Document:

ex10_3.htm

Exhibit 10.3

HILL-ROM HOLDINGS, INC.

 STOCK AWARD

(EFFECTIVE <<GRANT DATE>>)

1.           Purpose.  The purpose of the Hill-Rom Holdings, Inc. Stock Award (hereinafter called the “Award”), which is granted under the Hill-Rom Holdings, Inc. Stock Incentive Plan (the “Plan”), is to promote the profitability and growth of Hill-Rom Holdings, Inc. (the “Company”) by offering an incentive payable in Company common stock to <<Name>> (the “Employee”) who is in a position to contribute to such profitability and growth.

2.           Amount of Award.  Solely for purposes of this Award, the Company shall cause an account to be established in the name of the Employee (“Deferred Stock Account”), which shall be assumed to be invested in <<Units>> shares (“Initial Deferred Stock Award”) of common stock, no par value of the Company (“Common Stock”).  The Initial Deferred Stock Award represents the number of shares of Common Stock that would be earned if the performance level described in Section 3(a) were attained at the “Target” performance level, as described in Section 3, subject to modification as set out in Section 3(b).  No actual shares of Common Stock shall be held in the Deferred Stock Account, and the number of hypothetical shares of Common Stock maintained in the Deferred Stock Account (“Deferred Stock”) shall be a book entry which states the number of shares of Common Stock the Employee would have a right to receive in accordance with the terms of this Award.  Any stock dividends, stock splits and other similar rights inuring to Common Stock shall be assumed to inure to the Deferred Stock, which may increase or decrease the number of shares of Deferred Stock in the Deferred Stock Account.  Notwithstanding anything herein to the contrary, no cash dividends paid on Common Stock by the Company shall be paid or credited to the account of the Employee with respect to any Deferred Stock in the Deferred Stock Account.

	 	
3. 

	
Vested Deferred Stock.

	
  

	
(a)

	
Earned Deferred Stock. Subject to Section 4, the shares of Deferred Stock in the Employee’s Deferred Stock Account will become “Earned Deferred Stock” based on the achievement of certain performance goals (“Performance Goals”) with respect to the fiscal year to which this Award relates.  The Compensation and Management Development Committee of the Company’s Board of Directors (the “Committee”) will establish the Performance Goals no later than seventy-five (75) days after the first day of each fiscal year and will communicate the Performance Goals in writing to the Employee concurrent with the grant of this Award.  Earned Deferred Stock shall not be vested unless and until it becomes Vested Deferred Stock as detailed in Paragraph 3(b) below.

	
  

	
(b)

	
Vested Deferred Stock. Earned Deferred Stock (if any) shall become non-forfeitable (“Vested Deferred Stock”) based on the Company’s TSR performance over the TSR Performance Period relative to the TSR of peer companies.  The specific methodology (including the length of the TSR Performance Period) shall be as determined by the Committee no later than seventy-five (75) days after the first day of each calendar year, and the Committee will communicate such methodology in writing to the Employee concurrent with the grant of this Award.  Any fractional shares of Vested Deferred Stock determined under this Section 3 shall be rounded up to the next whole share of Vested Deferred Stock.  Subject to Section 4, any portion of the Earned Deferred Stock that does not become Vested Deferred Stock shall be forfeited by Employee without the payment of any consideration or further consideration by the Company.

 

  

  

  

 

	 	
4. 

	
Employment Requirements.

