AMENDED AND RESTATED DEBT CONVERSION AGREEMENT
AMENDED
AND RESTATED DEBT CONVERSION AGREEMENT
This
Amended and Restated Debt Conversion Agreement made as of this 1st day of
November, 2006 between Web2 Corp., a Delaware corporation (the “Company”) having
a principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (“Lender”) having a principal place of business at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
WHEREAS,
Lender has from time to time advanced funds to the Company $1,726,184.14of
which
a portion has been paid, a portion converted into shares of the Company’s common
stock and there is an outstanding balance of $1,549,268.14, including accrued
but unpaid interest as of October 25, 2006 (the “Loan”); and
WHEREAS,
the Loan was made pursuant to a Grid Promissory Note dated April 8, 2005, which
memorialized advances, payments and interest from June 9, 2004 to the date
of
the Note (the “Grid Note”) a conversion agreement dated as of August 2004
(“Conversion Agreement”) and Security Agreement dated as of October 28, 2004
(the “Security Agreement”);
WHEREAS,
as a result of changes in the control of the Company in December 2004, and
subsequent improvements in the Company’s record keeping procedures, the parties
want to assure that certain terms of the Grid Note, Conversion Agreement and
Security Agreement are fully understood and properly recorded.
WHEREAS,
the parties wish to definitively state key terms and provisions so as to provide
a convenient reference and prevent any future misunderstandings.
NOW
THEREFORE, in consideration of the terms, conditions and agreements contained
in
this Agreement, the Grid Note, Conversion Agreement and Security Agreement,
the
parties agree as follows:
1. BALANCE
OF GRID NOTE AND INTEREST.
Annexed
hereto as Exhibit
A
is a
schedule of advances to the Company, interest accrued, payments made and amounts
converted. The parties agree that under the Grid Note, as amended by the
Security Agreement, Conversion Agreement and representations of former
management to the Lender at the time additional advances were made, interest
on
outstanding balances increased from 8% to 18% with retroactive effect to June
9,
2004.
2. CONVERSION.
(a) Voluntary
Conversion.
At any
time after August 31, 2004 until there is no longer a balance outstanding on
the
Grid Note, principal and interest due on the Grid Note shall be convertible
into
shares of Common Stock at the option of the Lender, in whole or in part at
any
time and from time to time (subject to the limitations on conversion set forth
in Section 2(c) hereof). The Lender shall effect conversions by delivering
to the Company the form of Notice of Conversion attached hereto as Exhibit
B
(a
“Notice
of Conversion”),
specifying therein the amount of principal and interest of the Grid Note to
be
converted, the date of the advance or advances being satisfied by such
conversion, and the date on which such conversion is to be effected (a
“Conversion
Date”).
If no
Conversion Date is specified in a Notice of Conversion, the Conversion Date
shall be the date that such Notice of Conversion is provided hereunder. Once
delivered, the Notice of Conversion shall be irrevocable, unless provided
otherwise by the Company in its sole discretion or as provided in Section
2(d)(iii). To effect conversions hereunder, the Lender shall not be required
to
physically surrender the Grid Note to the Company unless the entire principal
amount of the Grid Note plus all accrued and unpaid interest thereon has been
so
converted. Unless otherwise directed by Lender in the Conversion Notice,
conversions hereunder shall have the effect of lowering the outstanding
principal amount of the Grid Note in an amount equal to the applicable
conversion and the principal so converted, for purposes of Rule 144 under the
Securities Act of 1933, as amended, shall be the earliest unconverted principal
advance received by the Company. The Lender and the Company shall maintain
records showing the principal amount converted (and interest, if any) and the
date of such conversions by making successive notations on Schedule 1 hereto.
In
the event of any dispute or discrepancy, the records of the Lender shall be
controlling and determinative in the absence of manifest error.
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(b) Conversion
Price.
The
conversion price in effect on any Conversion Date shall initially be equal
to
$0.01 (subject
to adjustment herein, the “Conversion
Price”).
Effective July 15, 2006, the Conversion Price, adjusted for a reverse split
was
$0.15.
(c) Conversion
Limitations.
