who8k072208ex10-1.htm


    
      

      

    

    
 

    
      FORM
OF NOTE

       

       

      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY
STATE, AND MAY NOT BE OFFERED, SOLD TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE
144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION
OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE
REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM
REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.

       

       

      WHO’S
YOUR DADDY, INC., A NEVADA CORPORATION

       

       

      10%
CONVERTIBLE PROMISSORY NOTE

       

       

      


       

       

      $100,000                                                                                                ____________
__, 2008

       

       

                 FOR
VALUE RECEIVED, the
undersigned, Who’s Your Daddy, Inc., a Nevada corporation (the “Company”),
hereby promises to pay to the order of __________________________________
________________________________________________________________________

       

       

      (the
“Investor”), in lawful money of the United States of America, and in immediately
payable funds, the principal sum of $100,000. The principal and any unpaid
accrued interest thereon shall be due and payable on January 15, 2010 (the
“Maturity Date”). Payment of all amounts due hereunder shall be made at the
address of the Investor provided for in the Subscription Agreement. The Company
further promises to pay interest at the rate of 10% per annum on the outstanding
principal balance hereof, such interest to be payable upon the Maturity Date
(prorated for any partial month).

       

      This Note
has been issued pursuant to a Subscription Agreement of even date herewith
between the Company and the Investor (the “Subscription Agreement”), which
contains representations and warranties and additional covenants of the Company
with respect to the Note. Capitalized terms not otherwise defined herein shall
have the meaning set forth in the Subscription Agreement. THE PROVISIONS OF THE
SUBSCRIPTION AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE.

       

                 1.           PAYMENTS. The Company
hereby promises to pay to the Investor, in lawful money of the United States of
America, and in immediately payable funds, the principal sum of $100,000. The
principal hereof and any unpaid accrued interest thereon shall be due and
payable on the Maturity Date (unless such payment date is accelerated as
provided in Section 1(a) or 5 hereof) (the “Maturity Date”). The Company further
promises to pay interest at the rate of 10% per annum on the outstanding
principal balance hereof, such interest to be payable upon the Maturity Date
(prorated for any partial month). Payment of all amounts due hereunder shall be
made at the address of the Investor provided for in the Subscription Agreement.
Payments shall be made according to the following schedule:

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

       

      (a)           The
Company currently intends to conduct a best efforts private offering of its
common stock or convertible securities for a proposed minimum of $3.5 million
(the “Proposed Private Placement”). Fifty percent (50%) of the net proceeds
raised by the Company in the Proposed Private Placement or any other debt or
equity offering conducted prior to the Maturity Date by the Company will be used
to repay any amounts due under this Note pari passu with all other
notes issued pursuant to this Offering (as defined in the Subscription
Agreement).

       

       

      (b)           The
Investor shall have the right to convert principal and interest into common
stock of the of the Company’s unregistered common stock (the “Conversion
Shares”) at a price (the “Conversion Price”) equal to 80% of the volume weighted
average price (“VWAP”) for the last 30 trading days preceding the earlier of (i)
closing of at least $3 million in gross proceeds of the Proposed Private
Placement, or (ii) twelve months from the initial closing date of this Offering,
but in no event shall the Conversion Price be less than $0.50 per share or
greater than $0.75 per share.  The Investor shall maintain this right
of conversion, for any outstanding principal and/or interest, until the note is
paid in full.

       

       

      (c)           Provided
the Investor does not elect to exercise his right to convert and if the payments
set forth in section 1(a) are insufficient to satisfy all principal and interest
due hereunder, beginning thirty days after the final closing of the Proposed
Private Placement, Company will make monthly principal and interest payments to
the Investor amortized over a period of 60 months, until all principal and
interest is paid in full.

       

       

      (d)           If
the Company does not conduct the Proposed Private Placement, then beginning 18
months from the date of this Note or January 15, 2010, whichever is later, the
Company will make monthly payments of principal and interest amortized over a
period of 60 months, until all principal and interest is paid in
full.

       

       

       

      2.           PREPAYMENT. This Note
may be prepaid, in whole or in part, without the prior written consent of the
Investor and without penalty or premium.

       

       

       

      3.           DEFAULT. The
occurrence of any one of the following events shall constitute an Event of
Default:

       

       

      (a)           The
non-payment, when due, of any principal or interest pursuant to this
Note;

       

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      (b)           The
material breach of any representation or warranty in this Note or in the
Subscription Agreement or in any Exhibit to the Note or the Subscription
Agreement, all of which are incorporated by reference, or in any other agreement
that may be entered into by and between the Investor and the Company regarding
this Note. In the event the Investor becomes aware of a breach of this Section
3(b), the Investor shall notify the Company in writing of such breach and if the
breach is curable by the Company within 60 days and the Company is taking all
reasonable steps to cure the breach, the Company shall have 60 days notice to
effect a cure of such breach;

       

       

      (c)           The
material breach of any covenant or undertaking in this Note or in
the

       

      Subscription
Agreement or in any Exhibit to the Note or the Subscription Agreement or in any
other agreement that may be entered into by and between the Investor and the
Company regarding this Note not otherwise provided for in this Section 3. In the
event the Investor becomes aware of a breach of this Section 3(c), the Investor
shall notify the Company in writing of such breach and if the breach is curable
by the Company within 60 days and the Company is taking all reasonable steps to
cure the breach, the Company shall have 60 days notice to effect a cure of such
breach;

       

       

      (d)           A
default shall occur in the payment when due (subject to any applicable grace
period), whether by acceleration or otherwise, of any indebtedness of the
Company or an event of default or similar event shall occur with respect to such
indebtedness, if the effect of such default or event (subject to any required
notice and any applicable grace period) would be to accelerate the maturity of
any such indebtedness or to permit the holder or holders of such indebtedness to
cause such indebtedness to become due and payable prior to its express
maturity;

