Exhibit 10.1
NEITHER THIS NOTE NOR THE SECURITIES THAT MAY BE ISSUED BY THE BORROWER UPON
CONVERSION HEREOF (COLLECTIVELY, THE "SECURITIES") HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION. NEITHER THE SECURITIES NOR ANY INTEREST OR
PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED:
(I) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE 1933 ACT, OR APPLICABLE STATE SECURITIES LAWS; OR (II) IN THE ABSENCE
OF AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE ISSUER, THAT REGISTRATION
IS NOT REQUIRED UNDER THE 1933 ACT OR; (III) UNLESS SOLD, TRANSFERRED OR
ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.
22% CONVERTIBLE NOTE
MATURITY DATE OF AUGUST 19, 2015
$50,000 FEBRUARY 19, 2015 *THE "ISSUANCE DATE"
FOR VALUE RECEIVED, Red Giant Entertainment, Inc., a Nevada Corporation (the
"Company") doing business in Clermont, FL hereby promises to pay to the order of
JSJ Investments Inc., an accredited investor and Texas Corporation, or its
assigns (the "Holder") the principal amount of Fifty Thousand Dollars ($50,000),
on demand of the Holder at any time on or after August 17, 2015 (the "Maturity
Date"), and to pay interest on the unpaid principal balance hereof at the rate
of Twenty-Two Percent (22%) per annum (the "Interest Rate") from the date hereof
(the "Issuance Date") until the same becomes due and payable, whether at
maturity or upon acceleration or by prepayment or otherwise; PROVIDED, that any
amount of principal or interest on this Note which is not paid when due shall
bear interest at such rate on the unpaid principal balance hereof plus Default
Interest from the due date thereof until the same is paid in full. Interest
shall commence accruing on the Issuance Date, shall be computed on the basis of
a 365-day year and the actual number of days elapsed and shall accrue daily and,
after the Maturity Date, compound quarterly. This is the fourth and last of four
convertible notes per the terms of agreement established June 10, 2014 for a
combined total of $200,000.
1. Payments of Principal and Interest.
a. Payment of Principal. Upon the Maturity Date, this note has a cash
redemption premium of 150% of the principal amount only upon approval
and acceptance by JSJ Investments Inc. This provision only may be
exercised if the consent of the Holder is obtained. The principal
balance of this Note shall be paid to the Holder hereof on demand.
b. Default Interest. Any amount of principal on this Note which is not
paid when due shall bear Twenty-Two Percent (22%) interest per annum
from the date thereof until the same is paid ("Default Interest") and
the Holder, at the Holder's sole discretion, may include any accrued
but unpaid Default Interest in the Conversion Amount.
c. General Payment Provisions. This Note shall be made in lawful money of
the United States of America by check to such account as the Holder may
from time to time designate by written notice to the Company 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 (as defined below), 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. For purposes of this Note, "Business Day" shall mean any day
other than a Saturday, Sunday or a day on which commercial banks in the
State of Texas are authorized or required by law or executive order to
remain closed.
2. Conversion of Note. At any time prior to the Maturity Date, or after the
Maturity Date, the Conversion Amount of this Note shall be convertible into
shares of the Company's common stock, share (the "Common Stock"), on the
terms and conditions set forth in this Paragraph 2.
a. Certain Defined Terms. For purposes of this Note, the following terms
shall have the following meanings:
i. "Conversion Amount" means the sum of (A) the principal amount of
this Note to be converted with respect to which this
determination is being made, (B) Interest; and (C) Default
Interest, if any, on unpaid interest and principal, if so
included at the Holder's sole discretion.
ii. "Conversion Price" means the lower of: (i) a 45% discount to the
average of the three lowest daily trading prices for the previous
twenty (20) trading days to the date of Conversion; or (ii) a 45%
discount to the average of the three lowest daily trading prices
for the previous twenty (20) trading days before the date that
this note was executed.
iii. "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or
agency thereof.
iv. "Shares" means the Shares of the Company into which any balance
on this Note may be converted upon submission of a Conversion
Notice.
x. Xxxxxx'x Conversion Rights. At any time or times on or after the
Issuance Date, the Holder shall be entitled to convert all of the
outstanding and unpaid principal amount of this Note into fully paid
and non-assessable shares of Common Stock in accordance with the stated
Conversion Price.
