Note.
(b) If
an Event of Default occurs and is continuing, Holder may exercise any or all of
the following rights and remedies:
(i) Declare
the Note and the Interest Payment be immediately due and payable, and upon such
declaration, the Note and the Interest Payment shall immediately be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are expressly waived.
(ii) Exercise
any and all other rights and remedies available to Holder and otherwise
available to creditors at law and in equity.
6. Conversion. The Notes shall be
convertible into shares of the Company’s common stock, par value $0.001 per
share (the “Common
Stock”), on the terms and conditions set forth in this Section
6.
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(a) Conversion
Right.
(i) At
any time or times on or after the date hereof, the Holder shall be entitled to
convert any portion of the outstanding and unpaid Conversion Amount (as defined
below) into fully paid and nonassessable shares of Common Stock in accordance
with Section 6(c), at the Conversion Rate (as defined below). The
Company shall not issue any fraction of a share of Common Stock upon any
conversion. If the issuance would result in the issuance of a
fraction of a share of Common Stock equal to or in excess of one half of one
share, the Company shall round such fraction of a share of Common Stock up to
the nearest whole share. The Company shall pay any and all stock
transfer, stamp, documentary and similar taxes (excluding any taxes on the
income or gain of the Holder) that may be payable with respect to the issuance
and delivery of shares of Common Stock to the Holder upon conversion of any
Conversion Amount.
(ii) If
all or any of the principal and accrued but unpaid interest underlying this Note
remains outstanding prior to the next sale by the Company, subsequent to the
financing pursuant to which this Note was issued, to one or more investors of
securities (the “Financing
Securities”), in one transaction or a series of related transactions (a
“Qualified Financing”),
the principal amount of this Note plus all accrued but unpaid interest thereon,
or any portion thereof, shall, at the option of the Holder, be converted into
Financing Securities at a price per share equal to the lower of (i) the
Conversion Price (as defined below) or (ii) the price per share payable by the
investors in the Qualified Financing. As a precondition to the
conversion of principal and accrued but unpaid interest under this Note, the
Holder must, unless waived by the Company, satisfy all reasonable conditions
established by the Company and the lead investor(s) in the applicable financing,
including without limitation, qualifying as an “accredited investor” (if such
qualification is a condition to participating in such offering) and the
execution and delivery by the Holder of all documents reasonably required to be
delivered in connection with such financing. The Company covenants
that all shares of Financing Securities issued upon conversion will, upon
issuance, be fully paid and non-assessable and free from all taxes, liens and
charges caused or created by the Company with respect to the issue thereof.
Notice of a Qualified Financing shall be given by the Company to the Holder at
least five (5) days prior to the closing date of such financing. If
this Note is converted into Financing Securities in such financing, this Note
shall be surrendered to the Company within five (5) days of the closing of such
financing at the Company’s registered office. The Holder or the
Holder’s nominee or permitted assignee, shall be entitled to be entered in the
books of the Company as the holder of the number of Financing Securities into
which this Note is convertible in accordance with the provisions hereof and, as
soon as practicable thereafter, the Company shall deliver to the Holder or,
subject as aforesaid, its nominee or permitted assignee, a certificate for such
Financing Securities. Any part of this Note may be converted as
provided herein and all references in this Note to conversion of this Note shall
be deemed to include conversion of such part.
(b) Conversion Rate. The number of
shares of Common Stock issuable upon conversion of any Conversion Amount
pursuant to Section 6(a)(i) (the “Conversion Rate”) shall be
determined by dividing (x) the Conversion Amount by (y) the Conversion
Price.
“Conversion Amount” means the
sum of (A) the portion of the principal to be converted, redeemed or otherwise
with respect to which this determination is being made and (B) accrued and
unpaid interest with respect to such principal.
“Conversion Price” means, as of
any Conversion Date (as defined below) or other date of determination, $0.30,
subject to adjustment as provided herein.
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(c) Mechanics of
Conversion.