(a)           Except as otherwise provided herein, upon the Employee’s termination of employment for any reason before the end of the TSR Performance Period, any Deferred Stock or Earned Deferred Stock maintained in the Deferred Stock Account which is not Vested Deferred Stock shall be forfeited by the Employee without the payment of any consideration or further consideration by the Company, and neither the Employee nor any successors, heirs, assigns, or legal representatives of the Employee shall thereafter have any further rights or interest in such forfeited Deferred Stock or Earned Deferred Stock.  If the Employee remains continuously employed by the Company until the last day of the TSR Performance Period, the number of shares of Deferred Stock or Earned Deferred Stock that are determined by the Committee to be Vested Deferred Stock pursuant to Section 3 shall become Vested Deferred Stock, regardless of whether the Employee remains employed with the Company until the date of such determination. Temporary absences from employment because of illness, vacation or leave of absence and transfers among the Company and/or any of its Subsidiaries (as defined in the Plan) shall not be considered terminations of employment.  For purposes of this Award and the Plan, the Committee shall have absolute discretion to determine the date and circumstances of termination of the Employee’s employment, and its determination shall be final, conclusive and binding upon the Employee.  Notwithstanding anything herein to the contrary, the transfer of the Employee’s employment from the Company to any of its Subsidiaries or from one of the Company’s Subsidiaries to the Company or another of the Company’s Subsidiaries in connection with a Distribution (as defined below) or disposition shall not constitute a termination of employment for purposes of this Award, and the Employee’s employment will be deemed to continue for purposes of this Award until otherwise terminated as provided herein.  In particular, if the Employee transfers employment from the Company to any of its Subsidiaries or from one of the Company’s Subsidiaries to the Company or another of the Company’s Subsidiaries in connection with or in anticipation of a Distribution or disposition, such transfer of employment shall not constitute a termination of employment for purposes of this Award, and the Employee’s employment will be deemed to continue for purposes of this Award until otherwise terminated as provided herein.

(b)           Notwithstanding the foregoing, upon the termination of the Employee’s employment with the Company, one of its Subsidiaries or one of their respective divisions before the end of the TSR Performance Period by reason of disability (as determined by the Committee) or death any Earned Deferred Stock or Deferred Stock maintained in the Deferred Stock Account shall become Vested Deferred Stock, calculating the amount of Vested Deferred Stock by assuming the Company’s relative TSR ranking for purposes of Section 3(b) to be at the target level and, if termination occurs prior to the satisfaction of the Performance Goals, assuming the Performance Goals to have been achieved at the target level for purposes of Section 3(a).  The Employee shall have no right to any additional shares of Deferred Stock, regardless of the Company’s TSR performance during the TSR Performance Period.  In the event of the termination of Employee’s employment with the Company, one of its Subsidiaries or one of their respective divisions before the end of the TSR Performance Period by reason of Retirement (as defined below), a pro rata portion (based on the number of days of Employee’s employment during the TSR Performance Period) of the Deferred Stock that would have become Vested Deferred Stock in accordance with Section 3, if any, shall become Vested Deferred Stock at the end of the TSR Performance Period, including any additional Deferred Stock that may be granted by the Committee under Section 3 if the Company’s TSR relative to peer companies’ TSR during the TSR Performance Period is above the target amount and, if termination occurs prior to the end of the satisfaction of the Performance Goals, assuming the Performance Goals to have been achieved at the target level for purposes of Section 3(a).

 

  

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(c)           Any Earned Deferred Stock or Deferred Stock maintained in the Deferred Stock Account shall become Vested Deferred Stock upon the termination of the Employee’s employment by the Company for any reason other than on account of his death, disability, retirement or for Cause (as defined in the Employee’s employment agreement) or by Employee for Good Reason (as defined in the Employee’s employment agreement)(i) after the day after the first anniversary date of the effective date of this Award and (ii) after the occurrence, but before the [CEO: third / Non-CEO: second] anniversary of (A) a Change in Control (as defined in Section 14.2 of the Plan), or (B) a sale, transfer or disposition of substantially all of the assets or capital stock of a Subsidiary (as defined in the Plan) or division of the Company or one of its Subsidiaries for whom the Employee is employed at the time of such Change in Control, sale, transfer, or disposition.  Notwithstanding anything herein to the contrary, the distribution by the Company to Company shareholders of any or all of the shares of common stock of any of its Subsidiaries (“Distribution”) shall not constitute an event causing Earned Deferred Stock or Deferred Stock to become Vested Deferred Stock as described in the preceding sentence.

