Document:

ex10-b

 

Exhibit 10(b)

 

	 	 	 
	CADBURY SCHWEPPES	 	
CADBURY SCHWEPPES

PUBLIC LIMITED COMPANY
	 
	 
	 	 	
REGISTERED IN ENGLAND NO. 52457
	

	 	 	 
	 	 	
REGISTERED OFFICE:
	 	 	
25 BERKELEY SQUARE

LONDON W1J 6HB

3 April 2002

Securities and Exchange Commission

450 5th Street, N.W.

Washington DC 20549

	Re:	 	Exhibit 10b to Annual
Report on Form 20-F:

Representations Received from Arthur Andersen LLP

Ladies and Gentlemen:

Cadbury Schweppes public limited company (“CS”) has received a representation
letter from Arthur Andersen LLP (“Andersen”), CS’s independent public
accountants, in connection with the issuance of Andersen’s audit report
incorporated by reference in CS’s Annual Report on this Form 20-F. In its
letter, Andersen has represented to CS that its audit of the consolidated
financial statements of CS referenced in its audit report was subject to
Andersen’s quality control system for the U.S. accounting and auditing practice
to provide reasonable assurance that the engagement was conducted in compliance
with professional standards, and that there was appropriate continuity of
Andersen personnel working on the audit, availability of the U.S. national
office consultation, and availability of personnel at foreign affiliates of
Andersen to conduct relevant portions of the audit.

Very truly yours

 

 

/s/ D J Kappler

D J Kappler

Chief Financial OfficerExhibit 10.20

                            7% CONVERTIBLE DEBENTURE

NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE
BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES  COMMISSION  OF  ANY  STATE  OR  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED  (THE  "ACT").  THE  SECURITIES  ARE  RESTRICTED AND MAY NOT BE OFFERED,
RESOLD,  PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO AN
EFFECTIVE  REGISTRATION  STATEMENT  OR  AN  EXEMPTION  FROM  SUCH  REGISTRATION
REQUIREMENTS.

NO.  01                                                            US  $  75,000

                             PEN INTERCONNECT, INC.

