Exhibit 10.2

Exhibit B

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS. NOTWITHSTANDING THE FOREGOING, THESE
SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION OF THESE SECURITIES MAY
BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.

No. [  

]

$[  

]

Date: February __, 2006

BULLDOG TECHNOLOGIES INC.

SENIOR AMORTIZING CONVERTIBLE NOTE DUE

August 24, 2007

THIS NOTE is one of a series of duly authorized and issued Notes of Bulldog
Technologies Inc., a Nevada corporation (the “Company”), designated as its
Senior Convertible Notes due August 24, 2007, in the aggregate principal amount
of $2,000,000 (the “Notes”).

FOR VALUE RECEIVED, the Company promises to pay to the order of [Holder] or its
registered assigns (the “Holder”), the outstanding portion of the principal sum
of [__________] $(__________), on August 24, 2007 (the “Maturity Date”), or such
earlier date as the Notes are required or permitted to be repaid as provided
hereunder, and to pay interest to the Holder on the unconverted and then
outstanding principal amount of this Note in accordance with the provisions
hereof. The principal amount of this Note may be increased as set forth in
Section 2(c) below. Notwithstanding the foregoing, the Company hereby
unconditionally promises to pay to the order of the Holder interest on any
principal or interest payable hereunder that shall not be paid in full when due,
whether at the time of any stated interest payment date or maturity or by
prepayment, acceleration or declaration or otherwise, for the period from and
including the due date of such payment to but excluding the date the same is
paid in full, at a rate of 18% per annum (but in no event in excess of the
maximum rate permitted under applicable law).

Interest payable under this Note shall be computed on the basis of a year of 360
days and actual days elapsed (including the first day but excluding the last
day) occurring in the period for which interest is payable.

 

 

 

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Payments of principal and interest shall be made in lawful money of the United
States of America to the Holder at its address as provided in Section 14 or by
wire transfer to such account specified from time to time by the Holder hereof
for such purpose as provided in Section 14.

The Holder of this Note is entitled to the benefits of the Security Agreement.

1.            Definitions. In addition to the terms defined elsewhere in this
Note, (a) capitalized terms that are not otherwise defined herein have the
meanings given to such terms in the Securities Purchase Agreement, dated as of
February 24, 2006, among the Company and the Purchasers identified therein (the
“Purchase Agreement”), and (b) the following terms have the meanings indicated:

"Company Prepayment Price" for any Notes which shall be subject to prepayment
pursuant to Section 8(a), shall equal the sum of: (i) the 115% of the principal
amount of Notes to be prepaid, plus all accrued and unpaid interest thereon, and
(ii) all other amounts, costs, expenses and liquidated damages due in respect of
such Notes.

“Conversion Date” means the date a Conversion Notice is delivered to the Company
together with the Conversion Schedule pursuant to Section 6(a).

“Conversion Notice” means a written notice in the form attached hereto as
Schedule 1.

“Equity Conditions” means, with respect to a specified issuance of Common Stock,
that each of the following conditions is satisfied: (i) the number of authorized
but unissued and otherwise unreserved shares of Common Stock is sufficient for
such issuance; (ii) such shares of Common Stock are registered for resale by the
Holder and may be sold by the Holder pursuant to an effective Registration
Statement covering the Underlying Shares or all such shares may be sold without
volume restrictions pursuant to Rule 144(k) under the Securities Act; (iii) the
Common Stock is listed or quoted (and is not suspended from trading) on a
Trading Market and such shares of Common Stock are approved for listing upon
issuance; (iv) such issuance would be permitted in full without violating
Section 6(b) hereof or the rules or regulations of any Trading Market; (v) no
Bankruptcy Event has occurred; (vi) the Company is not in default with respect
to any material obligation hereunder or under any other Transaction Document;
and (vii) no public announcement of a pending or proposed Change of Control
transaction has occurred that has not been consummated.

“Event Equity Value” means 115% of the average of the Closing Prices for the
five Trading Days preceding the date of delivery of the notice requiring payment
of the Event Equity Value, provided that if the Company does not make such
required payment (together with any other payments, expenses and liquidated
damages then due and payable under the Transaction Documents) when due or, in
the event the Company disputes in good faith the occurrence of the Triggering
Event pursuant to which such notice relates, does not instead deposit such
required payment (together with such other payments, expenses and liquidated
damages then due) in escrow with an independent third-party escrow agent within
five Trading Days of the date such required payment is

 

 

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due, then the Event Equity Value shall be 115% of the greater of (a) the average
of the Closing Prices for the five Trading Days preceding the date of delivery
of the notice requiring payment of the Event Equity Value and (b) the average of
the Closing Prices for the five Trading Days preceding the date on which such
required payment (together with such other payments, expenses and liquidated
damages) is paid in full.

“Initial Interest Period” means the period beginning on the Closing Date and
ending on March 31, 2006.

“Interest Period” means a period of six months for the calculation of the
interest on the Note, provided that any such period (i) shall start on the last
day of the preceding period (other than the Initial Interest Period); (ii) which
would otherwise end on a day which is not a Trading Day shall be extended to the
next succeeding day which is a Trading Day and the following interest period
shall then end on the day on which it would have ended if the preceding interest
period had not been so extended; and (iii) which would otherwise overrun the
Maturity Date shall be shortened to end on the Maturity Date.