In consideration of the grant of this Award, the Employee hereby agrees and acknowledges that any provisions in an Employment Agreement and/or a Change in Control Agreement between the Employee and the Company related to the vesting of awards granted under the Plan shall not apply and have no effect with respect to this Award, and that the vesting of this Award upon a Change in Control shall be governed solely by this Award.

5.            Delivery of Shares.  The Company shall deliver to the Employee shares of Common Stock equal in number to the number of shares of Vested Deferred Stock.  The shares of Common Stock delivered to the Employee shall be from shares held by the Company as treasury stock or from shares of Common Stock acquired by the Company in the open market.  Subject to the Employee’s election to defer, all shares of Common Stock to be delivered to the Employee shall be delivered as soon as administratively possible after the day on which such shares become Vested Deferred Stock, but no later than March 15th of the calendar year immediately following the calendar year in which such shares become Vested Deferred Stock.  However, shares of Vested Deferred Stock delivered due to the Employee’s termination under Section 4(c) shall be delivered within ninety (90) days after the Employee’s termination provided that the Employee shall have no right to designate the calendar year in which the shares will be delivered.  Notwithstanding the foregoing, if shares become deliverable by reason of the Employee’s separation from service following and at the time of the Employee’s separation from service the Employee is a “specified employee” as defined in Code Section 409A, then the shares of Common Stock to be delivered shall be delivered on the date which is the first day of the seventh month after the date of the Employee’s separation from service.

 

  

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6.            Administration of the Award.  The Committee shall administer the Award.  The Committee shall have complete and full discretion in the administration and interpretation of the terms of the Award.

7.            Right to Defer Payment of Award.

(a)           Election to Defer Award.  The Employee may elect to defer payment of the Award otherwise due on the date shares become Vested Deferred Stock by completing a written election and delivering such election to the Company at least one year prior to such date; provided however, that the completion of such written election and the delivery of such election may be at an earlier date as determined by the Committee or required by law to insure the validity of such deferral.  The Employee may not defer payment for a period that is shorter than five (5) years after the date the shares become Vested Deferred Stock.  At the end of the deferral period elected by the Employee (or within a certain period of time after the last day of the deferral period as determined by the Committee or required by law to insure the validity of the deferral), the Company, subject to Sections 10, 11 and 12, shall deliver to the Employee shares of Common Stock equal in number to the number of Vested Deferred Stock held in the Employee’s Deferred Stock Account.

(b)           Financial Hardship.  A withdrawal from the Employee’s Deferred Stock Account of Vested Deferred Stock shall be permitted prior to the termination of the deferral period in the event that the Employee experiences an “unforeseeable emergency” as such term is defined in Section 409A(a)(2)(B)(ii) of the Internal Revenue Code of 1986, as amended (“Code”) and the regulations issued thereunder.  The Employee must apply to the Committee for an unforeseeable emergency withdrawal and demonstrate that the circumstances being experienced were not under the Employee’s control and constitute a real emergency, which is likely to cause a severe financial hardship.  The Committee shall have the authority to require such medical or other evidence as it may need to determine the necessity for the Employee’s withdrawal request.  If such application for withdrawal is permitted, the amount of such withdrawal shall be limited to an amount reasonably necessary to satisfy the emergency need, and the Committee must take into account any additional compensation available.  If the Employee makes a withdrawal, the amount of the Employee’s Deferred Stock Account under this Award shall be proportionately reduced to reflect the withdrawal.  Also, the withholding requirements described in Section 12 shall also be effected before the withdrawal.  Notwithstanding anything in this Section 4(b) to the contrary, any withdrawal for any unforeseeable emergency must comply with Code Section 409A(a)(2)(B).

8.            No Rights as Stockholder.  The Employee shall have no rights as a stockholder with respect to any shares of Common Stock covered by this Award until shares of Common Stock are delivered to the Employee.  Until such time, the Employee shall not be entitled to dividends (except where the Employee’s Deferred Stock Account is adjusted for stock dividends pursuant to Section 2) or to vote at meetings of the stockholders of the Company.

