AGREEMENT TO CONVERT LOAN TO
STOCK
This agreement
("Agreement") dated effective as of September 28, 2004 is between
Paulson Investment Company, Inc. ("Paulson") and microHelix, Inc.
("Company").
RECITALS
A. Company borrowed funds in the original principal
amount of $200,000 from Paulson under a Cash Advance Agreement
dated March 28, 2003 (the "Loan").
B. The outstanding balance payable to Paulson under
the Loan on September 28, 2004 is $113,941.55, including all
accrued but unpaid interest (the "Unpaid Balance").
C. Paulson and Company wish to convert the Unpaid
Balance into shares of the Company's Common Stock at a conversion
rate of $0.41 per share.
AGREEMENT
1. Paulson and Company agree to convert the Unpaid
Balance under the Loan into 277,907 shares of Company's Common
Stock (the "Shares") at a conversion rate of $0.41 per share on
September 28, 2004. All Shares are validly issued, fully paid and
nonassessable. Paulson agrees that upon issuance of the Shares the
Loan is paid in full.
2. Paulson is an "accredited investor" within the
meaning of that term as defined in Rule 501(a) promulgated under
the Securities Act of 1933, as amended (the "Act"). Paulson
represents that the Shares are being acquired for investment for
Paulson's own account, not as a nominee or agent, and not with a
view to the resale or distribution of all or any part of the
Shares; Paulson has no present intention of selling, granting any
participation in or otherwise distributing all or any part of the
Shares; and Paulson does not have any contract, undertaking,
agreement or arrangement with any person or entity to sell,
transfer or grant participations to such person or to any third
party with respect to any of the Shares.
4. Paulson understands that the Shares have not
been registered under the Act on the ground that the issuance is
exempt from registration under the Act pursuant to Section 4(2) of
the Act, and that the Company's reliance on such exem