The
Company shall not effect any conversion of the Grid Note, and a Lender shall
not
have the right to convert any portion of the Grid Note to the extent that after
giving effect to such conversion, such Lender (together with such Lender’s
affiliates, and any other person or entity acting as a group together with
such
Lender or any of such Lender’s affiliates), as set forth on the applicable
Notice of Conversion, would beneficially own in excess of the Beneficial
Ownership Limitation (as defined below). For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned by such Lender
and its affiliates shall include the number of shares of Common Stock issuable
upon conversion of the Grid Note with respect to which the determination of
such
sentence is being made, but shall exclude the number of shares of Common Stock
which would be issuable upon (A) conversion of the remaining, nonconverted
principal amount of the Grid Note beneficially owned by such Lender or any
of
its affiliates and (B) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company (including, without limitation,
any other Debentures or the Warrants) subject to a limitation on conversion
or
exercise analogous to the limitation contained herein beneficially owned by
such
Lender or any of its affiliates. Except as set forth in the preceding
sentence, for purposes of this Section 2(c), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the
rules and regulations promulgated thereunder.
To the
extent that the limitation contained in this Section 2(c) applies, the
determination of whether the Grid Note is convertible (in relation to other
securities owned by such Lender together with any affiliates) and of which
amounts of the Grid Note are convertible shall be in the sole discretion of
such
Lender, and the submission of a Notice of Conversion shall be deemed to be
such
Lender’s determination of whether the Grid Note may be converted (in relation to
other securities owned by such Lender) and which amounts of the Grid Note are
convertible, in each case subject to such aggregate percentage limitations.
To
ensure compliance with this restriction, each Lender will be deemed to represent
to the Company each time it delivers a Notice of Conversion that such Notice
of
Conversion has not violated the restrictions set forth in this paragraph and
the
Company shall have no obligation to verify or confirm the accuracy of such
determination. In
addition, a determination as to any group status as contemplated above shall
be
determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. For
purposes of this Section 2(c), in determining the number of outstanding shares
of Common Stock, a Lender may rely on the number of outstanding shares of Common
Stock as reflected in the most recent of the following: (A) the Company’s most
recent Form 10-QSB or Form 10-KSB, as the case may be, (B) a more recent public
announcement by the Company or (C) any other notice by the Company or the
Company’s transfer agent setting forth the number of shares of Common Stock
outstanding. Upon the written request of a Lender, the Company shall
within two Trading Days confirm in writing to such Lender the number of shares
of Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including the Grid Note, by such
Lender or its affiliates since the date as of which such number of outstanding
shares of Common Stock was reported. The Company, in refraining from or taking
actions under this Section 2(c), may rely solely upon filings made by the Lender
under Section 13(d) of the Exchange Act or written representation of the Lender
as to its beneficial ownership. The “Beneficial Ownership Limitation” shall be
4.99% of the number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock issuable upon conversion
of the Grid Note held by the Lender. The Beneficial Ownership Limitation
provisions of this Section 2(c) may be waived by such Lender, at the election
of
such Lender, upon not less than 61 days’ prior notice to the Company to change
the Beneficial Ownership Limitation to 9.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of
shares of Common Stock upon conversion of the Grid Note held by the Lender,
and
the provisions of this Section 2(c) shall continue to apply. Upon such a change
by a Lender of the Beneficial Ownership Limitation from such 4.99% limitation
to
such 9.99% limitation, the Beneficial Ownership Limitation may not be waived
by
such Lender. The provisions of this paragraph shall be implemented in a manner
otherwise than in strict conformity with the terms of this Section 2(c) to
correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation herein contained
or to make changes or supplements necessary or desirable to properly give effect
to such limitation.
The
limitations contained in this paragraph shall apply to a successor Lender of
the
Grid
Note.
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(d) Mechanics
of Conversion
i. Conversion
Shares Issuable Upon Conversion of Principal Amount.
The
number of shares of Common Stock issuable upon a conversion hereunder shall
be
determined by the quotient obtained by dividing (x) the outstanding principal
amount of the Grid Note to be converted by (y) the Conversion
Price.
ii. Delivery
of Certificate Upon Conversion.
Not
later than three Trading Days after any Conversion Date, the Company will
deliver or cause to be delivered to the Lender a certificate or certificates
representing the Conversion Shares which shall be free of restrictive legends
and trading restrictions (other than those required by the Purchase Agreement)
representing the number of shares of Common Stock being acquired upon the
conversion of the Grid Note. The Company shall, if available and if allowed
under applicable securities laws, use its reasonable best efforts to deliver
any
certificate or certificates required to be delivered by the Company under this
Section electronically through the Depository Trust Corporation or another
established clearing corporation performing similar functions.
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iii. Failure
to Deliver Certificates.