c. Fractional Shares. The Company shall not issue any fraction of a share
of Common Stock upon any conversion; if such issuance would result in
the issuance of a fraction of a share of Common Stock, the Company
shall round such fraction of a share of Common Stock up to the nearest
whole share.
d. Conversion Amount. The Conversion Amount shall be converted pursuant to
Rule 144(b)(1)(ii) and Rule 144(d)(1)(ii) as promulgated by the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, into free trading shares at the Conversion Price.
e. Mechanics of Conversion. The conversion of this Note shall be conducted
in the following manner:
i. Holder's Conversion Requirements. To convert this Note into
shares of Common Stock on any date set forth in the Conversion
Notice by the Holder (the "Conversion Date"), the Holder hereof
shall transmit by email, facsimile or otherwise deliver, for
receipt on or prior to 11:59 p.m., Eastern Time on such date or
on the next business day, a copy of a fully executed notice of
conversion in the form attached hereto as Exhibit 1 (the
"Conversion Date") to the Company.
ii. Company's Response. Upon receipt by the Company of a copy of a
Conversion Notice, the Company shall as soon as practicable, but
in no event later than one (1) Business Day after receipt of such
Conversion Notice, send, via email, facsimile or overnight
courier, a confirmation of receipt of such Conversion Notice to
such Holder indicating that the Company will process such
Conversion Notice in accordance with the terms herein. Within two
(2) Business Days after the date of the Conversion Confirmation,
the Company shall have issued and electronically transferred the
shares to the Broker indicated in the Conversion Notice; should
the Company be unable to transfer the shares electronically, it
shall, within two (2) Business Days after the date of the
Conversion Confirmation, have surrendered to FedEx for delivery
the next day to the address as specified in the Conversion
Notice, a certificate, registered in the name of the Holder, for
the number of shares of Common Stock to which the Holder shall be
entitled.
iii. Record Holder. The person or persons entitled to receive the
shares of Common Stock issuable upon a conversion of this Note
shall be treated for all purposes as the record holder or holders
of such shares of Common Stock on the Conversion Date.
iv. Timely Response by Company. Upon receipt by Company of a
Conversion Notice, Company shall respond in a timely manner to
Holder by provision within two business days of the Shares
requested in the Conversion Notice.
v. Penalty for Delinquent Response. If Company fails to deliver for
whatever reason (including any neglect or failure by, E.G., the
Company, its counsel or the transfer agent) to Holder the Shares
as requested in a Conversion Notice and within three business
days of the receipt thereof, there shall accrue a penalty of
Additional Shares due to Holder equal to 25% of the number stated
in the Conversion Notice beginning on the Fourth business day
after the date of the Notice. The Additional Shares shall be
issued and the amount of the Note retired will not be reduced
beyond that stated in the Conversion Notice. Each additional 5
business days beyond the Fourth business day after the date of
this Notice shall accrue an additional 25% penalty for
delinquency, without any corresponding reduction in the amount
due under the Note, for so long as Company fails to provide the
Shares so demanded.
vi. Conversion Right Unconditional. If the Holder shall provide a
Notice of Conversion as provided herein, the Company's
obligations to deliver Common Stock shall be absolute and
unconditional, irrespective of any claim of setoff, counterclaim,
recoupment, or alleged breach by the Holder of any obligation to
the Company.
2
vii. Transfer Agent Fees and Legal Fees. The issuance of the
certificates shall be without charge or expense to the Holder.
The Company shall pay any and all Transfer Agent fees and legal
fees required for processing of any Notice of Conversion,
including but not limited to the cost of obtaining a legal
opinion with regard to the conversion.
3. Other Rights of Holders: Reorganization, Reclassification, Consolidation,
Merger or Sale. Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Company's
assets to another Person or other transaction which is effected in such a
way that holders of Common Stock are entitled to receive (either directly
or upon subsequent liquidation) stock, securities or assets with respect to
or in exchange for Common Stock is referred to herein as "Organic Change."
Prior to the consummation of any (i) Organic Change or (ii) other Organic
Change following which the Company is not a surviving entity, the Company
will secure from the Person purchasing such assets or the successor
resulting from such Organic Change (in each case, the "Acquiring Entity") a
written agreement (in form and substance reasonably satisfactory to the
Holder) to deliver to Holder in exchange for this Note, a security of the
Acquiring Entity evidenced by a written instrument substantially similar in
form and substance to this Note, and reasonably satisfactory to the Holder.
