Document:

f10k2009ex4xxxi_conspiracy.htm

     

    Exhibit
4.27

     

    "NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE [CONVERTIBLE –OR-EXERCISABLE] HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES."

    

    
      	 
      	
              Right
      to Purchase           
             shares of Common Stock
      of 

              Conspiracy
      Entertainment Holdings, Inc. (subject to 

              adjustment
      as provided herein)

            

    

    

    CLASS
B COMMON STOCK PURCHASE WARRANT

       

      
        	No. 2009-B-001 	Issue Date: December
      11, 2009

      

       

       

    

    CONSPIRACY
ENTERTAINMENT HOLDINGS, INC., a corporation organized under the laws of the
State of Utah (the “Company”), hereby certifies that, for value
received,                    
or its assigns (the “Holder”), is entitled, subject to the
terms set forth below, to purchase from the Company at any time after the Issue
Date until 5:00 p.m., E.S.T on the fifth anniversary of the Issue Date (the
“Expiration Date”), up to           
       fully paid and nonassessable
shares of Common Stock at a per share purchase price of the lesser of (i) $0.01
or (ii) 70% of the average of the 5 lowest closing bid prices of the Common
Stock of the Company for the 30 Trading Days prior to the Exercise
Date.  The aforedescribed purchase price per share, as adjusted from
time to time as herein provided, is referred to herein as the “Purchase
Price."  The number and character of such shares of Common Stock and
the Purchase Price are subject to adjustment as provided herein.  The
Company may reduce the Purchase Price for some or all of the Warrants,
temporarily or permanently, provided such reduction is made as to all
outstanding Warrants for all Holders of such Warrants.  Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Amendment Agreement (the “Amendment Agreement”), dated as of
December 11, 2009, entered into by the Company and the Holder.

    

    As used
herein the following terms, unless the context otherwise requires, have the
following respective meanings:

     

    (a)           The
term “Company” shall mean Conspiracy Entertainment Holdings, Inc., a Utah
corporation, and any corporation which shall succeed or assume the obligations
of Conspiracy Entertainment Holdings, Inc. hereunder.

     

    (b)           The
term “Common Stock” includes (i) the Company's Common Stock, $0.001 par
value per share, as authorized on the date of the Subscription Agreement, and
(ii) any other securities into which or for which any of the securities
described in (i) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or
otherwise.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    "NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE [CONVERTIBLE –OR-EXERCISABLE] HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES."

    

    
      	 
      	
              Right to Purchase1,000,000 shares of Common Stock of 

              Conspiracy Entertainment Holdings, Inc. (subject to 

              adjustment as provided herein)

            

    

    

    CLASS
B COMMON STOCK PURCHASE WARRANT

    

    
      
        	No. 2009-B-002	Issue Date: December
      11, 2009

      

    

     

    CONSPIRACY
ENTERTAINMENT HOLDINGS, INC., a corporation organized under the laws of the
State of Utah (the “Company”), hereby certifies that, for value received,
WHALEHAVEN CAPITAL FUND LIMITED, 560 Sylvan Avenue, Englewood Cliffs, NJ 07632,
Fax: (201) 586-0258, or its assigns (the “Holder”), is entitled, subject to the
terms set forth below, to purchase from the Company at any time after the Issue
Date until 5:00 p.m., E.S.T on the fifth anniversary of the Issue Date (the
“Expiration Date”), up to 1,000,000 fully paid and nonassessable shares of
Common Stock at a per share purchase price of the lesser of (i) $0.01 or (ii)
70% of the average of the 5 lowest closing bid prices of the Common Stock of the
Company for the 30 Trading Days prior to the Exercise Date.  The
aforedescribed purchase price per share, as adjusted from time to time as herein
provided, is referred to herein as the “Purchase Price."  The number
and character of such shares of Common Stock and the Purchase Price are subject
to adjustment as provided herein.  The Company may reduce the Purchase
Price for some or all of the Warrants, temporarily or permanently, provided such
reduction is made as to all outstanding Warrants for all Holders of such
Warrants.  Capitalized terms used and not otherwise defined herein
shall have the meanings set forth in that certain Amendment Agreement (the
“Amendment Agreement”), dated as of December 11, 2009, entered into by the
Company and the Holder.

