THIS NOTE AND THE SECURITIES ISSUABLE
UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
UNDER ANY STATE SECURITIES LAWS. THEY ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED, SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO UNDER THE ACT
OR APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT ANY PROPOSED TRANSFER
OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
_________________________
CONVERTIBLE PROMISSORY NOTE
OF
DAUPHIN TECHNOLOGY, INC.
|
Principal Amount : $1,000,000
|
Date:
June 20, 2006
|
Dauphin Technology, Inc., an Illinois
corporation (the “Company”), for value received, hereby
promises to pay to the order of Diamantis Antonopoulos, a
resident/corporation/partnership of the state of Illinois (the
“Holder”), at 4028 W. 147 th Street
Midlothian Illinois, 60445, the principal sum of One Million
Dollars ($1,000,000), plus interest on the principal amount
outstanding at a rate of two percent (2%) per annum, calculated
from the date of this Convertible Promissory Note (this
“Note”) until the principal amount hereof and all
interest accrued thereon is paid (or converted, as provided in
Section 2 hereof). The outstanding principal amount of this Note,
and the interest accrued thereon, shall be due and payable at the
Holder’s address given above on the earliest to occur of (i)
December 31, 2006 (the “Maturity Date”), or (ii) when,
upon or during the occurrence of an Event of Default (as defined in
Section 8 below), such amounts are declared due and payable by
Holder or made automatically due and payable in accordance with the
terms hereof, unless this Note shall have been previously converted
pursuant to Section 2 hereof or as provided otherwise in this
Note.
This Note is one of several convertible
promissory notes that have been issued or that may hereafter be
issued in connection with the Company’s borrowing of an
aggregate principal amount (including the principal amount
represented by this Note) of up to $2,000,000.00 (the
“Series”).
The following is a statement of the rights of
the Holder of this Note and the conditions to which this Note is
subject, and to which the Holder hereof, by the acceptance of this
Note, agrees:
1.
Definitions . The following definitions shall apply
for all purposes of this Note:
1.1
“Company” shall mean the Company, as
defined above, and includes any corporation or entity that shall
succeed to or assume the obligations of the Company under this
Note.
1.2
“Conversion Date” shall mean the date
on which, pursuant to Sections 2 and 3 hereof, this Note is
converted into the Conversion Stock.
1.3 “
Conversion Stock ” shall mean 3,333,333
shares of $0.001 par value common stock of the Company, in
consideration of the principal amount payable hereunder. Upon
conversion into stock, the holder agrees to waive all interest
accrued during the term of the loan.
1.4
“Holder,” or similar terms, when the
context refers to a holder of this Note, shall mean any person who
shall at the time be the registered holder of this Note.
2.
Conversion; Prepayment .
a.
Conversion of Note . The Holder or the Company shall have
the right, to convert the principal into Conversion Stock, at any
time after the Company has amended its Articles of Incorporation to
provide for a number of authorized shares of $0.001 par value
common stock sufficient in number to enable the Company to validly
issue Conversion Stock in an amount sufficient to convert this Note
and any other notes issued as part of the Series, and prior to the
Company’s payment of the outstanding principal balance of
this Note. Upon Conversion under this Section 2, this Note shall be
surrendered at the principal offices of the Company.
b.
Prepayment of Note . Prior to Stock Conversion this Note may
be prepaid in full at any time without penalty only by mutual
agreement between the company and the holder.
3. Issuance
of Conversion Stock . As soon as practicable after
conversion and surrender of this Note, the Company will, at its
expense, cause to be issued in the name of and delivered to the
Holder, a certificate or certificates for the number of shares of
Conversion Stock to which the Holder shall be entitled upon such
conversion, bearing such legends as may be required by applicable
state and federal securities laws in the opinion of legal counsel
of the Company. Such conversion shall be deemed to have occurred
(i) under Section 2 above and (ii) immediately prior to the close
of business on the Conversion Date. No fractional shares will be
issued upon conversion of this Note. If upon any conversion of this
Note a fraction of a share would otherwise result, then, in lieu of
such fractional share, the Company will pay the cash value of that
fractional share, calculated on the basis of the closing price as
of the close of trading on the last tr
