Insider filing report for Changes in Beneficial Ownership
- Schedule 13G & 13D forms are used to report a party's ownership of stock which exceeds 5% of a company's total stock issue.
- Schedule 13G is a shorter version of Schedule 13D with fewer reporting requirements.
"Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise"
- Peter Lynch
What is insider trading>>
- Peter Lynch
What is insider trading>>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 12)
Nanophase Technologies Corporation
(Name of Issuer)
COMMON STOCK, par value $.01
(Title of Class of Securities)
630079101
(CUSIP Number)
Bradford T. Whitmore
1603 Orrington Ave., Suite 900
Evanston, Illinois 60201
Telephone: (847) 733-1230
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
November 13, 2019
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject
of this Schedule 13D, and is filing this schedule because
of Section 240.13d-l(e), 240.13d-l(f) or 240.13d-l(g),
check the following box. [ ]
NOTE: Schedules filed in paper format shall include a
signed original and five copies of the schedule, including
all exhibits. See Section 240.13d-7 for other parties
to whom copies are to be sent.
The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect
to the subject class of securities, and for any subsequent
amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover
page shall not be deemed to be "filed" for the purpose of
Section 18 of the Securities Exchange Act of 1934 ("Act")
or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
2
Schedule 13D/A
CUSIP No. 630079101 Page 2 of 10 Pages
1. Names of Reporting Person
S.S. OR I.R.S. Identification No. of Above Persons
Bradford T. Whitmore
2. Check the Appropriate Box if a Member of a Group (See
instructions)
(a) [ ]
(b) [ ]
3. SEC Use Only
4. Source of Funds (See instructions)
OO
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 27,147,889 shares
Shares
Beneficially 8 Shared Voting Power
Owned by 3,034,710 shares
Each
Reporting 9 Sole Dispositive Power
Person 27,147,889 shares
With
10 Shared Dispositive Power
3,034,710 shares
11. Aggregate Amount Beneficially Owned by Each Reporting
Person
30,182,599 shares
12. Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See instructions) [ ]
13. Percent of Class Represented by Amount in Row (11)
62.7%
14. Type of Reporting Person (See instructions)
IN
3
Schedule 13D/A
CUSIP No. 630079101 Page 3 of 10 Pages
1. Names of Reporting Person
S.S. OR I.R.S. Identification No. of Above Persons
Grace Investments, LP
2. Check the Appropriate Box if a Member of a Group (See
instructions)
(a) [ ]
(b) [ ]
3. SEC Use Only
4. Source of Funds (See instructions)
OO
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Delaware Limited Partnership
7 Sole Voting Power
Number of 0
Shares 8 Shared Voting Power
Beneficially 601,410 shares
Owned by
Each
Reporting 9 Sole Dispositive Power
Person 0
With 10 Shared Dispositive Power
601,410 shares
11. Aggregate Amount Beneficially Owned by Each Reporting
Person
601,410 shares
12. Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See instructions) [ ]
13. Percent of Class Represented by Amount in Row (11)
1.3 %
14. Type of Reporting Person (See instructions)
PN
4
Schedule 13D/A
CUSIP No. 630079101 Page 4 of 10 Pages
1. Names of Reporting Person
S.S. OR I.R.S. Identification No. of Above Persons
Grace Brothers, LP
2. Check the Appropriate Box if a Member of a Group (See
instructions)
(a) [ ]
(b) [ ]
3. SEC Use Only
4. Source of Funds (See instructions)
OO
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Delaware Limited Partnership
7 Sole Voting Power
Number of 0
Shares 8 Shared Voting Power
Beneficially 2,433,300 shares
Owned by
Each
Reporting 9 Sole Dispositive Power
Person 0
With 10 Shared Dispositive Power
2,433,300 shares
11. Aggregate Amount Beneficially Owned by Each Reporting
Person
2,433,300 shares
12. Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See instructions) [ ]
13. Percent of Class Represented by Amount in Row (11)
5.1%
14. Type of Reporting Person (See instructions)
PN
5
Schedule 13D/A
CUSIP No. 630079101 Page 5 of 10 Pages
1. Names of Reporting Person
S.S. OR I.R.S. Identification No. of Above Persons
Spurgeon Corporation
2. Check the Appropriate Box if a Member of a Group (See
instructions)
(a) [ ]
(b) [ ]
3. SEC Use Only
4. Source of Funds (See instructions)
OO
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Illinois Corporation
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned by 3,034,710 shares
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
3,034,710 shares
11. Aggregate Amount Beneficially Owned by Each Reporting
Person
3,034,710 shares
12. Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See instructions) [ ]
13. Percent of Class Represented by Amount in Row (11)
6.3%
14. Type of Reporting Person (See instructions)
CO
6
Schedule 13D/A
CUSIP No. 630079101 Page 6 of 10 Pages
1. Names of Reporting Person
S.S. OR I.R.S. Identification No. of Above Persons
BRO-GP,LLC
2. Check the Appropriate Box if a Member of a Group (See
instructions)
(a) [ ]
(b) [ ]
3. SEC Use Only
4. Source of Funds (See instructions)
OO
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Delaware Limited Liability Company
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned by 2,433,300 shares
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
2,433,300 shares
11. Aggregate Amount Beneficially Owned by Each Reporting
Person
2,433,300 shares
12. Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See instructions) [ ]
13. Percent of Class Represented by Amount in Row (11)
5.1%
14. Type of Reporting Person (See instructions)
OO
7
Schedule 13D/A
CUSIP No. 630079101 Page 7 of 10 Pages
1. Names of Reporting Person
S.S. OR I.R.S. Identification No. of Above Persons
INV-GP, LLC
2. Check the Appropriate Box if a Member of a Group (See
instructions)
(a) [ ]
(b) [ ]
3. SEC Use Only
4. Source of Funds (See instructions)
OO
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Delaware Limited Liability Company
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned by 601,410 shares
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
601,410 shares
11. Aggregate Amount Beneficially Owned by Each Reporting
Person
601,410 shares
12. Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See instructions) [ ]
13. Percent of Class Represented by Amount in Row (11)
1.3%
14. Type of Reporting Person (See instructions)
OO
8
Page 8 of 10 Pages
The undersigned hereby amends its Schedule 13D as filed on
September 19, 2003 and as previously amended relating to
the Common Stock of Nanophase Technologies Corporation.
