ex10-2.htm


    Exhibit
10.2

     

    THIS
NOTE, AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE (THE
“SECURITIES”)
HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL
(i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT” OR THE
“SECURITIES
ACT”) SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY
THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO
THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH
SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES
LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS
NOTE AND ANY SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE (EXCEPT AS
OTHERWISE PROVIDED BELOW).

     

    


    CONVERTIBLE
PROMISSORY NOTE

     

    
      	
              $12,500

            	
              Effective
      February ___, 2010 

            


    

     

    FOR VALUE
RECEIVED, Sandalwood Ventures,
Ltd., a Nevada Corporation (the “Company”),
having an address of 15 Park, Lossiemouth, Morayshire 1V30 5SE, Scotland, hereby
promises to pay to the order of Little Bay Consulting SA,
and/or assigns (the “Holder”),
at the offices of Holder at Urbanicacion Marbella,
53rd St E, MMG Tower 16th Floor‎ Panama City, Panama, or such other place
as may be designated by Holder to the Company in writing, the aggregate
principal amount of Twelve Thousand Five Hundred Dollars ($12,500),
together with interest on the unpaid principal amount hereof, upon the terms and
conditions hereinafter set forth.

     

    
      	
              1.

            	
              Loan Amount.  This Convertible
      Promissory Note (this “Note”,
      “Promissory
      Note” or “Agreement”)
      evidences the loan of Twelve Thousand Five Hundred Dollars ($12,500),
      from the Holder to the Company (hereinafter referred to as the “Loan”
      or the “Principal”). 

            
	 
      	 
      	 
      
	
              2.

            	
              Payment Terms.  The Company promises to pay
      to Holder the balance of Principal, together with accrued and unpaid
      interest, on  February __, 2011 (the “Maturity
      Date”), unless this Note is earlier prepaid as herein provided or
      earlier converted into Common Stock (as hereinafter defined) of the
      Company pursuant to Section 3 hereof.  All payments hereunder shall
      be made in lawful money of the United States of America.  Payment
      shall be credited first to the accrued interest then due and payable and
      the remainder to Principal.

            
	 
      	 
      	 
      
	
              3.

            	
              Interest.  Interest on the outstanding
      portion of Principal of this Note shall accrue at a rate of eight percent
      (8%) per annum.  All computations of interest shall be made on the
      basis of a 360-day year for actual days elapsed.  Such interest shall
      accrue and be paid upon the Maturity Date of the
  Loan.

            


    

    


    
      	 
      	
              a.

            	
              Notwithstanding
      any provision in this Note, the total liability for payments of interest
      and payments in the nature of interest, including all charges, fees,
      exactions, or other sums which may at any time be deemed to be interest,
      shall not exceed the limit imposed by the usury laws of the State of
      Nevada or the applicable laws of the United States of America, whichever
      shall be higher (the “Maximum
      Rate”).

            


    

    


    
      	 
      	
              b.

            	
              In
      the event the total liability for payments of interest and payments in the
      nature of interest, including, without limitation, all charges, fees,
      exactions or other sums which may at any time be deemed to be interest,
      which for any month or other interest payment period exceeds the Maximum
      Rate, all sums in excess of those lawfully collectible as interest for the
      period in question (and without further agreement or notice by, among or
      to the Holder the undersigned) shall be applied to the reduction of the
      principal balance, with the same force and effect as though the
      undersigned had specifically designated such excess sums to be so applied
      to the reduction of the principal balance and the Holder had agreed to
      accept such sums as a premium-free prepayment of principal; provided,
      however, that the Holder may, at any time and from time to time, elect, by
      notice in writing to the undersigned, to waive, reduce or limit the
      collection of any sums in excess of those lawfully collectible as interest
      rather than accept such sums as a prepayment of the principal
      balance.  The undersigned does not intend or expect to pay nor
      does the Holder intend or expect to charge, accept or collect any interest
      under this Note greater than the Maximum
Rate.

            


    

      

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    
      	 
      	
              c.

            	
              If
      any payment of principal or interest on this Note shall become due on a
      Saturday, Sunday or any other day on which national banks are not open for
      business, such payment shall be made on the next succeeding business
      day.

