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Document Preview Callable Secured Convertible Note |
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Title: |
Callable Secured Convertible Note |
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Date: |
2005 |
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$55 |
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#1334791 |
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| THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT). 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 OR UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER SAID ACT. |
CALLABLE SECURED CONVERTIBLE NOTE
| San Diego, California | |
| April 29, 2005 | $425,000 |
FOR VALUE RECEIVED, SNOCONE SYSTEMS INC., a Nevada corporation (hereinafter called the Borrower), hereby promises to pay to the order of AJW Qualified Partners, LLC or registered assigns (the Holder) the sum of $425,000, on April 29, 2008 (the Maturity Date), and to pay interest on the unpaid principal balance hereof at the rate of eight percent (8%) (the Interest Rate) per annum from April 29, 2005 (the Issue Date) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of fifteen percent (15%) per annum from the due date thereof until the same is paid (Default Interest). Interest shall commence accruing on the Issue Date, shall be computed on the basis of a 365-day year and the actual number of days elapsed and shall be payable quarterly provided that no interest shall be due and payable for any month in which the Trading Price (as such term is defined below) is greater than $1.3375 for each Trading Day (as such term is defined below) of the month. All payments due hereunder (to the extent not converted into common stock, $.001 par value per share (the Common Stock) in accordance with the terms hereof) shall be made in lawful money of the United States of America provided that interest due and payable for the first six (6) months following the Issue Date shall be paid on the date hereof. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term business day shall mean any day other than a Saturday, Sunday or a day on which commercial
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banks in the city of New York, New York are authorized or required by law or executive order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement, dated April 29, 2005, pursuant to which this Note was originally issued (the Purchase Agreement).
This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof. The obligations of the Borrower under this Note shall be secured by that certain Security Agreement and Intellectual Property Security Agreement, each dated April 29, 2005 by and between the Borrower and the Holder.
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