“Interest Rate” has the meaning set forth in Section 2(a) herein.

“LIBOR” means, in respect of a six-month Interest Period (i) the rate of
interest per annum  (expressed with a maximum of 4 decimals) offered for
deposits in the relevant currency and amount which appears on Telerate page 3750
or on any other relevant Telerate, Bloomberg or Reuter page as of 11:00 a.m.
London time two (2) Business Days prior to the commencement of the relevant
Interest Period; or (ii) should such quotation not be published on the relevant
day and time such interest rate per annum according to such other widely
published LIBOR quotation as the Company may select for the relevant Interest
Period as of 11:00 a.m. London time two (2) Business Days prior to the
commencement of the Interest Period.

“Original Issue Date” means the date of the first issuance of any Notes,
regardless of the number of transfers of any particular Note.

"Principal Payment Date" means any date on which payment of a principal amount
of this Note shall be due and payable by the Company in accordance with Section
2.

“Triggering Event” means any of the following events: (a) the Common Stock is
not listed or quoted, or is suspended from trading, on a Trading Market for a
period of five or more Trading Days (which need not be consecutive Trading
Days); (b) the Company fails for any reason to deliver a certificate evidencing
any Securities to a Purchaser within five Trading Days after delivery of such
certificate is required pursuant to any Transaction Document or the exercise or
conversion rights of the Holders pursuant to any Transaction Document are
otherwise suspended for any reason; (c) the Company fails to have available a
sufficient number of authorized but unissued and otherwise unreserved shares of
Common Stock available to issue Underlying Shares upon any conversion of the
Note; (d) at any time after the Closing Date, any Common Stock

 

 

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issuable pursuant to the Transaction Documents is not listed on a Trading
Market; (e) the Company effects or publicly announces its intention to effect
any exchange, recapitalization or other transaction that effectively requires or
rewards physical delivery of certificates evidencing the Common Stock; (f) the
effectiveness of the Registration Statement lapses for any reason or the Holder
shall not be permitted to resell any Underlying Shares under the Registration
Statement, in either case, for five or more Trading Days (which need not be
consecutive Trading Days); (g) the Company fails to make any cash payment
required under the Transaction Documents and such failure is not cured within
ten days after notice of such default is first given to the Company by a
Purchaser; (h) the Company defaults in the timely performance of any obligation
under the Transaction Documents and such default continues uncured for a period
of 20 days after the date on which notice of such default is first given to the
Company by a Purchaser (it being understood that no prior notice need be given
in the case of a default that cannot reasonably be cured within 20 days); or (i)
the Company materially breaches any of its representations or warranties under
the Transaction Documents.

 

2.

Principal and Interest.

(a)    The Company shall pay interest to the Holder on the aggregate unconverted
and then outstanding principal amount of this Note for each Interest Period at a
rate (the "Interest Rate") which is the greater of (i) 6% per annum or (ii)
LIBOR plus 300 basis points per annum. Each Interest Period, other than the
Initial Interest Period shall begin on either April 1 or October 1 of each year
occurring prior to the Maturity Date. Interest shall be payable quarterly in
arrears on each March 31, June 30, September 30 and December 31, except if such
date is not a Trading Day, in which case such interest shall be payable on the
next succeeding Trading Day (each, an “Interest Payment Date”). The first
Interest Payment Date shall be March 31, 2006.

(b)     The Company shall pay the principal balance of this Note to the Holder
in 14 equal monthly installments (each, a “Monthly Installment”) commencing on
the date four (4) months following the Closing Date and to continue for each of
the 13 months thereafter, except if such date is not a Trading Day, in which
case such principal shall be payable on the next succeeding Trading Day (each, a
“Principal Payment Date”), until the outstanding principal balance of this Note
has been paid in full. The Company shall pay all then accrued and unpaid
interest on this Note together with the final payment of principal hereunder.

(c)    Subject to the conditions and limitations set forth below, the Company
may pay interest or principal on this Note in (i) cash or (ii) shares of Common
Stock. The Company must deliver written notice to the Holder indicating the
manner in which it intends to pay interest and principal at least 30 Trading
Days prior to each Interest Payment Date or Principal Payment Date, as
applicable, but the Company may indicate in any such notice that the election
contained therein shall continue for subsequent Interest Payment Dates or
Principal Payment Dates until revised. Failure to timely provide such written
notice shall be deemed an election by the Company to pay the amount of any
interest or principal in cash.

(d)       Notwithstanding the foregoing, the Company may not pay interest or
principal by issuing shares of Common Stock unless all of the Equity Conditions
are then

 

 

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satisfied with respect to all shares of Common Stock then issuable upon
conversion of all outstanding Notes and Warrants. If the Company is required to
pay interest in cash on any Interest Payment Date but fails to do so, the Holder
may (but shall not be required to) treat such interest as if it had been added
to the principal amount of this Note as of such Interest Payment Date or accept
any number of shares of Common Stock in lieu of such interest payment.