Unless otherwise indicated, all capitalized terms used
herein but not defined herein shall have the same meaning
as set forth in the Schedule 13D. Except as set forth
herein, the Schedule 13D remains unchanged.
Item 2. Identity and Background
(a) The statement is filed by Grace Brothers, LP, a
Delaware limited partnership ("Grace"), Grace Investments,
LP, a Delaware limited partnership ("Grace Investments"),
BRO-GP, LLC, a Delaware Limited Liability Company, INV-GP,
LLC, a Delaware Limited Liability Company, Bradford T.
Whitmore ("Whitmore"), and Spurgeon Corporation
("Spurgeon") (the "Filers"). Spurgeon and BRO-GP, LLC
are the general partners of Grace. Spurgeon and INV-GP,
LLC are the general partners of Grace Investments.
Whitmore is the manager and sole member of both BRO-GP,
LLC and INV-GP, LLC.
(b) The business address of Grace, Grace Investments,
BRO-GP, LLC, INV-GP, LLC and Whitmore is 1603 Orrington
Avenue, Suite 900, Evanston, Illinois 60201. The business
address of Spurgeon is 407 S. Third Street, Suite 230,
Geneva, Illinois 60134.
(c) The principal business of Grace and Grace Investments
is to purchase, sell, invest, and trade in securities.
The principal business of BRO-GP, LLC is that of being a
general partner of Grace. The principal business of
INV-GP, LLC is that of being a general partner of Grace
Investments. Whitmore's principal occupation is that of
being the manager of BRO-GP, LLC and INV-GP, LLC. The
principal business of Spurgeon is that of being a general
partner of Grace and Grace Investments.
(d) None of the persons referred to in this Item 2 has,
during the last five years, been convicted in a criminal
proceeding (excluding traffic violations or similar
misdemeanors).
(e) None of the persons referred to in this Item 2 has,
during the last five years, been a party to a civil
proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
(f) Grace and Grace Investments are each a Delaware limited
partnership. BRO-GP, LLC and INV-GP, LLC are each a
Delaware limited liability company. Spurgeon is an
Illinois corporation. Whitmore is a citizen of the
United States.
9
Page 9 of 10 Pages
Item 4. Purpose of Transaction
On November 13, 2019, Whitmore entered into an agreement to
purchase from the Company a 2% Second Secured Convertible
Note, in the principal sum of $2,000,000, due May 15, 2024
(the "Note"). The closing of the purchase transaction, and
the funding contemplated by the Note, will be as agreed by
the parties, on or about November 20, 2019. The note is
convertible into 10,000,000 shares of Commmon Stock, if and
when the Company has filed an amendment to its Certificate
of Incorporation (the "Certificate Amendment") pursuant to
which the Company's authorized shares of Common Stock will
be increased by an amount sufficient to satisfy the
conversion rights under the Note. Following the Certificate
Amendment the Note is convertible at the discretion of the
holder. If the Certificate Amendment is not filed by
December 31, 2019, the Note is immediately due and payable.
The Filers have no plans or proposals which relate to, or
would result in, any of the matters referred to in
Paragraphs (a) through (j), inclusive, of Item 4 of the
Schedule 13D. The Filers may, at any time and from time to
time, review or reconsider their investment in the Company
and formulate plans or proposals with respect thereto, but
have no present intention of doing so.
Item 5. Interest in Securities of the Issuer
(a) As of the date of this filing:
(1) Grace Brothers, LP beneficially owns 2,433,300 shares of
Common Stock, representing approximately 5.1% of the
outstanding shares of Common Stock. As general partners of
Grace Brothers, LP, Spurgeon and BRO-GP, LLC each may be
deemed to share beneficial ownership of these 2,433,300
shares of Common Stock. Spurgeon and BRO-GP, LLC otherwise
disclaim beneficial ownership.
(2) Grace Investments, LP beneficially owns 601,410 shares of
Common Stock, representing approximately 1.3% of the
outstanding shares of Common Stock. As general partners of
Grace Investments, LP, Spurgeon and INV-GP, LLC may be deemed
to share beneficial ownership of these 601,410 shares of
Common Stock. Spurgeon and INV-GP, LLC otherwise disclaim
beneficial ownership.
(3) Following the Certificate Amendment, Whitmore will be
the beneficial owner of 27,147,889 shares of Common Stock.
As the manager and sole member of both
BRO-GP, LLC and INV-GP, LLC, Whitmore may be deemed the
indirect beneficial owner of 3,034,710 shares of stock
beneficially owned by those entities, for a total
beneficial ownership of 30,182,599 shares, or 62.7% of the
outstanding shares of Common Stock.
