ADDENDUM TO CONVERTIBLE PROMISSORY NOTE
EXHIBIT
10-3
ADDENDUM
TO
THIS
ADDENDUM (the “Addendum”) is hereby entered into as of August 27, 2009, by and
between Signature Exploration & Production Corp., a Delaware corporation
(“Signature”), and Bristol Capital, LLC, a Delaware limited liability company
(“Bristol”) (Signature and Bristol are hereinafter sometimes collectively
referred to as the “Parties”).
WHEREAS, Signature issued to Bristol a
convertible promissory note (the “Note”) dated as of August 17, 2009, in the
principal amount of $18,000.00, pursuant to a Purchase Agreement dated as of
August 17, 2009 (the “Agreement”)” by and between Signature as Buyer (as defined
in the Agreement) and Bristol as a Seller (as defined in the
Agreement);
WHEREAS, the Parties desire to amend
the Note by including a provision to limit the number of shares issuable to
Bristol under the Note;
NOW THEREFORE, the Parties
agree to amend the Note as set forth below:
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1.
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Conversion
Limitation. Signature shall not effect any conversion of
the Note, and Bristol shall not have the right to convert any portion of
the Note, to the extent that after giving effect to the conversion set
forth on the applicable conversion notice (“Notice of Conversion”)
submitted by Bristol, Bristol (together with its affiliates, and any
persons acting as a group together with Bristol or any of Bristol’s
affiliates) would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below). For purposes of the foregoing
sentence, the number of shares of common stock beneficially owned by
Bristol and its affiliates shall include the number of shares of common
stock issuable upon conversion of the Note with respect to which such
determination is being made, but shall exclude the number of shares of
common stock which are issuable upon (i) conversion of the remaining,
unconverted principal amount of the Note beneficially owned by Bristol or
any of its affiliates and (ii) exercise or conversion of the unexercised
or unconverted portion of any other securities of Signature subject to a
limitation on conversion or exercise analogous to the limitation contained
herein (including, without limitation, any other convertible securities or
warrants) beneficially owned by Bristol or any of its
affiliates. Except as set forth in the preceding sentence, for
purposes of this provision, beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. To the extent that the
limitation contained herein applies, the determination of whether the Note
is convertible (in relation to other securities owned by Bristol together
with any affiliates) and of which principal amount of the Note is
convertible shall be in the sole discretion of Bristol, and the submission
of a Notice of Conversion shall be deemed to be Bristol’s determination of
whether the Note may be converted (in relation to other securities owned
by Bristol together with any Affiliates) and which principal amount of the
Note is convertible, in each case subject to the Beneficial Ownership
Limitation. To ensure compliance with this restriction, Bristol
will be deemed to represent to Signature each time it delivers a Notice of
Conversion that such Notice of Conversion has not violated the
restrictions set forth in this provision and Signature shall have no
obligation to verify or confirm the accuracy of such
determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this provision,
in determining the number of outstanding shares of common stock, Bristol
may rely on the number of outstanding shares of common stock as stated in
the most recent of the following: (i) Signature’s most recent periodic or
annual report filed with the Commission, as the case may be, (ii) a more
recent public announcement by Signature, or (iii) a more recent written
notice by Signature or its transfer agent setting forth the number of
shares of common stock outstanding. Upon the written or oral
request of Bristol, Signature shall within two trading days confirm orally
and in writing to Bristol the number of shares of common stock then
outstanding. In any case, the number of outstanding shares of
common stock shall be determined after giving effect to the conversion or
exercise of securities of Signature, including the Note, by Bristol or its
affiliates since the date as of which such number of outstanding shares of
common stock was reported. The “Beneficial Ownership
Limitation” shall be 9.99% of the number of shares of the common stock
outstanding immediately after giving effect to the issuance of shares of
common stock issuable upon conversion of the Note held by
Bristol. Bristol, upon not less than 61 days’ prior notice to
Signature, may waive the Beneficial Ownership Limitation and the
Beneficial Ownership Limitation shall no longer apply as of the 61st day
after such notice is delivered to Signature. The limitations
contained in this provision shall apply to a successor holder of the
Note.
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2.
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Miscellaneous
Provisions.
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(a)
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Except
as amended and modified herein, all other provisions of the Note, as
modified and amended by this Addendum, are hereby ratified and approved,
and shall remain in full force and
effect.
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(b)
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This
Addendum and the Note together constitute the entire agreement between the
parties relating to the subject matter hereof and thereof. This
Addendum may be executed in counterparts and each counterpart may be
deemed an original. A telefaxed copy or electronic copy in PDF
format of this Addendum shall be deemed an
original
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IN WITNESS WHEREOF, the Parties hereto
have caused this Addendum to be executed by its duly authorized officers as of
the day first written above.
SIGNATURE
EXPLORATION & PRODUCTION CORP.
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By:
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/s/ Xxxxxx Xxxxxx
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Name:
Xxxxxx Xxxxxx
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Title:
Chief Financial Officer
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BRISTOL
CAPITAL, LLC
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By:
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/s/ Xxxx Xxxxxxx
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Name:
Xxxx Xxxxxxx
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Title:
Manager
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