Prior to the consummation of any other Organic Change, the Company shall
make appropriate provision (in form and substance reasonably satisfactory
to the Holders of a majority of the Conversion Amount of the Notes then
outstanding) to ensure that each of the Holders will thereafter have the
right to acquire and receive in lieu of or in addition to (as the case may
be) the shares of Common Stock immediately theretofore acquirable and
receivable upon the conversion of such Holder's Note, such shares of stock,
securities or assets that would have been issued or payable in such Organic
Change with respect to or in exchange for the number of shares of Common
Stock which would have been acquirable and receivable upon the conversion
of such Holder's Note as of the date of such Organic Change (without taking
into account any limitations or restrictions on the convertibility of the
Note). All provisions of this Note must be included to the satisfaction of
Holder in any new Note created pursuant to this section.
4. Representations and Warranties of the Company. In connection with the
transactions provided for herein, the Company hereby represents and
warrants to the Holders the following.
a. Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under
the laws of the state of its incorporation and has all requisite
corporate power and authority to carry on its business as now
conducted. The Company is duly qualified to transact business and is in
good standing in each jurisdiction in which the failure to so qualify
would have a material adverse effect on its business or properties.
b. Authorization. All corporate action has been taken on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement. The Company
has taken all corporate action required to make all of the obligations
of the Company reflected in the provisions of this Agreement, valid and
enforceable obligations. The shares of capital stock issuable upon
conversion of the Notes have been authorized or will be authorized
prior to the issuance of such shares.
c. Fiduciary Obligations. The Company hereby represents that it intends to
use the proceeds of the Notes primarily for the operations of its
business and not for any personal, family, or household purpose. The
Company hereby represents that its board of directors, in the exercise
of its fiduciary duty, has approved the execution of this Agreement
based upon a reasonable belief that the loan provided for herein is
appropriate for the Company after reasonable inquiry concerning its
financial objectives and financial situation.
5. Covenants of the Company. So long as the Company shall have any obligations
under this Note, the Company shall not without the Holder's written consent
pay, declare or set apart for such payment any dividend or other
distribution (whether in cash, property, or other securities) on share of
capital stock solely in the form of additional shares of Common Stock.
a. So long as the Company shall have any obligations under this Note, the
Company shall not without the Holder's written consent redeem,
repurchase, or otherwise acquire (whether for cash or in exchange for
property or other securities) in any one transaction or series of
transactions any shares of capital stock of the Company or any
warrants, rights, or options to acquire any such shares.
b. So long as the Company shall have any obligations under this Note, the
Company shall not without the Holder's written consent incur any
liability for borrowed money, except (a) borrowings in existence as of
this date and of which the Company has informed the Holder in writing
before the date hereof or (b) indebtedness to trade creditors or
financial institutions incurred in the ordinary course of business.
c. So long as the Company shall have any obligations under this Note, the
Company shall not without the Holder's written consent sell, lease, or
otherwise dispose of a significant portion of its assets outside the
ordinary course of business. Any consent to the disposition of any
assets may be conditioned upon a specified use of the proceeds thereof.
3
6. Issuance of Common Stock Equivalents. If the Company, at any time after the
Issuance Date, shall issue any securities convertible into or exchangeable
for, directly or indirectly, Common Stock ("Convertible Securities"), other
than the Note, or any rights or warrants or options to purchase any such
Common Stock or Convertible Securities, shall be issued or sold
(collectively, the "Common Stock Equivalents") and the aggregate of the
price per share for which Additional Shares of Common Stock may be issuable
thereafter pursuant to such Common Stock Equivalent, plus the consideration
received by the Company for issuance of such Common Stock Equivalent
divided by the number of shares of Common Stock issuable pursuant to such
Common Stock Equivalent (the "Aggregate Per Common Share Price") shall be
less than the applicable Conversion Price then in effect, or if, after any
such issuance of Common Stock Equivalents, the price per share for which
Additional Shares of Common Stock may be issuable thereafter is amended or
adjusted, and such price as so amended shall make the Aggregate Per Share
Common Price be less than the applicable Conversion Price in effect at the
time of such amendment or adjustment, then the applicable Conversion Price
upon each such issuance or amendment shall be adjusted on the basis that
(1) the maximum number of Additional Shares of Common Stock issuable
pursuant to all such Common Stock Equivalents shall be deemed to have been
issued (whether or not such Common Stock Equivalents are actually then
exercisable, convertible or exchangeable in whole or in part) as of the
earlier of (A) the date on which the Company shall enter into a firm
contract for the issuance of such Common Stock Equivalent, or (B) the date
of actual issuance of such Common Stock Equivalent. No adjustment of the
applicable Conversion Price shall be made under this subsection (vii) upon
the issuance of any Convertible Security which is issued pursuant to the
exercise of any warrants or other subscription or purchase rights therefor,
if any adjustment shall previously have been made to the exercise price of
such warrants then in effect upon the issuance of such warrants or other
rights pursuant to this subsection (vii). No adjustment shall be made to
the Conversion Price upon the issuance of Common Stock pursuant to the
exercise, conversion or exchange of any Convertible Security or Common
Stock Equivalent where an adjustment to the Conversion Price was made as a
result of the issuance or purchase of any Convertible Security or Common
Stock Equivalent.