(i) Optional
Conversion. To convert any Conversion Amount into shares of
Common Stock on any date (a “Conversion Date”), the Holder
shall (A) transmit by facsimile (or otherwise deliver), for receipt on or prior
to 4:00 p.m., New York Time, on such date, a copy of an executed notice of
conversion in the form attached hereto as Exhibit I (the “Conversion Notice”) to the
Company and (B) if required by Section 6(c)(ii), cause the Note to be delivered
to the Company as soon as practicable on or following such date. On
or before 4:00 p.m., New York Time, on the first (1st)
Business Day following the date of receipt of a Conversion Notice, the Company
shall transmit by facsimile a confirmation of receipt of such Conversion Notice
to the Holder (at the facsimile number provided in the Conversion Notice) and
the Company’s transfer agent, if any (the “Transfer
Agent”). On or before 4:00 p.m., New York Time, on the third
(3rd)
Business Day following the date of receipt of a Conversion Notice (the “Share Delivery Date”), the Company shall
issue and deliver to the address as specified in the Conversion Notice, a
certificate, registered in the name of the Holder or its designee, for the
number of shares of Common Stock to which the Holder shall be
entitled. If the Note is physically surrendered for conversion as
required by Section 6(c)(ii) and the outstanding principal of the Note is
greater than the principal portion of the Conversion Amount being converted,
then the Company shall as soon as practicable and in no event later than three
(3) Business Days after receipt of the Note and at its own expense, issue and
deliver to the Holder a new Note representing the outstanding principal not
converted. The person or persons entitled to receive the shares of
Common Stock issuable upon a conversion of the Note shall be treated for all
purposes as the record holder or holders of such shares of Common Stock on the
Conversion Date.
(ii) Book-Entry. Notwithstanding
anything to the contrary set forth herein, upon conversion of any portion of the
Note in accordance with the terms hereof, the Holder shall not be required to
physically surrender the Note to the Company unless (A) the full Conversion
Amount represented by the Note is being converted or (B) the Holder has
provided the Company with prior written notice (which notice may be included in
a Conversion Notice) requesting physical surrender and reissue of the
Note. The Holder and the Company shall maintain records showing the
principal and interest converted and the dates of such conversions or shall use
such other method, reasonably satisfactory to the Holder and the Company, so as
not to require physical surrender of the Note upon conversion.
7. Rights upon
Issuance of Other Securities
(a) Record Date. If the Company
takes a record of the holders of Common Stock for the purpose of entitling them
(A) to receive a dividend or other distribution payable in Common Stock, Options
or in Convertible Securities or (B) to subscribe for or purchase Common Stock,
Options or Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the Common Stock deemed to have been issued or
sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
(b) Adjustment of Conversion
Price upon Subdivision or Combination of Common Stock; Stock
Dividends. If the Company at any time, or from time to time,
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its outstanding shares of Common Stock into a greater
number of shares, the Conversion Price in effect immediately prior to such
subdivision will be proportionately reduced. If the Company at any
time, or from time to time, combines (by combination, reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, the Conversion Price in effect immediately prior to
such combination will be proportionately increased. Any adjustment
under this Section 7(b) shall become effective at the close of business on the
date the subdivision or combination becomes effective or, in the case of a stock
dividend or distribution, the date of such event.
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(c) (i) Adjustment of Conversion Price upon
Cash Dividends and Distributions. If the Company at any time,
or from time to time, pays a dividend or makes a distribution in cash to the
record holders of any class of Common Stock, then immediately after the close of
business on the day that the Common Stock trades ex-distribution, the Conversion
Price then in effect shall be reduced to an amount equal to the product of (i)
the Conversion Price in effect immediately prior to such dividend or
distribution and (ii) the quotient determined by dividing (A) the Closing Sale
Price of the Common Stock on the day that the Common Stock trades
ex-distribution by (B) the sum of (1) the Closing Sale Price of the Common Stock
on the day that the Common Stock trades ex-distribution plus (2) the amount per
share of such dividend or distribution. The Company shall not be
required to give effect to any adjustment in the Conversion Price pursuant to
this Section 7(c) unless and until the net effect of one or more adjustments
(each of which shall be carried forward until counted toward an adjustment),
determined in accordance with this Section 7(c), shall have resulted in a change
of the Conversion Price by at least 1%, and when the cumulative net effect of
more than one adjustment so determined shall be to change the Conversion Price
by at least 1%, such change in the Conversion Price shall thereon be given
effect.
