thereafter issuable upon
the conversion of this Debenture shall be determined by multiplying the number of Conversion Shares theretofore issuable upon conversion of this Debenture by a
fraction, of which the numerator shall be the number of shares outstanding immediately prior to the issuance of such rights, options, warrants or convertible
securities plus the number of additional shares offered for subscription or purchase, and of which the denominator shall be the number of shares outstanding
immediately prior to the issuance of such rights, options, warrants or convertible securities. Such adjustment shall be made whenever such rights,
options, warrants or convertible securities are issued, and shall become effective immediately upon issuance of such rights, options, warrants or convertible
securities. In the event of such adjustment, corresponding adjustments shall be made to the Conversion Price.
In case the Company shall
distribute to holders of its common shares evidences of its indebtedness or assets (excluding cash dividends or distributions out of current earnings made in
the ordinary course of business consistent with past practices), then in each case the number of Conversion Shares thereafter issuable upon the conversion of
this Debenture shall be determined by multiplying the number of Conversion Shares theretofore issuable upon conversion of this Debenture by a fraction, of which
the numerator shall be the then Market Price (as defined below) on the date of such distribution, and of which the denominator shall be such Market Price on
such date minus the then fair value (determined as provided in subsection 6(f) below) of the portion of the assets or evidences of indebtedness so distributed
applicable to one share. Such adjustment shall be made whenever any such distribution is made and shall become effective on the date of distribution.
In the event of any such adjustment, the number of Conversion Shares shall also be adjusted and shall be that number determined by multiplying the number
of shares issuable upon exercise before the adjustment by a fraction, the numerator of which shall be the Conversion Price in effect immediately before the
adjustment and the denominator of which shall be the Conversion Price as so adjusted.
Whenever the number of
Conversion Shares issuable upon the conversion of this Debenture is adjusted as provided in this Section 6, the Conversion Price shall be adjusted by
multiplying such Conversion Price immediately prior to such adjustment by a fraction, the numerator of which shall be the number of Conversion Shares issuable
upon the conversion of this Debenture immediately prior to such adjustment, and the denominator of which shall be the number of Conversion Shares issuable
Upon the expiration of any
rights, options, warrants or conversion privileges, if such shall not have been exercised, the number of Conversion Shares issuable upon conversion of the
Debenture and the Conversion Price, to the extent the Debenture has not then been converted, shall, upon such expiration, be readjusted and shall thereafter be
such number and such price as they would have been had they been originally adjusted (or had the original adjustment not been required, as the case may be) on
the basis of (A) the fact that the only shares issued in respect of such rights, options, warrants or conversion privileges were the shares, if any, actually
issued or sold upon the exercise of such rights, options, warrants or conversion privileges, and (B) the fact that such shares, if any, were issued or sold for
the consideration actually received by the Company upon such exercise plus the consideration, if any, actually received by the Company for the issuance, sale or
grant of all such rights, options, warrants or conversion privileges whether or not exercised; provided, however, that no such readjustment shall have the
effect of decreasing the numbers of Conversion Shares issuable upon conversion of the Debenture or increasing the Conversion Price by an amount in excess of the
amount of the adjustment made in respect of the issuance, sale or grant of such rights, options, warrants or conversion privileges.
Upon any adjustment of the
Conversion Price and the number of Conversion Shares issuable upon conversion of the Debenture, then and in each such case, the Company shall give written
notice thereof, by first-class mail, postage prepaid, addressed to the Holder as shown on the books of the Company, which notice shall state the Conversion
Price resulting from such adjustment and the increase or decrease, if any, in the number of shares issuable at such price upon the conversion of the Debenture,
setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.
