THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”). THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE...
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933 (THE “ACT”). THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS, OR SUCH OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT
TO
AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE
LAWS.
| October_, 2006 |
$______
|
CREATIVE
ENTERPRISES INTERNATIONAL, INC.,
a
Nevada corporation (the “Company” or the
“Maker”)
hereby
promises to pay to ___________
(the
“Holder”)
the
sum of ____________________ Dollars ($___________) (the “Principal”)
on the
earlier of (i) October__ 2008 (the “Maturity
Date”),
and
(ii) the date on which there is an acceleration pursuant to the terms of this
Convertible Note (the “Note”),
and
to pay interest on the Principal, which shall accrue at the rate of 10% per
annum (except as provided in Section 1.3), calculated for the actual number
of
days the Principal is outstanding and interest is accrued and unpaid based
on a
360-day year, in accordance with the terms hereof. Such payment shall be made
in
lawful money of the United States of America at such address as the Holder
shall
hereafter give to the Maker by written notice made in accordance with the
provisions hereof.
The
Company has issued this Note pursuant to a Subscription Agreement, dated as
of
the date set forth above (the “Subscription
Agreement”)
between the Maker and the Holder and other signatories thereto, if any, all
terms of which are incorporated herein by this reference and hereby made a
part
of this Note. By its acceptance of this Note, each Holder agrees to be bound
by
the terms of the Subscription Agreement. All capitalized terms not otherwise
defined herein shall have the meanings ascribed to such terms in the
Subscription Agreement.
The
following terms apply to this Note:
ARTICLE
I
ACCELERATION;
INTEREST; PREPAYMENT
1.1
Acceleration
of Maturity Date.
Subject
to Article III of this Note, the Principal and accrued and unpaid Interest
shall
become immediately due and payable upon the occurrence of an Event of Default
(as defined herein), which event shall be deemed an Acceleration
Date.
1.2 Payment
of Interest.
Payment
of accrued Interest on the Principal shall be paid in cash in full on the
Maturity Date or such earlier date on which the Principal is paid to the Holder
or on which the Note is converted pursuant to the terms hereof. Notwithstanding
the foregoing, unless previously converted in full in accordance with Section
2
hereof, the accrued but unpaid interest on this Note may be paid, at the sole
option of the Company, in cash or in shares (the “Interest Shares”) of Common
Stock, par value $.001 per share, of the Company. In such event, the holder
of
this Note shall be entitled to receive that number of Interest Shares equal
to
(i) the then-accrued but unpaid interest of this Note divided by the average
closing price for the five (5) consecutive trading days ending not more than
three (3) days prior to the date on which the Interest payment is to be made
by
the Company. All payments made by the Maker on this Note shall be applied first
to the payment of accrued and unpaid Interest on this Note and then to the
reduction of the unpaid principal balance of this Note. Payments of Principal
and Interest shall be deemed made on the date such payment is deposited or,
if
mailed, on the date deposited in the mail with proper postage and addressed
to
the Holder at the address shown on the records of the Company, or such other
address as provided to the Maker in writing by the Holder. In the event that
the
date for the payment of any amount payable under this Note falls due on a
Saturday, Sunday or public holiday under the laws of the State of New York,
the
time for payment of such amount shall be extended to the next succeeding
business day and Interest shall continue to accrue on any principal amount
so
effected until the payment thereof on such extended due date.
1.3
Prepayment.
The
principal of and accrued interest on this Note may be prepaid in full or in
part, at any time without premium or penalty. If this Note is called for
prepayment pursuant this Section 1.3, the Company shall give written notice
to
the Holder not less than ten (10) days nor more than sixty (60) days prior
to
the date the Company intends to effect the prepayment (the “Prepayment
Date”),
setting forth the prepayment price to be paid, instructions for presentation
of
the Notes for prepayment and the Prepayment Date. The Holder shall, upon receipt
of notice of prepayment, cause this Note to be timely delivered to the Company
at its principal offices. If on or before the Prepayment Date all funds
necessary to pay for the Notes to be prepaid shall have been set aside by the
Company for the benefit of such Holders, then, on and after such date,
notwithstanding that any Note subject to prepayment shall not have been
surrendered for prepayment, the obligation evidenced by all Notes not
surrendered for prepayment shall be deemed no longer outstanding, and all rights
with respect thereto shall forthwith cease and terminate, except only the right
of the holder of each Note subject to prepayment to receive the prepayment
amount to which he would be entitled upon receiving notice of prepayment.