    

    As used
herein the following terms, unless the context otherwise requires, have the
following respective meanings:

     

    (a)           The
term “Company” shall mean Conspiracy Entertainment Holdings, Inc., a Utah
corporation, and any corporation which shall succeed or assume the obligations
of Conspiracy Entertainment Holdings, Inc. hereunder.

     

    (b)           The
term “Common Stock” includes (i) the Company's Common Stock, $0.001 par
value per share, as authorized on the date of the Subscription Agreement, and
(ii) any other securities into which or for which any of the securities
described in (i) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or
otherwise.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    "NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE [CONVERTIBLE –OR-EXERCISABLE] HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES."

    

    
      	  	
              Right to Purchase 2,000,000 shares of Common Stock of 

              Conspiracy Entertainment Holdings, Inc. (subject to 

              adjustment as provided herein)

            

    

    

    CLASS
B COMMON STOCK PURCHASE WARRANT

     

    
      
        	No. 2009-B-003	Issue Date: December
      11, 2009

      

    

     

    CONSPIRACY
ENTERTAINMENT HOLDINGS, INC., a corporation organized under the laws of the
State of Utah (the “Company”), hereby certifies that, for value received,
WHALEHAVEN FUND LIMITED, 560 Sylvan Avenue, Englewood Cliffs, NJ 07632, Fax:
(201) 586-0258, or its assigns (the “Holder”), is entitled, subject to the terms
set forth below, to purchase from the Company at any time after the Issue Date
until 5:00 p.m., E.S.T on the fifth anniversary of the Issue Date (the
“Expiration Date”), up to 2,000,000 fully paid and nonassessable shares of
Common Stock at a per share purchase price of the lesser of (i) $0.01 or (ii)
70% of the average of the 5 lowest closing bid prices of the Common Stock of the
Company for the 30 Trading Days prior to the Exercise Date.  The
aforedescribed purchase price per share, as adjusted from time to time as herein
provided, is referred to herein as the “Purchase Price."  The number
and character of such shares of Common Stock and the Purchase Price are subject
to adjustment as provided herein.  The Company may reduce the Purchase
Price for some or all of the Warrants, temporarily or permanently, provided such
reduction is made as to all outstanding Warrants for all Holders of such
Warrants.  Capitalized terms used and not otherwise defined herein
shall have the meanings set forth in that certain Amendment Agreement (the
“Amendment Agreement”), dated as of December 11, 2009, entered into by the
Company and the Holder.

    

    As used
herein the following terms, unless the context otherwise requires, have the
following respective meanings:

     

    (a)           The
term “Company” shall mean Conspiracy Entertainment Holdings, Inc., a Utah
corporation, and any corporation which shall succeed or assume the obligations
of Conspiracy Entertainment Holdings, Inc. hereunder.

     

    (b)           The
term “Common Stock” includes (i) the Company's Common Stock, $0.001 par
value per share, as authorized on the date of the Subscription Agreement, and
(ii) any other securities into which or for which any of the securities
described in (i) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or
otherwise.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    "NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE [CONVERTIBLE –OR-EXERCISABLE] HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES."

    

    
      	 
      	
              Right to Purchase 2,000,000 shares of Common Stock of 

              Conspiracy Entertainment Holdings, Inc. (subject to 

              adjustment as provided herein)

            

    

    

    CLASS
B COMMON STOCK PURCHASE WARRANT

     

    
      
        	No. 2009-B-003	Issue Date: December
      11, 2009

      

    

     