                   7% CONVERTIBLE DEBENTURE DUE AUGUST 8, 2001

     THIS DEBENTURE is issued by Pen Interconnect, Inc., a corporation organized
and  existing  under  the  laws  of  the  State  of  Utah (the "Company") and is
designated  as  its  7%  Convertible  Debenture  Due  August  8,  2004.
FOR  VALUE RECEIVED, the Company promises to pay to AMRO Int'l S.A. or permitted
assigns  (the "Holder"), the principal sum Seventy Fifty Thousand and 00/100 (US
$75,000)  Dollars on August 8, 2001 (the "Maturity Date") and to pay interest on
the principal sum outstanding from time to time quarterly in arrears at the rate
of  7% per annum accruing from the date of initial issuance. Accrual of interest
shall  commence  on  the  first  business day to occur after the date of initial
issuance  and  continue until payment in full of the principal sum has been made
or  duly  provided for.  Quarterly interest payments shall be due and payable on
September  1,  December  1,  March  1  and  June 1 of each year, commencing with
December  1,  2000.  If  any interest payment date or the Maturity Date is not a
business  day  in  the State of New York, then such payment shall be made on the
next  succeeding  business day. The forwarding of such check, shall constitute a
payment  of principal and interest hereunder and shall satisfy and discharge the
liability  for principal and interest on this Debenture to the extent of the sum
represented  by  such  check  plus  any  amounts  so  deducted.
This  Debenture  is  subject  to  the  following  additional  provisions:
     1.     The  Company  shall  be  entitled  to  withhold from all payments of
interest  on  this  Debenture  any  amounts  required  to  be withheld under the
applicable  provisions  of the United States income tax laws or other applicable
laws  at  the  time  of  such payments, and Holder shall execute and deliver all
required  documentation  in  connection  therewith.
2.     This  Debenture  has been issued subject to investment representations of
the  original  purchaser  hereof  and  may  be  transferred or exchanged only in
compliance  with  the  Securities Act of 1933, as amended (the "Act"), and other
applicable  state and foreign securities laws.  The Holder shall deliver written
notice  to the Company of any proposed transfer of this Debenture.  In the event
of  any  proposed  transfer of this Debenture, the Company may require, prior to
issuance  of  a  new Debenture in the name of such other person, that it receive
reasonable  transfer documentation including legal opinions that the issuance of
the  Debenture in such other name does not and will not cause a violation of the
Act  or  any  applicable  state  or  foreign  securities  laws.   Prior  to  due
presentment  for  transfer  of  this Debenture, the Company and any agent of the
Company  may treat the person in whose name this Debenture is duly registered on
the  Company's  Debenture  Register  as  the  owner  hereof  for  the purpose of
receiving  payment as herein provided and for all other purposes, whether or not
this  Debenture  be overdue, and neither the Company nor any such agent shall be
affected  by  notice  to  the  contrary.  This  Debenture  has been executed and
delivered  pursuant to the Convertible Debenture and Warrants Purchase Agreement
dated  as  of  August  __, 2000 between the Company and the original Holder (the
"Purchase  Agreement"),  and  is  subject  to  the  terms  and conditions of the
Purchase Agreement, which are, by this reference, incorporated herein and made a
part  hereof. Capitalized terms used and not otherwise defined herein shall have
the  meanings  set  forth  for  such  terms  in  the  Purchase  Agreement.
3.     The  Holder  of  this Debenture is entitled, at its option, to convert at
any  time  commencing on the date hereof, the principal amount of this Debenture
or  any  portion  thereof,  plus any accrued and unpaid interest, into shares of
Common Stock of the Company ("Conversion Shares") at a conversion price for each
share of Common Stock ("Conversion Price") equal to the lesser of (i) $0.15 (the
"Set  Price")(subject  to adjustment for stock splits and the like) and (ii) 70%
of  the  Market  Price  on  the  Conversion  Date.
4.     The  rate  of interest on this Debenture shall be seven percent (7%), per
annum,  on  the  outstanding principal until paid or converted. The Holder shall
have  the  right  to  cause  the  Company  to issue Common Stock in exchange for
interest otherwise payable in cash pursuant to this Debenture.  The exact number
of  Common  Stock  into  which  such  interest  payment  is convertible shall be
determined  as  set  forth  in  Section  3.
5.     At  the election of the Holder, the Company shall use at least 50% of the
net proceeds of any subsequent equity financing to redeem all or any part of the
entire  outstanding  amount  of  this  Debenture  at  a  price  of  130%  of the
outstanding principal balance, plus all accrued but unpaid interest. The Company
shall  make  the redemption payment to the Holder six (6) Trading Days after the
notice  of  redemption  is  tendered  and  agreed  to by the Holder ("Redemption
Payment Date"). The Holder shall have the right to convert this Debenture as set
forth  in  Section 8 until the Trading Day prior to the Redemption Payment Date.
6.     Intentionally  omitted.
7.     On  the  Maturity  Date,  the  Company  will pay the principal of and any
accrued  but  unpaid interest due upon this Debenture, less any amounts required
by  law to be deducted, to the registered holder of this Debenture and addressed
to  such  holder  at  the  last  address  appearing  on  the  Debenture Register
8.     (a)     Conversion shall be effectuated by surrendering this Debenture to
the Company (if such Conversion will convert all outstanding principal) together
with  the form of conversion notice attached hereto as Exhibit A (the "Notice of
                                                       ---------
Conversion"),  executed by the Holder of this Debenture evidencing such Holder's
intention  to  convert this Debenture or a specified portion (as above provided)
hereof, and accompanied, if required by the Company, by proper assignment hereof
in blank.  Interest accrued or accruing from the date of issuance to the date of
conversion  shall  be paid in cash as set forth above. No fraction of a share or
scrip  representing  a fraction of a share will be issued on conversion, but the
number of shares issuable shall be rounded to the nearest whole share.  The date
on  which  Notice of Conversion is given (the "Conversion Date") shall be deemed
to  be the date on which the Holder faxes the Notice of Conversion duly executed
to  the  Company.  Facsimile  delivery  of  the  Notice  of  Conversion shall be
accepted  by  the  Company at facsimile number (949) 798-5800: Stephen J. Fryer.
Certificates  representing Common Stock upon conversion will be delivered to the
Holder  within  three (3) Trading Days from the date the Notice of Conversion is
delivered  to  the Company.  Delivery of shares upon conversion shall be made to
the  address  specified  by  the  Holder  in  the  Notice  of  Conversion.
     (b)     The  Company  understands that a delay in the issuance of shares of
Common Stock upon a conversion beyond the three (3) Trading Day period described
in  Paragraph 8(a) could result in economic loss to the Holder.  As compensation
to  the  Holder  for  such  loss, the Company agrees to pay late payments to the
Holder for late issuance of shares of Common Stock upon conversion in accordance
with  the  following  schedule  (where "No. Trading Days Late" is defined as the
number of Trading Days beyond three (3) Trading Days from the date the Notice of
Conversion  is  delivered  to  the  Company).