Holders may convert their Notes pursuant to Article II of this Note during
the
period from the date of notice of prepayment until 5:00 p.m. Eastern Time on
the
business day immediately prior to the Prepayment Date.
1.4 Holder
Deemed Owner.
The
registered Holder hereof may be deemed the absolute owner of this Note (whether
or not this Note shall be overdue and notwithstanding any notice of ownership
or
writing hereon made by anyone other than the Maker, for the purpose of receiving
payment hereof or thereof or on account hereof and for all other purposes)
and
the Maker shall not be affected by notice to the contrary.
ARTICLE
II
CONVERSION
RIGHTS; CONVERSION PRICE
2.1. Conversion
Rights.
2
(a) Voluntary
Conversion.
Commencing
on the date hereof, the Holder shall have the right prior to the Maturity Date,
to convert the entirety of the outstanding Principal amount of this Note, into
shares of Common Stock of the Company, par value $.001 per share (the
“Common
Stock”),
at
the Conversion Rate (as defined herein) determined as provided herein. The
initial Conversion Rate of this Note is $0.05, subject to adjustment in
accordance with the provisions of this Article II (the “Conversion
Rate”).
The
number of shares of Common Stock to be issued upon each conversion of this
Note
shall be determined by dividing (i) the amount of Principal to be converted
by
(ii) the Conversion Rate in effect on the date the Conversion Notice is
delivered to the Maker by the Holder. Upon
the
conversion of this Note,
all
rights of the Holder, except the right to receive certificates representing
shares of Common Stock of the Company in accordance with this Article II and
the
right to receive payment of all accrued and unpaid interest in accordance with
Section 1.3, shall cease and this Note shall no longer be deemed to be
outstanding.
(b) Method
of Conversion.
Except
as otherwise provided in this Note or agreed to by the Holder, this Note may
be
converted by the Holder pursuant to its conversion rights set forth in Section
2.1 in whole at any time or in part (provided such partial conversion is at
least $10,000) as follows. In the event of a Holder electing to exercise its
conversion rights, submitting to the Maker a Conversion Notice (by facsimile
dispatched on the Conversion Date and confirmed by U.S. mail or overnight mail
service sent within two business days thereafter) and surrendering this Note
with the mailed confirmation of the Conversion Notice at the principal office
of
the Maker. Upon a partial conversion of this Note, a new Note containing the
same date and provisions as this Note shall be issued by the Maker to the Holder
for the balance due hereunder which shall not have been converted. The Company
shall, as soon as practicable thereafter, issue and deliver to Holder, at the
address set forth in this Note, a certificate or certificates representing
the
shares of Common Stock (bearing such legends as may be required or advisable
in
the opinion of counsel of the Company) determined in accordance with provisions
of this Article II, together with a check payable to the Holder for accrued
and
unpaid Interest and any cash amounts payable as described in Section 2(c) below.
(c) No
Fractional Shares.
No
fractional shares shall be issued upon conversion of this Note. In lieu of
the
Company issuing any fractional shares to the Holder upon the conversion of
this
Note, the Company shall pay to the Holder an amount in cash equal to the product
obtained by multiplying the Conversion Rate by the fraction of a share not
issued pursuant to the previous sentence. Upon conversion of this Note in full
and the payment of the amounts specified in this Note, the Company shall be
released from all its obligations and liabilities under this Note.
2.2 Adjustment
to Conversion Rate.
The
Conversion Rate shall be subject to adjustment from time to time upon the
happening of certain events as set forth below.
(a) Subdivision.
If the
Company, at any time while Notes remain outstanding, shall (i) subdivide or
forward split the Common Stock (or effect a similar transaction), the Conversion
Rate shall be proportionately reduced or (ii) effect a reverse stock split
or
similar transaction, the Conversion Rate shall be proportionately increased,
as
the case may be, as of the effective date of such subdivision, reverse or
forward stock split or similar transaction, or, if the Company shall take a
record of holders of its Common Stock for the purpose of any such transaction,
as of such record date, whichever is earlier (provided if such transaction
does
not actually occur, such adjustment shall not be made).