If in
the case of any Notice of Conversion such certificate or certificates are not
delivered to or as directed by the applicable Lender by the third Trading Day
after a Conversion Date, the Lender shall be entitled by written notice to
the
Company at any time on or before its receipt of such certificate or certificates
thereafter, to rescind such conversion, in which event the Company shall
immediately return the certificates representing the principal amount of the
Grid Note tendered for conversion.
iv. Reservation
of Shares Issuable Upon Conversion.
The
Company covenants that it will at all times reserve and keep available out
of
its authorized and unissued shares of Common Stock solely for the purpose of
issuance upon conversion of the Grid Note and payment of interest on the Grid
Note, each as herein provided, free from preemptive rights or any other actual
contingent purchase rights of persons other than the Lender (and the other
Lenders of the Grid Notes), not less than such number of shares of the Common
Stock as shall (subject to the terms and conditions set forth in the Purchase
Agreement) be issuable (taking into account the adjustments and restrictions
of
Section 5) upon the conversion of the outstanding principal amount of the Grid
Note and payment of interest hereunder. The Company covenants that all shares
of
Common Stock that shall be so issuable shall, upon issue, be duly and validly
authorized, issued and fully paid, nonassessable.
v. Fractional
Shares.
Upon a
conversion hereunder the Company shall not be required to issue stock
certificates representing fractions of shares of the Common Stock, but may
if
otherwise permitted, make a cash payment in respect of any final fraction of
a
share based on the VWAP at such time. If the Company elects not, or is unable,
to make such a cash payment, the Lender shall be entitled to receive, in lieu
of
the final fraction of a share, one whole share of Common Stock.
vi. Transfer
Taxes.
The
issuance of certificates for shares of the Common Stock on conversion of the
Grid Note shall be made without charge to the Lender hereof for any documentary
stamp or similar taxes that may be payable in respect of the issue or delivery
of such certificate, provided that the Company shall not be required to pay
any
tax that may be payable in respect of any transfer involved in the issuance
and
delivery of any such certificate upon conversion in a name other than that
of
the Lender of the Grid Note so converted and the Company shall not be required
to issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that
such
tax has been paid.
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3. CERTAIN
ADJUSTMENTS.
(a) Stock
Dividends and Stock Splits.
If the
Company, at any time while the Grid Note is outstanding: (A) pays a stock
dividend or otherwise makes a distribution or distributions on shares of its
Common Stock or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not include any
shares of Common Stock issued by the Company pursuant to the Grid Note,
including as interest thereon), (B) subdivides outstanding shares of Common
Stock into a larger number of shares, (C) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares,
or (D) issues by reclassification of shares of the Common Stock any shares
of
capital stock of the Company, then the Conversion Price shall be multiplied
by a
fraction of which the numerator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made pursuant to this
Section shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case
of a
subdivision, combination or re-classification.
(b) Pro
Rata Distributions.
If the
Company, at any time while the Grid Note is outstanding, shall distribute to
all
Lenders of Common Stock (and not to the Lenders of the Grid Note) evidences
of
its indebtedness or assets (including cash and cash dividends) or rights or
warrants to subscribe for or purchase any security, then in each such case
the
Conversion Price shall be adjusted by multiplying such Conversion Price in
effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which the
denominator shall be the VWAP determined as of the record date mentioned above,
and of which the numerator shall be such VWAP on such record date less the
then
fair market value at such record date of the portion of such assets or evidence
of indebtedness so distributed applicable to one outstanding share of the Common
Stock as determined by the Board of Directors in good faith. In either case
the
adjustments shall be described in a statement provided to the Lender of the
portion of assets or evidences of indebtedness so distributed or such
subscription rights applicable to one share of Common Stock. Such adjustment
shall be made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above.
(c) Fundamental
Transaction.
If, at
any time while the Grid Note is outstanding, (A) the Company effects any merger
or consolidation of the Company with or into another Person, (B) the Company
effects any sale of all or substantially all of its assets in one or a series
of
related transactions, (C) any tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which Lenders of Common
Stock are permitted to tender or exchange their shares for other securities,
cash or property, or (D) the Company effects any reclassification of the Common
Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property
(in any such case, a “Fundamental
Transaction”),
then
upon any subsequent conversion of the Grid Note, the Lender shall have the
right
to receive, for each Conversion Share that would have been issuable upon such
conversion immediately prior to the occurrence of such Fundamental Transaction,
the same kind and amount of securities, cash or property as it would have been
entitled to receive upon the occurrence of such Fundamental Transaction if
it
had been, immediately prior to such Fundamental Transaction, the Lender of
one
share of Common Stock (the “Alternate
Consideration”).