 

  

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9. 

	
Definitions.

	
  

	
(a)

	
“Retirement” means a termination of employment after (i) the day after the first anniversary date of the effective date of this Award, and (ii) attaining age fifty-five (55) and completion of five (5) years of employment.

	
  

	
(b)

	
“TSR” means the total shareholder return of the applicable company’s stock for the applicable period.

Unless otherwise specified in this Award, capitalized terms shall have the meanings specified in the Plan.

10.           Compliance With Securities Laws.  Prior to the receipt of any certificates for shares of Common Stock pursuant to this Award, the Employee (or the Employee’s beneficiary or legal representative upon the Employee’s death or disability) shall enter into such additional written representations, warranties and Awards as the Company may reasonably request in order to comply with applicable securities laws or with this Award.

11.           Stock Ownership Guidelines.  The Employee (or the Employee’s beneficiary or legal representative upon the Employee’s death or disability) shall be bound by the “Stock Ownership Guidelines” of the Company as may be in effect from time to time.

12.           Withholding.  Any payment of Common Stock under this Award shall be subject to applicable federal and state withholding requirements.  Hence, unless the Employee delivers a check to the Company equal to the required withholding, the number of shares distributed shall be reduced to meet the Employee’s applicable withholding requirements.

13.           Designation of Beneficiary.  The Employee shall be permitted to provide to the Committee a beneficiary designation for receipt of his or her Award after death.  If the Employee fails to designate a beneficiary, or if the designated beneficiary predeceases the Employee, the Award shall be paid to the deceased Employee’s spouse, if living, or if such spouse is not living, to the deceased Employee’s estate.

14.           Adjustments.  In the event of any merger, reorganization, consolidation, sale of substantially all assets, recapitalization, stock dividend, stock split, spin-off, split-up, split-off, distribution of assets or other change in corporate structure occurring after the effective date of this Award affecting the Common Stock subject to this award, the Board of Directors of the Company shall adjust the number and kind of shares of Common Stock subject to this Award so as to maintain the proportionate number of shares subject to this award, and such adjustment shall be conclusive and binding upon the Employee and the Company.

 

  

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15.            Non-Transferability.

(a)           The Deferred Stock, the Earned Deferred Stock, the Deferred Stock Account and the Vested Deferred Stock may not be sold, assigned, transferred, exchanged, pledged, hypothecated, or otherwise encumbered and no such sale, assignment, transfer, exchange, pledge, hypothecation, or encumbrance, whether made or created by a voluntary act of the Employee or any agent of the Employee or by operation of law, shall be recognized by, or be binding upon, or shall in any manner affect the rights of, the Company, its successors or any agent thereof.

(b)           No amounts payable under the Award shall be transferable by the Employee other than by his designation of a beneficiary pursuant to Section 13.  The amounts payable under the Award shall be exempt from the claims of creditors of the Employee and from all orders, decrees, levies and executions and any other legal process to the fullest extent that may be permitted by law.

16.            Amendments to Award.  The Award may only be modified upon the mutual agreement of the Company and the Employee.

17.           Source of Benefit Payments.  The payment of the Award to the Employee shall be paid solely from the general assets of the Company.  Until the actual delivery of the shares of Common Stock, the Employee shall not have any interest in any specific assets of the Company, including shares of Common Stock, under the terms of the Award.  The Award shall not be considered to create an escrow account, trust fund or other funding arrangement of any kind, or a fiduciary relationship between the Employee and the Company.  Until such time of payment, no shares of the Common Stock shall be set aside by the Company for the Award.

18.            Successors and Assigns.

(a)           This Award is personal to the Employee and without the prior written consent of the Company shall not be assignable by the Employee except by will or the laws of descent and distribution.  This Award shall inure to the benefit of and be enforceable by the Employee’s guardian and legal representatives.