    CONSPIRACY
ENTERTAINMENT HOLDINGS, INC., a corporation organized under the laws of the
State of Utah (the “Company”), hereby certifies that, for value received,
WHALEHAVEN CAPITAL LP, 560 Sylvan Avenue, Englewood Cliffs, NJ 07632, Fax: (201)
586-0258, or its assigns (the “Holder”), is entitled, subject to the terms set
forth below, to purchase from the Company at any time after the Issue Date until
5:00 p.m., E.S.T on the fifth anniversary of the Issue Date (the “Expiration
Date”), up to 2,000,000 fully paid and nonassessable shares of Common Stock at a
per share purchase price of the lesser of (i) $0.01 or (ii) 70% of the average
of the 5 lowest closing bid prices of the Common Stock of the Company for the 30
Trading Days prior to the Exercise Date.  The aforedescribed purchase
price per share, as adjusted from time to time as herein provided, is referred
to herein as the “Purchase Price."  The number and character of such
shares of Common Stock and the Purchase Price are subject to adjustment as
provided herein.  The Company may reduce the Purchase Price for some
or all of the Warrants, temporarily or permanently, provided such reduction is
made as to all outstanding Warrants for all Holders of such
Warrants.  Capitalized terms used and not otherwise defined herein
shall have the meanings set forth in that certain Amendment Agreement (the
“Amendment Agreement”), dated as of December 11, 2009, entered into by the
Company and the Holder.

    

    As used
herein the following terms, unless the context otherwise requires, have the
following respective meanings:

     

    (a)           The
term “Company” shall mean Conspiracy Entertainment Holdings, Inc., a Utah
corporation, and any corporation which shall succeed or assume the obligations
of Conspiracy Entertainment Holdings, Inc. hereunder.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (b)           The
term “Common Stock” includes (i) the Company's Common Stock, $0.001 par
value per share, as authorized on the date of the Subscription Agreement, and
(ii) any other securities into which or for which any of the securities
described in (i) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or
otherwise.

     

    (c)           The
term “Other Securities” refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which the
holder of the Warrant at any time shall be entitled to receive, or shall have
received, on the exercise of the Warrant, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities pursuant to
Section 4 herein or otherwise.

     

    (d)           The
term “Warrant Shares” shall mean the Common Stock issuable upon exercise of this
Warrant.

     

    1.           Exercise of
Warrant.

     

    1.1.          Number of Shares Issuable
upon Exercise.  From and after the Issue Date through and
including the Expiration Date, the Holder hereof shall be entitled to receive,
upon exercise of this Warrant in whole in accordance with the terms of
subsection 1.2 or upon exercise of this Warrant in part in accordance with
subsection 1.3, shares of Common Stock of the Company, subject to
adjustment pursuant to Section 4.

     

    1.2.          Full
Exercise.  This Warrant may be exercised in full by the Holder
hereof by delivery of an original or facsimile copy of the form of subscription
attached as Exhibit A hereto (the “Subscription Form”) duly executed by
such Holder and delivery within two days thereafter of payment, in cash, wire
transfer or by certified or official bank check payable to the order of the
Company, in the amount obtained by multiplying the number of shares of Common
Stock for which this Warrant is then exercisable by the Purchase Price then in
effect.  The original Warrant is not required to be surrendered to the
Company until it has been fully exercised.

     

    1.3.          Partial
Exercise.  This Warrant may be exercised in part (but not for a
fractional share) by delivery of a Subscription Form in the manner and at the
place provided in subsection 1.2 except that the amount payable by the
Holder on such partial exercise shall be the amount obtained by multiplying
(a) the number of whole shares of Common Stock designated by the Holder in
the Subscription Form by (b) the Purchase Price then in
effect.  On any such partial exercise provided the Holder has
surrendered the original Warrant, the Company, at its expense, will forthwith
issue and deliver to or upon the order of the Holder hereof a new Warrant of
like tenor, in the name of the Holder hereof or as such Holder (upon payment by
such Holder of any applicable transfer taxes) may request, the whole number of
shares of Common Stock for which such Warrant may still be
exercised.

     

    1.4.          Fair Market Value.
Fair Market Value of a share of Common Stock as of a particular date (the
“Determination Date”) shall mean:

     

    (a)           If
the Company's Common Stock is traded on an exchange or is quoted on the NASDAQ
Global Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the New
York Stock Exchange or the American Stock Exchange, LLC, then the average of the
closing sale prices of the Common Stock for the five (5) Trading Days
immediately prior to (but not including) the Determination Date;

     

    (b)           If
the Company's Common Stock is not traded on an exchange or on the NASDAQ Global
Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the New York
Stock Exchange or the American Stock Exchange, Inc., but is traded on the OTC
Bulletin Board or in the over-the-counter market or Pink Sheets, then the
average of the closing bid and ask prices reported for the five (5) Trading Days
immediately prior to (but not including) the Determination Date;

