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THE
SECURITIES EVIDENCED HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
UNDER ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION
STATEMENT IS NOT REQUIRED UNDER THE SECURITIES ACT AND THE
RULES AND REGULATIONS PROMULGATED THEREUNDER OR UNDER ANY
APPLICABLE STATE SECURITIES LAWS.
9%
CONVERTIBLE PROMISSORY NOTE
Amount $50,000
Issuance
Date March
18, 2008
MEGA
MEDIA GROUP, INC., a Nevada corporation (the "Company") for
value received, hereby promises to pay to Dr. Elan Kaufman or
its registered assigns (the "Holder"), on the earlier of: (1)
the closing by the Company of a private placement offering of
its securities, or an underwritten public offering by the
Company of its securities; or September 18 th
, 2008 (the "Maturity Date") at the principal offices of the
Company, the principal sum of $50,000.00
in such coin or currency of the United States of America as at
the time of payment shall be
legal tender for the payment of public and private debts and
to pay interest on the outstanding principal balance at the
Maturity Date as hereinafter provided.
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i)
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Interest
accrued during the term of this Note in its entirety on or within
five (5) calendar days of the Maturity Date. Accrued interest maybe
be converted into shares based on the same conversion rate as the
principal amount as listed below in section 2. The Note will bear
interest at the rate of nine percent (9%) per annum on the
principal balance until this Note shall be paid in
full.
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a)
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Conversion. The Holder shall
have the right from time to time, and at any time on or prior to
the Maturity Date to convert all or any part of the outstanding and
unpaid principal amount of this Note into fully paid and
non-assessable shares of Common Stock, $.001 par value per
share. The number of shares of Common Stock to be issued
upon each conversion of this Note shall be determined by dividing
the amount of principal and accrued interest to be converted
(“Conversion Amount”) by the applicable Conversion
Price then in effect on the date specified in the notice of
conversion, in the form attached hereto as Exhibit A (the
“Notice of Conversion”). The Conversion
Price shall be e qual to the average closing bid price of
the Common Stock (as
reported by Bloomberg L.P.) on the OTC Bulletin Board for the ten
(10) trading days prior to the date of the Conversion Notice
(the
“Conversion Date”) multiplied by .80
provided that the
Notice of Conversion is submitted by facsimile (or by other means
resulting in, or reasonably expected to result in, notice) to the
Company before 6:00 p.m., New York, New York time on such
Conversion Date.
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b)
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Conversion Price Limit . Notwithstanding the
provisions in Section 2(a), the Conversion Price shall not exceed
$.40.
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c)
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Method of Conversion .
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i)
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Mechanics of Conversion . This Note
may be converted by the Holder in whole or in part at any time from
time to time after the Note is issued to the Holder, by
(A) submitting to the Company a Notice of Conversion (by
facsimile or other reasonable means of communication dispatched on
the Conversion Date prior to 6:00 p.m., New York, New York time)
and (B) surrendering this Note at the principal office of the
Company.
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ii)
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Delivery of Common Stock Upon Conversion . Upon
receipt by the Company from the Holder of a facsimile transmission
(or other reasonable means of communication) of a Notice of
Conversion, the Company shall issue and deliver or cause to be
issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion
within five (5) business days after such receipt (and, solely in
the case of conversion of the entire unpaid principal amount
hereof, surrender of this Note).
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3)
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Concerning the Shares . The shares of Common
Stock issuable upon conversion of this Note may not be sold or
transferred unless (i) such shares are sold pursuant to
an effective registration statement under the Act or (ii) the
Borrower or its transfer agent shall have been furnished with an
opinion of counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable
transactions) to the effect that the shares to be sold or
transferred may be sold or transferred pursuant to an exemption
from such registration or (iii) such shares are sold or
transferred pursuant to Rule 144 under the Act (or a successor
rule) (“ Rule 144
”). Until such time as the shares of Common Stock
issuable upon conversion of this Debenture have been registered
under the Act or otherwise may be sold pursuant to Rule 144 without
any restriction as to the number of securities as of a particular
date that can then be immediately sold, each certificate for shares
of Common Stock issuable upon conversion of this Debenture that has
not been so included in an effective registration statement or that
has not been sold pursuant to an effective registration statement
or an exemption that permits removal of the legend, shall bear a
legend substantially in the following form, as
appropriate:
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“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THE SECURITIES MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER
SA
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