3
(b) Stock
Dividends.
If the
Company at any time while any Notes are outstanding shall pay a dividend in
shares of, or make other distribution of shares of, the Common Stock, then
the
Conversion Rate shall be adjusted, as of the date the Company shall take a
record of the holders of its Common Stock for the purpose of receiving such
dividend or other distribution (or if no such record is taken, as at the date
of
such payment or other distribution), to that price determined by multiplying
the
Conversion Rate in effect immediately prior to such payment or other
distribution by a fraction (i) the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior to such dividend or
distribution, and (ii) the denominator of which shall be the total number of
shares of Common Stock outstanding immediately after such dividend or
distribution.
2.3 Reclassification,
Consolidation or Merger.
At any
time while this Note remains outstanding, in case of any reclassification or
change of Common Stock (other than a change in par value, or from par value
to
no par value per share, or from no par value per share to par value or as a
result of a subdivision or combination of Common Stock for which an adjustment
has been made pursuant to Section 2.2), or in case of any consolidation or
merger of the Company with or into another corporation (other than a merger
with
another corporation in which the Company is a continuing corporation and which
does not result in any reclassification or change, other than a change in par
value, or from par value to no par value per share, or from no par value per
share to par value, or as a result of a subdivision or combination of Common
Stock for which an adjustment has been made pursuant to Section 2.3) or in
the
case of any sale or transfer of the property or assets of the Company as an
entirety or substantially as an entirety, the Company, or such successor or
purchasing corporation, as the case may be, shall, without payment of any
additional consideration therefor, execute new notes providing that the holders
of the Notes shall have the right to convert such new notes (upon terms not
less
favorable to the holders than those then applicable to the Notes) and to receive
upon such exercise, in lieu of each share of Common Stock theretofore issuable
upon exercise of the Notes, the kind and amount of shares of stock, other
securities, money or property receivable upon such reclassification, change,
consolidation, merger, sale or transfer by the Holder as if the Notes had been
converted immediately prior to such reclassification, change, consolidation,
merger, sale or transfer. The provisions of this Section 2.3 shall similarly
apply to successive reclassifications, changes, consolidations, mergers, sales
and transfers.
2.4 Restrictions
on Shares.
This
Note has been issued by the Maker pursuant to an exemption from registration
under the Securities Act of 1933 (the “Act”).
Neither this Note nor the shares of Common Stock, as the case may be, issuable
upon conversion of this Note may be offered, sold or otherwise transferred
unless (i) they first shall have been registered under the Act and applicable
state securities laws or (ii) the Maker shall have been furnished with an
opinion of legal counsel (in form, substance and scope reasonably acceptable
to
Maker) to the effect that such sale or transfer is exempt from the registration
requirements of the Act. Each certificate for shares of Common Stock issuable
upon conversion of this Note that has not been so registered and that have
not
been sold pursuant to an exemption that permits removal of the applicable
legend, shall bear a legend substantially in the following form, as
appropriate:
4
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933 (THE “ACT”). THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS, OR SUCH OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT
TO
AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE
LAWS.
Upon
the
request of a holder of a certificate representing any shares of Common Stock
issuable upon conversion of this Note, the Maker shall remove the foregoing
legend from the certificate or issue to such Holder a new certificate therefor
free of any transfer legend, if (i) with such request, the Maker shall have
received an opinion of counsel, reasonably satisfactory to the Maker in form,
substance and scope, to the effect that any such legend may be removed from
such
certificate or (ii) a registration statement under the Act covering such
securities is in effect.
2.5 Reservation
of Shares.
The
Company shall at all times have authorized and reserved, for the purpose of
issuance, a sufficient number of shares of Common Stock to provide for the
issuance of shares of Common Stock underlying the then outstanding aggregate
Principal amount of the Notes.
2.6 Limitation
on Right to Convert.