(b) Grace Brothers, LP: shared voting power (with BRO-GP,
LLC, Whitmore and Spurgeon)
2,433,300 Shares of Common Stock
Grace Investments, LP: shared voting power (with INV-GP,
LLC, Whitmore and Spurgeon)
601,410 Shares of Common Stock
Whitmore: shared voting power (with Grace Brothers, LP,
Grace Investments, LP, BRO-GP, LLC, INV-GP, LLC and Spurgeon)
3,034,710 Shares of Common Stock;
and
sole voting power
27,147,889 Shares of Common Stock
Spurgeon: shared voting power (with Grace Brothers, LP,
Grace Investments, LP, BRO-GP, LLC, INV-GP, LLC and Whitmore)
3,034,710 Shares of Common Stock
(c) The transactions effected by the Filers during the
past sixty days are set forth in Schedule A.
10
Page 10 of 10 Pages
Item 7. Items to be Filed as Exhibits
Exhibit 1 - Nanophase Technologies Corporation Securities
Purchase Agreement
Exhibit 2 - 2% Second Secured Convertible Note
SIGNATURE
After reasonable inquiry and to the best of its knowledge
and belief, the undersigned certifies that the information
set forth in this Statement with respect to it is true,
complete and correct.
Dated: November 15, 2019
Bradford T. Whitmore
By: /s/ Bradford T. Whitmore
Name: Bradford T. Whitmore
Grace Investments, LP
By: /s/ Bradford T. Whitmore
Name: Bradford T. Whitmore
Manager: INV-GP, LLC
Its: General Partner
Grace Brothers, LP
By: /s/ Bradford T. Whitmore
Name: Bradford T. Whitmore
Manager: BRO-GP, LLC
Its: General Partner
Spurgeon Corporation
By: /s/ Jerald A. Trannel
Name: Jerald A. Trannel
Its: Vice President
SCHEDULE A
TRADE ACTIVITY FOR NANOPHASE TECHNOLOGIES, CORP.
EFFECTED BY BRADFORD T. WHITMORE FOR THE PREVIOUS
60 DAYS.
Amount of Price per
Date Security Principal Note
Purchased
11/13/2019 2% Second Secured $2,000,000 $100
Convertible Notes
Due 2024
(Convertible at
$.20 per share of
Common Stock
Exhibit 1
NANOPHASE TECHNOLOGIES CORPORATION SECURITIES PURCHASE
AGREEMENT
SECURITIES PURCHASE AGREEMENT ("Agreement") dated as of
November 13, 2019 by and between BRADFORD T. WHITMORE,
an individual ("Whitmore" or "Purchaser") and NANOPHASE
TECHNOLOGIES CORPORATION, a Delaware corporation (the
"Company").
W I T N E S S E T H:
WHEREAS, the Company, and its subsidiary, SOLESENCE, LLC,
a Delaware limited liability company ("SLLC"), have a need
for working capital;
WHEREAS, the Company desires to sell and issue to the
Purchaser, and the Purchaser now wishes to purchase from the
Company, a 2% Second Secured Convertible Notes due 2024, in
the form attached hereto as Exhibit A (the "Convertible
Note") convertible into shares (the "Conversion Shares") of
the Company's common stock, par value $0.01 per share
("Common Stock");
WHEREAS, the Company, the Purchaser and SLLC desire to enter
into a Commercial Security Agreement in the form attached
hereto as Exhibit B (the "Security Agreement") to secure the
obligations of the Company under the Convertible Note by a
perfected junior lien on all of the assets of the Company and
SLLC; and WHEREAS, pursuant to Common Stock Purchase
Agreement, dated as May 13, 2019 between the Company and
Purchaser (as amended from time to time, the "CSPA"),
the
Company agreed, under certain circumstances, to register for
resale under the Securities Act of 1933, as amended (the
"Securities Act"), certain of its Common Stock then being
acquired by Purchaser and the parties hereto desire to amend
the CSPA to include the Conversion Shares in said
registrations.
NOW, THEREFORE, in consideration of the foregoing premises and
the covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Purchase and Sale of Convertible Note
Section 1.1
Issuance of Convertible Note. Upon the following terms and
conditions, the Company shall issue and sell to the Purchaser,
and the Purchaser shall purchase from the Company, the
Convertible Note in the principal amount of $2,000,000.00.
Section 1.2
Purchase Price. The purchase price for the Convertible Notes
to be paid by Purchaser (the "Purchase Price") shall be its
face value.
Section 1.3
Loan Documents. On the Closing Date, (a) the Purchaser, the
Company and SLLC shall execute the Security Agreement to
secure the Company's obligations under the Convertible Note by
a junior priority lien on the assets of the Company and SLLC,
subordinate only to the Permitted Liens (defined below), (b)
the UCC-1 Financing Statements and the Patent and Trademark
Financing Statements shall be executed and filed as
applicable. Collectively, the Purchase Agreement and the
Convertible Note shall be referred to as the "Transaction
Documents", and the Security Agreement, the UCC-1 Financing
Statements and the Patent and Trademark Financing Statements,
all as amended (as applicable), shall be referred to as the
"Loan Documents".
Section 1.4
The Closing and Amendment.
(a) Timing. Subject to the fulfillment or waiver of the
conditions set forth in Article IV hereof, the purchase and
sale of the Convertible Notes shall take place at a closing
(the "Closing"), to be held on or about November 20, 2019 (the
"Closing Date").
(b) Form of Payment and Closing. On the Closing Date, the
Company shall deliver to the Purchaser the Convertible Note
purchased and paid for by it hereunder, issued in the name of
the Purchaser. Subject to the applicable conditions set forth
in Section 4.2 below, on the Closing Date, the Purchaser shall
pay the Purchase Price by wire transfer of immediately
available funds to an account designated in writing by the
Company. In addition, each party shall deliver all documents,
instruments and writings required to be delivered by such
party pursuant to this Agreement at or prior to the Closing,
as specified in Article IV below. Subject to the payments of
the Purchase Price in accordance with this Agreement, the
Convertible Note will be fully paid for by the Purchaser as of
the Closing Date.
