"NEITHER THE ISSUANCE AND SALE OF
THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES
INTO WHICH THESE SECURITIES ARE [CONVERTIBLE –OR-EXERCISABLE]
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN
OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES."
|
Principal
Amount $75,000.00
|
Issue Date: May 21,
2009
|
SECURED CONVERTIBLE
NOTE
FOR VALUE
RECEIVED, CONSPIRACY ENTERTAINMENT HOLDINGS, INC., a Utah
corporation (hereinafter called "Borrower"), hereby promises to pay
to ALPHA CAPITAL ANSTALT, Pradafant 7, 9490 Furstentums, Vaduz,
Lichtenstein, Fax: 011-42-32323196 (the "Holder") or order, without
demand, the sum of Seventy-Five Thousand Dollars ($75,000.00), with
interest accruing thereon, as follows: Thirty-Seven Thousand Five
Hundred Dollars ($37,500.00) payable in cash on December 31, 2009,
and the balance on May 21, 2010 in cash or shares of Common Stock
of Borrower (the "Maturity Date"), if not retired
sooner.
This Note has been entered into pursuant to the
terms of a subscription agreement between the Borrower and the
Holder, dated of even date herewith (the “Subscription
Agreement”), and shall be governed by the terms of such
Subscription Agreement. Unless otherwise separately
defined herein, all capitalized terms used in this Note shall have
the same meaning as is set forth in the Subscription
Agreement. The following terms shall apply to this
Note:
ARTICLE I
GENERAL PROVISIONS
1.1
Interest Rate . Interest payable on this
Note shall accrue at the annual rate of fifteen percent (15%) and
be payable on the Maturity Date, accelerated or otherwise, when the
principal and remaining accrued but unpaid interest shall be due
and payable, or sooner as described below.
1.2
Payment Grace Period . The Borrower shall have a
five (5) day grace period to pay any monetary amounts due under
this Note, after which grace period a default interest rate of
eighteen percent (18%) per annum.
1.3
Conversion Privileges . The Conversion Privileges
set forth in Article II shall remain in full force and effect
immediately from the date hereof and until the Note is paid in full
regardless of the occurrence of an Event of Default. The
Note shall be payable in full on the Maturity Date, unless
previously converted into Common Stock in accordance with Article
II hereof.
"NEITHER THE ISSUANCE AND SALE OF
THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES
INTO WHICH THESE SECURITIES ARE [CONVERTIBLE –OR-EXERCISABLE]
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN
OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES."
|
Principal
Amount $75,000.00
|
Issue Date: May 21,
2009
|
SECURED CONVERTIBLE
NOTE
FOR VALUE
RECEIVED, CONSPIRACY ENTERTAINMENT HOLDINGS, INC., a Utah
corporation (hereinafter called "Borrower"), hereby promises to pay
to WHALEHAVEN CAPITAL FUND LIMITED, 560 Sylvan Avenue, Englewood
Cliffs, NJ 07632, Fax: (201) 586-0258 (the "Holder") or order,
without demand, the sum of Seventy-Five Thousand Dollars
($75,000.00), with interest accruing thereon, as follows:
Thirty-Seven Thousand Five Hundred Dollars ($37,500.00) payable in
cash on December 31, 2009, and the balance on May 21, 2010 in cash
or shares of Common Stock of Borrower (the "Maturity Date"), if not
retired sooner.
This Note has been entered into pursuant to the
terms of a subscription agreement between the Borrower and the
Holder, dated of even date herewith (the “Subscription
Agreement”), and shall be governed by the terms of such
Subscription Agreement. Unless otherwise separately
defined herein, all capitalized terms used in this Note shall have
the same meaning as is set forth in the Subscription
Agreement. The following terms shall apply to this
Note:
ARTICLE I
GENERAL PROVISIONS
1.1
Interest Rate . Interest payable on this
Note shall accrue at the annual rate of fifteen percent (15%) and
be payable on the Maturity Date, accelerated or otherwise, when the
principal and remaining accrued but unpaid interest shall be due
and payable, or sooner as described below.
1.2
Payment Grace Period . The Borrower shall have a
five (5) day grace period to pay any monetary amounts due under
this Note, after which grace period a default interest rate of
eighteen percent (18%) per annum.
1.3
Conversion Privileges . The Conversion Privileges
set forth in Article II shall remain in full force and effect
immediately from the date hereof and until the Note is paid in full
regardless of the occurrence of an Event of Default. The
Note shall be payable in full on the Maturity Date, unless
previously converted into Common Stock in accordance with Article
II hereof; provided, that if an Event of Default has occurred, the
Borrower may not pay this Note, without the consent of the Holder,
until one year after the later of the date the Event of Default has
been cured or one year after the Maturity Date.
ARTICLE II
CONVERSION RIGHTS
The Holder shall have the right to convert the
principal and any interest due under this Note into Shares of the
Borrower's Common Stock, $.001 par value per share (“Common
Stock”) as set forth below.
2.1.
Conversion into the Borrower's Common Stock .