In no
event shall the Holder be permitted to convert Principal of this Note if, upon
such conversion, (x) the number of shares of Common Stock to be issued pursuant
to such Conversion plus
(y) the
number of shares of Common Stock of the Company beneficially owned by the Holder
would exceed 9.99% of the number of shares of Common Stock of the Company then
issued and outstanding, it being the intent of the Company and the Holder that
the Holder not be deemed at any time to have the power to vote or dispose of
greater than 9.99% of the number of shares of Common Stock of the Company issued
and outstanding at any time. Nothing contained herein shall be deemed to
restrict the right of the Holder to convert such excess Principal amount at
such
time as such Conversion will not violate the provisions of this Section
2.6.
As
used
herein, beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act. To the extent that the limitation contained in this
Section
2.6)
applies
(and without limiting any rights the Company may otherwise have), the Company
may rely on the Holder’s determination of whether this Note
is
convertible pursuant to the terms hereof,
the
Company shall have no obligation whatsoever to verify or confirm the accuracy
of
such determination, and the submission of a Conversion Notice by the Holder
shall be deemed to be the Holder’s representation that this Note is
convertible
pursuant
to the terms hereof.
Notwithstanding the foregoing, however, the Holder shall have the right, upon
sixty-one (61) days’ prior written notice to the Company, to waive the
provisions of this Section
2.6).
2.7 Automatic
Conversion.
Notwithstanding anything herein to the contrary, at such time as the conversion
of the Principal of this Note in its entirety would not result in Holder being
deemed the beneficial owner of 9.99% or more of the total number of issued
and
outstanding shares of the Company’s Common Stock, then the Company may deliver a
notice to the Holder (a “Forced
Conversion Notice”
and
the
date such notice is received by the Holder, the “Forced
Conversion Notice Date”)
to
cause the Holder to immediately convert all or part of the then outstanding
Principal amount of this Note pursuant to Section
2.1
and the
Holder shall surrender (if the entire Note is converted) this Note to the
Company for conversion within 5 business days of the Forced Conversion Notice
Date. The Company may only effect a Forced Conversion Notice if each of the
following shall be true: (i) there is a sufficient number of authorized but
unissued and otherwise unreserved shares of Common Stock for the issuance of
all
the shares of Common Stock that are issuable to the Holder upon conversion
in
full of the Notessubject to the Forced Conversion Notice; and (ii) no Event
of
Default nor any event that with the passage of time would constitute an Event
of
Default has occurred and is continuing.
5
ARTICLE
III
EVENTS
OF DEFAULT
3.1 Default.
If one
or more of the following events shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or
be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default
in the due and punctual payment of the Principal of, or Interest on this Note
when and as the same shall become due and payable, whether at the Maturity
Date,
the Acceleration Date or otherwise and continuance of such default for a period
of 20 days;
(b) The
Company makes, or consents to, an assignment for the benefit of creditors or
admits in writing its inability to pay its debts generally as they become due;
(c) An
order,
judgment or decree is entered adjudicating the Company or any Subsidiary
bankrupt or insolvent;
(d) The
Company or any Subsidiary, petitions or applies to any tribunal for the
appointment of a trustee or receiver of the Company or any Subsidiary, or of
any
substantial part of the assets of the Company or any Subsidiary, or commences
any proceedings (other than proceedings for the voluntary liquidation and
dissolution of a Subsidiary) relating to the Company or a Subsidiary under
any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction whether now or hereafter
in
effect;
(e) Any
such
petition or application is filed, or any such proceedings are commenced, against
the Company or any Subsidiary, and the Company or any Subsidiary by any act
indicates its approval thereof, consent or acquiescence therein, or an order,
judgment or decree is entered appointing any such trustee or receiver, or
approving the petition in any such proceedings, and such order, judgment or
decree remains unstayed and in effect for more than 60 days;
(f) Any
order, judgment or decree is entered in any proceedings against the Company
or
any Subsidiary decreeing the dissolution of the Company and such order, judgment
or decree remains unstayed and in effect for more than 60 days;
(g) Any
order, judgment or decree is entered in any proceedings against the Company
or
any Subsidiary decreeing a split-up of the Company which requires the
divestiture of in excess of 25% of the consolidated assets of the Company and
its Subsidiaries, or the divestiture of the stock of a Subsidiary and such
order, judgment or decree remains unstayed and in effect for more than 60 days;
or
6
(h)
The
dissolution of Maker or any material Subsidiary of Maker or any vote in favor
thereof by the board of directors and shareholders of Maker or any material
Subsidiary of Maker;
and
the
holders of the holders of not less than 50% of principal amount of the Note
outstanding at the time (the “Majority Holders”) shall have given fifteen (15)
days prior written notice to the Company by certified or registered mail, return
receipt requested (or such longer period of time as may be specified for any
particular subsection of this Section 3.1), and the Company shall not have
cured
the default within such applicable time period, then an event of default shall
be deemed to have occurred (herein called, after the giving of such notice
as is
applicable, an “Event of Default”).
