THIS NOTE
HEREOF HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ SECURITIES ACT ”), OR ANY
APPLICABLE STATE SECURITIES LAWS. THIS NOTE HAS BEEN
ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW FOR
DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED UNLESS IT HAS BEEN SO REGISTERED OR AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
CONVERTIBLE PROMISSORY
NOTE
Principal
Amount: $18,000
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Issue Date: August 17,
2009
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FOR VALUE
RECEIVED , the
undersigned , Signature Exploration & Production Corp. ,
a Delaware corporation (the “ Borrower ”
or the “ Company ”), hereby promises to
pay to the order of Bristol Capital, LLC (together with its
heirs, personal representatives, successors and assigns, and any
such bearer, being hereinafter referred to collectively
as the “ Holder ”), on or
before November 20, 2009 (the “ Maturity
Date ”), the principal sum of Eighteen Thousand
Dollars ($18,000) (this “ Note ”),
together with interest thereon at the rate set forth herein (the
“ Loan ”). For purposes of
this Note, “Borrower” shall mean all successors in
interest and assignees, including, without limitation, pursuant to
a merger, consolidation, reorganization, recapitalization or other
similar restructuring event (collectively, a “
Reorganization ”), and all endorsers, sureties
and guarantors and any other person liable or to become liable with
respect to the Loan.
1.
Interest Rate . Interest shall accrue on the
outstanding principal balance of this Note from and after the date
hereof at the rate of 10% per annum. Interest shall be
calculated on the basis of a 360-day year, and shall be charged on
the principal outstanding from time to time for the actual number
of days elapsed.
2.
Payment of Principal and Interest. The Borrower
shall pay the Holder all accrued interest on the Maturity
Date.
3.
Conversion. At any time while this Note is
outstanding, the Holder may convert any portion of this Note that
is outstanding, whether such portion represents principal or
interest, into shares of common stock of the Company (the
“Conversion Shares”) at a price (the “Conversion
Price”) equal to the lesser of (i) $0.01 and (ii) 50% of the
average of the three (3) lowest trading prices during the twenty
(20) trading days preceding the date that the Holder notifies the
Company that it elects to effectuate a conversion (the
“Conversion Date”). The Company must deliver
the Conversion Shares to the Holder no later than the third
(3 rd
) business day after the Conversion
Date (the “Share Delivery Date”).
4.
Acknowledgement by the Holder . The Holder hereby
represents and warrants to the Borrower that the Holder has
sufficient knowledge and experience of financial and business
matters so that the Holder is able to evaluate the merits and risks
of purchasing this Note and the Holder has had substantial
experience in previous private and public purchases of
securities. The Holder is an “accredited
investors” as that term is defined in Rule 501 of Regulation
D under the Securities Act.
5.
Anti-dilution Adjustment . If at any time this
Note is outstanding, the Company issues common stock or securities
convertible into or exercisable for common stock at a price per
share that is lower than the Conversion Price (a “Dilutive
Issuance”), or adjusts the price per share at which any of
its outstanding securities can be converted into or exercised for
common stock to a price that is lower than the Conversion Price (a
“Dilutive Adjustment”), the Conversion Price shall
automatically be adjusted to equal the lower price granted in such
Dilutive Issuance or Dilutive Adjustment (the “Adjusted
Conversion Price”). The Company must provide
written notice to the Holder of a Dilutive Issuance or a Dilutive
Adjustment (the “Adjustment Notice”) within three (3)
trading days of such occurrence, provided however that the Adjusted
Conversion Price shall be deemed to be in effect automatically upon
any Dilutive Issuance or Dilutive Adjustment regardless of whether
the Company provides the Adjustment Notice. The Company must honor
any conversions requested by the Holder at the Adjusted Conversion
Price following any Dilutive Issuance or Dilutive
Adjustment.
6.
Event of Default . Any of the following shall
constitute an “ Event of Default ” under
this Note, and shall give rise to the remedies provided in
Section 6 herein:
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The failure by
the Borrower to pay the Indebtedness or otherwise to satisfy when
due, as contemplated in Section 2 ;
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The failure by
the Borrower to deliver the Conversion Shares by the Share Delivery
Date, as contemplated in Section 3 ;
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The failure by
the Borrower to provide the Adjustment Notice or honor conversions
at the Adjusted Conversion Price following a Dilutive Issuance or
Dilutive Adjustment, as contemplated in Section 6
;
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The failure by
the Borrower to timely file and keep current periodic reports with
the SEC;
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If the
Borrower: (i) makes a general assignment for the
benefit of creditors; (ii) is adjudicated a bankrupt or
insolvent; (iii) files a voluntary petition in bankruptcy;
(iv) takes advantage, as against its creditors, of any bankruptcy
law or statute of the United States of America or any
state
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