Did anyone read the supplemental filing today. Read this from section 8... Kind of long...
The Borrower may, on the terms and conditions set forth in this Agreement, borrow, repay and re-borrow at any time during the Commitment Period as long as the repayments take the form of cash. Prepayment of the Advances may be made, at the Borrower's sole discretion, through the issuance of the Borrower's preferred stock, par value, under similar terms as set forth in paragraph 8 below, or cash.
8. Conversion Right.
If any amounts remain outstanding under this Agreement or the Notes on or after the Maturity Date, the Lender shall have the option to convert such outstanding amounts into shares of the Borrower's common stock at a conversion price equal to 50% multiplied by the Market Price (as defined herein) (representing a discount rate of 50%). “Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the closing bid price on the Over- the-Counter Bulletin Board, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTCQB is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. Provided, however, that if the closing bid price for the common stock on the Clearing Date (defined below) is lower than the Closing Bid Price, then the Conversion Price shall be adjusted such that the discount rate shall be taken from the closing bid price on the Clearing Date, and the Company shall issue additional shares to the Holder to reflect such adjusted Conversion Price; and provided further, that if the Company’s common stock becomes chilled by Deposit Trust Corporation (DTC) at the time that any portion of the principal and interest of this Note is converted by Holder, than the discount rate shall be adjusted to sixty percent (60%) for so long as the Common Stock is chilled. For purposes of this Agreement, the Clearing Date shall be on the date in which the Conversion Shares are deposited into the Holder’s brokerage account and Holder’s broker has confirmed with Holder that the Holder may execute trades of the Conversion Shares without restriction. If such notice is received from the broker by the Holder after 12:00 PM Eastern Standard Time, the notice shall be deemed to have been received on the next Trading Day. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTCQB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded. The Lender will not be allowed to convert or own in excess of 9.99% of the issued and outstanding common stock.
The Borrower may, on the terms and conditions set forth in this Agreement, borrow, repay and re-borrow at any time during the Commitment Period as long as the repayments take the form of cash. Prepayment of the Advances may be made, at the Borrower's sole discretion, through the issuance of the Borrower's preferred stock, par value, under similar terms as set forth in paragraph 8 below, or cash.
8. Conversion Right.
If any amounts remain outstanding under this Agreement or the Notes on or after the Maturity Date, the Lender shall have the option to convert such outstanding amounts into shares of the Borrower's common stock at a conversion price equal to 50% multiplied by the Market Price (as defined herein) (representing a discount rate of 50%). “Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the closing bid price on the Over- the-Counter Bulletin Board, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTCQB is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. Provided, however, that if the closing bid price for the common stock on the Clearing Date (defined below) is lower than the Closing Bid Price, then the Conversion Price shall be adjusted such that the discount rate shall be taken from the closing bid price on the Clearing Date, and the Company shall issue additional shares to the Holder to reflect such adjusted Conversion Price; and provided further, that if the Company’s common stock becomes chilled by Deposit Trust Corporation (DTC) at the time that any portion of the principal and interest of this Note is converted by Holder, than the discount rate shall be adjusted to sixty percent (60%) for so long as the Common Stock is chilled. For purposes of this Agreement, the Clearing Date shall be on the date in which the Conversion Shares are deposited into the Holder’s brokerage account and Holder’s broker has confirmed with Holder that the Holder may execute trades of the Conversion Shares without restriction. If such notice is received from the broker by the Holder after 12:00 PM Eastern Standard Time, the notice shall be deemed to have been received on the next Trading Day. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTCQB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded. The Lender will not be allowed to convert or own in excess of 9.99% of the issued and outstanding common stock.