3.2 Upon
the
occurrence of any Event of Default described in Sections 3.1, and so long as
such Event of Default shall not have been remedied, the holder of this Note,
by
notice in writing to the Company, may declare the principal of this Note then
outstanding and the interest accrued thereon if not already due and payable,
to
be due and payable immediately, and upon any such declaration the same shall
become and shall be immediately due and payable, anything in this Note contained
to the contrary notwithstanding.
ARTICLE
IV
REGISTRATION
RIGHTS
The
Holder shall be entitled to all of the rights and subject to all of the
obligations regarding registration of the shares of Common Stock issuable upon
Conversion of this Note, as described in the Subscription Agreement between
the
Company and the original holder hereof.
ARTICLE
V
MISCELLANEOUS
5.1 Failure
or Indulgency Not Waiver.
No
failure or delay on the part of the Holder in the exercise of any power, right
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or privilege. All rights
and remedies existing hereunder are cumulative to, and not exclusive of, any
rights or remedies otherwise available.
5.2 Notices.
Any
notice herein required or permitted to be given shall be in writing and may
be
personally served or delivered by courier or sent by United States mail and
shall be deemed to have been given upon receipt if personally served (which
shall include telephone line facsimile transmission) or sent by courier or
three
(3) days after being deposited in the United States mail, certified, with
postage pre-paid and properly addressed, if sent by mail. For the purposes
hereof, the address of the Holder shall be as shown on the records of the Maker;
and the address of the Maker shall be ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Both the Holder and the Maker may change the address
for
service by delivery of written notice to the other as herein provided.
7
4.3 Amendment
Provision.
This
Note and any provision hereof may be amended only by an instrument in writing
signed by the Maker and the Holder.
5.4 Assignability.
This
Note shall be binding upon the Maker and its successors and assigns and shall
inure to be the benefit of the Holder and its successors and assigns;
provided,
however,
that
so
long as no Event of Default has occurred, this Note shall only be transferable
in whole or in increments of $10,000 subject to the restrictions contained
in
the restrictive legend on the first page of this Note.
5.5 No
Recourse.
Each
Note is issued upon the express condition, to which each successive holder
expressly assents and by receiving the same agrees, that no recourse under
or
upon any obligation, covenant or agreement of the Notes, or for the payment
of
the Principal of, or premium, if any, or the Interest on, a Note, or for any
claim based on a Note, or otherwise in respect hereof, shall be had against
any
incorporator or any past, present or future stockholder, officer or director,
as
such, of the Company or of any successor corporation, whether by virtue of
the
constitution, statute or rule of law or by any assessment or penalty or
otherwise howsoever, all such individual liability being hereby expressly waived
and released as a condition of and as a part of the consideration for the
execution and issue of the Notes; provided, however, that nothing herein shall
prevent enforcement of the liability, if any, of any stockholder or subscriber
to capital stock upon or in respect of capital stock not fully paid.
5.6 Waiver
of Demand.
Maker
hereby expressly waives demand and presentment for payment notice of nonpayment,
notice of dishonor, protest, notice of protest, bringing of suit, and diligence
in taking any legal action or remedy to collect amounts called for
hereunder.
5.7 Cost
of Collection.
If
default is made in the payment of this Note, the Maker shall pay the Holder
hereof costs of collection, including reasonable attorneys' fees.
5.8 Governing
Law.
This
Note shall be governed by the internal laws of the State of New York, without
regard to conflicts of laws principles. The parties hereto hereby submit to
the
exclusive jurisdiction of the state or federal courts located in the City of
New
York, in the State of New York with respect to any dispute arising under this
Note.
5.9 Suits
for Enforcement and Remedies.
