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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.
MEGA
MEDIA GROUP, INC.
9%
CONVERTIBLE PROMISSORY NOTE
Amount $100,000.00
Issuance
Date July
1,
2008
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1)
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MEGA
MEDIA GROUP, INC., a Nevada corporation (the "Company") for value
received, hereby promises to pay to Jaworek Capital LLC. 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 June 30
th , 2009 (the "Maturity Date") at the principal offices of
the Company, the principal sum of
$100,000.00 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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As
further consideration, the Company grants to the Holder the right
to purchase 500,000 of the Company's
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common
shares at $0.11 per share (the "Option"). The common shares
underlying the option shall have no registration rights, and no
"piggy back" registration rights. The option shall expire on June
26, 2009.
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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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3) Conversion
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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 equal
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)
Conversion Price Limit. Notwithstanding
the provisions in Section 2(a), the Conversion Price shall not
exceed $.40.
c)
Method of Conversion.
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i)
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)
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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4)
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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 SAID ACT, OR AN OPINION OF COUNSEL IN FORM,
SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN
COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION
S UNDER SAID ACT."
The
legend set forth above shall be removed and the Borrower shall
issue to the Holder a new certificate therefor free of any
transfer legend if (i) the Borrower or its transfer agent
shall have received an opinion of counsel, in form, substance
and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of
such Common Stock may be made without registration under the
Act and the shares are so sold or transferred, (ii) such
Holder provides the Borrower or its transfer agent with
reasonable assurances that the Common Stock issuable upon
conversion of this Debenture (to the extent such securities
are deemed to have been acquired on the same date) can be sold
pursuant to Rule 144 or (iii) in the case of the Common Stock
issuable upon conversion of this Debenture, such security is
registered for sale by the Holder under an effective
registration statement filed 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. Nothing in this Debenture shall (i) limit
the Borrower's obligation under the Registration Rights
Agreement or (ii) affect in any way the Holder's obligations
to comply with applicable prospectus delivery
requi
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