            


    

     

    
      	
              4.

            	
              Option to Convert this
      Note.

            	 
      


    

     

    
      	 
      	
              a.

            	
              At
      any time prior to the Maturity Date or prior to payment in full by the
      Company, Holder shall have the option to convert the unpaid principal
      balance of this Promissory Note, together with all accrued interest, into
      shares of common stock (the “Shares”
      and the “Common
      Stock”) of the Company  (the “Conversion Option”) at the
      conversion price of $0.01 per common share (the “Conversion
      Price” and each a “Conversion”);

            
	 
      	 
      	 
      
	 
      	
              b.

            	
              In
      order to exercise this Conversion Option, the Holder shall surrender this
      Promissory Note to the Company, accompanied by written notice of its
      intentions to exercise this Conversion Option, which notice shall set
      forth the principal amount of this Promissory Note to be converted and
      shall be in the form of Exhibit A,
      attached hereto (“Notice
      of Conversion”). Within ten (10) business days of the Company’s
      receipt of the Notice of Conversion and this Note, the Company shall
      deliver or cause to be delivered to the Holder, written confirmation that
      the Shares have been issued in the name of the Holder;

            
	 
      	 
      	 
      
	 
      	
              c.

            	
              In
      the event of the exercise of the Conversion Option, Holder shall cooperate
      with the Company to promptly take any and all additional actions required
      to make Holder a stockholder of the Company including, without limitation,
      in connection with the issuance of the Shares, such representations as to
      financial condition, investment intent and sophisticated investor status
      as are reasonably required by counsel for the Company. Holder shall be
      deemed to have automatically re-certified the Representations (defined
      below) at such time or times as Holder exercises its Conversion Option as
      provided herein, and the Company shall be able to rely on such
      re-certification for all purposes;

            
	 
      	 
      	 
      
	 
      	
              d.

            	
              The
      Company shall at all times take any and all additional actions as are
      necessary to maintain the required authority to issue the Shares to the
      Holder, in the event the Holder exercises its rights under the Conversion
      Option;

            
	 
      	 
      	 
      
	 
      	
              e.

            	
              Payment
      to Company prior to Holder’s delivery of a Notice of Conversion shall
      terminate Holder’s option to
convert;

            


    

    


    
      	 
      	
              f.

            	
              Conversion
      calculations pursuant to this Section 4 shall
      be rounded to the nearest whole share of Common Stock, and no fractional
      shares shall be issuable by the Company upon conversion of this Note.
      Conversion of this Note shall be deemed payment in full of this Note and
      this Note shall thereupon be cancelled;

            
	 
      	 
      	 
      
	 
      	
              g.

            	
              If
      the Company at any time or from time to time on or after the effective
      date of the  issuance of this Note (the “Original
      Issuance Date”) effects a subdivision of its outstanding Common
      Stock, the Conversion Price then in effect immediately before that
      subdivision shall be proportionately decreased, and conversely, if the
      Company at any time or from time to time on or after the Original Issuance
      Date combines its outstanding shares of Common Stock into a smaller number
      of shares, the Conversion Price then in effect immediately before the
      combination shall be proportionately
increased;

            


    

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    
      	 
      	
              h.

            	
              All
      Shares of Common Stock which may be issued upon conversion of this Note
      will, upon issuance by the Company in accordance with the terms of this
      Note, be validly issued, free from all taxes and liens with respect to the
      issuance thereof (other than those created by the holders), free from all
      pre-emptive or similar rights and be fully paid and non
      assessable;

            
	 
      	 
      	 
      
	 
      	
              i.

            	
              On
      the date of any Conversion, all rights of any Holder with respect to the
      amount of this Note converted, will terminate, except only for the rights
      of any such Holder to receive certificates (if applicable) for the number
      of Shares of Common Stock which this Note has been
    Converted.

            


    

      

    
      	
              5.

            	
              Redemption.  This
      Note may be redeemed by the Company by payment of the entire Principal and
      interest outstanding under this Note in cash to
    Holder. 

            


    

     

    
      	 
      	
              a.

            	
              This
      Note may be prepaid in whole or in part at any time without
      penalty.

            
	 
      	 
      	 
      
	 
      	
              b.