                              Late  Payment  for  Each
                              $5,000  of  Principal  Amount
No. Trading Days Late         Being Converted
---------------------        ---------------
1                             $100
-                             ----
2                             $200
-                             ----
3                             $300
-                             ----
4                             $400
-                             ----
5                             $500
-                             ----
6                             $600
-                             ----
7                             $700
-                             ----
8                             $800
-                             ----
9                             $900
-                             ----
10                           $1,000
-                            ------
More than 10                 $1,000 +$200
                             for each Trading Day
                             Late beyond 10 Trading Days
------------                 ---------------------------

     The  Company  shall  pay any payments incurred under this Paragraph 8(b) in
immediately  available  funds  upon demand.  Nothing herein shall limit Holder's
right  to  pursue  injunctive  relief  and/or  actual  damages for the Company's
failure  to  issue  and  deliver  Common Stock to the holder, including, without
limitation,  the  Holder's  actual  losses  occasioned by any "buy-in" of Common
Stock necessitated by such late delivery.  Furthermore, in addition to any other
remedies  which  may  be  available to the Holder, in the event that the Company
fails  for  any  reason to effect delivery of such shares of Common Stock within
three  (3)  Trading  Days from the date the Notice of Conversion is delivered to
the  Company,  the  Holder  will  be  entitled  to revoke the relevant Notice of
Conversion  by  delivering a notice to such effect to the Company, whereupon the
Company  and  the  Holder  shall  each be restored to their respective positions
immediately prior to delivery of such Notice of Conversion, and in such event no
late  payments  shall  be  due  in  connection  with  such withdrawn conversion.
     (c)     If  at  any time (a) the Company challenges, disputes or denies the
right of the Holder to effect the conversion of this Debenture into Common Stock
or otherwise dishonors or rejects any Notice of Conversion properly delivered in
accordance  with  this Paragraph 8 or (b) any Company stockholder who is not and
has  never been an Affiliate (as defined in Rule 405 under the Securities Act of
1933, as amended) of the Holder obtains a judgment or any injunctive relief from
any  court  or  public  or governmental authority which denies, enjoins, limits,
modifies,  delays  or  disputes  the  right  of  the holder hereof to effect the
conversion  of  this Debenture into Common Stock, then the Holder shall have the
right,  by  written  notice,  to  require  the  Company  to promptly redeem this
Debenture  for  cash  at  a  redemption price equal to one hundred fifty percent
(150%)  of  the  outstanding  principal amount hereof and all accrued and unpaid
interest hereon. Under any of the circumstances set forth above, the Corporation
shall  indemnify and hold harmless the holder and be responsible for the payment
of all costs and expenses of the holder, including its reasonable legal fees and
expenses,  as  and  when  incurred  in disputing any such action or pursuing its
rights hereunder (in addition to any other rights of the holder). In the event a
Holder  of  this  Debenture shall elect to convert any or all of the outstanding
principal  amount  hereof,  the  Company  may not refuse conversion based on any
claim that the Holder or any one associated or affiliated with the Holder of has
been  engaged  in  any  violation of law, unless, an injunction from a court, on
notice, restraining and or enjoining conversion of all or part of this Debenture
shall  have been sought and obtained and the Company posts a surety bond for the
benefit  of  the  Holder  in  the amount of 150% of the principal amount of this
Debenture  outstanding,  which  is  subject  to the injunction, which bond shall
remain  in  effect until the completion of arbitration/litigation of the dispute
and  the  proceeds  of  which  shall  be payable to such holder of any shares of
Series  A Convertible Preferred Stock to the extent it obtains judgment.  In the
absence  of  an  injunction  precluding the same, the Company shall issue shares
upon  a  properly  noticed  conversion.
     9.     No  provision of this Debenture shall alter or impair the obligation
of  the  Company,  which is absolute and unconditional, to pay the principal of,
and interest on, this Debenture at the time, place, and rate, and in the coin or
