|
EXHIBIT 10.34
THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF
HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY
MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES
ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY
TO MAKER THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD
PURSUANT TO RULE
144 UNDER SUCH ACT.
CONVERTIBLE PROMISSORY NOTE
$450,000 November 30, 2007
THIS CONVERTIBLE PROMISSORY NOTE ("Note") is issued pursuant to
the
terms and conditions of that certain Termination of Amended and
Restated
Management Agreement, dated December 26, 2007 but effective for
all purposes
as of November 30, 2007, by and among AMERICAN TONERSERV CORP.,
a Delaware
corporation ("ATS"), OPTIMA TECHNOLOGIES, LLC, a Delaware
limited liability
company ("Maker"), AZARIA MANAGEMENT GROUP, LLC (fka OPTIMA
TECHNOLOGIES,
L.L.C.), a Nevada limited liability company ("Payee"), and
certain other
parties (the "Termination Agreement"). Capitalized terms used
herein and not
otherwise defined herein shall have the meanings ascribed
thereto in the
Termination Agreement.
1. Obligation. For value received, Maker hereby promises to pay
to the
order of Payee the principal sum of Four Hundred Fifty Thousand
Dollars
($450,000).
2. Maturity Date. The term of this Note shall be three (3)
months,
beginning with the date of this Note and ending on March 1, 2008
(the
"Maturity Date").
3. Interest Rate. No interest shall accrue on the principal of
this Note
during the term of this Note.
4. Conversion.
(a) Automatic Conversion. At any time prior to the Maturity
Date,
upon the earlier to occur of (i) the closing of at least Three
Million Five
Hundred Thousand Dollars ($3,500,000) of Units (excluding
conversion of this
Note) offered by that certain Private Placement Memorandum of
ATS dated
October 12, 2007 (the "PPM"); (ii) the closing of the purchase
of the assets
of Tonertype of Florida, LLC; or (iii) the Maturity Date, the
outstanding
aggregate principal amount of this Note shall be automatically
converted into
nine (9) Units. As used herein and as defined in the PPM, each
"Unit"
consists of Two Hundred Thousand (200,000) shares of Common
Stock of ATS and
Two Hundred Thousand (200,000) redeemable warrants, each to
purchase one (1)
share of Common Stock of ATS.
(b) Mechanics and Effect of Conversion. Upon surrender of this
Note
to Maker, ATS shall issue and deliver to Payee a certificate or
certificates
for the number of shares of Common Stock to which Payee shall be
entitled. No
fractional shares of Common Stock shall be issued upon
conversion of this
Note. In lieu of Maker issuing any fractional shares to Payee
upon the
conversion of this Note, Maker shall pay to Payee the amount of
outstanding
principal and accrued interest that is not so converted. Upon
conversion of
this Note, with the proper issuance of the number of shares of
Common Stock
to which Payee shall be entitled and full payment of any
principal and
interest not converted in lieu of issuing fractional shares,
Maker shall be
forever released from all its obligations and liabilities under
this Note.
(c) No Stockholder Rights. Nothing contained in this Note shall
be
construed as conferring upon Payee or any other person any
rights whatsoever
as a stockholder of ATS; and no dividends shall be payable or
accrued in
respect of this Note or the interest represented hereby or the
Common Stock
obtainable he
| 