(a) The
Holder shall have the right from and after the date of the issuance
of this Note and then at any time until this Note is fully paid, to
convert any outstanding and unpaid principal portion of this Note,
and accrued interest, at the election of the Holder (the date of
giving of such notice of conversion being a "Conversion Date") into
fully paid and nonassessable shares of Common Stock as such stock
exists on the date of issuance of this Note, or any shares of
capital stock of Borrower into which such Common Stock shall
hereafter be changed or reclassified, at the conversion price as
defined in Section 2.1(b) hereof (the "Conversion Price"),
determined as provided herein. Upon delivery to the
Borrower of a completed Notice of Conversion, a form of which is
annexed hereto as Exhibit A, Borrower shall issue and deliver to
the Holder within three (3) business days after the Conversion Date
(such third day being the “Delivery Date”) that number
of shares of Common Stock for the portion of the Note converted in
accordance with the foregoing. At the election of the
Holder, the Borrower will deliver accrued but unpaid interest on
the Note, if any, through the Conversion Date directly to the
Holder on or before the Delivery Date (as defined in the Second
Amendment). The number of shares of Common Stock to be
issued upon each conversion of this Note shall be determined by
dividing that portion of the principal of the Note and interest, if
any, to be converted, by the Conversion Price.
(b) Subject
to adjustment as provided in Section 2.1(c) hereof, the conversion
price per share shall be equal to $0.01 (“Conversion
Price”).
(c)
The Conversion Price and number and kind of shares or other
securities to be issued upon conversion determined pursuant to
Section 2.1(a), shall be subject to adjustment from time to time
upon the happening of certain events while this conversion right
remains outstanding, as follows:
A.
Merger, Sale of Assets, etc
. If (A) the Borrower effects
any merger or consolidation of the Borrower with or into
another entity, (B) the Borrower effects any sale of all or
substantially all of its assets in one or a series of related
transactions, (C) any tender offer or exchange offer
(whether by the Borrower or another entity) is completed pursuant
to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, (D)
the Borrower consummates a stock purchase agreement or other
business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of
arrangement) with one or more persons or entities whereby such
other persons or entities acquire more than the 50% of the
outstanding shares of Common Stock (not including any shares of
Common Stock held by such other persons or entities making or party
to, or associated or affiliated with the other persons or entities
making or party to, such stock purchase agreement or other business
combination), (E) any "person" or "group" (as these terms are used
for purposes of Sections 13(d) and 14(d) of the 1934 Act) is or
shall become the "beneficial owner" (as defined in Rule 13d-3 under
the 1934 Act), directly or indirectly, of 50% of the aggregate
Common Stock of the Borrower, or (F) the Borrower effects any
reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property
(in any such case, a
"Fundamental Transaction"), this Note, as to the
unpaid principal portion thereof and accrued interest thereon,
shall thereafter be deemed to evidence the right to convert into
such number and kind of shares or other securities and property as
would have been issuable or distributable on account of such
Fundamental Transaction, upon or with respect to the securities
subject to the conversion right immediately prior to such
Fundamental Transaction. The foregoing provision shall
similarly apply to successive Fundamental Transactions of a similar
nature by any such successor or purchaser. Without
limiting the generality of the foregoing, the anti-dilution
provisions of this Section shall apply to such securities of such
successor or purchaser after any such Fundamental
Transaction.
B.
Reclassification, etc. If the Borrower at any
time shall, by reclassification or otherwise, change the Common
Stock into the same or a different number of securities of any
class or classes that may be issued or outstanding, this Note, as
to the unpaid principal portion thereof and accrued interest
thereon, shall thereafter be deemed to evidence the right to
purchase an adjusted number of such securities and kind of
securities as would have been issuable as the result of such change
with respect to the Common Stock immediately prior to such
reclassification or other change.
C.
Stock Splits, Combinations and Dividends . If the
shares of Common Stock are subdivided or combined into a greater or
smaller number of shares of Common Stock, or if a dividend is paid
on the Common Stock in shares of Common Stock, the Conversion Price
shall be proportionately reduced in case of subdivision of shares
or stock dividend or proportionately increased in the case of
combination of shares, in each such case by the ratio which the
total number of shares of Common Stock outstanding immediately
after such event bears to the total number of shares of Common
Stock outstanding immediately prior to such event.
D.
Share Issuance . So long as this Note is
outstanding, if the Borrower shall issue any Common Stock except
for the Excepted Issuances (as defined in the Subscription
Agreement), prior to the complete conversion or payment of this
Note, for a consideration per share that is less than the
Conversion Price that would be in effect at the time of such issue,
then, and thereafter successively upon each such issuance, the
Conversion Price shall be reduced to such other lower issue
price. For purposes of this adjustment, the issuance of
any security or debt instrument of the Borrower carrying the right
to convert such security or debt instrument into Common Stock or of
any warrant, right or option to purchase Common Stock shall result
in an adjustment to the Conversion Price upon the issuance of the
above-described security, debt instrument, warrant, right, or
option and again upon the issuance of shares of Common Stock upon
exercise of such convers