currency  herein  prescribed.  This  Debenture  is  a  direct  obligation of the
Company.
10.     No  recourse  shall  be  had for the payment of the principal of, or the
interest  on,  this  Debenture,  or  for any claim based hereon, or otherwise in
respect  hereof,  against  any  incorporator,  shareholder, employee, officer or
director,  as  such,  past,  present  or future, of the Company or any successor
corporation,  whether  by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such liability
being,  by  the acceptance hereof and as part of the consideration for the issue
hereof,  expressly  waived  and  released.
               11.     In case of any (1) merger or consolidation of the Company
with or into another Person, or (2) sale by the Company of more than one-half of
the  assets of the Company (on an as valued basis) in one or a series of related
transactions,  the Holder shall have the right to (A) deem such an occurrence an
Event  of Default and exercise its rights of prepayment pursuant to Paragraph 14
herein,  (B)  convert  its  aggregate  principal  amount  of this Debenture then
outstanding  into  the  shares  of stock and other securities, cash and property
receivable  upon  or deemed to be held by holders of Common Stock following such
merger,  consolidation or sale, and the Holder shall be entitled upon such event
or  series  of  related  events  to  receive such amount of securities, cash and
property  as  the  shares  of  Common  Stock into which such aggregate principal
amount  of  this  Debenture  could have been converted immediately prior to such
merger, consolidation or sales would have been entitled, or (C) in the case of a
merger  or  consolidation,  (x)  require the surviving entity to issue shares of
convertible preferred stock or convertible debentures with such aggregate stated
value  or  in  such  face  amount,  as  the  case may be, equal to the aggregate
principal amount of this Debenture then held by the Holder, plus all accrued and
unpaid  interest  and  other amounts owing thereon, which newly issued shares of
preferred stock or debentures shall have terms identical (including with respect
to  conversion) to the terms of this Debenture (except, in the case of preferred
stock,  as  may  be required to reflect the differences between equity and debt)
and  shall be entitled to all of the rights and privileges of the Holder of this
Debenture  set  forth herein and the agreements pursuant to which this Debenture
was  issued  (including,  without  limitation,  as  such  rights  relate  to the
acquisition,  transferability,  registration and listing of such shares of stock
other  securities issuable upon conversion thereof), and (y) simultaneously with
the  issuance  of  such  convertible  preferred stock or convertible debentures,
shall  have  the  right to convert such instrument only into shares of stock and
other  securities,  cash  and  property  receivable upon or deemed to be held by
holders of Common Stock following such merger or consolidation.   In the case of
clause  (C),  the  conversion  price  applicable  for the newly issued shares of
convertible  preferred  stock  or convertible debentures shall be based upon the
amount  of  securities,  cash and property that each share of Common Stock would
receive in such transaction and the Conversion Price in effect immediately prior
to  the  effectiveness  or  closing date for such transaction.  The terms of any
such merger, sale or consolidation shall include such terms so as to continue to
give the Holder the right to receive the securities, cash and property set forth
in  this  Paragraph upon any conversion or redemption following such event. This
Paragraph  shall  similarly  apply  to  successive  such  events.
     12.     The Holder of the Debenture, by acceptance hereof, agrees that this
Debenture  is being acquired for investment and that such Holder will not offer,
sell  or  otherwise  dispose  of  this  Debenture  or the Shares of Common Stock
issuable  upon  conversion  thereof  except  under  circumstances which will not
result  in  a  violation  of the Act or any applicable state Blue Sky or foreign
laws  or  similar  laws  relating  to  the  sale  of  securities.
13.     This Debenture shall be governed by and construed in accordance with the
laws of the State of New York.  Each of the parties consents to the jurisdiction
of the federal courts whose districts encompass any part of the City of New York
or  the state courts of the State of New York sitting in the City of New York in
connection  with  any dispute arising under this Agreement and hereby waives, to
the  maximum  extent  permitted  by  law, any objection, including any objection
based  on  forum  non conveniens, to the bringing of any such proceeding in such
jurisdictions.
14.     The  following  shall  constitute  an  "Event  of  Default":