(c) Amendment. Prior to December 31, 2019, the Company shall
(i) obtain board and shareholder approval for an amendment to
its Certificate of Incorporation (the "Certificate Amendment")
pursuant to which the Company's authorized shares of Common
Stock are increased by an amount sufficient to satisfy the
conversion rights under the Convertible Note purchased
hereunder, and (ii) duly execute and file the Certificate
Amendment with the Delaware Secretary of State and any other
governmental offices as may be necessary to carry out its
intent. The Company's failure of comply with (i) and (ii)
above shall result in the Convertible Note being immediately
due and payable as set forth therein.
ARTICLE II
Representations and Warranties
Section 2.1
Representations and Warranties of the Company. The Company
hereby makes the following representations and warranties to
Purchaser as of the date hereof:
(a) Organization and Qualification; Material Adverse Effect.
The Company is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, with the requisite corporate power and authority to
own and use its properties and assets and to carry on its
business as currently conducted. The Company has no
subsidiaries other than SLLC. The Company is duly qualified
to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of the
business conducted or property owned by it makes such
qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not,
individually or in the aggregate, (x) adversely affect the
legality, validity or enforceability of any of the
Transaction Documents or Loan Documents in any material
respect, (y) have a material adverse effect on the results
of operations, assets, or financial condition of the Company
or (z) adversely impair in any material respect the Company's
ability to perform fully on a timely basis its obligations
under the Transaction Documents and the Loan Documents (a
"Material Adverse Effect").
Exhibit 2
2% SECOND SECURED CONVERTIBLE NOTE
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THIS NOTE DOES NOT REQUIRE PHYSICAL SURRENDER OF THE
NOTE IN THE EVENT OF A PARTIAL REDEMPTION OR CONVERSION. AS A
RESULT, FOLLOWING ANY REDEMPTION OR CONVERSION OF ANY PORTION
OF THIS NOTE, THE OUTSTANDING PRINCIPAL AMOUNT REPRESENTED BY
THIS NOTE MAY BE LESS THAN THE PRINCIPAL AMOUNT AND ACCRUED
INTEREST SET FORTH BELOW.
2% SECOND SECURED CONVERTIBLE NOTE DUE MAY 15, 2024 OF
NANOPHASE TECHNOLOGIES CORPORATION
Note No.: 2019-1
Original Principal Amount: $2,000,000.00
Issuance Date: November 20, 2019
Evanston, Illinois
FOR VALUE RECEIVED, NANOPHASE TECHNOLOGIES CORPORATION, a
Delaware corporation (the "Company") hereby promises to pay
to the order of BRADFORD T. WHITMORE or its registered
assigns or successors-in-interest ("Holder") the principal
sum of TWO MILLION U.S. DOLLARS (U.S. $2,000,000.00)
together with all accrued but unpaid interest thereon, if
any, on May 15, 2024 ("Maturity Date"), to the extent such
principal amount and interest has not been converted into
the Company's Common Stock, $0.01 par value per share (the
"Common Stock"), in accordance with the terms hereof.
Interest on the unpaid principal balance hereof shall
accrue at the rate of 2% per annum from the original date
of issuance, November 20, 2019 (the "Issuance Date").
Notwithstanding anything contained herein, this Note shall
bear interest on the due and unpaid Principal Amount from
and after the occurrence and during the continuance of an
Event of Default pursuant to Section 5(a), at the rate (the
"Default Rate") equal to the lower of twelve percent (12%)
per annum or the highest rate permitted by law. Unless
otherwise agreed or required by applicable law, payments
will be applied first to any unpaid collection costs, then
to unpaid interest and fees (including late charges, if
applicable) and any remaining amount to principal.
Except as otherwise provided herein, all payments of
principal and interest (including late charges, if
applicable) on this Note shall be made in lawful money of
the United States of America by wire transfer of
immediately available funds to such account as the Holder
may from time to time designate by written notice in
accordance with the provisions of this Note or by Company
check. This Note may not be prepaid in whole or in part
except as otherwise provided herein. Whenever any amount
expressed to be due by the terms of this Note is due on any
day which is not a Business Day (as defined below), the
same shall instead be due on the next succeeding day which
is a Business Day.
Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Securities Purchase
Agreement dated on or about the Issuance Date
pursuant to which the Notes were originally issued (the
"Purchase Agreement"). For purposes hereof the following
terms shall have the meanings ascribed to them below:
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which commercial banks in the City of
Chicago are authorized or required by law or executive
order to remain closed.
"Certificate Amendment" shall have the meaning set forth in
the Purchase Agreement.
"Change in Control Transaction" means (a) the disposition
by the Company of all or substantially all of its assets,
whether in one transaction or in a series of related
transactions, to an unaffiliated buyer for value and (b) any
sale by the Company of its stock or of instruments or
securities convertible into or exchangeable for its stock,
or any merger, consolidation, conversion or reorganization
of the Company, in one transaction or in a series of related
transactions pursuant to which the persons owning the right
to receive distributions and dividends declared and paid on
the Company's stock (including any holders of instruments
and securities convertible into or exchangeable for the
Company's stock which are entitled pursuant to their terms
to participate in such distributions and dividends)
immediately before such transaction or series of related
transactions own less than half of the right to receive
such distributions and dividends immediately after such
transaction or series of related transactions.
"Conversion Ratio" means, at any time, a fraction, of which
the numerator is the
entire outstanding Principal Amount of this Note (or such
portion thereof that is being redeemed or repurchased), and
of which the denominator is the then applicable Conversion
Price.