Merger, Reorganization or
Consolidation. In any case in which a transaction would result in a complete liquidation of the Company or a merger, reorganization, or
consolidation of the Company with any other unrelated corporation or other entity in which the Company is not the surviving corporation or the Company becomes a
wholly-owned subsidiary of another unrelated corporation or other entity (all such transactions being referred to herein as a Reorganization), the
surviving corporation or other entity shall be required to assume the Debenture or to issue a substitute Debenture in place thereof which substitute Debenture
shall provide for terms at least as favorable to the Holder as contained in this Debenture and shall provide the Holder the right to acquire the kind and amount
of common stock and other securities and property which the Holder would have owned or been entitled to receive had the Debenture been converted immediately
prior to such Reorganization.
No provision of this Debenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of this
Debenture at the time, place, and rate, and in the form, herein prescribed.
Demand/Presentment. The Company hereby expressly waives demand and presentment for payment, notice of non-payment, protest, notice of protest,
notice of dishonor, notice of acceleration or intent to accelerate, and diligence in taking any
action to collect amounts
called for hereunder and shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.
Cost and Fees.
The Company agrees to pay all costs and expenses, including reasonable attorneys fees, which may be incurred by the Holder in collecting any amount
due under this Debenture.
Events of Default.
If one or more of the following described Events of Default shall occur and continue for 30 days, unless a different time frame is noted
(a) The Company shall default in
the payment of principal or interest on this Debenture, and such failure shall continue for a period of five (5) days; or
(b) The Company shall fail to
perform or observe, in any material respect, any other covenant, term, provision, condition, agreement or obligation of the Company under this Debenture and
such failure shall continue uncured for a period of thirty (30) days after notice from the Holder of such failure; or
(c) The Company shall (1) become
insolvent; (2) admit in writing its inability to pay its debts generally as they mature; (3) make an assignment for the benefit of creditors or commence
proceedings for its dissolution; (4) apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its
property or business; (5) file a petition for bankruptcy relief, consent to the filing of such petition or have filed against it an involuntary petition for
bankruptcy relief, all under federal or state laws as applicable; or
(d) A trustee, liquidator or
receiver shall be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged within thirty
(30) days after such appointment; or
(e) Any governmental agency or
any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the whole or any substantial portion of the
properties or assets of the Company; or
(f) Any money judgment, writ or
warrant of attachment, or similar process, in excess of Five Hundred Thousand ($500,000) Dollars in the aggregate shall be entered or filed against the Company
or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of fifteen (15) days or in any event later than
five (5) days prior to the date of any proposed sale thereunder; or
(g) Bankruptcy, reorganization,
insolvency or liquidation proceedings, or other proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be instituted
voluntarily by or involuntarily against the Company; or
(h) The Company shall not deliver
to the Holder the shares pursuant to paragraph 4 herein within 30 days of receipt of Notice of Conversion; or
(i) any of the representations or
warranties made by the Company herein or hereafter furnished by or on behalf of the Company in connection with the execution and delivery of this Debenture
shall be false or misleading in a material respect on the Closing Date; or
(j) If the Company is then a
reporting company it shall fail to make the required filings or statements with the Securities Exchange Commission by the appropriate deadlines.
Then, or at any time thereafter, unless cured, and
in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of
any subsequent default) at the option of the Holder and in the Holders sole discretion, the Holder may consider this Debenture immediately due and
payable, without presentment, demand, protest or (further) notice of any kind (other than notice of acceleration), all of which are hereby expressly waived,
anything herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately, and without expiration of any
period of grace, enforce any and all of the Holders rights and remedies provided herein or any other rights or remedies afforded by law. Upon an
Event of Default, interest shall accrue on all amounts outstanding under this Debenture at the rate of 10% per annum, until such Event of Default is cured or
the principal and all accrued interest under this Debenture is paid in full.
. No recourse shall be had for the payment of the principal or interest of this Debenture, or for any claim based hereon, or otherwise in respect
hereof, against any incorporator, shareholder, officer or director, as such, past, present or future, of the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived and released.
In case any provision of this Debenture 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 Debenture will not in any way be affected or impaired thereby.