a.     The Company shall default in the payment of principal or interest on this
Debenture  and  same  shall  continue  for  a  period  of  three  (3)  days;  or
b.     Any  of  the  material  representations or warranties made by the Company
herein,  in the Purchase Agreement, the Registration Rights Agreement, or in any
agreement, certificate or financial statements heretofore or hereafter furnished
by  the  Company in connection with the execution and delivery of this Debenture
or  the  Purchase Agreement shall be false or misleading in any material respect
at  the  time  made;  or
c.     The  Company  fails  to  issue shares of Common Stock to the Holder or to
cause its Transfer Agent to issue shares of Common Stock upon proper exercise by
the  Holder  of the conversion rights of the Holder in accordance with the terms
of  this Debenture, fails to transfer or to cause its Transfer Agent to transfer
any  certificate for shares of Common Stock issued to the Holder upon conversion
of  this  Debenture  as  and when required by this Debenture or the Registration
Rights  Agreement, and such transfer is otherwise lawful, or fails to remove any
restrictive legend or to cause its Transfer Agent to transfer any certificate or
any  shares  of  Common  Stock  issued  to  the  Holder  upon conversion of this
Debenture  as and when required by this Debenture, the Purchase Agreement or the
Registration  Rights  Agreement and such legend removal is otherwise lawful, and
any  such  failure  shall  continue  uncured  for  five  (5)  business  days; or
d.     The  Company  shall  fail to perform or observe, in any material respect,
any  other  covenant, term, provision, condition, agreement or obligation of the
Company  under the Purchase Agreement, the Registration Rights Agreement or this
Debenture  and  such  failure shall continue uncured for a period of thirty (30)
days  after  written  notice  from  the  Holder  of  such  failure;  or
e.     The  Company  shall  (1)  admit in writing its inability to pay its debts
generally as they mature; (2) make an assignment for the benefit of creditors or
commence  proceedings  for  its  dissolution; or (3) apply for or consent to the
appointment  of  a  trustee, liquidator or receiver for its or for a substantial
part  of  its  property  or  business;  or
f.     A  trustee,  liquidator or receiver shall be appointed for the Company or
for a substantial part of its property or business without its consent and shall
not  be  discharged  within  sixty  (60)  days  after  such  appointment;  or
g.     Any  governmental  agency  or  any court of competent jurisdiction at the
instance of any governmental agency shall assume custody or control of the whole
or  any substantial portion of the properties or assets of the Company and shall
not  be  dismissed  within  sixty  (60)  days  thereafter;  or
h.     Any  money judgment, writ or warrant of attachment, or similar process in
excess  of  One  Hundred  Thousand  ($100,000) Dollars in the aggregate shall be
entered  or  filed  against the Company or any of its properties or other assets
and  shall  remain unpaid, unvacated, unbonded or unstayed for a period of sixty
(60)  days  or  in  any  event later than five (5) days prior to the date of any
proposed  sale  thereunder;  or
i.     Bankruptcy,  reorganization,  insolvency  or  liquidation  proceedings or
other  proceedings for relief under any bankruptcy law or any law for the relief
of  debtors  shall  be  instituted  by or against the Company and, if instituted
against  the  Company,  shall not be dismissed within sixty (60) days after such
institution or the Company shall by any action or answer approve of, consent to,
or  acquiesce  in  any such proceedings or admit the material allegations of, or
default  in  answering  a  petition  filed  in  any  such  proceeding;  or
j.     The  Company  shall  have  its  Common  Stock  suspended or delisted from
trading  on  a  Principal  Market  for  in  excess  of  five  (5)  Trading Days;
Then,  or  at  any time thereafter, and in each and every such case, unless such
Event  of  Default shall have been waived in writing by the Holder (which waiver
shall  not  be deemed to be a waiver of any subsequent default) at the option of
the  Holder  and  in  the Holder's sole discretion, the Holder may consider this
Debenture  immediately  due and payable, without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived, anything herein or
in  any note or other instruments contained to the contrary notwithstanding, and
the  Holder  may  immediately  enforce  any  and  all of the Holder's rights and
remedies  provided  herein  or  any  other  rights  or remedies afforded by law.
     15.     Nothing  contained  in  this  Debenture  shall  be  construed  as
conferring  upon  the  Holder  the  right  to vote or to receive dividends or to
