SENSE TECHNOLOGIES INC.
SERIES “B” 10% CONVERTIBLE SECURED
PROMISSORY NOTE
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Note No:
9-B
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Issue Date: September 23,
2003
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Name of Holder:
Cynthia Schroeder
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Principal Amount: $5,388.36
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THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, OR HYPOTHECATED BY THE HOLDER OF THIS NOTE IN THE ABSENCE
OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE NOTE
UNDER SUCH ACT AND APPLICABLE LAWS OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
Sense Technologies, Inc. (the
“Company”), a Yukon corporation, with an office located
at 2535 N. Carleton Avenue, Suite B, Grand Island, Nebraska, 68803,
for value received, hereby promises to pay to the above named
Holder the Principal Amount set out above, together with interest
on the unpaid principal balance of this Series “B” 10%
Convertible Secured Promissory Note. The Principal Amount shall
become immediately due and payable on demand made on or after
August 30, 2005 (the “Demand Date”). Payment for all
amounts due under this Note shall be made by mail to the registered
address of the Holder. This Note is one of an issue of the
Company’s Series “B” 10% Convertible Secured
Promissory Notes in the aggregate principal amount of up to
$623,973.97 (the “Offering”).
The following is a statement of
the rights of the Holder and the conditions to which this Note is
subject, and to which the Holder hereof, by the acceptance of this
Note, agrees:
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1.
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Interest . The Company shall pay simple interest at the
rate of 10% per annum on the Principal Amount of the Note
outstanding from time to time, calculated each calendar quarter not
in advance (the “Interest”). Subject to the provisions
hereof, payment of interest in respect of a calendar quarter shall
be made two weeks after the end of that quarter. If payment of
accrued interest in respect of one or more calendar quarters is not
made in the time provided, then interest shall continue to accrue
and instead be payable for the immediately following calendar
quarter in the same manner. No interest is payable in respect of
any portion of the Principal Amount which has been converted into
common stock of the Company, or which has been repaid by the
Company to the Holder.
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2.
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Conversion . The Noteholder may at any time prior to demand
for repayment being made on or after August 30, 2005, and upon 20
days prior written Notice, convert all or a portion of the
outstanding Principal Amount of the Note to the company’s no
par value common stock, at the rate of one share of common stock
for every $0.29 of the total principal amount. The Company, on due
conversion of the Note, will issue shares of its common stock for
the Principal Amount of the Note converted. Shares issued on
conversion of the Note may bear
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a legend
denoting any restrictions on transfer pursuant to applicable laws,
including without limitation Rule 144 under the U.S. Securities
Act of 1933.
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3.
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Redemption. The Note may be redeemed in whole or in part at
the election of the Company upon 10 days of notice being sent to
the Holder by regular mail, fax or courier, at any time after
August 30, 2005 at a redemption price equal to the principal amount
being redeemed, plus accrued but unpaid interest thereon. The offer
to redeem the Note will be made pro-rata to all note-holders under
the Offering.
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4.
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Grant of
Security Interest .
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(i)
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As security for
the full and timely payment of the Principal Amount and the
Interest, the Company hereby grants, assigns, transfers, mortgages,
pledges and charges to and in favor of the Holder, all its interest
and property in all of the Company’s inventory, from time to
time, of Guardian Alert TM products (the “Security
Interest”).
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(ii)
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The Security
Interest of the Holder will rank pari-passu to the security
interests of all other holders of Series “B” 10%
Convertible Secured Promissory Notes issued pursuant to this
Offering.
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5.
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Events of
Default . If any of the
events of default occurs (herein individually referred to as an
“Event of Default”), subject to the provisions of this
section, the Holder of the Note may, so long as such default
condition exists, declare the entire unpaid principal and unpaid
accrued interest hereon immediately due and payable. The following
shall each constitute an Event of Default:
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(i)
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Default in the
payment of any unpaid principal and unpaid accrued interest of this
Note when properly due and payable in accordance with the terms of
this Note provided that the Holder has provided prior notice of
such default in writing to the Company and the Company has not
remedied or cured such default with a period of 15 days from such
notice. The Holder may not declare the unpaid principal and unpaid
accrued interest due and payable unless the notice provision of
this section has been complied with.
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(ii)
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The institution
by the Company of proceedings to be adjudicated as bankrupt or
insolvent, or the consent by it to in
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