This Debenture and any agreements referred to in this Debenture constitute the full and entire understanding and agreement between the Company and the
Holder with respect to the subject hereof. Neither this Debenture nor any term hereof may be amended, waived, discharged or terminated other than by a written
instrument signed by the Company and the Holder.
This Debenture shall be governed by and construed in accordance with the laws of Florida applicable to contracts made and wholly to be performed within
the State of Florida and shall be binding upon the successors and assigns of each party hereto. The Holder and the Company hereby mutually waive trial by jury
and consent to exclusive jurisdiction and venue in the courts of the State of Florida. At Holders election, any dispute between the parties may be
arbitrated rather than litigated in the courts, before the American Arbitration Association in West Palm Beach, Florida and pursuant to its rules. Upon demand
made by the Holder to the Company, the Company agrees to submit to and
participate in such
arbitration. This Agreement may be executed in counterparts, and the facsimile transmission of an executed counterpart to this Agreement shall be effective as
Notice of Certain Events. In the
case of the occurrence of a Reorganization described in Section 7 of this Debenture, the Company shall cause to be mailed to the Holder of this Debenture at its
last address as it appears in the Companys security registry, at least twenty (20) days prior to the applicable record, effective or expiration date
hereinafter specified (or, if such twenty (20) days notice is not possible, at the earliest possible date prior to any such record, effective or
expiration date), a notice thereof, including, if applicable, a statement of the date on which such Reorganization is expected to become effective, and the date
as of which it is expected that holders of record of the shares will be entitled to exchange their shares for securities, cash or other property deliverable
upon such Reorganization.
Transmittal of Notices. Except as
may be otherwise provided herein, any notice or other communication or delivery required or permitted hereunder shall be in writing and shall be delivered
personally, or sent by telecopier machine or by a nationally recognized overnight courier service, and shall be deemed given when so delivered personally, or by
telecopier machine or overnight courier service as follows:
If to the Holder, to:
1606 Willowview Street
Longview, TX 75604
If to the Company, to:
Alliance Media Group Holdings, Inc.
400 North Congress Avenue
West Palm Beach, FL 33401
Telephone: (888) 607-3555
With a copy to:
Law Offices of Robert Diener
56 Laenani Street
Haiku, HI 96708
Each of the Holder or the Company may change the foregoing
address by notice given pursuant to this Section 16(b).
Attorneys Fees. Should any
party hereto employ an attorney for the purpose of enforcing or construing this Debenture, or any judgment based on this Debenture, in any legal proceeding
whatsoever, including insolvency, bankruptcy, arbitration, declaratory relief or other litigation, the prevailing party shall be entitled to receive from the
other party or parties thereto reimbursement for all reasonable attorneys' fees and all reasonable costs, including but not limited to service of process,
filing fees, court and court reporter costs, investigative costs, expert witness fees, and the cost of any bonds, whether taxable or not, and that such
reimbursement shall be included in any judgment or final order issued in that proceeding. The "prevailing party" means the party determined by
the court to most nearly prevail and not necessarily the one in whose favor a judgment is rendered.
IN WITNESS WHEREOF, the Company
has caused this instrument to be duly executed by an officer thereunto duly authorized.
Dated: July 31, 2012
ALLIANCE MEDIA GROUP HOLDINGS, INC.
/s/ Daniel de Liege
Name: Daniel de Liege
ACKNOWLEDGED AND AGREED:
/s/ Jena Waldron
NOTICE OF CONVERSION
(To be executed by the Registered Holder in order to
Convert the Debenture)
The undersigned hereby irrevocably elects to
convert $___________ of the above Debenture No. _______ into shares of common stock of Alliance Media Group Holdings, Inc. according to the conditions set forth
in such Debenture, as of the date written below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay
all transfer and other taxes and charges payable with respect thereto.
Date of Conversion
Applicable Conversion Price
[Print Name of Holder and Title of Signer]
SSN or EIN:
Shares are to be registered in the following name:
SSN or EIN:
Shares are to be sent or delivered to the following account: