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EXHIBIT 10.51
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ALLONGE TO CONVERTIBLE NOTE
This ALLONGE TO CONVERTIBLE NOTE supplements and is hereby made
a
part of that certain Convertible Note made by NESTOR, INC., a
Delaware
corporation to LAURUS MASTER FUND, LTD., c/o Ironshore Corporate
Services Ltd.,
P.O. Box 1234 G.T., Queensgate House, South Church Street, Grand
Cayman, Cayman
Islands, Fax: 345-949-9877 dated May 16, 2005 in the principal
amount of Six
Million Dollars ($6,000,000) (the "Note"). Capitalized terms
used herein but not
defined herein shall have the meanings assigned to them by the
Note.
The Note is hereby amended by the addition of a Section 3.4
to
Article III, to be inserted immediately following the existing
Section 3.3,
which Section 3.4 shall read:
3.4 Limitation on Conversions. Notwithstanding anything
contained herein to the contrary, the Holder shall not be
entitled
to convert pursuant to the terms of this Note an amount that
would
be convertible into that number of Conversion Shares which
would
exceed the difference between (i) 4.99% of the issued and
outstanding shares of Common Stock and (ii) the number of shares
of
Common Stock beneficially owned by the Holder (the "Conversion
Share
Limitation"). For purposes of the immediately preceding
sentence,
beneficial ownership shall be determined in accordance with
Section
13(d) of the Exchange Act and Regulation 13d-3 thereunder.
The
Conversion Share Limitation described in this Section 3.4
shall
automatically become null and void following notice to the
Company
upon the occurrence and during the continua
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