"Conversion Price" shall equal USD 0.20 (which Conversion
Price shall be subject to adjustment as set forth herein).
"Conversion Shares" means the shares of Common Stock into
which the Notes are convertible (including repayment in
Common Stock as set forth herein) in accordance with the
terms hereof and the Purchase Agreement.
"Convertible Securities" means any convertible securities,
warrants, options or other rights to subscribe for or to
purchase or exchange for, shares of Common Stock.
"CSPA" means the Common Stock Purchase Agreement, dated as
May 13, 2019 between the Company and Holder, as amended
from time to time.
"Debt" shall mean indebtedness of any kind.
"Effective Date" means the date on which a Registration
Statement covering all the Conversion Shares and other
Registrable Securities (as defined in the CSPA) is
declared effective by the Securities and Exchange
Commission.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Market Price" shall equal the average of the VWAP for
each of the twenty (20) Trading Days, excluding the five
(5) highest Trading Days (i.e. the Trading Days with the
highest VWAP) from the average, immediately preceding the
date on which such Market Price is being determined.
"Principal Amount" shall refer to the sum of (i) the
original principal amount of this Note, (ii) all accrued
but unpaid interest hereunder, and (iii) any default
payments owing under the Transaction Documents but not
previously paid or added to the Principal Amount.
"Principal Market" shall mean the OTCQB trading
marketplace or such other principal market or exchange on
which the Common Stock is then listed for trading.
"Registration Statement" shall have the meaning set forth
in the Purchase Agreement.
"Securities Act" shall mean the Securities Act of 1933,
as amended.
"Trading Day" shall mean (x) if the Common Stock is listed
on the New York Stock Exchange, the American Stock
Exchange or Nasdaq Stock Market, a day on which there is
trading on such stock exchange, or (y) if the foregoing
provisions are inapplicable, a day on which quotations are
reported by OTC Markets Group.
"VWAP" shall mean the daily volume weighted average price
of the Common Stock on the Principal Market as reported by
Bloomberg Financial L.P. (based on a trading day from 9:30
a.m. Eastern Time to 4:00 p.m. Eastern Time) using the AQR
function on the date in question.
The following terms and conditions shall apply to this Note:
Section 1.
Payments of Principal and Interest.
(a) Interest. This Note shall accrue interest monthly
(commencing on the Issuance Date) at a rate of 2% per annum.
Interest shall be paid semi-annually on 15th day of May and
November each year commencing on May 15, 2020 until this
note is paid in full, or such earlier date upon acceleration
or by conversion or redemption in accordance with the terms
hereof or of the other Transaction Documents.
(b) Payment of Principal. Subject to the provisions hereof,
the Principal Amount of this Note shall be due and payable
in cash on the Maturity Date. The Company shall have no
right to prepay the Principal Amount of this Note.
Section 2.
Seniority. The obligations of the Company hereunder (a)
shall rank junior to the Company's Notes governed by the
Business Loan Agreement, dated as of November 16, 2018, by
and among the Company and the Beachcorp, LLC, as amended
from time to time (the "Beachcorp Loan Agreement"), (b) are
secured by liens which are junior to the liens securing the
Company's Promissory Note, originally dated March 4, 2018,
payable to the order of Libertyville Bank and Trust Company,
as amended by that certain Change in Terms Agreement, dated
March 4, 2019 (as so amended and as it may be hereafter
amended, modified, extended or refinanced from time to
time), and (c) shall be senior to the Company's unsecured
indebtedness.
Section 3.
Conversion.
(a) Conversion by Holder. Subject to the terms hereof and
restrictions and limitations contained herein, and provided
that the Company has filed the Certificate Amendment as
provided for in the Purchase Agreement, the Holder shall
have the right, at such Holder's option, at any time and
from time to time to convert the outstanding Principal Amount
under this Note in whole or in part by delivering to the
Company a fully executed notice of conversion in the form of
conversion notice attached hereto as Exhibit A (the
"Conversion Notice"), which may be transmitted by facsimile
or email (with the original mailed on the same day be
certified or registered mail, postage prepaid and return
receipt requested or via overnight courier), on the date of
conversion (the "Conversion Date"). A Conversion Notice shall
be deemed sent on the date of delivery if delivered before
5:00 p.m. Central Time on such date, or the day following such
date if delivered after 5:00 p.m. Central Time. In the event
that the Certificate Amendment has not been properly approved
and filed on or before 5:00pm (Central Time) on December 31,
2019, the entire principal balance of this Note and all other
unpaid amounts accrued hereunder, shall become immediately
due and payable and the Company shall immediately pay to the
Holder an amount equal to 105% of the outstanding Principal
Amount of the Notes held by the Holder (plus all accrued and
unpaid interest, if any).
(b) Conversion Date Procedures. Upon conversion of this Note
pursuant to this Section 3, the outstanding Principal Amount
hereunder shall be converted into such number of fully paid,
validly issued and non-assessable shares of Common Stock,
free of any liens, claims and encumbrances, as is determined
by dividing the outstanding Principal Amount (and, at the
election of the Holder, any accrued interest or applicable
late charges) being converted by the then applicable
Conversion Price. If a conversion under this Note cannot be
effected in full for any reason, or if the Holder is
converting less than all of the outstanding Principal Amount
hereunder pursuant to a Conversion Notice, the Company
shall, upon request by the Holder, promptly deliver to the
Holder (but no later than five Trading Days after the
Conversion Date) a Note for such outstanding Principal
Amount (and, at the election of the Holder, any accrued
interest or applicable late charges) as has not been
converted if this Note has been surrendered to the Company
for partial conversion. The Holder shall not be required to
physically surrender this Note to
the Company upon any
conversion hereunder unless the full outstanding Principal
Amount (and, at the election of the Holder, any accrued
interest or applicable late charges) represented by this
Note is being converted or repaid. The Holder and the
Company shall maintain records showing the outstanding
Principal Amount (and, at the election of the Holder, any
accrued interest or applicable late charges) so converted
and repaid and the dates of such conversions or repayments
or shall use such other method, reasonably satisfactory to
the Holder and the Company, so as not to require physical
surrender of this Note upon each such conversion or
repayment.