       

       

      (e)           The
commencement by the Company of any voluntary proceeding under any
bankruptcy, reorganization, arrangement, insolvency, readjustment or debt,
receivership, dissolution, or liquidation law or statute or any jurisdiction,
whether now or hereafter in effect; or the adjudication of the Company as
insolvent or bankrupt by a decree of a court of competent jurisdiction; or the
petition or application by the Company for, acquiescence in, or consent by the
Company to, the appointment of any receiver or trustee for the Company or for
all or a substantial part of the property of the Company; or the assignment by
the Company for the benefit of creditors; or the written admission of the
Company of its inability to pay its debts as they mature; or

       

       

      (f)           The
commencement against the Company of any proceeding relating to the Company under
any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt,
receivership, dissolution or liquidation law or statute or any jurisdiction,
whether now or hereafter in effect, provided, however, that the commencement of
such a proceeding shall not constitute an Event of Default unless the Company
consents to the same or admits in writing the material allegations of same, or
said proceeding shall remain undismissed for 30 days; or the issuance of any
order, judgment or decree for the appointment of a receiver or trustee for the
Company or for all or a substantial part of the property of the Company, which
order, judgment or decree remains undismissed for 30 days; or a warrant of
attachment, execution, or similar process shall be issued against any
substantial part of the property of the Company.

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      Upon the
occurrence of any Event of Default, the Investor may, by written notice to the
Company, declare all or any portion of the unpaid principal amount due to
Investor, together with all accrued interest thereon, immediately due and
payable.

       

       

       

      4.           NOTICES. Notices to
be given hereunder shall be in writing and shall be deemed

       

      to have
been sufficiently given if delivered personally or sent by overnight delivery
service or by facsimile transmission. Notice shall be deemed to have been
received on the date of personal delivery or facsimile transmission, or if sent
by overnight delivery service, shall be deemed to have been received on the next
delivery day after deposit with the courier or messenger. The address of the
Company is set forth in the Subscription Agreement and the Company shall give
written notice of any change of address to the Investor. The address of the
Investor is as set forth in Subscription Agreement, and the Investor shall give
written notice of any change of address to the Company.

       

       

      5.           CONSENT TO JURISDICTION AND
SERVICE OF PROCESS. The Parties consent to the jurisdiction of any court
of the State of California and of any federal court located in
California.  San Diego County, California shall be proper
venue.

       

       

      6.           GOVERNING LAW. THIS
NOTE SHALL BE GOVERNED BY AND

       

      CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY THEREIN, WITHOUT
GIVING EFFECT TO THE RULES AND CONFLICTS OF LAW.

       

       

      7.           ATTORNEYS FEES. If
any legal action or any other proceeding, including arbitration or action for
declaratory relief is brought for the interpretation or enforcement of this
Agreement, the Prevailing Party shall be entitled to recover reasonable
attorneys’ fees and other costs incurred in that action or proceeding, in
addition to any other relief to which it may be entitled. “Prevailing Party”
shall include without limitation (a) a party who dismisses an action in exchange
for sums allegedly due; (b) the party who receives performance from the other
party of an alleged breach or a desired remedy that is substantially equivalent
to the relief sought in an action or proceeding; or (c) the party determined to
be the prevailing party by an arbitrator or a court of law.

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      8.           CONFORMITY WITH LAW.
It is the intention of the Company and of the Investor to conform strictly to
applicable usury and similar laws.  Accordingly, notwithstanding
anything to the contrary in this Note, it is agreed that the aggregate of all
charges which constitute interest under applicable usury and similar laws that
are contract for, chargeable or receivable under or in respect of this Note,
shall under no circumstances exceed the maximum amount of interest permitted by
such laws, and any excess, whether occasioned by acceleration or maturity of
this Note or otherwise, shall be canceled automatically, and if theretofore
paid, shall be either refunded to the Company or credited on the principal
amount of this Note.

       

       

      9.           NOTICE OF RIGHT TO
COUNSEL. Each of the parties has had the opportunity to
have  this Agreement reviewed by their respective attorney. Each of
the parties affirms to the other that they have apprized themselves of all
relevant information giving rise to this Agreement and has consulted and
discussed with their independent advisors the provisions of this Agreement and
fully understands the legal consequences of each provision. Each party further
affirms to the other that they have not, and do not, rely upon any
representation of advice from the other or from the other parties'
counsel.

       

       

       

      IN WITNESS WHEREOF, the
Company has signed and sealed this Note and delivered it in the State of
California as of _____________ ___, 2008.

       

       

      


       

       

      


       

      
        	 
      	
                COMPANY:

              
	 
      	 
      
	 
      	
                WHO’S
      YOUR DADDY, INC.,

              
	 
      	
                a
      Nevada corporation

              
	 
      	 
      
	 
      	 
      
	 
      	
                _____________________________________________

              
	 
      	
                By:  Michael
      R. Dunn

              
	 
      	
                Its:  Chief
      Executive Officer

              


      

       

      


       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      


       

       

      


       

      
        	 
      	
                INVESTOR:

              
	 
      	 
      
	 
      	
                _____________________________________________

              
	 
      	 
      
	 
      	
                By:  _________________________________________

              
	 
      	 
      
	 
      	
                Its:   _________________________________________

              
	 
      	 
      
	 
      	 
      
	 
      	
                JOINTLY
      WITH (if applicable):

              
	 
      	 
      
	 
      	
                _____________________________________________

              
	 
      	 
      
	 
      	
                By:  _________________________________________

              
	 
      	 
      
	 
      	
                Its:   _________________________________________