(e)       In the event that the Company elects to pay interest or principal on
any Interest Payment Date or Principal Payment Date, as applicable, in shares of
Common Stock, the number of shares of Common Stock to be issued to each Holder
as such interest or principal shall be (i) with respect to interest, determined
by dividing the aggregate amount of interest then payable to such Holder by the
Market Price (as defined below) as of the applicable Interest Payment Date, and
rounding up to the nearest whole share, (ii) with respect to principal,
determined by dividing the total principal then payable to such Holder by the
lower of (y) the Conversion Price (as adjusted in accordance herewith) and (z)
the Market Price as of the applicable Principal Payment Date, and rounding up to
the nearest whole share, and (iii) paid to such Holder in accordance with
Section 2(f) below. The term “Market Price” shall mean 90% of the arithmetic
average of the VWAP for the 20 Trading Days prior to the applicable Interest
Payment Date or Principal Payment Date, as the case may be (not including such
date). Notwithstanding anything to the contrary, the Company may not cause any
Principal Payment or Interest Payment to be made in Common Stock unless the
Closing Price of the Common Stock on the Principal Payment Date or Interest
Payment Date, as the case may be, is greater than the arithmetic average of the
VWAP for the 20 Trading Days prior to such Principal Payment Date or Interest
Payment Date (as adjusted for stock splits, stock combinations or other similar
recapitalization or event).

(f)          In the event that any interest or principal is paid in Common
Stock, the Company shall on such Interest Payment Date or Principal Payment Date
(i) issue and deliver to such Holder a certificate, free of restrictive legends,
registered in the name of the Holder or its designee, for the number of shares
of Common Stock to which the Holder shall be entitled, or (ii) at all times
after the Holder has notified the Company that this clause (ii) shall apply and
if the Company is currently eligible, credit the number of shares of Common
Stock to which the Holder shall be entitled to the Holder’s or its designee’s
balance account with The Depository Trust Company through its Deposit Withdrawal
Agent Commission System.

(g)      The Notes may be repaid at any time in whole or part by the Company
paying to the Holder the Company Prepayment Price. The date on which such
repayment shall occur shall be the “Prepayment Date”. Notwithstanding the
foregoing, no less than 30 days prior to the Prepayment Date, the Company shall
notify each Holder in writing of the Prepayment Date and the principal amount of
Notes to be redeemed. The Holder may convert all or any portion of the Note to
be repaid with respect to which it has received a notice of prepayment provided
such Holders converts such Note by 6:30 p.m. (New York time) on the Trading Day
immediately preceding the Prepayment Date.

 

3.

Ranking and Covenants.

(a)        Except as set forth in Schedule 3.1(dd) or as otherwise permitted in
Section 4.10(a) of the Purchase Agreement (the “Existing Indebtedness”), no
indebtedness of the

 

 

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Company is senior to this Note in right of payment, whether with respect to
principal, interest, damages or upon liquidation or dissolution or otherwise.
Other than the Existing Indebtedness and any renewal, refinancing or replacement
thereof that does not exceed the aggregate amount of the Existing Indebtedness
and the borrowing availability under the related credit or loan agreements on
the date hereof, the Company will not, and will not permit any Subsidiary to,
directly or indirectly, enter into, create, incur, assume or suffer to exist any
indebtedness of any kind, that is senior in any respect to the Company’s
obligations under the Notes, other than indebtedness secured by purchase money
security interests (which will be senior only as to the underlying assets
covered thereby), indebtedness under capital lease obligations (which will be
senior only as to the assets covered thereby) and indebtedness from a commercial
lender for the purpose of financing receivables or inventory exceeding $100,000
in the aggregate at any time. The Company will not, and will not permit any
Subsidiary to, directly or indirectly, incur any Lien on or with respect to any
of its property or assets now owned or hereafter acquired or any interest
therein or any income or profits therefrom.

(b)        So long as any Notes are outstanding, neither the Company nor any
Subsidiary shall, directly or indirectly, (i) redeem, purchase or otherwise
acquire any capital stock or set aside any monies for such a redemption,
purchase or other acquisition or (ii) issue any Floating Price Security (as
defined in Section 10(d)(ii)).

(c)        The Company covenants that it will at all times reserve and keep
available out of its authorized but unissued and otherwise unreserved Common
Stock, solely for the purpose of enabling it to issue Underlying Shares as
required hereunder, the number of Underlying Shares which are then issuable and
deliverable upon the conversion of (and otherwise in respect of) this entire
Note (taking into account the adjustments set forth in Section 10 and
disregarding any limitations set forth in Section 6(b)), free from preemptive
rights or any other contingent purchase rights of Persons other than the Holder.
The Company covenants that all Underlying Shares so issuable and deliverable
shall, upon issuance in accordance with the terms hereof, be duly and validly
authorized and issued and fully paid and nonassessable.

4.            Registration of Notes. The Company shall register the Notes upon
records to be maintained by the Company for that purpose (the “Note Register”)
in the name of each record holder thereof from time to time. The Company may
deem and treat the registered Holder of this Note as the absolute owner hereof
for the purpose of any conversion hereof or any payment of interest or principal
hereon, and for all other purposes, absent actual notice to the contrary.