(i) Stock Certificates or DWAC. The Company will deliver to
the Holder not later than three (3) Trading Days after the
Conversion Date, a certificate or certificates which shall
be free of restrictive legends and trading restrictions
(assuming that the Registration Statement has been declared
effective), representing the number of shares of Common
Stock being acquired upon the conversion of this Note. In
lieu of delivering physical certificates representing the
shares of Common Stock issuable upon conversion of this
Note, provided the Company's transfer agent is
participating in the Depository Trust Company ("DTC")
Fast Automated Securities Transfer ("FAST") program, upon
request of the Holder, the Company shall use commercially
reasonable efforts to cause its transfer agent to
electronically transmit such shares issuable upon
conversion to the Holder (or its designee), by crediting
the account of the Holder's (or such designee's) prime
broker with DTC through its Deposit Withdrawal Agent
Commission system (provided that the same time periods
herein as for stock certificates shall apply). If in the
case of any conversion hereunder, such certificate or
certificates are not delivered to or as directed by the
Holder by the third Trading Day after the Conversion
Date, the Holder 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 this Note tendered for conversion.
(c) Conversion Price Adjustments.
(i) Stock Dividends and Splits. If the Company or any of
its subsidiaries, at any time while the Notes are
outstanding (A) shall pay a stock dividend or otherwise
make a distribution or distributions on any equity
securities (including instruments or securities convertible
into or exchangeable for such equity securities) in shares
of Common Stock, or (B) subdivide outstanding Common Stock
into a larger number of shares, then each Affected
Conversion Price (as defined below) shall be multiplied by
a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding before such event and the
denominator of which shall be the number of shares of Common
Stock outstanding after such event. Any adjustment made
pursuant to this Section 3(c)(i) 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.
As used herein, the Affected Conversion Prices (each an
"Affected Conversion Price") shall refer to: (i) the
Conversion Price; (ii) each reported daily closing price of
the Common Stock on the Principal Market occurring on any
Trading Day included in the period used for determining the
Market Price, the Conversion Price, and applicability of the
restriction in Section 3(f), as the case may be, which
Trading Day occurred before the record date in the case of
events referred to in clause (A) of this Section 3(c)(i) and
before the effective date in the case of the events referred
to in clause (B) of this Section 3(c)(i).
(ii) Distributions. If the Company or any of its
subsidiaries, at any time while the Notes are outstanding,
shall distribute to all holders of Common Stock evidences of
its indebtedness or assets or cash or rights or warrants to
subscribe for or purchase any security of the Company or any
of its subsidiaries (excluding those referred to in Section
3(c)(i) above), then concurrently with such distributions to
holders of Common Stock, the Company shall distribute to
holders of the Notes the amount of such indebtedness, assets,
cash or rights or warrants which lower of: (A) the Conversion
Price or (B) the holders of Notes would have received had all
their Notes been converted into Common Stock at the then
applicable Market Price immediately prior to the record date
for such distribution.
(iii) Rounding of Adjustments. All calculations under this
Section 3 shall be made to the nearest cent or the nearest
1/100th of a share, as the case may be.
(iv) Notice of Adjustments. Whenever any Affected Conversion
Price is adjusted pursuant to Section 3(c)(ii) above, the
Company shall promptly deliver to each holder of the Notes,
a notice setting forth the Affected Conversion Price after
such adjustment and setting forth a brief statement of the
facts requiring such adjustment, provided that any failure
to so provide such notice shall not affect the automatic
adjustment hereunder.
(v) Change in Control Transactions. In case of any Change in
Control Transaction, the Holder shall have the right
thereafter to, at its option, require the Company or its
successor to redeem this Note, in whole or in part, at a
redemption price equal to 105% of the outstanding Principal
Amount (plus any accrued interest or applicable late charges)
being redeemed. This provision shall similarly apply to
successive reclassifications, consolidations, mergers, sales,
transfers or share exchanges.
(vi) Notice of Certain Events. If:
A. the Company shall declare a dividend (or any other
distribution) on its Common Stock; or
B. the Company shall declare a special nonrecurring cash
dividend on or a redemption of its Common Stock; or
C. the Company shall authorize the granting to all holders of
the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any
rights; or
D. the approval of any stockholders of the Company shall be
required in connection with any reclassification of the Common
Stock of the Company, 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 of exchange whereby the Common Stock is
converted into other securities, cash or property; or
E. the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the
Company; then the Company shall cause to be filed at each
office or agency maintained for the purpose of conversion of
this Note, and shall cause to be mailed to the Holder at its
last address as it shall appear upon the books of the Company,
on or prior to the date notice to the Company's stockholders
generally is given, 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 holders of 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 holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or
share exchange.