(b)           This Award shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c)           The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Award in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

 

  

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19.           Award Subject to Plan.  This Award is subject to the terms of the Plan.  The terms and provisions of the Plan (including any subsequent amendments thereto) are hereby incorporated herein by reference.  In the event of a conflict between any terms and provisions contained herein and the terms or provisions of the Plan, the applicable terms or provisions of the Plan will govern and prevail.

20.           Governing Law.  This Award shall be governed by and construed in accordance with the internal laws of the State of Indiana without reference to principles of conflict of laws.  The captions of this Award are not part of the provisions hereof and shall have no force or effect.  This Award may not be amended or modified except by a written Award executed by the parties hereto or their respective successors and legal representatives.

21.           Severability.  The invalidity or unenforceability of any provision of this Award shall not affect the validity or enforceability of any other provision of this Award.

22.           No Waiver.  The failure of the Employee or the Company to insist upon strict compliance with any provision of this Award or the failure to assert any right the Employee or the Company may have under this Award shall not be deemed to be a waiver of such provision or right or any other provision or right of this Award.

23.           Code Section 409A.  The Plan is intended to comply with, or otherwise be exempt from, Code Section 409A. The Plan shall be administered, interpreted, and construed in a manner consistent with Code Section 409A or an exemption therefrom.  Should any provision of the Plan be found not to comply with, or otherwise be exempt from, the provisions of Code Section 409A, such provision shall be modified and given effect (retroactively if necessary), in the sole discretion of the Committee, and without the consent of the Employee, in such manner as the Committee determines to be necessary or appropriate to comply with, or to effectuate an exemption from, Code Section 409A.  If any of the payments under this Award are subject to Code Section 409A and the Company determines that the Employee is a “specified employee” under Code Section 409A at the time of the Employee’s separation from service, then each such payment will not be made or commence until the date which is the first day of the seventh month after the Employee’s separation from service, and any payments that otherwise would have been paid during the first six months after the Employee’s separation from service will be paid in a lump sum on the first day of the seventh month after the Employee’s separation from service or upon the Employee’s death, if earlier.  Such deferral will be effected only to the extent required to avoid adverse tax treatment to the Employee, including (without limitation) the additional twenty percent (20%) federal tax for which the Employee would otherwise be liable under Code Section 409A(a)(l)(B) in the absence of such deferral.

24.           Entire Award.  The Employee and the Company acknowledge that this Award supersedes any prior agreement between the parties with respect to the subject matter of this Award.

  

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25.           Counterparts.  This Award may be executed in counterparts, which together shall constitute one and the same original.

 

 

 

	
Effective Date:    

	
<< DATE>>

	  

 

	

HILL-ROM HOLDINGS, INC.

	  	  	  	 
	  	  	  	 
	  	  	  	 
	  	  	  	 
	  	
Accepted:

	 	 
	  	  	
<<NAME>>

	 

 

 

 

- 8 -IDS
    Industries, Inc.	$100,000
    PROMISSORY NOTE	Finkis
    Capital, LLC

 

 

	January
    22, 2014	$100,000
    PROMISSORY NOTE

FOR
VALUE  RECEIVED,
IDS Industries,
Inc., a Nevada
corporation (the "Borrower")
with at
least 38,723,370 common
shares issued and outstanding
(as of January 9, 2014), promises
to pay to Finiks Capital, LLC or its
Assignees (the "Lender")
the Principal Sum along with the Interest
Rate and any other fees
according to the terms herein.
This Note
will become effective only upon execution
by both parties and
delivery of the first payment of
Consideration by the Lender (the "Effective
Date").