5.            Registration of Transfers and Exchanges. Subject to compliance
with all applicable laws, the Company shall register the transfer of any portion
of this Note in the Note Register upon surrender of this Note to the Company at
its address for notice set forth herein. Upon any such registration or transfer,
a new Note, in substantially the form of this Note (any such new Note, a “New
Note”), evidencing the portion of this Note so transferred shall be issued to
the transferee and a New Note evidencing the remaining portion of this Note not
so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Note by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a holder
of a Note. This Note is exchangeable for an equal aggregate principal amount of
Notes of different authorized denominations, as requested by the Holder
surrendering

 

 

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the same. No service charge or other fee will be imposed in connection with any
such registration of transfer or exchange.

 

6.

Conversion.

(a)        At the Option of the Holder. All or any portion of this Note shall be
convertible into shares of Common Stock (subject to the limitations set forth in
Section 6(b)), at the option of the Holder, at any time and from time to time
from and after the Original Issue Date. The number of Underlying Shares issuable
upon any conversion hereunder shall equal the outstanding principal amount of
this Note to be converted, plus the amount of any accrued but unpaid interest on
this Note through the Conversion Date, divided by the Conversion Price on the
Conversion Date. The Holder shall effect conversions under this Section 6(a) by
delivering to the Company a Conversion Notice together with a schedule in the
form of Schedule 2 attached hereto (the “Conversion Schedule”). If the Holder is
converting less than all of the principal amount of this Note, or if a
conversion hereunder may not be effected in full due to the application of
Section 6(b), the Company shall honor such conversion to the extent permissible
hereunder and shall promptly deliver to the Holder a Conversion Schedule
indicating the principal amount (and accrued interest) which has not been
converted.

 

(b)

Certain Conversion Restrictions.

Relating to the Number of Shares.

(A) Subject to Section 6(b)(i)(B), the number of shares of Common Stock that may
be acquired by a Holder upon any conversion of Notes (or otherwise in respect
hereof) shall be limited to the extent necessary to insure that, following such
conversion (or other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its Affiliates and any other Persons whose
beneficial ownership of Common Stock would be aggregated with such Holder’s for
purposes of Section 13(d) of the Exchange Act, does not exceed 4.999% (the
“Threshold Percentage”) or 9.999% (the “Maximum Percentage”) of the total number
of issued and outstanding shares of Common Stock (including for such purpose the
shares of Common Stock issuable upon such conversion). For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. Each delivery
of a Conversion Notice hereunder will constitute a representation by the
applicable Holder that it has evaluated the limitations set forth in this
Section 6(b)(i)(A) and has determined that issuance of the full number of
Underlying Shares issuable in respect of such Conversion Notice does not violate
the restrictions contained in this Section 6(b)(i)(A).

(B) Notwithstanding the provisions of Section 6(b)(i)(A), by written notice to
the Company, the Holder shall have the right (x) at any time and from time to
time to reduce its Maximum Percentage immediately upon notice to the Company in
the event and only to the extent that Section 16 of the Exchange Act or the
rules promulgated thereunder (or any successor statute or rules) is changed to
reduce the beneficial ownership percentage threshold thereunder to a percentage
less than 9.999% and (y) at any time and from time to time, to waive the
provisions of this Section insofar as they relate to the Threshold

 

 

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Percentage or to increase its Threshold Percentage (but not in excess of the
Maximum Percentage) unless the Holder shall have, by written instrument
delivered to the Company, irrevocably waived its rights to so increase its
Threshold Percentage, but (i) any such waiver or increase will not be effective
until the 61st day after such notice is delivered to the Company, and (ii) any
such waiver or increase or decrease will apply only to the Holder and not to any
other holder of Notes.

(C) If the Company is listed on an Eligible Market and for so long as the
Company is listed on such Eligible Market, if the Company has not previously
obtained Shareholder Approval (as defined below), then the Company may not issue
in excess of the Issuable Maximum upon conversions of the Notes. The "Issuable
Maximum" means a number of shares equal to 19.99% of the of the Company's
outstanding shares on the Closing Date. Each Holder shall be entitled to a
portion of the Issuable Maximum equal to the quotient obtained by dividing: (x)
the principal amount of Notes issued and sold to such Holder on the Original
Issue Date by (y) the aggregate principal amount of Notes issued and sold by the
Company on the Original Issue Date. If any Holder shall no longer hold Notes,
then such Holder's remaining portion of the Issuable Maximum shall be allocated
pro-rata among the remaining Holders. If on any Conversion Date: (A) the
aggregate number of shares of Common Stock that would then be issuable upon
conversion in full of all then outstanding principal amount of Notes would
exceed the Issuable Maximum, and (B) the Company shall not have previously
obtained the vote of shareholders, as may be required by the applicable rules
and regulations of its Trading Market (or any successor entity) applicable to
approve the issuance of shares of Common Stock in excess of the Issuable Maximum
pursuant to the terms hereof (the "Shareholder Approval"), then, the Company
shall issue to the converting Holder a number of shares of Common Stock equal to
such Holder's pro-rata portion (which shall be calculated pursuant to the terms
hereof) of the Issuable Maximum and, with respect to the remainder of the
principal amount of Notes then held by such Holder for which a conversion would
result in an issuance of shares of Common Stock in excess of such Holder's
pro-rata portion (which shall be calculated pursuant to the terms hereof) of the
Issuable Maximum (the "Excess Principal Amount"), the applicable Holder shall
have the right to require the Company to either: (1) obtain the Shareholder
Approval applicable to such issuance as soon as is possible, but in any event
not later than the 60th day after such request, or (2) pay cash, in an amount
equal to the Excess Principal Amount (and accrued and unpaid interest thereon).
If a Holder shall have elected the first option pursuant to the immediately
preceding sentence and the Company shall have failed to obtain the Shareholder
Approval on or prior to the 60th day after such request, then within three (3)
days of such 90th day, the Company shall pay cash to such Holder an amount equal
to Excess Principal Amount (and accrued and unpaid interest thereon).
Notwithstanding anything herein to the contrary, if on any date other than a
Conversion Date: (A) the aggregate number of shares of Common Stock that would
then be issuable upon conversion in full of all then outstanding principal
amount of Notes would exceed the Issuable Maximum, and (B) the Company shall not
have previously obtained the Shareholder Approval, then, the Holder shall be
entitled to require the Company to pay to it in cash an amount equal to the
principal amount of Notes (and accrued and unpaid interest thereon) then held by
such Holder for which a potential conversion on such date would result in an
issuance of shares of Common Stock in excess of such Holder's pro-

 

 

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rata portion (which shall be calculated pursuant to the terms hereof) of the
Issuable Maximum. The outstanding principal amount of Notes shall be reduced by
the Excess Principal Amount upon the Holder’s receipt of the Excess Principal
Amount pursuant to the terms hereof. The Company and the Holder understand and
agree that shares of Common Stock issued to and then held by the Holder as a
result of conversions of Notes shall not be entitled to cast votes on any
resolution to obtain Shareholder Approval pursuant hereto.

 

 

7.

Mechanics of Conversion.

(a)        Upon conversion of this Note, the Company shall promptly (but in no
event later than three Trading Days after the Conversion Date) issue or cause to
be issued and cause to be delivered to or upon the written order of the Holder
and in such name or names as the Holder may designate a certificate for the
Underlying Shares issuable upon such conversion, free of restrictive legends
unless a registration statement covering the resale of the Underlying Shares and
naming the Holder as a selling stockholder thereunder is not then effective and
such Underlying Shares are not then freely transferable without volume
restrictions pursuant to Rule 144 under the Securities Act. The Holder, or any
Person so designated by the Holder to receive Underlying Shares, shall be deemed
to have become holder of record of such Underlying Shares as of the Conversion
Date. The Company shall, upon request of the Holder, use its best efforts to
deliver Underlying Shares hereunder electronically through the Depository Trust
Corporation or another established clearing corporation performing similar
functions.

(b)       The Holder shall not be required to deliver the original Note in order
to effect a conversion hereunder. Execution and delivery of the Conversion
Notice shall have the same effect as cancellation of the original Note and
issuance of a New Note representing the remaining outstanding principal amount.
Upon surrender of this Note following one or more partial conversions, the
Company shall promptly deliver to the Holder a New Note representing the
remaining outstanding principal amount.

(c)        The Company’s obligations to issue and deliver Underlying Shares upon
conversion of this Note in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to enforce the same,
or any set-off, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to
the Company or any violation or alleged violation of law by the Holder or any
other Person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the Holder in connection with the
issuance of such Underlying Shares.

(d)       If by the third Trading Day after a Conversion Date the Company fails
to deliver to the Holder such Underlying Shares in such amounts and in the
manner required pursuant to Section 7(a), then the Holder will have the right to
rescind such conversion.

(e)        If by the third Trading Day after a Conversion Date the Company fails
to deliver to the Holder such Underlying Shares in such amounts and in the
manner required pursuant to Section 7(a), and if after such third Trading Day
the Holder purchases (in an open market

 

 

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transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by such Holder of the Underlying Shares which the Holder anticipated
receiving upon such conversion (a “Buy-In”), then the Company shall either (i)
pay cash to such Purchaser in an amount equal to such Purchaser's total purchase
price (including brokerage commissions, if any) for the shares of Common Stock
so purchased (the “Buy-In Price”), at which point the Company's obligation to
deliver such certificate (and to issue such Common Stock) shall terminate, or
(ii) promptly honor its obligation to deliver to such Purchaser a certificate or
certificates representing such Common Stock and pay cash to such Purchaser in an
amount equal to the excess (if any) of the Buy-In Price over the product of (A)
such number of shares of Common Stock, times (B) the Closing Price on the date
of the event giving rise to the Company's obligation to deliver such
certificate.

 

8.

Events of Default.

(a)        “Event of Default” means any one of the following events (whatever
the reason and whether it shall be voluntary or involuntary or effected by
operation of law or pursuant to any judgment, decree or order of any court, or
any order, rule or regulation of any administrative or governmental body):

(i)           any default in the payment (free of any claim of subordination) of
principal, interest or liquidated damages in respect of any Notes, as and when
the same becomes due and payable (whether on a date specified for the payment of
interest or the date on which the obligations under the Note mature or by
acceleration, redemption, prepayment or otherwise);

(ii)          the Company or any Subsidiary defaults in any of its obligations
under any other note or any mortgage, credit agreement or other facility,
indenture agreement, factoring agreement or other instrument under which there
may be issued, or by which there may be secured or evidenced, any indebtedness
for borrowed money or money due under any long term leasing or factoring
arrangement of the Company or any Subsidiary in an amount exceeding $500,000,
whether such indebtedness now exists or is hereafter created, and such default
results in such indebtedness becoming or being declared due and payable prior to
the date on which it would otherwise become due and payable;

 

(iii)

the occurrence of a Triggering Event; or

 

(iv)

the occurrence of a Bankruptcy Event.

 

(b)       At any time or times following the occurrence of an Event of Default,
the Holder shall have the option to elect, by notice to the Company (an “Event
Notice”), to require the Company to repurchase all or any portion of (i) the
outstanding principal amount of this Note, at a repurchase price equal to the
greater of (A) 115% of such outstanding principal amount, plus all accrued but
unpaid interest thereon through the date of payment, or (B) the Event Equity
Value of the Underlying Shares issuable upon conversion of such principal amount
and all such accrued but unpaid interest thereon, and (ii) any Underlying Shares
issued to such Holder upon conversion of Notes and then owned by the Holder, at
a price per share equal to the Event Equity Value of such issuable and issued
Underlying Shares. The aggregate amount payable pursuant to

 

 

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the preceding sentence is referred to as the “Event Price.” The Company shall
pay the Event Price to the Holder no later than the third Trading Day following
the date of delivery of the Event Notice, and upon receipt thereof the Holder
shall deliver this Note and certificates evidencing any Underlying Shares so
repurchased to the Company (to the extent such certificates have been delivered
to the Holder).

(c)        Upon the occurrence of any Bankruptcy Event, all amounts pursuant to
Section 10(b) shall immediately become due and payable in full in cash, without
any further action by the Holder.

(d)       In connection with any Event of Default, the Holder need not provide
and the Company hereby waives any presentment, demand, protest or other notice
of any kind, and the Holder may immediately and without expiration of any grace
period enforce any and all of its rights and remedies hereunder and all other
remedies available to it under applicable law. Any such declaration may be
rescinded and annulled by the Holder at any time prior to payment hereunder. No
such rescission or annulment shall affect any subsequent Event of Default or
impair any right consequent thereto.

9.            Charges, Taxes and Expenses. Issuance of certificates for
Underlying Shares upon conversion of (or otherwise in respect of) this Note
shall be made without charge to the Holder for any issue or transfer tax,
withholding tax, transfer agent fee or other incidental tax or expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the registration of any certificates for Underlying Shares or Notes in a name
other than that of the Holder. The Holder shall be responsible for all other tax
liability that may arise as a result of holding or transferring this Note or
receiving Underlying Shares in respect hereof.

10.          Certain Adjustments. The Conversion Price is subject to adjustment
from time to time as set forth in this Section 10.

(a)        Stock Dividends and Splits. If the Company, at any time while this
Note is outstanding, (i) pays a stock dividend on its Common Stock or otherwise
makes a distribution on any class of capital stock that is payable in shares of
Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger
number of shares, or (iii) combines outstanding shares of Common Stock into a
smaller number of shares, then in each such case the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to clause (i) of this
Section 10(a) shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution,
and any adjustment pursuant to clause (ii) or (iii) of this Section 10(a) shall
become effective immediately after the effective date of such subdivision or
combination.

(b)        Pro Rata Distributions. If the Company, at any time while this Note
is outstanding, distributes to holders of Common Stock (i) evidences of its
indebtedness, (ii) any security (other than a distribution of Common Stock
covered by the preceding paragraph),

 

 

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(iii) rights or warrants to subscribe for or purchase any security, or (iv) any
other asset (in each case, “Distributed Property”), then in each such case the
Conversion Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution shall be
adjusted (effective on such record date) to equal the product of such Conversion
Price times a fraction of which the denominator shall be the average of the
Closing Prices for the five Trading Days immediately prior to (but not
including) such record date and of which the numerator shall be such average
less the then fair market value of the Distributed Property distributed in
respect of one outstanding share of Common Stock, as determined by the Company’s
independent certified public accountants that regularly examine the financial
statements of the Company (an “Appraiser”). In such event, the Holder, after
receipt of the determination by the Appraiser, shall have the right to select an
additional appraiser (which shall be a nationally recognized accounting firm),
in which case such fair market value shall be deemed to equal the average of the
values determined by each of the Appraiser and such appraiser. As an alternative
to the foregoing adjustment to the Conversion Price, at the request of the
Holder delivered before the 90th day after such record date, the Company will
deliver to such Holder, within five Trading Days after such request (or, if
later, on the effective date of such distribution), the Distributed Property
that such Holder would have been entitled to receive in respect of the
Underlying Shares for which this Note could have been exercised immediately
prior to such record date. If such Distributed Property is not delivered to a
Holder pursuant to the preceding sentence, then upon expiration of or any
conversion of the Note that occurs after such record date, such Holder shall
remain entitled to receive, in addition to the Underlying Shares otherwise
issuable upon such conversion (if applicable), such Distributed Property.

(c)        Fundamental Changes. If, at any time while this Note is outstanding,
(i) the Company effects any merger or consolidation of the Company with or into
another Person, (ii) the Company effects any sale of all or substantially all of
its assets in one or more transactions, (iii) any tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (other than as a result of a subdivision or
combination of shares of Common Stock described in Section 10(a)) (in any such
case, a “Fundamental Change”), then upon any subsequent conversion of this Note,
the Holder shall have the right to receive, for each Underlying Share that would
have been issuable upon such conversion absent such Fundamental Change, the same
kind and amount of securities, cash or property as it would have been entitled
to receive upon the occurrence of such Fundamental Change if it had been,
immediately prior to such Fundamental Change, the holder of one share of Common
Stock (the “Alternate Consideration”). If holders of Common Stock are given any
choice as to the securities, cash or property to be received in a Fundamental
Change, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any conversion of this Note following such
Fundamental Change. In the event of a Fundamental Change, the Company or the
successor or purchasing Person, as the case may be, shall execute with the
Holder a written agreement providing that:

 

(x)       this Note shall thereafter entitle the Holder to purchase the
Alternate Consideration,

 

 

 

12

 

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(y)        in the case of any such successor or purchasing Person, upon such
consolidation, merger, statutory exchange, combination, sale or conveyance such
successor or purchasing Person shall be jointly and severally liable with the
Company for the performance of all of the Company's obligations under this Note
and the Purchase Agreement, and

 

(z)         if registration or qualification is required under the Exchange Act
or applicable state law for the public resale by the Holder of shares of stock
and other securities so issuable upon exercise of this Note, such registration
or qualification shall be completed prior to such reclassification, change,
consolidation, merger, statutory exchange, combination or sale.

 

If, in the case of any Fundamental Change, the Alternate Consideration includes
shares of stock, other securities, other property or assets of a Person other
than the Company or any such successor or purchasing Person, as the case may be,
in such Fundamental Change, then such written agreement shall also be executed
by such other Person and shall contain such additional provisions to protect the
interests of the Holder as the Board of Directors of the Company shall
reasonably consider necessary by reason of the foregoing. At the Holder’s
request, any successor to the Company or surviving Person in such Fundamental
Change shall issue to the Holder a new Note consistent with the foregoing
provisions and evidencing the Holder’s right to convert such Note into Alternate
Consideration. The terms of any agreement pursuant to which a Fundamental Change
is effected shall include terms requiring any such successor or surviving Person
to comply with the provisions of this Section 10(c) and insuring that this Note
(or any such replacement security) will be similarly adjusted upon any
subsequent transaction analogous to a Fundamental Change. If any Fundamental
Change constitutes or results in a Change of Control, then at the request of the
Holder delivered before the 90th day after such Fundamental Change, the Company
(or any such successor or surviving entity) will purchase this Note from the
Holder for a purchase price, payable in cash within five Trading Days after such
request (or, if later, on the effective date of the Fundamental Transaction),
equal to the Black Scholes value of the remaining unexercised portion of this
Note on the date of such request.

 

(d)

Subsequent Equity Sales.

(i)           If, at any time while this Note is outstanding, the Company or any
Subsidiary issues additional shares of Common Stock or rights, warrants, options
or other securities or debt convertible, exercisable or exchangeable for shares
of Common Stock or otherwise entitling any Person to acquire shares of Common
Stock (collectively, “Common Stock Equivalents”) at an effective net price to
the Company per share of Common Stock (the “Effective Price”) less than the
Conversion Price (as adjusted hereunder to such date), then the Conversion Price
shall be reduced to equal the Effective Price. For purposes of this paragraph,
in connection with any issuance of any Common Stock Equivalents, (A) the maximum
number of shares of Common Stock potentially issuable at any time upon
conversion, exercise or exchange of such Common Stock Equivalents (the “Deemed
Number”) shall be deemed to be outstanding upon issuance of such Common Stock
Equivalents, (B) the Effective Price applicable to such Common Stock shall equal
the minimum dollar value of consideration payable to the Company to

 

 

13

 

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purchase such Common Stock Equivalents and to convert, exercise or exchange them
into Common Stock (net of any discounts, fees, commissions and other expenses),
divided by the Deemed Number, and (C) no further adjustment shall be made to the
Conversion Price upon the actual issuance of Common Stock upon conversion,
exercise or exchange of such Common Stock Equivalents.

(ii)          If, at any time while this Note is outstanding, the Company or any
Subsidiary issues Common Stock Equivalents with an Effective Price or a number
of underlying shares that floats or resets or otherwise varies or is subject to
adjustment based (directly or indirectly) on market prices of the Common Stock
(a “Floating Price Security”), then for purposes of applying the preceding
paragraph in connection with any subsequent conversion, the Effective Price will
be determined separately on each Conversion Date and will be deemed to equal the
lowest Effective Price at which any holder of such Floating Price Security is
entitled to acquire Common Stock on such Conversion Date (regardless of whether
any such holder actually acquires any shares on such date).

(iii)         Notwithstanding the foregoing, no adjustment will be made under
this paragraph (d) in respect of any Excluded Stock.

(e)        Calculations. All calculations under this Section 10 shall be made to
the nearest cent or the nearest 1/100th of a share, as applicable. The number of
shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common Stock.

(f)        Notice of Adjustments. Upon the occurrence of each adjustment
pursuant to this Section 10, the Company at its expense will promptly compute
such adjustment in accordance with the terms hereof and prepare and deliver to
the Holder a certificate describing in reasonable detail such adjustment and the
transactions giving rise thereto, including all facts upon which such adjustment
is based.

(g)        Notice of Corporate Events. If the Company (i) declares a dividend or
any other distribution of cash, securities or other property in respect of its
Common Stock, including without limitation any granting of rights or warrants to
subscribe for or purchase any capital stock of the Company or any Subsidiary,
(ii) authorizes or approves, enters into any agreement contemplating or solicits
stockholder approval for any Fundamental Change or (iii) authorizes the
voluntary dissolution, liquidation or winding up of the affairs of the Company,
then the Company shall deliver to the Holder a notice describing the material
terms and conditions of such transaction, at least 20 Trading Days prior to the
applicable record or effective date on which a Person would need to hold Common
Stock in order to participate in or vote with respect to such transaction, and
the Company will take all steps reasonably necessary in order to insure that the
Holder is given the practical opportunity to convert this Note prior to such
time so as to participate in or vote with respect to such transaction; provided,
however, that the failure to deliver such notice or any defect therein shall not
affect the validity of the corporate action required to be described in such
notice.

 

 

 

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11.          No Fractional Shares. The Company shall not issue or cause to be
issued fractional Underlying Shares on conversion of this Note. If any fraction
of an Underlying Share would, except for the provisions of this Section 11, be
issuable upon conversion of this Note, the number of Underlying Shares to be
issued will be rounded up to the nearest whole share.

12.          Notices. Any and all notices or other communications or deliveries
hereunder (including any Conversion Notice) shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified in this Section 12 prior to 6:30 p.m. (New York City time) on a
Trading Day, (ii) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in this Section 12 on a day that is not a Trading Day or later than
6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day
following the date of mailing, if sent by nationally recognized overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The addresses for such communications shall be: (i) if to
the Company, to , 301-11120 Horseshoe Way, Richmond, British Columbia V7A5H7,
facsimile: 604-271-8654, attention John Cockburn, with a copy to Clark Wilson
LLP, 800-885 West Georgia Street, Vancouver, British Columbia V6C3H1, facsimile:
604-687-6314, attention Virgil Hlus, or (ii) if to the Holder, to the address or
facsimile number appearing on the Company’s Noteholder records or such other
address or facsimile number as the Holder may provide to the Company in
accordance with this Section 12.

 

13.

Miscellaneous.

(a)        This Note shall be binding on and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. The Company shall
not be permitted to assign this Note.

(b)        Subject to Section 13(a), nothing in this Note shall be construed to
give to any person or corporation other than the Company and the Holder any
legal or equitable right, remedy or cause under this Note.

(C)       GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS CONCERNING
THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS NOTE SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF
MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN
(INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS),
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 IMPROPER. EACH PARTY
HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS
BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF
VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF
DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER

 

 

15

 

 

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.
THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.

(d)       The headings herein are for convenience only, do not constitute a part
of this Note and shall not be deemed to limit or affect any of the provisions
hereof.

(e)        In case any one or more of the provisions of this Note shall be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Note shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Note.

(f)        In the event of any stock split, subdivision, dividend or
distribution payable in shares of Common Stock (or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly shares of Common Stock), combination or other similar
recapitalization or event occurring after the date hereof, each reference in
this Note to a price shall be amended to appropriately account for such event.

(g)        No provision of this Note may be waived or amended except in a
written instrument signed, in the case of an amendment, by the Company and the
Holder or, or, in the case of a waiver, by the Holder. No waiver of any default
with respect to any provision, condition or requirement of this Note shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right.

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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a
duly authorized officer as of the date first above indicated.

 

BULLDOG TECHNOLOGIES INC.

 

 

By                                                                     

Name: Matthew S.K. Yoon

Title: Chief Financial Officer

 

 

 

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Schedule 1

FORM OF CONVERSION NOTICE

(To be executed by the registered Holder

in order to convert Note)

The undersigned hereby elects to convert the specified principal amount of
Senior Amortizing Convertible Notes (the “Notes”) into shares of common stock,
par value $0.001 per share (the “Common Stock”), of Bulldog Technologies Inc., a
Nevada corporation, according to the conditions hereof, as of the date written
below.

 

Date to Effect Conversion

 

Principal amount of Notes owned prior to conversion

 

Principal amount of Notes to be converted

(including accrued but unpaid interest thereon)

 

Number of shares of Common Stock to be Issued

 

Applicable Conversion Price

 

Principal amount of Notes owned subsequent to Conversion

 

Name of Holder

 

By                                          
                                                   

Name:

Title:

 

 

 

 

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Schedule 2

CONVERSION SCHEDULE

This Conversion Schedule reflects conversions of the Senior Amortizing
Convertible Notes issued by Bulldog Technologies Inc.

Date of Conversion

Amount of Conversion

Aggregate Principal Amount Remaining Subsequent to Conversion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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