(d) Reservation and Issuance of Underlying Securities. The
Company covenants that it will at all times following the
filing of the Certificate Amendment, reserve and keep
available out of its authorized and unissued Common Stock
solely for the purpose of issuance upon conversion of this
Note (including repayments in stock), free from preemptive
rights or any other actual contingent purchase rights of
persons other than the holders of the Notes, not less than
such number of shares of Common Stock as shall (subject to
any additional requirements of the Company as to reservation
of such shares set forth in the Purchase Agreement) be
issuable (taking into account the adjustments under this
Section 3 but without regard to any ownership limitations
contained herein) upon the conversion of this Note hereunder
in Common Stock (including repayments in stock). The Company
covenants that all shares of Common Stock that shall be so
issuable shall, upon issue, be duly authorized, validly
issued, fully paid, nonassessable and, assuming that the
Registration Statement has been declared effective, freely
tradeable.
(e) No Fractions. Upon a conversion hereunder the Company
shall not be required to issue stock certificates
representing fractions of shares of Common Stock, but may
if otherwise permitted, make a cash payment in respect of
any final fraction of a share based on the closing price of
a share of Common Stock at such time. If the Company elects
not, or is unable, to make such cash payment, the Holder
shall be entitled to receive, in lieu of the final fraction
of a share, one whole share of Common Stock.
(f) Charges, Taxes and Expenses. Issuance of certificates
for shares of Common Stock upon the conversion of this
Note (including repayment in stock) shall be made without
charge to the holder hereof for any issue or transfer tax
or other incidental expense in respect of the issuance of
such certificate, all of which taxes and expenses shall be
paid by the Company, and such certificates shall be issued
in the name of the Holder or in such name or names as may
be directed by the Holder; provided, however, that in the
event certificates for shares of Common Stock are to be
issued in a name other than the name of the Holder, this
Note when surrendered for conversion shall be accompanied
by an assignment form; and provided further, that the
Company shall not be required to pay any tax or taxes
which may be payable in respect of any such transfer.
(g) Cancellation. After all of the Principal Amount
(including accrued but unpaid interest and default
payments (including any applicable late charges) at any
time owed on this Note) have been paid in full or
converted into Common Stock, this Note shall
utomatically be deemed canceled and the Holder shall
promptly surrender the Note to the Company at the
Company's principal executive offices.
(h) Notices Procedures. Any and all notices or other
communications or deliveries to be provided by the Holder
hereunder, including, without limitation, any Conversion
Notice, shall be in writing and delivered personally, by
confirmed facsimile or email, or by a nationally recognized
overnight courier service to the Company at the email,
facsimile, telephone number or address of the principal
place of business of the Company as set forth in the
Purchase Agreement. Any and all notices or other
communications or deliveries to be provided by the Company
hereunder shall be in writing and delivered personally, by
facsimile, or by a nationally recognized overnight courier
service addressed to the Holder at the facsimile telephone
number or address of the Holder appearing on the books of
the Company, or if no such facsimile telephone number or
address appears, at the principal place of business of the
Holder. Any notice or other communication or deliveries
hereunder shall be deemed delivered (i) upon receipt, when
delivered personally, (ii) when sent by facsimile, upon
receipt if received on a Business Day prior to 5:00 p.m.
(Central Time), or on the first Business Day following
such receipt if received on a Business Day after 5:00 p.m.
(Central Time) or (iii) upon receipt, when deposited with
a nationally recognized overnight courier service.
Section 4.
Defaults and Remedies.
(a) Events of Default. An "Event of Default" is: (i) a
default in
the payment of any Principal Amount of the Notes; (ii)
default under the Beachcorp Loan Agreement, (iii) failure
by the Company for ten (10) days after notice to it, to
comply with any provision of the Purchase Agreement or
any of the Registration Rights provisions of the CSPA;
(iv) an Event of Default under the Security Agreement;
(v) a material breach by the Company of its
representations or warranties in the Purchase Agreement;
(vi) any event of default under or acceleration prior to
maturity of any mortgage, indenture or instrument under
which there may be issued or by which there may be secured
or evidenced any indebtedness for money borrowed by the
Company or a subsidiary of the Company or for money
borrowed the repayment of which is guaranteed by the
Company or a subsidiary of the Company, whether such
indebtedness or guarantee now exists or shall be created
hereafter, provided that the obligations with respect to
any such borrowed or accelerated amount exceeds, in the
aggregate, $100,000; (vii) any money judgment, writ or
warrant of attachment, or similar process in excess of
$100,000 in the aggregate shall be entered or filed
against the Company or a subsidiary of the Company or
any of their respective properties or other assets and
shall remain unpaid, unvacated, unbonded and unstayed for
a period of 30 days; (viii) if the Company or any
subsidiary of the Company pursuant to or within the
meaning of any Bankruptcy Law: (A) commences a voluntary
case; (B) has an involuntary case commenced against it,
and such case is not dismissed within 45 days of such
commencement or consents to the entry of an order for
relief against it in an involuntary case; (C) consents
to the appointment of a Custodian of it for all or
substantially all of its property; (D) makes a general
assignment for the benefit of its creditors; or (E)
admits in writing that it is generally unable to pay
its debts as the same become due; (ix) a court of
competent jurisdiction enters an order or decree under
any Bankruptcy Law that: (1)
is for relief against the Company in an involuntary
case; (2) appoints a Custodian of the Company or for
all or substantially all of its property; or (3) orders
the liquidation of the Company or any subsidiary, and
the order or decree remains unstayed and in effect for
forty-five (45) days; or (x) the Company fails to
approve and file the Certificate Amendment on or before
December 31, 2019. The terms "Bankruptcy Law" means
Title 11, U.S. Code, or any similar federal or state
law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
(b) Remedies. If an Event of Default occurs and is
continuing with respect to this Note, the Holder may
declare all of the then outstanding Principal Amount
of this Note, including any interest due thereon, to
be due and payable immediately, except that in the
case of an Event of Default arising from events
described in clauses (vii), (viii) and (x) of
Section 4(a), this Note shall become due and payable
without further action or notice. In the event of an
acceleration under clause (x) of Section 4(a), the
amount due and owing to the Holder shall be 105% of
the outstanding Principal Amount of the Notes held by
the Holder (plus all accrued and unpaid interest, if
any). In either case the Company shall pay interest on
such amount in cash at the Default Rate to the Holder
if such amount is not paid within seven days of
Holder's request. The remedies under this Note shall
be cumulative.