7. Reservation of Shares. The Company shall at all times, so long as any
principal amount of the Note is outstanding, reserve and keep available out
of its authorized and unissued Common Stock, solely for the purpose of
effecting the conversion of the Note, such number of shares of Common Stock
as shall at all times be sufficient to effect the conversion of all of the
principal amount of the Note then outstanding. The initial number of shares
of Common Stock reserved for conversions of the Notes and each increase in
the number of shares so reserved shall be allocated pro rata among the
Holders of the Note based on the principal and interest amount of the Notes
held by each Holder at the time of issuance of the Notes or increase in the
number of reserved shares, as the case may be. In the event a Holder shall
sell or otherwise transfer any of such Holder's Note, each transferee shall
be allocated a pro rata portion of the number of reserved shares of Common
Stock reserved for such transferor. Any shares of Common Stock reserved and
allocated to any Person which ceases to hold any Note shall be allocated to
the remaining Holders, pro rata based on the principal amount of the Note
then held by such Holders.
8. Voting Rights. Holders of this Note shall have no voting rights, except as
required by law.
9. Reissuance of Note. In the event of a conversion or redemption pursuant to
this Note of less than all of the Conversion Amount represented by this
Note, the Company shall promptly cause to be issued and delivered to the
Holder, upon tender by the Holder of the Note converted or redeemed, a new
note of like tenor representing the remaining principal amount of this Note
which has not been so converted or redeemed and which is in substantially
the same form as this Note, as set forth above.
10. Default and Remedies.
a. Event of Default. An "Event of Default" is: (i) default for ten (10)
days in payment of interest or Default Interest on this Note; (ii)
default in payment of the principal amount of this Note when due; (iii)
failure by the Company for thirty (30) days after notice to it to
comply with any other material provision of this Note; (iv) breach of
any covenants, warranties, or representations by the Company herein;
(v) cessation of operations by the Company or a material subsidiary;
(vi) if the Company pursuant to or within the meaning of any Bankruptcy
Law; (A) commences a voluntary case; (B) consents to the entry of an
order for relief against it in an involuntary case; (C) consents to the
appointment of a Custodian of it or for all or substantially all of its
property; (D) makes a general assignment for the benefit of its
creditors; or (E) admits in writing that it is generally unable to pay
its debts as the same become due; or (vi) a court of competent
jurisdiction enters an order or decree under any Bankruptcy Law that:
(I) is for relief against the Company in an involuntary case; (2)
appoints a Custodian of the Company or for all or substantially all of
its property; or (3) orders the liquidation of the Company or any
subsidiary, and the order or decree remains unstayed and in effect for
thirty (30) days. The Term "Bankruptcy Law" means Title 11, U.S. Code,
or any similar Federal or State Law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
4
b. Remedies. If an Event of Default occurs and is continuing, the Holder
of this Note may declare all of this Note, including any interest and
Default Interest and other amounts due, to be due and payable
immediately.
11. Vote to Change the Terms of this Note. This Note and any provision hereof
may only be amended by an instrument in writing signed by the Company and
holders of a majority of the aggregate Conversion Amount of the Notes then
outstanding.