If any
one or more Events of Default shall occur, the Holder may proceed to (i) protect
and enforce Holder’s rights either by suit in equity or by action at law, or
both, whether for the specific performance of any covenant, condition or
agreement contained in this Note or in any agreement or document referred to
herein or in aid of the exercise of any power granted in this Note or in any
agreement or document referred to herein, (ii) enforce the payment of this
Note,
or (iii) enforce any other legal or equitable right of the Holder. No right
or
remedy herein or in any other agreement or instrument conferred upon the Holder
of this Note is intended to be exclusive of any other right or remedy, and
each
and every such right or remedy shall be cumulative and shall be in addition
to
every right and remedy given hereunder or now or hereafter existing at law
or in
equity or by statute or otherwise.
8
5.10 Denominations.
At the
request of the Holder, upon surrender of this Note, the Maker shall promptly
issue new Notes in the aggregate outstanding principal amount hereof, in the
form hereof, in such denominations of at least $10,000 as the Holder shall
request.
5.11 Replacement
of Note.
Upon
receipt of evidence reasonably satisfactory to the Maker of the loss, theft,
destruction or mutilation of this Note and, in the case of any such loss, theft
or destruction, upon delivery of an indemnity agreement reasonably satisfactory
in form and amount to the Maker, or, in the case of any such mutilation, upon
surrender and cancellation of this Note, the Maker, at its expense, will execute
and deliver, in lieu thereof, a new Note of like tenor.
5.12 Withholding
Tax.
The
Holder of this Note agrees to bear the cost of any U.S. withholding tax on
interest payable under this Note.
5.13 Investment
Purpose.
The
Holder of this Note, by acceptance hereof, agrees that this Note is being
acquired for investment and that such Holder will not offer, sell or otherwise
dispose of this Note or the Conversion Securities issuable upon the conversion
of this Note except under circumstances that will not result in a violation
of
the Act or any applicable state securities laws or similar laws relating to
the
sale of securities.
5.14 Severability.
In case
any provision of this Note is held by a court of competent jurisdiction to
be
excessive in scope or otherwise invalid or unenforceable, such provision shall
be adjusted rather than voided, if possible, so that it is enforceable to the
maximum extent possible, and the validity and enforceability of the remaining
provisions of this Note will not in any way be affected or impaired
thereby.
5.15 Interest
Rate.
If any
interest rate specified herein is held to be impermissible, then the rate
charged on the indebtedness represented hereby shall be reduced to the highest
rate then permitted by law.
5.16 Headings.
The
headings of the sections of this Note are inserted for convenience only and
do
not affect the meaning of such section.
IN
WITNESS WHEREOF, the Maker has caused this Note to be executed this __th day
of
October, 2006.
| [SEAL] | CREATIVE ENTERPRISES INTERNATIONAL, INC. |
|
By:_______________________________
Name:
Title:
|
9
Exhibit
1
NOTICE
OF CONVERSION
TO:
[______________________]
1.
Pursuant
to the terms of the attached Convertible Note (the "Note"), the undersigned
hereby elects to convert $
principal amount of the Note into Conversion Securities of Creative Enterprises
International, Inc. (the "Maker"). Capitalized terms used herein and not
otherwise defined herein have the respective meanings provided in the
Note.
2.
Please
issue a certificate or certificates for the number of Conversion Securities
into
which such principal amount of the Note is convertible in the name(s) specified
immediately below or, if additional space is necessary, on an attachment
hereto:
|
Name
|
Name
|
|
|
Address
|
Address
|
|
|
SS
or Tax ID Number
|
SS
or Tax ID Number
|
3.
In the
event of partial exercise, please reissue an appropriate Note(s) for the balance
that shall not have been converted.
4.
The
undersigned represents and warrants that (i) all of the requirements of the
Securities Act of 1933, as amended (the "Act"),
applicable to the undersigned have been complied with by the undersigned and
(ii) the undersigned has not engaged in any transaction or series of
transactions that is a part of or a plan or scheme to evade the registration
requirements of the Act.
|
Date:
_______________________
|
_________________________________
Signature
of Registered Holder
|
|
(Must
be signed exactly as name appears in the
Note.
The signature must be notarized.)
|
10