(ii) Adjustment of Conversion Price upon
Distributions of Capital Stock, Indebtedness or Other Non-Cash
Assets. If the Company at any time, or from time to time,
distributes any shares of capital stock of the Company (other than Common
Stock), evidences of indebtedness or other non-cash assets (including securities
of any person other than the Company but excluding (1) dividends or
distributions paid exclusively in cash or (2) dividends or distributions
referred to in Section 7(b)) to the record holders of any class of Common Stock,
then the Conversion Price then in effect shall be reduced to an amount equal to
the product of (A) the Conversion Price then in effect and (B) a fraction of
which the numerator shall be the Closing Sale Price share of the Common Stock on
the record date fixed for determination of stockholders entitled to receive such
distribution less the fair market value on such record date (as determined by
the Company’s board of directors) of the portion of the capital stock, evidences
of indebtedness or other non-cash assets so distributed applicable to one share
of Common Stock (determined on the basis of the number of shares of Common Stock
outstanding on the record date) and of which the denominator shall be the
Closing Sale Price per share of the Common Stock on such record
date. Notwithstanding the foregoing, if the securities distributed by
the Company to the record holders of any class of Common Stock consist of
capital stock of, or similar equity interests in, a Subsidiary or other business
unit, the Conversion Price shall be decreased so that the same shall be equal to
the rate determined by multiplying the Conversion Price in effect on the record
date with respect to such distribution by a fraction the numerator of which
shall be the average Closing Sale Price of one share of Common Stock over the
Spinoff Valuation Period (as defined below) and of which the denominator shall
be the sum of (x) the average Closing Sale Price of one share of Common Stock
over the ten consecutive Trading Day period (the “Spinoff Valuation Period”)
commencing on and including the fifth Trading Day after the date on which
“ex-dividend trading” commences on the Common Stock on the Principal Market or
any national or regional exchange or market on which the Common Stock is then
listed or quoted and (y) the average Closing Sale Price over the Spinoff
Valuation Period of the portion of the securities so distributed applicable to
one share of Common Stock, such adjustment to become effective immediately prior
to the opening of business on the fifteenth Trading Day after the date on which
“ex-dividend trading” commences.
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(d) Ratchet. In the event
the Company shall issue Common Stock, or securities convertible, exchangeable or
exercisable into Common Stock (excluding in each case shares issued (i) in any
of the transactions described in Subsections (a), (b) and (c) above, (ii) upon
exercise of options granted to the Company’s employees, directors, consultants
or officers under a plan or plans or individual compensation arrangements
adopted by the Company’s board of directors, if such shares would otherwise be
included in this Subsection (d), (iii) upon conversion of shares or exercise of
options and warrants outstanding as of the date hereof, or (iv) to shareholders
of any Company which merges into the Company in proportion to their stock
holdings of such Company immediately prior to such merger, upon such merger),
for consideration per share, exercise price per share, conversion price per
share or exchange price per share (as the case may be)(“Offering Price”) less than the
then applicable Conversion Price, the Conversion Price shall be adjusted
immediately thereafter so that it shall equal such Offering
Price. Such adjustment shall be made successively whenever any such
issuance is made.
(e) Other Events; Other
Dividends and Distributions. If any event
occurs of the type contemplated by the provisions of this Section 7 but not
expressly provided for by such provisions (including, without limitation, the
granting of stock appreciation rights, phantom stock rights or other rights with
equity features), then the Company’s board of directors shall make in good faith
an adjustment in the Conversion Price so as to protect the rights of the Holder
under the Note; provided that no such adjustment will increase the Conversion
Price as otherwise determined pursuant to this Section 7.
(f) Notice of
Adjustment. Whenever the
Conversion Price is adjusted pursuant to this Section 7, the Company shall
promptly mail notice of such adjustment to each Holder, which notice shall set
forth the Conversion Price after adjustment, the date on which such adjustment
became effective and a brief statement of the facts resulting in such
adjustment.
8. Successors and
Assigns. Subject to the restrictions on transfer described in
Sections 10 and 12 below, the rights and obligations of the Company and Holder
shall be binding upon and benefit the successors, assigns, heirs, administrators
and transferees of the parties.
9. Waiver and
Amendment. Any provision of this Note may be amended, waived
or modified upon the written consent of the Company and the Majority
Holders. Any such amendment, waiver or modification effected in
accordance with this paragraph shall be binding upon the Company and each
Holder, it being understood and agreed that such written consent will affect all
Notes and be binding on all holders thereof regardless of whether any particular
holder executed such consent.
10.
