CONVERTIBLE PROMISSORY NOTE
OF
ALLEGRO BIODIESEL CORPORATION
| U.S.
$1,000,000.00 |
November 21, 2007
|
For
value received, Allegro Biodiesel Corporation, a Delaware
corporation (the "
Company "),
with principal offices at 6033 West Century Blvd., Suite 1090, Los
Angeles, California 90045, hereby promises to pay to
Monarch Pointe Fund, Ltd. ("
Holder "),
or its registered assigns, the principal sum of ONE MILLION Dollars
($1,000,000) (the "
Principal Amount "),
or such lesser amount as shall then equal the outstanding principal
amount hereunder, together with interest compounded quarterly on
the unpaid principal balance at a rate equal to seven percent
(7.0%) per annum, computed on the basis of the actual number of
days elapsed and a year of 365 or 366 days as the case may be, from
the date of this Note, until the principal amount and all interest
accrued thereon are paid (or converted, as provided in
Section 3 hereof).
An
amount equal to the then unpaid Principal Amount together with
any then unpaid accrued interest on the Principal Amount (the
"
Maturity Payment ")
shall be due and payable on March 31, 2008 (the "
Maturity Date "),
at the principal offices of the Company or by mail to the address
of the registered holder of this Note in lawful money of the United
States, unless this Note shall have been previously converted
pursuant to Section 2 hereof. The Maturity Payment
shall be paid prior to any distributions by the Company to holders
of Company equity securities in respect of such
securities.
The
following is a statement of the rights of Holder and the
conditions to which this Note is subject, and to which Holder
hereof, by the acceptance of this Note, agrees:
1.
DEFINITIONS .
The following definitions shall apply for all purposes of this
Note:
1.1
"
Company "
means the "
Company "
as defined above and includes any corporation which shall succeed
to or assume the obligations of the Company under this
Note.
1.2
"
Conversion Price "
means $0.65 per share of Conversion Stock.
1.3
"
Conversion Stock "
means the Common Stock, par value $0.01 per share, of the Company.
The number and character of the Conversion Stock are subject to
adjustment as provided herein.
1.4
"
Holder "
means any person who shall at the time be the registered holder of
this Note.
1.5
"
Note "
means this Convertible Promissory Note.
2.
CONVERSION .
2.1
Election .
The
Holder or may elect to convert all or part of the outstanding
principal amount of and any accrued but unpaid interest on this
Note, into shares of Conversion Stock at the Conversion Price then
in effect. The Holder may make such an election by delivery of a
notice to the Company, together with this Note. The Company, at its
option, may require the Holder to convert all, or a portion, of the
outstanding principal amount of and any accrued but unpaid interest
on this Note by delivery of written notice to the
Holder.
| U.S.
$1,000,000.00 |
November 21, 2007
|
2.2
Issuance of Conversion Stock
.
As soon as practicable after conversion of this Note, the Company
at its expense will cause to be issued in the name of and delivered
to the Holder, a certificate or certificates for the number of
shares of Conversion Stock to which the Holder shall be entitled
upon such conversion (bearing such legends as may be required by
applicable state and federal securities laws in the opinion of
legal counsel of the Company, by the Company's Certificate of
Incorporation or Bylaws, or by any agreement between the Company
and the Holder), together with any other securities and property to
which the Holder is entitled upon such conversion under the terms
of this Note. Such conversion shall be deemed to have been made on
the date of delivery of the applicable conversion notice, together
with this Note. No fractional shares will be issued upon conversion
of this Note. If upon any conversion of this Note, a fraction of a
share would otherwise result, then in lieu of such fractional share
the Company will pay the cash value of that fractional share,
calculated on the basis of the then current market price of the
Company's common stock, as determined in good faith by the Board of
Directors of the Company.
3.
ADJUSTMENT PROVISIONS .
The number and character of shares of Conversion Stock issuable
upon conversion of this Note and the Conversion Price therefor, are
subject to adjustment upon occurrence of the following events
between the date this Note is issued and the date it is
converted:
3.1
Adjustment for Stock Splits, Stock Dividends,
Recapitalizations, etc .
The Conversion Price of this Note and the number of shares of
Conversion Stock issuable upon conversion of this Note shall each
be proportionally adjusted to reflect any stock dividend, stock
split, reverse stock split, reclassification, recapitalization or
other similar event affecting the number of outstanding shares of
Conversion Stock unless the conversion ratio of such Conversion
Stock already reflects such event.
3.2
Adjustment for Other Dividends
and Distributions .
In case the Company shall make or issue, or shall fix a record date
for the determination of eligible holders of Conversion Stock
entitled to receive, a dividend or other distribution payable with
respect to their shares of Conversion Stock that is payable in
(a) securities of the Company (other than issuances with
respect to which adjustment is made under Section 3.1), or
(b) assets (other than cash dividends paid or payable solely
out of retained earnings), then, and in each such case, the Holder,
upon conversion of this Note at any time after the consummation,
effective date or record date of such event, shall receive, in
addition to the shares of Conversion Stock issuable upon such
conversion prior to such date, the securities or such other assets
of the Company to which the Holder would have been entitled upon
such date if the Holder had converted this Note immediately prior
thereto (all subject to further adjustment as provided in this
Note).
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