consent  or  receive  notice  as  a  shareholder  in  respect  of any meeting of
shareholders  or  any  rights whatsoever as a shareholder of the Company, unless
and  to  the  extent  converted  in  accordance  with  the  terms  hereof.
     16.     In no event shall the Holder be permitted to convert this Debenture
for  shares of Common Stock upon which, (x) the number of shares of Common Stock
owned by such Holder (other than shares of Common Stock issuable upon conversion
of  this  Debenture) plus (y) the number of shares of Common Stock issuable upon
conversion  of this Debenture, would be equal to or exceed 9.9% of the number of
shares  of  Common  Stock then issued and outstanding, including shares issuable
upon  conversion of this Debenture held by such Holder after application of this
Paragraph  16.  As  used  herein,  beneficial  ownership  shall be determined in
accordance  with  Section  13(d)  of  the  Securities  Exchange  Act of 1934, as
amended,  and  the  rules  and  regulations  thereunder.  To the extent that the
limitation  contained in this Paragraph 16 applies, the determination of whether
this  Debenture  is  convertible  (in  relation to other securities owned by the
Holder)  and of which a portion of this Debenture is convertible shall be in the
sole  discretion  of  such  Holder, and the submission of a Notice of Conversion
shall  be  deemed to be such Holder's determination of whether this Debenture is
convertible  (in relation to other securities owned by such holder) and of which
portion of this Debenture is convertible, in each case subject to such aggregate
percentage  limitation,  and  the  Company shall have no obligation to verify or
confirm  the  accuracy of such determination.  Nothing contained herein shall be
deemed  to  restrict the right of a holder to convert this Debenture into shares
of  Common Stock at such time as such conversion will not violate the provisions
of  this Paragraph 16.  The provisions of this Paragraph 16 may be waived by the
Holder  of  this  Debenture  upon  not  less  than  75 days' prior notice to the
Company,  and  the provisions of this Paragraph 16 shall continue to apply until
such 75th day (or such later date as may be specified in such notice of waiver).
No  conversion of this Debenture in violation of this Paragraph 16 but otherwise
in  accordance  with  this Debenture shall affect the status of the Common Stock
issued upon such conversion as validly issued, fully-paid and nonassessable.  If
instead  of receiving cash on the Maturity Date the Holder instead exercises its
right  to  convert  this  Debenture into Common Stock pursuant to Paragraph 3 by
delivery  of  a  Notice  of  Conversion  prior  to  receipt of payment, and such
conversion  would  cause  the  limit  contained  in  the  first sentence of this
Paragraph 16 to be exceeded, such conversion of this Debenture shall occur up to
such  limit  and  the  remaining  unconverted portion of this Debenture shall be
converted  into  Common  Stock  (1)  in  accordance  with one or more Notices of
Conversion  delivered  by  the  Holder  or  (2) 65 days after the Maturity Date,
whichever  is  earlier.  Notwithstanding  anything  contained  herein  to  the
contrary,  no  interest  shall  accrue  after  the  Maturity  Date  on  any such
unconverted  portion  of  this  Debenture.

<PAGE>

     IN  WITNESS  WHEREOF,  the  Company  has  caused this instrument to be duly
executed  by  an  officer  thereunto  duly  authorized.
Dated:  August  8,  2000
PEN  INTERCONNECT,  INC.
     By:  /s/  Stephen  J.  Fryer
          -----------------------
Stephen  J.  Fryer,  Chairman  &  CEO
Attest:
_______________________

<PAGE>
                                    EXHIBIT A

                              NOTICE OF CONVERSION
   (To be Executed by the Registered Holder in order to Convert the Debenture)
     The  undersigned hereby irrevocably elects to convert $ ________________ of
the  principal amount of the above Debenture No. ___ into Shares of Common Stock
of Pen Interconnect, Inc. (the "Company") according to the conditions hereof, as
of  the  date  written  below.
Date of Conversion* ____________________________________________________________
Conversion  Price  *  ____________________________________________________
Accrued Interest________________________________________________________________
Signature_____________________________________________________________________
                                     [Name]
Address:______________________________________________________________________
     _______________________________________________________________________
*If such conversion represents the remaining principal balance of the Debenture,
the  original  Debenture  must  accompany this notice within three Trading Days.

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