The
Principal Sum is
$100,000
(one hundred
thousand) plus accrued
and unpaid interest
and any other
fees.
The
Consideration is
$90,000
(ninety thousand) payable by wire
(there exists a $10,000
original issue discount (the
"OID")
. The
Lender shall pay $20,000
of Consideration
upon closing of
this Note.
The Lender
may pay additional Consideration
to the Borrower
in such amounts and at such dates
as Lender may choose in its sole discretion.
THE PRINCIPAL
SUM DUE TO LENDER
SHALL BE PRORATED BASED ON THE CONSIDERATION
ACTUALLY PAID BY LENDER (PLUS
AN APPROXIMATE 10% ORIGINAL ISSUE DISCOUNT THAT
IS PRORATED BASED ON
THE CONSIDERATION ACTUALLY PAID BY THE
LENDER AS WELL
AS ANY OTHER INTEREST OR FEES)
SUCH THAT THE BORROWER IS
ONLY REQUIRED TO REPAY THE AMOUNT FUNDED AND
THE BORROWER IS NOT REQUIRED TO REPAY
ANY UNFUNDED PORTION OF THIS NOTE. The
Maturity Date is
one

hundred
and eighty days
from the Effective Date
of each payment (the
"Maturity
Date")
and is
the date upon which
the Principal Sum of
this Note,
as well as any unpaid interest
and other fees,
shall be due
and payable.
The Conversion Price
is 51% of the average
of the three (3) lowest
bid side price in
the ten (10) trading days previous
to the conversion ,
with a
maximum conversion price of four ($0.04)
cents (In the case that conversion shares are not
deliverable by DWAC an additional 10%
discount will apply,

however,
while we
would like to
see you become
DWAC eligible, since
you are not
currently, we will
not apply this
penalty; and
if the
shares are ineligible for deposit into
the DTC
system and only eligible for Xclearing deposit
an additional 5% discount shall
apply; as
we understand, you
currently are DTC Eligible and if you
were to lose that eligibility,
this penalty
will apply) .
 Unless
otherwise agreed in
writing by both parties,
at no time
will the Lender convert
any amount of the Note into common
stock that would result in the
Lender owning more than 4.99% of
the common stock outstanding.

1.     
ZERO Percent Interest
for the First Three
Months.
The Borrower
may repay this Note
at any time
on or before
90 days from the Effective Date,
after which
the Borrower may
not make further payments
on this Note prior to the
Maturity Date without written approval from Lender.
If the Borrower repays
the Note on or
before 90 days from the
Effective Date, the Interest Rate
shall be ZERO PERCENT (0%). If Borrower
does not repay the
Note on or before
90 days from the
Effective Date,
a one-time Interest charge
of 10% shall be applied to the
Principal Sum. Any
interest payable is in addition to the
OID, and that OID
(or prorated OID,
if applicable) remains payable
regardless of time and
manner of payment by Borrower.

2.     
Conversion. The Lender
has the right,
at any time
after the Effective
Date, at its
election, to convert all or
part of the outstanding and unpaid
Principal Sum and accrued interest
(and any other
fees) into shares of fully paid and non-assessable shares of
common stock of the Borrower
as per this conversion formula:
Number of
shares receivable upon conversion equals
the dollar conversion amount divided by
the Conversion Price. Conversions
may be delivered to Borrower by method
of Lender's
choice (including but not
limited
to email, facsimile
, mail,
overnight
courier, or
personal delivery) ,
and all conversions
shall be cashless and not
require further payment from the
Lender. If
no objection is
delivered from
Borrower to Lender regarding
any variable or
calculation of the conversion notice within 24 hours
of delivery of the conversion notice,
the Borrower shall have been thereafter deemed
to have irrevocably confirmed and irrevocably
ratified such notice of conversion and waived
any objection thereto. The Borrower shall
deliver the shares from any
conversion to Lender
(in any name
directed by Lender) within 3
(three) business days of conversion notice
delivery.