            	
              Any
      partial prepayment shall be applied first to any accrued interest and then
      to any principal Loan amount
outstanding.

            


    

     

    
      	
              6.

            	
              Representations and Warranties
      of the Company. The Company represents and warrants to Holder as
      follows: 

            


    

     

    
      	 
      	
              a.

            	
              The
      execution and delivery by the Company of this Note (i) are within the
      Company’s corporate power and authority, and (ii) have been duly
      authorized by all necessary corporate action.  Further, the
      undersigned is a duly authorized representative of the Company and has
      been authorized by a resolution of the Board of Directors of the Company
      to exercise any and all documents necessary to effectuate the transaction
      contemplated hereby.

            


    

    


    
      	 
      	
              b.

            	
              This
      Note is a legally binding obligation of the Company, enforceable against
      the Company in accordance with the terms hereof, except to the extent that
      (i) such enforceability is limited by bankruptcy, insolvency,
      reorganization, moratorium or other laws relating to or affecting
      generally the enforcement of creditors’ rights, and (ii) the availability
      of the remedy of specific performance or in injunctive or other equitable
      relief is subject to the discretion of the court before which any
      proceeding therefore may be
brought.

            


    

    


    
      	
              7.

            	
              Representations, Warranties and
      Covenants of Holder. Holder represents and warrants to the Company,
      and agrees, as follows (collectively the “Representations”):

            


    

      

    
      	 
      	
              a.

            	
              This
      Note and any Conversion Shares issuable upon conversion of this Note are
      being acquired by Holder for its own account for investment and not with a
      view to, or for sale in connection with, any distribution
      thereof.

            


    

      

    
      	 
      	
              b.

            	
              Holder
      is a non “U.S.
      person” as such term is defined under Regulation S as promulgated
      by the Securities and Exchange Commission (“SEC”) under authority of
      the Securities Act; resides outside of the United States; was not
      solicited for an investment in the Company, by the Company or any person
      or entity acting on its behalf while it, was located within the United
      States; has not entered into this Agreement inside the United States;
      certifies under penalty of perjury that it is neither a citizen nor a
      resident of the United States and the following definitions and
      acknowledgements are applicable to the current purchase, and the issuance
      of the Common Stock and the transactions evidenced by this Agreement are
      exempt from registration pursuant to Regulation S of the Act; Holder
      further represents and warrants that Holder is familiar with Regulation S;
      Holder is receiving the Note for its own account and not on behalf of any
      U.S. person, and the sale has not been pre-arranged with a purchaser in
      the United States; and that "United
      States" means the United States of America, its territories and
      possessions, any State of the United States, and the District of
      Columbia.

            


       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      	 
      	
              c.

            	
              Holder
      has sufficient knowledge and experience in financial and business matters
      and is capable of evaluating the risks and merits of Holder’s investment
      in the Company; Holder believes that Holder has received or had access to
      all information Holder considers necessary or appropriate to make an
      informed investment decision with respect to this Note; and Holder is able
      financially to bear the risk of losing Holder’s full investment in this
      Note.

            
	 
      	 
      	 
      
	 
      	
              d.

            	
              Holder
      understands that this Note and any Shares converted pursuant hereto have
      not been registered under the Securities Act or registered or qualified
      under any the securities laws of any state or other jurisdiction, are
      “restricted
      securities,” and cannot be resold or otherwise transferred unless
      they are registered under the Securities Act, and registered or qualified
      under any other applicable securities laws, or an exemption from such
      registration and qualification is available. Prior to any proposed
      transfer of this Note or any Shares, Holder shall, among other things,
      give written notice to the Company of its intention to effect such
      transfer, identifying the transferee and describing the manner of the
      proposed transfer and, if requested by the Company, accompanied by (i)
      investment representations by the transferee similar to those made by
      Holder in this Section 7 and (ii) an opinion of counsel satisfactory to
      the Company to the effect that the proposed transfer may be effected
      without registration under the Securities Act and without registration or
      qualification under applicable state or other securities laws. Each
      certificate issued to evidence any Shares shall bear a legend as
      follows:

               

              "The
      securities represented by this certificate have not been registered under
      the Securities Act of 1933 or any state securities act.  The
      securities have been acquired for investment and may not be sold,
      transferred, pledged or hypothecated unless (i) they shall have been
      registered under the Securities Act of 1933 and any applicable state
      securities act, or (ii) the corporation shall have been furnished with an
      opinion of counsel, satisfactory to counsel for the corporation, that
      registration is not required under any such acts."

            
	 
      	 
      	 
      
	 
      	
              e.

            	
              The
      Holder has read and reviewed the Company’s Registration Statement filing
      on the Securities and Exchange Commission’s EDGAR webpage at www.sec.gov,
      including the risk factors, results of operations, description of business
      operations and audited and unaudited financial statements included
      therein.

            


    

    


    
      	
              8.

            	
              Certain Waivers by the
      Company.  Except
      as expressly provided otherwise in this Note, the Company and every
      endorser or guarantor, if any, of this Note waive presentment, demand,
      notice, protest and all other demands and notices in connection with the
      delivery, acceptance, performance, default or enforcement of this Note,
      and assent to any extension or postponement of the time of payment or any
      other indulgence, to any substitution, exchange or release of collateral
      available to Holder, if any, and to the addition or release of any other
      party or person primarily or secondarily
liable.

            


    

    


    
      	
              9.

            	
              Assignment by
      Holder.  If
      and whenever this Note shall be assigned and transferred, or negotiated,
      including transfers to substitute or successor trustees, the holder hereof
      shall be deemed the “Holder”
      for all purposes under this Note.

            
	 
      	 
      
	
              10.

            	
              Amendment.  This Note may not be changed
      orally, but only by an agreement in writing, signed by the party against
      whom enforcement of any waiver, change, modification or discharge is
      sought.

            


    

     

    
      	
              11.

            	
              Costs and Fees.  Anything else in this
      Note to the contrary notwithstanding, in any action arising out of this
      Agreement, the prevailing party shall be entitled to collect from the
      non-prevailing party all of its attorneys’ fees.  For the
      purposes of this Note, the party who receives or is awarded a substantial
      portion of the damages or claims sought in any proceeding shall be deemed
      the “prevailing”
      party and attorneys’ fees shall mean the reasonable fees charged by an
      attorney or a law firm for legal services and the services of any legal
      assistants, and costs of litigation, including, but not limited to, fees
      and costs at trial and appellate levels.

            


       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

      	
              12.

            	
              Governing Law.  It is the intention of
      the parties hereto that the terms and provisions of this Note are to be
      construed in accordance with and governed by the laws of the State of
      Nevada, except as such laws may be preempted by any federal law
      controlling the rate of interest which may be charged on account of this
      Note.

            


    

      

    
      	
              13.

            	
              No
      Third Party Benefit.  The provisions and covenants
      set forth in this Agreement are made solely for the benefit of the parties
      to this Agreement and are not for the benefit of any other person, and no
      other person shall have any right to enforce these provisions and
      covenants against any party to this Agreement.

            
	 
      	 
      
	
              14.

            	
              Jurisdiction, Venue and Jury
      Trial Waiver.  The parties hereby
      consent and agree that, in any actions predicated upon this Note, venue is
      properly laid in Nevada and that the Circuit Court in and for Las Vegas,
      Nevada, shall have full subject matter and personal jurisdiction over the
      parties to determine all issues arising out of or in connection with the
      execution and enforcement of this Note.

            
	 
      	 
      
	
              15.

            	
              Interpretation.  The term “Company”
      as used herein in every instance shall include the Company’s successors,
      legal representatives and assigns, including all subsequent grantees,
      either voluntarily by act of the Company or involuntarily by operation of
      law and shall denote the singular and/or plural and the masculine and/or
      feminine and natural and/or artificial persons, whenever and wherever the
      contexts so requires or properly applies.  The term “Holder”
      as used herein in every instance shall include the Holder’s successors,
      legal representatives and assigns, as well as all subsequent assignees,
      endorsees and holders of this Note, either voluntarily by act of the
      parties or involuntarily by operation of law.  Captions and
      paragraph headings in this Note are for convenience only and shall not
      affect its interpretation.

            
	 
      	 
      
	
              16.

            	
              WAIVER OF JURY
      TRIAL.  THE
      COMPANY AND HOLDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
      THE RIGHT EITHER MAY HAVE TO TRIAL BY JURY IN RESPECT TO ANY LITIGATION
      BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE AND
      ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY
      COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS, (WHETHER VERBAL OR
      WRITTEN) OR ACTIONS OF EITHER PARTY.  THE COMPANY ACKNOWLEDGES
      THAT THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO THE HOLDER IN
      EXTENDING CREDIT TO THE COMPANY, THAT THE HOLDER WOULD NOT HAVE EXTENDED
      SUCH CREDIT WITHOUT THIS JURY TRIAL WAIVER, AND THAT THE COMPANY HAS BEEN
      REPRESENTED BY AN ATTORNEY OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN
      ATTORNEY IN CONNECTION WITH THIS JURY TRIAL WAIVER AND UNDERSTANDS THE
      LEGAL EFFECT OF THIS WAIVER.

            


    

    


    
      	
              17.

            	
              Entire
      Agreement.  This Agreement constitutes the sole
      and only agreement of the parties hereto and supersedes any prior
      understanding or written or oral agreements between the parties respecting
      the subject matter hereof.

            


    

    


    
      	
              18.

            	
              Effect of Facsimile and
      Photocopied Signatures. This Agreement may be executed in
      several counterparts, each of which is an original.  It shall
      not be necessary in making proof of this Agreement or any counterpart
      hereof to produce or account for any of the other
      counterparts.  A copy of this Agreement signed by one Party and
      faxed or scanned and emailed to another Party (as a PDF or similar image
      file) shall be deemed to have been executed and delivered by the signing
      Party as though an original.  A photocopy or PDF of this
      Agreement shall be effective as an original for all
    purposes.

            


    

    


    [Remainder
of page left intentionally blank.  Signature page
follows.]

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    IN WITNESS WHEREOF, the
undersigned have caused this Convertible Promissory Note to be executed and
delivered by a duly authorized officer as of the date first above written, to be
effective as of the effective date set forth above.

     

    
      	 
      	
              SANDALWOOD
      VENTURES, LTD.

              a
      Nevada Corporation

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:
      /s/ Edwin
      Slater

            
	 
      	
              Edwin
      Slater, President

            


    

    


    Holder:

    


    Little
Bay Consulting SA

    


    By: ___________________

    


    Its:
___________________

     

    Printed
Name: ___________________

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    EXHIBIT
A

    


    Conversion Election
Form

    


    


    ____________,
200_

    


    Sandalwood
Ventures, Ltd.

    15
Park

    Lossiemouth,
Morayshire 1V30 5SE

    Scotland

    


    Re:           Conversion of Promissory
Note

    


    Gentlemen:

    


    You are
hereby notified that, pursuant to, and upon the terms and conditions of that
certain Convertible Promissory Note of Sandalwood Ventures, Ltd. (the “Company”),
in the principal amount of $12,500 (the “Note”),
held by me (us), I (we) hereby elect to exercise my (our) Conversion Option (as
such term in defined in the Note), in connection with $__________ of the amount
currently owed under the Note (including $___________ of accrued interest),
effective as of the date of this writing, which amount will convert in
________________ shares of the Company’s Common Stock (the “Conversion”).  In
connection with the Conversion, I (we) hereby re-certify, re-confirm and
re-warrant the Representations, as such Representations are defined in Section 7
of the Note.

    


    Please
issue certificate(s) for the applicable shares of the Company’s Common Stock
issuable upon the Conversion, in the name of the person provided
below.

    


    
      	 
      	
              Very
      truly yours,

            
	 
      	 
      
	 
      	 
      
	 
      	
              ___________________________

            
	 
      	
              Name:

            


    

    


     

    Please
issue certificate(s) for Common Stock as follows:

    


    ______________________________________________

    Name

    


    ______________________________________________

    Address

    


    ______________________________________________

    Social
Security No. of Shareholder (if applicable)

    


    Please
send the certificate(s) evidencing the Common Stock to:

    


    Attn:___________________________________________

    


    ______________________________________________

    Address

    


    
      
        
        

      

      
        -7-