12. Lost or Stolen Note. Upon receipt by the Company of evidence satisfactory
to the Company of the loss, theft, destruction or mutilation of this Note,
and, in the case of loss, theft or destruction, of an indemnification
undertaking by the Holder to the Company in a form reasonably acceptable to
the Company and, in the case of mutilation, upon surrender and cancellation
of the Notes, the Company shall execute and deliver a new Note of like
tenor and date and in substantially the same form as this Note; provided,
however, the Company shall not be obligated to re-issue a Note if the
Holder contemporaneously requests the Company to convert such remaining
principal amount into Common Stock.
13. Payment of Collection, Enforcement and Other Costs. If: (i) this Note is
placed in the hands of an attorney for collection or enforcement or is
collected or enforced through any legal proceeding; or (ii) an attorney is
retained to represent the Holder of this Note in any bankruptcy,
reorganization, receivership or other proceedings affecting creditors'
rights and involving a claim under this Note, then the Company shall pay to
the Holder all reasonable attorneys' fees, costs and expenses incurred in
connection therewith, in addition to all other amounts due hereunder.
14. Cancellation. After all principal and accrued interest at any time owed on
this Note has been paid in full, this Note shall automatically be deemed
canceled, shall be surrendered to the Company for cancellation and shall
not be reissued.
15. Waiver of Notice. To the extent permitted by law, the Company hereby waives
demand, notice, protest and all other demands and notices in connection
with the delivery, acceptance, performance, default or enforcement of this
Note.
16. Governing Law. This Note shall be construed and enforced in accordance
with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the laws
of the State of Texas, without giving effect to provisions thereof
regarding conflict of laws. Each party hereby irrevocably submits to the
non-exclusive jurisdiction of the state and federal courts sitting in Texas
for the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding
by sending by certified mail or overnight courier a copy thereof to such
party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
17. Remedies, Characterizations, Other Obligations, Breaches and Injunctive
Relief. The remedies provided in this Note shall be cumulative and in
addition to all other remedies available under this Note, at law or in
equity (including a decree of specific performance and/or other injunctive
relief), and no remedy contained herein shall be deemed a waiver of
compliance with the provisions giving rise to such remedy and nothing
herein shall limit a Holder's right to pursue actual damages for any
failure by the Company to comply with the terms of this Note. The Company
covenants to each Holder of Notes that there shall be no characterization
concerning this instrument other than as expressly provided herein. Amounts
set forth or provided for herein with respect to payments, conversion and
5
the like (and the computation thereof) shall be the amounts to be received
by the Holder thereof and shall not, except as expressly provided herein,
be subject to any other obligation of the Company (or the performance
thereof).
18. Specific Shall Not Limit General; Construction. No specific provision
contained in this Note shall limit or modify any more general provision
contained herein. This Note shall be deemed to be jointly drafted by the
Company and all Holders and shall not be construed against any person as
the drafter hereof.
19. Failure or Indulgence Not Waiver. No failure or delay on the part of this
Note 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.
20. Partial Payment. In the event of partial payment by the Holder, the
principal sum due to the Holder shall be prorated based on the
consideration actually paid by lender such that the company is only
required to repay the amount funded and the company is not required to
repay any unfunded portion of this note.
21. Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
herein. None of the terms of this Agreement can be waived or modified,
except by an express agreement signed by the Parties.
22. Representations and Warranties. The Company expressly acknowledges that the
Holder, including but not limited to its officer, directors, employees,
agents, and affiliates, have not made any representation or warranty to it
outside the terms of this Agreement. The Company further acknowledges that
there have been no representations or warranties about future financing or
subsequent transactions between the parties.
23. Notices. All notices and other communications given or made to the Company
pursuant hereto shall be in writing (including facsimile or similar
electronic transmissions) and shall be deemed effectively given: (i) upon
personal delivery, (ii) when sent by electronic mail or facsimile, as
deemed received by the close of business on the date sent, (iii) five (5)
days after having been sent by registered or certified mail, return receipt
requested, postage prepaid or (iv) one (1) day after deposit with a
nationally recognized overnight courier, specifying next day delivery. All
communications shall be sent either by email, or fax, or to the address
specified on the signature page. The physical address, email address, and
phone number provided on the signature page shall be considered valid
pursuant to the above stipulations; should the Company's contact
information change from that listed on the signature page, it is incumbent
on the Company to inform the Holder.
24. Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from
this Agreement and the rest of the Agreement shall be enforceable in
accordance with its terms.