For
purposes of any such conversion, the determination of the Conversion Price
shall
be appropriately adjusted to apply to such Alternate Consideration based on
the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Conversion Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration. If Lenders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
the Lender shall be given the same choice as to the Alternate Consideration
it
receives upon any conversion of the Grid Note following such Fundamental
Transaction. To the extent necessary to effectuate the foregoing provisions,
any
successor to the Company or surviving entity in such Fundamental Transaction
shall issue to the Lender a new debenture consistent with the foregoing
provisions and evidencing the Lender’s right to convert such debenture into
Alternate Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this paragraph
(c) and insuring that the Grid Note (or any such replacement security) will
be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.
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(d) Calculations.
All
calculations under this Section 5 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section
5,
the number of shares of Common Stock deemed to be issued and outstanding as
of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.
(e) Notice
to the Lender.
i. Adjustment
to Conversion Price.
Whenever the Conversion Price is adjusted pursuant to any of this Section 5,
the
Company shall promptly mail to each Lender a notice setting forth the Conversion
Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment. If the Company issues a variable rate security,
despite the prohibition thereon in the Purchase Agreement, the Company shall
be
deemed to have issued Common Stock or Common Stock Equivalents at the lowest
possible conversion or exercise price at which such securities may be converted
or exercised in the case of a Variable Rate Transaction (as defined in the
Purchase Agreement).
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ii. Notice
to Allow Conversion by Lender. If (A) the Company shall declare a dividend
(or any other distribution) on the Common Stock; (B) the Company shall declare
a
special nonrecurring cash dividend on or a redemption of the Common Stock;
(C)
the Company shall authorize the granting to all Lenders of the Common Stock
rights or warrants to subscribe for or purchase any shares of capital stock
of
any class or of any rights; (D) the approval of any stockholders of the Company
shall be required in connection with any reclassification of the Common Stock,
any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the voluntary
or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; then, in each case, the Company shall cause to be filed at each office
or agency maintained for the purpose of conversion of the Grid Note, and shall
cause to be mailed to the Lender at its last addresses as it shall appear upon
the stock books of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating
(x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the Lenders of the Common Stock of record to be entitled
to
such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that Lenders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided that the
failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. The Lender is entitled to convert the Grid Note during the
20-day period commencing the date of such notice to the effective date of the
event triggering such notice.
4. LENDERS
REPRESENTATIONS AND WARRANTIES.
The
Lender hereby acknowledges, represents and warrants to, and agrees with, the
Company as follows:
(a) The
Lender will acquire the shares of the Company’s Common Stock upon conversion set
forth in Section 2 for its own account as principal, for investment purposes
only, and not with a view to, or for, resale, distribution or fractionalization
thereof, in whole or in part.
(b) The
Lender acknowledges its understanding that the offering and sale of the shares
of Common Stock upon conversion is intended to be exempt from registration
under
the Act by virtue of Section 2(2) of the Securities Act of 1933, as amended
(the
“Act”) and the provisions of Regulation D thereunder.
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(c) The
Lender has the financial ability to bear the economic risk of its investment,
has adequate means for providing for his current needs and personal
contingencies and has no need for liquidity with respect to his investment
in
the Company.
(d) The
Lender is an individual or organization which comes within a category of
“accredited investor” as that term is defined in Rule 501(a) of Regulation D
under the Act (17 C.F.R. 230.501(a)).
(e) The
Lender has made an independent investigation of the Company’s business, been
provided an opportunity to obtain additional information concerning the Company
it deems necessary to make an investment decision and all other information
to
the extent the Company possesses such information or can acquire it without
unreasonable effort or expense.
(f) The
Lender represents, warrants and agrees that it will not sell or otherwise
transfer the Shares unless registered under the Act or in reliance upon an
exemption therefrom, and fully understands and agrees that it must bear the
economic risk of its purchase for an indefinite period of time because, among
other reasons, the Shares or underlying securities have not been registered
under the Act or under the securities laws of certain states and, therefore,
cannot be resold, pledged, assigned or otherwise disposed of unless they are
subsequently registered under the Act and under the applicable securities laws
of such states or an exemption from such registration is available. The Lender
also understands that the Company is under no obligation to register the Shares
on its behalf or to assist the Lender in complying with any exemption from
registration under the Act. The Lender further understands that sales or
transfers of the Shares or underlying securities are restricted by the
provisions of state securities laws.