3.     
Conversion Delays. If Borrower
fails to deliver
shares in accordance
with the timeframe
stated in Section 2
, Lender,
at any time prior to
selling all of those shares, may rescind
any portion, in whole or
in part, of
that particular conversion attributable to the unsold shares
and have the rescinded conversion amount
returned to the Principal Sum with
the rescinded conversion shares
returned to the Borrower (under
Lender's
and Borrower's
expectations that any returned conversion
amounts will tack back to the original
date of the Note). In addition ,
for each conversion,
in the event that shares are not delivered
by the fourth business day (inclusive of
the day of conversion), a penalty of
$2,000 per day will be assessed for each
day after the third
business day (inclusive of the
day of the conversion) until share delivery
is made; and such penalty will be added
to the Principal Sum of the Note (under Lender's and Borrower's
expectations that any penalty amounts will tack back to the original date of the Note).

4.       
Reservation of Shares.
At all times during
which this Note
is convertible, the
Borrower will reserve from
its authorized and
unissued Common Stock
to provide for the issuance of
Common Stock upon the full
conversion
of this Note.
The Borrower
will at all times
reserve at least
5,000,000
shares of
Common Stock for conversion.

5.
Piggyback Registration Rights.
The Borrower shall include
on the next
registration statement the Borrower files
with SEC (or
on the subsequent
registration statement if such
registration statement is withdrawn) all
shares issuable upon conversion of
this Note.
Failure to
do so will result in liquidated damages
of 25% of the
outstanding principal balance of this Note,
but not less
than $25,000,
being immediately due
and payable to the
Lender at its election in
the form of
cash payment or addition
to the balance of this Note.

6.      
This Section Left
Intentionally Blank.

    	 

    	 

    

7.      
Default. The following are events of default under this Note: (i) the Borrower shall fail to pay any
principal under the Note when due and payable (or payable by conversion)
thereunder; or (ii) the Borrower shall fail
to pay any interest or any
other amount under the Note when due
and payable (or payable by conversion)
thereunder ; or
(iii) a receiver, trustee or other similar
official shall be appointed
over the Borrower or a material part
of its assets and such
appointment shall remain uncontested
for twenty (20) days or shall
not be dismissed or discharged within
sixty (60) days ; or (iv)
the Borrower shall become insolvent or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject
to applicable grace periods, if
any; or (v) the Borrower shall make a general assignment for the benefit of creditors; or
(vi) the Borrower shall file a petition for relief under any bankruptcy ,

Interest
free if paid
in full within
3 months

IDST
insolvency or similar
law (domestic or
foreign); or (vii)
an involuntary proceeding
shall be commenced or
filed against the Borrower;
or (viii) the
Borrower shall lose its status as " OTC
Eligible" or
the borrower's
shareholders shall lose the ability
to deposit (either electronically
or by physical
certificates, or
otherwise) shares into
the OTC System;
or (ix) the Borrower
shall become delinquent in
its filing requirements
as a fully-reporting issuer registered
with the SEC.

8.      
Remedies. In the
event of any
default, the outstanding
principal amount of
this Note, plus
accrued but unpaid interest,
liquidated
damages, fees and other amounts owing in respect
thereof through the date of
acceleration, shall become, at the Lender's
election, immediately
due and payable in cash at the Mandatory
Default Amount. The Mandatory Default Amount means the greater
of (i) the outstanding principal
amount of this Note,
plus all accrued
and unpaid interest, liquidated
damages,
fees and other amounts hereon ,
divided by
the Conversion Price on the date the
Mandatory Default Amount is either demanded
or paid in full,
whichever has a
lower Conversion Price,
multiplied by
the VWAP on the date the
Mandatory Default Amount is either demanded or paid in full,
whichever has a
higher VWAP ,
or (ii)
150% of the outstanding principal amount of
this Note, plus 100% of accrued and unpaid
interest, liquidated
damages , fees
and other amounts hereon.
Commencing five
(5) days after the occurrence of
any event of default that results
in the eventual acceleration of this
Note,
the interest
rate on this Note shall accrue
at an interest
rate
equal to at least 18% per annum or
the maximum rate permitted under applicable law.
In connection
with such acceleration described herein, the Lender need not provide,
and the
Borrower hereby waives ,
any presentment,
demand, protest or
other notice of any
kind, and the Lender may immediately and
without expiration of any
grace period enforce any and all
of its rights
and remedies hereunder
and all other remedies available to it under applicable law.
Such acceleration may be rescinded and annulled
by Lender at any time prior to payment hereunder and the Lender shall have all rights as a
holder of the note until such time,
if any,
as the Lender
receives full payment pursuant to this Section 8.
No such rescission or annulment shall affect any
subsequent event of default or impair any right consequent thereon.
Nothing herein shall limit Lender's
right to pursue any other remedies
available to it
at law or in
equity including, without limitation,
a decree of specific performance and/or
injunctive relief with respect to
the Borrower's failure to timely deliver certificates
representing shares of Common Stock upon conversion of the Note as required pursuant to the terms hereof.