Transfer of
this Note. With respect to any offer, sale or other
disposition of this Note, ▇▇▇▇▇▇ will give written notice to the Company prior
thereto, describing briefly the manner thereof, together with a written opinion
of ▇▇▇▇▇▇’s counsel, or other evidence if reasonably satisfactory to the
Company, to the effect that such offer, sale or other distribution may be
effected without registration or qualification (under any federal or state law
then in effect, as applicable). Upon receiving such written notice
and reasonably satisfactory opinion, if so requested, or other evidence, the
Company, as promptly as practicable, shall notify Holder that Holder may sell or
otherwise dispose of this Note, all in accordance with the terms of the notice
delivered to the Company. This Note thus transferred shall bear a
legend as to the applicable restrictions on transferability in order to ensure
compliance with the Act, unless in the opinion of counsel for the Company such
legend is not required in order to ensure compliance with the Securities
Act. The Company may issue stop transfer instructions to its transfer
agent in connection with such restrictions. Subject to the foregoing,
transfers of this Note shall be registered upon registration books maintained
for such purpose by or on behalf of the Company. Prior to
presentation of this Note for registration of transfer, the Company shall treat
the registered holder hereof as the owner and holder of this Note for the
purpose of receiving all payments of principal and the Premium Payment and for
all other purposes whatsoever, whether or not this Note shall be overdue and the
Company shall not be affected by notice to the
contrary. Notwithstanding the foregoing, Holder may assign this Note
to an affiliated entity without the prior written consent of the Company so long
as such assignment complies with applicable law.
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11. Assignment by the
Company. Neither this Note nor any of the rights, interests or
obligations hereunder may be assigned, in whole or in part (other than by
operation of law) by the Company without the prior written consent of the
Majority Holders.
12. Notices. All
notices, requests, demands, consents, instructions or other communications
required or permitted hereunder shall be in writing and faxed, mailed or
delivered to each party at the respective addresses of the parties as set forth
on the signature page hereto, or at such other address or facsimile number as a
party shall have furnished to the other party in writing. All such
notices and communications will be deemed effectively given the earlier of
(i) when received, (ii) when delivered personally, (iii) one
business day after being delivered by facsimile (with receipt of appropriate
confirmation), (iv) one business day after being deposited with an
overnight courier service of recognized standing or (v) four days after
being deposited in the U.S. mail, first class with postage prepaid.
13. Employees and
Agents. Holder may take any action hereunder by or through
agents or employees so long as such agents or employees are duly authorized to
so act on behalf of the Holder.
14. Payment. Payment
shall be made in lawful tender of the United States.
15. Expenses;
Waivers. If this Note is not paid when due and Holder takes
any action to enforce ▇▇▇▇▇▇’s rights hereunder, the Company shall promptly pay
upon demand by Holder all such reasonable costs of collection, including
reasonable attorneys’ fees, whether or not litigation is
commenced. The Company hereby waives notice of default, presentment
or demand for payment, protest or notice of nonpayment or dishonor and all other
notices or demands relative to this instrument. The Company also
shall pay for all attorney’s fees incurred by ▇▇▇▇▇▇ related to the drafting and
preparation of this Note.
16. Governing
Law. This Note and all actions arising out of or in connection
with this Note shall be governed by and construed in accordance with the laws of
the State of California, without regard to the conflicts of law provisions of
the State of California, or of any other state.
17. Effectiveness. This
Note shall become effective upon the execution by the Company and
Holder.
18. Security
Agreement. The obligations of the Company under this Note are
secured in accordance with, and entitled to the benefits of, the Security
Agreement, except that such benefits shall expire on the date that holders of a
majority of the aggregate principal amount of Notes issued have converted their
Notes in accordance with the terms hereof.
[Signatures Appear on Following
Page]
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The Company has caused this Note to be
issued as of the date first written above and agrees to all the terms set forth
above.
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By:
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Name: ▇▇▇▇
▇▇▇▇
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Title: Chief
Financial Officer
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Address: ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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Aliso Viejo, CA 92656
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Accepted
and agreed:
HOLDER:
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Name
and Position
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Address:
________________________________
________________________________
________________________________
EXHIBIT
I
CONVERSION
NOTICE
Reference
is made to the Convertible Note (the “Note”) issued to the
undersigned by CNS Response, Inc. (the “Company”). In
accordance with and pursuant to the Note, the undersigned hereby elects to
convert the Conversion Amount (as defined in the Note) of the Note indicated
below into shares of Common Stock par value $0.001 per share (the “Common Stock”) of the Company,
as of the date specified below.
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Date
of Conversion:
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Aggregate
Conversion Amount to be converted:
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Please
confirm the following information:
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Conversion
Price:
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Number
of shares of Common Stock to be issued:
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Please
issue the Common Stock into which the Note is being converted in the following
name and to the following address:
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Issue
to:
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Facsimile
Number:
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Authorization:
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By:
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Title:
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Dated:
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Account
Number:
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(if
electronic book entry transfer)
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Transaction
Code Number:
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(if
electronic book entry transfer)