(g) The
execution and performance of this Agreement has been duly authorized by all
requisite corporate action by Lender and the person signing this Agreement
on
behalf of Lender has been duly authorized by such entity to do so.
(h) The
foregoing representations, warranties and agreements shall survive the delivery
of the Shares under the Agreement.
5. COMPANY
REPRESENTATIONS AND WARRANTIES.
The
Company hereby acknowledges, represents and warrants to, and agrees with the
Lender as follows:
(a) The
Company has been duly organized, is validly existing and is in good standing
under the laws of the State of Delaware. The Company has full corporate power
and authority to enter into this Agreement and this Agreement has been duly
and
validly authorized, executed and delivered by the Company and is a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforcement may be limited by the United States
Bankruptcy Code and laws effecting creditors rights, generally.
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(b) Subject
to the performance by the Lenders of its obligations under this Agreement and
the accuracy of the representations and warranties of the Lender, the offering
and sale of the Shares will be exempt from the registration requirements of
the
Act.
(c) The
execution and delivery by the Company of, and the performance by the Company
of
its obligations under this Agreement in accordance with the terms of this
Agreement will not contravene any provision of applicable law or the charter
documents of the Company or any agreement or other instrument binding upon
the
Company, or any judgment, order or decree of any governmental body, agency
or
court having jurisdiction over the Company, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations under
this Agreement in accordance with the terms of this Agreement.
(d) The
foregoing representations, warranties and agreements shall survive the
Closing.
6. MISCELLANEOUS.
(a) Modification. Neither
this Agreement nor any provisions hereof shall be modified, discharged or
terminated except by an instrument in writing signed by the party against whom
any waiver, change, discharge or termination is sought.
(b) Notices.
Any
notice, demand or other communication which any party hereto may be required,
or
may elect, to give to anyone interested hereunder shall be sufficiently given
if
(a) deposited, postage prepaid, in a United States mail letter box, registered
or certified mail, return receipt requested, addressed to such address as may
be
given herein, or (b) delivered personally at such address.
(c) Counterparts. This
Agreement may be executed through the use of separate signature pages or in
any
number of counterparts, and each of such counterparts shall, for all purposes,
constitute one agreement binding on all the parties, notwithstanding that all
parties are not signatories to the same counterpart.
(d) Binding
Effect.
Except
as otherwise provided herein, this Agreement shall be binding upon and inure
to
the benefit of the parties and their heirs, executors, administrators,
successors, legal representatives and assigns. If the undersigned is more than
one person, the obligation of the Investor shall be joint and several, and
the
agreements, representations, warranties and acknowledgments herein contained
shall be deemed to be made by and be binding upon each such person and his
heirs, executors, administrators and successors.
(e) Entire
Agreement.
This
instrument contains the entire agreement of the parties, and there are no
representations, covenants or other agreements except as stated or referred
to
herein.
(f) Applicable
Law.
This
Agreement shall be governed and construed under the laws of the State of New
York.
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(g) Effect
on Prior Documents.
Except
as
expressly set forth herein, all of the terms and conditions of the Grid Note,
Conversion Agreement and Security Agreement shall continue in full force and
effect after the execution of this Amendment, and shall not be in any way
changed, modified or superseded by the terms set forth herein and the provisions
of this Amendment, if not expressly set forth herein.
(h) Successors
and Assigns.
This
Amendment shall be binding upon and shall inure to the benefit of the Company
and Lender’s successors and assigns. Notwithstanding the generality of the
foregoing, the provision of Section 2 shall inure to the benefit of any assignee
of the Lender of the right to receive payment under the Grid Note, in whole
or
in part, and the Company will rely upon Lender’s notice of such assignment as to
the date of the advances that have been assigned and the extent by which such
assignment includes the right to receive interest. The Company further agrees
that the assignments of advances by the Lender of amounts owing to the Lender
in
the aggregate amount of $260,187.67 on June 13, 2006 consisted of principal
advanced on the dates set forth in Exhibit A hereto and interest calculated
at
the rate of 8% from the date of such advances to the date of conversion.
Accordingly, the sum of $26,047.34 of interest (upon which no additional
interest is accruing remains due and owing to Lender) remains due and owing
to
Lender.
IN
WITNESS WHEREOF, the Company and Lender have caused this Agreement to be
executed and delivered by their respective officers, thereunto duly
authorized.
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▇▇▇▇▇▇, CEO
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