25. Usury. If it shall be found that any interest or other amount deemed
interest due hereunder violates the applicable law governing usury, the
applicable rate of interest due hereunder shall automatically be lowered to
equal the maximum rate of interest permitted under applicable law. The
Company covenants (to the extent that it may lawfully do so) that it will
not seek to claim or take advantage of any law that would prohibit or
forgive the Company from paying all or a portion of the principal or
interest on this Note.
6
26. Successors and Assigns. This Agreement shall be binding upon successors and
assigns.
-- SIGNATURE PAGE TO FOLLOW --
7
IN WITNESS WHEREOF, the Company has caused this Note to be signed by its CEO, on
and as of the Issuance Date.
COMPANY:
Signature: /s/ Xxxxx X. Xxxxxx
---------------------------------------------------
By: Xxxxx X. Xxxxxx
----------------------------------------------------------
Title: CEO
-------------------------------------------------------
Address: 000 X Xxx 00 #235
-----------------------------------------------------
Clermont, FL 34711
-----------------------------------------------------
Email: xxxxx@xxxxxxxxxxxxxxxxxxxxx.xxx
-------------------------------------------------------
Phone: 000-000-0000
-------------------------------------------------------
HOLDER:
Signature:
/s/ Xxxxxx Xxxxx
-------------------------------------------------------------
Xxxxxx Xxxxx, President
JSJ Investments Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx Xxxxx 000
Xxxxxx XX 00000
000-000-0000
8
Exhibit 1
Conversion Notice
Reference is made to the Convertible Note issued by Red Giant Entertainment,
Inc. (the "Note"), dated February 19, 2015 in the principal amount of $50,000
with 12% interest. This note currently holds a principal balance of $50,000. The
features of conversion stipulate a Conversion Price the lower of (i) a 45%
discount to the average of the three lowest daily trading prices for the
previous twenty (20) trading days to the date of Conversion; or (ii) a 45%
discount to the average of the three lowest daily trading prices for the
previous twenty (20) trading days before the date that this note was executed,
pursuant to the provisions of Section 2(a)(2) in the Note.
In accordance with and pursuant to the Note, the undersigned hereby elects to
convert $______ of the PRINCIPAL/INTEREST balance of the Note, indicated below
into shares of Common Stock (the "Common Stock"), of the Company, by tendering
the Note specified as of the date specified below.
Date of Conversion: __________
Please confirm the following information:
Conversion Amount: $ ____________________
Conversion Price: $ ____________________ ( ____ % discount from $______________)
Number of Common Stock to be issued: ___________________________________________
Current Issued/Outstanding: ____________________________________________________
PLEASE ISSUE THE COMMON STOCK INTO WHICH THE NOTE IS BEING CONVERTED IN THE NAME
OF THE HOLDER OF THE NOTE AND TRANSFER THE SHARES ELECTRONICALLY TO:
[BROKER INFORMATION]
HOLDER AUTHORIZATION:
JSJ INVESTMENTS INC.
0000 XXXXX XXXXXXX XXXXXXXXXX, XXXXX 000
XXXXXX, XX 00000
000-000-0000
Tax ID: 00-0000000
Xxxxxx Xxxxx, President
Date:
[Continued on Next Page]
9
PLEASE BE ADVISED, pursuant to Section 2(e)(2) of the Note, "Upon receipt by the
Company of a copy of the Conversion Notice, the Company shall as soon as
practicable, but in no event later than one (1) Business Day after receipt of
such Conversion Notice, SEND, VIA EMAIL, FACSIMILE OR OVERNIGHT COURIER, A
CONFIRMATION OF RECEIPT OF SUCH CONVERSION NOTICE TO SUCH HOLDER INDICATING THAT
THE COMPANY WILL PROCESS SUCH CONVERSION NOTICE in accordance with the terms
herein. Within two (2) Business Days after the date of the Conversion
Confirmation, the Company shall have issued and electronically transferred the
shares to the Broker indicated in the Conversion Notice; should the Company be
unable to transfer the shares electronically, they shall, within two (2)
Business Days after the date of the Conversion Confirmation, have surrendered to
FedEx for delivery the next day to the address as specified in the Conversion
Notice, a certificate, registered in the name of the Holder, for the number of
shares of Common Stock to which the Holder shall be entitled."
Signature:
Xxxxx Xxxxxx
CEO
Red Giant Entertainment Inc.
10