Section 5.
Purchase Agreement; Security Agreement; CSPA. This Note
is being issued to the Holder in connection with the
Purchase Agreement and is entitled to the benefits
thereof. The Company's obligations under this Note are
also secured, pursuant to the terms of the Security
Agreement by all the assets of the Company and SOLESENCE,
LLC, a Delaware limited liability company ("Grantor").
The Conversion Shares are entitled to registration
pursuant to the Registration Rights provisions of the
CSPA which is amended by the Purchase Agreement.
Section 6.
General.
(a) Payment of Expenses. The Company agrees to pay all
reasonable charges and expenses, including attorneys'
fees and expenses
, which may be incurred by the Holder
in successfully enforcing this Note and/or collecting
any amount due under this Note.
(b) Savings Clause. In 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 it is 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 or impaired
thereby. In no event shall the amount of interest paid
hereunder exceed the maximum rate of interest on the
unpaid principal balance hereof allowable by applicable
law. If any sum is collected in excess of the
applicable maximum rate, the excess collected shall be
applied to reduce the principal debt. If the interest
actually collected hereunder is still in excess of the
applicable maximum rate, the interest rate shall be
reduced so as not to exceed the maximum allowable under
law.
(c) Amendment. 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
holders of 75% of the Principal Amount of all Notes.
(d) Assignment, Etc. The Holder may assign or transfer
this Note to any transferee. The Holder shall notify the
Company of any such assignment or transfer promptly.
This Note shall be binding upon the Company and its
successors and shall inure to the benefit of the Holder
and its successors and permitted assigns.
(e) No Waiver. No failure on the part of the Holder to
exercise, and no delay in exercising any right, remedy or
power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise by the Holder of any
right, remedy or power hereunder preclude any other or
future exercise of any other right, remedy or power. Each
and every right, remedy or power hereby granted to the
Holder or allowed it by law or other agreement shall be
cumulative and not exclusive of any other, and may be
exercised by the Holder from time to time.
(f) Governing Law; Jurisdiction.
(i) Governing Law. THIS NOTE WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
ILLINOIS WITHOUT REGARD TO ANY CONFLICTS OF LAWS
PROVISIONS THEREOF THAT WOULD OTHERWISE REQUIRE THE
APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.
(ii) Jurisdiction. The Company irrevocably submits to
the exclusive jurisdiction of any State or Federal
Court sitting in the State of Illinois, County of
Cook, over any suit, action, or proceeding arising
out of or relating to this Note. The Company
irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have
to the laying of the venue of any such suit, action,
or proceeding brought in such a court and any claim
that suit, action, or proceeding has been brought in
an inconvenient forum.
The Company agrees that the service of process upon
it mailed by certified or registered mail, postage
prepaid and return receipt requested (and service so
made shall be deemed complete three days after the
same has been posted as aforesaid) or by personal
service shall be deemed in every respect effective
service of process upon it in any such suit or
proceeding. Nothing herein shall affect Holder's
right to serve process in any other manner permitted
by law. The Company agrees that a final non-appealable
judgment in any such suit or proceeding shall be
conclusive and may be enforced in other
jurisdictions by suit on such judgment or in any other
lawful manner.
(iii) NO JURY TRIAL. THE COMPANY HEREBY KNOWINGLY AND
VOLUNTARILY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A
TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED ON,
OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS NOTE.
(g) Replacement Notes. This Note may be exchanged by
Holder at any time and from time to time for a Note or
Notes with different denominations representing an equal
aggregate outstanding Principal Amount, as reasonably
requested by Holder, upon surrendering the same. No
service charge will be made for such registration or
exchange. In the event that Holder notifies the Company
that this Note has been lost, stolen or destroyed, a
replacement Note identical in all respects to the
original Note (except for registration number and
Principal Amount, if different than that shown on the
original Note), shall be issued to the Holder, provided
that the Holder executes and delivers to the Company an
agreement reasonably satisfactory to the Company to
indemnify the Company from any loss incurred by it in
connection with the Note.
Signature Page Follows
IN WITNESS WHEREOF, the Company has caused this Note to
be duly executed on November 20, 2019.
NANOPHASE TECHNOLOGIES CORPORATION, a Delaware
corporation
By:
Name:
Title:
Attest:
Sign:
Print Name:
EXHIBIT A
FORM OF CONVERSION NOTICE
(To be Executed by the Holder in order to Convert a Note)
The undersigned hereby elects to convert the aggregate
outstanding Principal Amount (as defined in the Note)
indicated below of this Note into shares of Common Stock,
$0.01 par value per share (the "Common Stock"), of
NANOPHASE TECHNOLOGIES CORPORATION, a Delaware corporation
(the "Company") according to the conditions hereof, as of
the date written below. If shares are to be issued in the
name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such
certificates and opinions as reasonably requested by the
Company in accordance therewith. No fee will be charged to
the holder for any conversion, except for such transfer
taxes, if any.
Conversion information:
Date to Effect Conversion
Aggregate Principal Amount of Note Being Converted
Aggregate Interest (plus any applicable late charges)
Being Converted
Number of shares of Common Stock to be Issued
Applicable Conversion Price
Signature
Name
Address