9.     
No Shorting. Lender agrees
that so long as
this Note from
Borrower to Lender
remains outstanding, Lender will not
enter into or effect
"short
sales"
of the
Common Stock or hedging transaction which
establishes a net short
position with respect to
the Common Stock of Borrower.
Borrower acknowledges and agrees that
upon delivery of a conversion
notice by Lender,
Lender immediately owns the shares of Common
Stock described in
the conversion
notice and any sale of
those shares issuable
under such conversion notice
would not be considered
short sales.

10.       
Assignability. The Borrower may
not assign this
Note. This Note
will be binding upon
the Borrower and its
successors and will
inure to the
benefit of the
Lender and its successors and assigns
and may be assigned
by the Lender to anyone of its
choosing without
Borrower's
approval.

11.       
Governing Law. This Note
will be governed
by, and construed
and enforced in
accordance
with,
the laws
of the State
of California,
without regard
to the conflict of laws principles
thereof. Any action brought by
either party against the other concerning
the transactions contemplated by this
Agreement shall be brought only
in the
state courts of
California or in
the federal
courts located in Orange County,
in the
State of California.
Both parties
and the individuals
signing this Agreement agree to
submit to the jurisdiction of such courts
.

12.       
Delivery of Process
by Lender to
Borrower. In the
event of any
action or proceeding
by Lender against Borrower, and
only by Lender
against Borrower, service of copies
of summons and/or
complaint and/or any other process which may
be served in any such
action or proceeding may
be made by Lender via
U.S.
Mail,
overnight delivery
service such as FedEx or
UPS,
email, fax,
or process
server, or
by mailing or otherwise delivering a
copy of such
process to the Borrower
at its
last known
attorney as set forth in its most
recent SEC filing.

13.      
Attorney Fees. In the
event any attorney
is employed by
either party to
this Note with
regard to any legal or equitable
action, arbitration or other proceeding
brought by such party for the
enforcement of this Note or because
of an alleged dispute ,
breach, default or misrepresentation 
in connection with any of the provisions
of this Note,
the prevailing party in
such proceeding will be
entitled to recover from the other party reasonable
attorneys' fees
and other costs and expenses incurred
, in
addition to any
other relief to which the prevailing
party may be entitled.

14.      
Opinion of Counsel.
In the event
that an opinion of
counsel is needed
for any matter related
to this Note,
Lender has
the right to
have any such opinion
provided by its counsel. Lender
also has the right to have
any such opinion provided
by Borrower's counsel.

15.      
Notices. Any notice
required or permitted
hereunder (including Conversion Notices)
must be in writing
and either personally
served, sent
by facsimile or email transmission,
or sent by overnight courier. Notices
will be deemed effectively delivered at the time
of transmission if by facsimile or email,
and if by overnight courier
the business day after such notice
is deposited with the courier service for
delivery.

  

	Borrower:
    Lender
	/s/
    Stephen Scott Plantinga
	Stephen
    Scott Plantinga – CEO
	IDS
    Industries, Inc.
	 
	/s/
    James P. Hodgins
	James
    P. Hodgins – Managing Member
	Finiks
    Capital, LLC

 

    	2

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