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (c)           Except
as provided in clause (d) below and Section 3.1, if the Company's Common
Stock is not publicly traded, then as the Holder and the Company agree, or in
the absence of such an agreement, by arbitration in accordance with the rules
then standing of the American Arbitration Association, before a single
arbitrator to be chosen from a panel of persons qualified by education and
training to pass on the matter to be decided; or

     

    (d)           If
the Determination Date is the date of a liquidation, dissolution or winding up,
or any event deemed to be a liquidation, dissolution or winding up pursuant to
the Company's charter, then all amounts to be payable per share to holders of
the Common Stock pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per share in
respect of the Common Stock in liquidation under the charter, assuming for the
purposes of this clause (d) that all of the shares of Common Stock then
issuable upon exercise of all of the Warrants are outstanding at the
Determination Date.

     

    1.5.          Company
Acknowledgment. The Company will, at the time of the exercise of the
Warrant, upon the request of the Holder hereof, acknowledge in writing its
continuing obligation to afford to such Holder any rights to which such Holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such Holder any such rights.

     

    1.6.          Delivery of Stock
Certificates, etc. on Exercise. The Company agrees that, provided the
full purchase price listed in the Subscription Form is received as specified in
Section 1.2, the shares of Common Stock purchased upon exercise of this Warrant
shall be deemed to be issued to the Holder hereof as the record owner of such
shares as of the close of business on the date on which delivery of a
Subscription Form shall have occurred and payment made for such shares as
aforesaid. As soon as practicable after the exercise of this Warrant in full or
in part, and in any event within three (3) business days thereafter (“Warrant
Share Delivery Date”), the Company at its expense (including the payment by it
of any applicable issue taxes) will cause to be issued in the name of and
delivered to the Holder hereof, or as such Holder (upon payment by such Holder
of any applicable transfer taxes) may direct in compliance with applicable
securities laws, a certificate or certificates for the number of duly and
validly issued, fully paid and non-assessable shares of Common Stock (or Other
Securities) to which such Holder shall be entitled on such exercise, plus, in
lieu of any fractional share to which such Holder would otherwise be entitled,
cash equal to such fraction multiplied by the then Fair Market Value of one full
share of Common Stock, together with any other stock or other securities and
property (including cash, where applicable) to which such Holder is entitled
upon such exercise pursuant to Section 1 or otherwise.  The
Company understands that a delay in the delivery of the Warrant Shares after the
Warrant Share Delivery Date could result in economic loss to the
Holder.  As compensation to the Holder for such loss, the Company
agrees to pay (as liquidated damages and not as a penalty) to the Holder for
late issuance of Warrant Shares upon exercise of this Warrant the proportionate
amount of $100 per business day after the Warrant Share Delivery Date for each
$10,000 of Purchase Price of Warrant Shares for which this Warrant is exercised
which are not timely delivered.  The Company shall pay any payments
incurred under this Section in immediately available funds upon
demand.  Furthermore, in addition to any other remedies which may be
available to the Holder, in the event that the Company fails for any reason to
effect delivery of the Warrant Shares by the Warrant Share Delivery Date, the
Holder may revoke all or part of the relevant Warrant exercise by delivery of a
notice to such effect to the Company, whereupon the Company and the Holder shall
each be restored to their respective positions immediately prior to the exercise
of the relevant portion of this Warrant, except that the liquidated damages
described above shall be payable through the date notice of revocation or
rescission is given to the Company.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    1.7.          Buy-In.   In
addition to any other rights available to the Holder, if the Company fails to
deliver to a Holder the Warrant Shares as required pursuant to this Warrant,
within seven (7) business days after the Warrant Share Delivery Date and the
Holder or a broker on the Holder’s behalf, purchases (in an open market
transaction or otherwise) shares of common stock to deliver in satisfaction of a
sale by such Holder of the Warrant Shares which the Holder was entitled to
receive from the Company (a “Buy-In”), then the Company shall pay in cash to the
Holder (in addition to any remedies available to or elected by the Holder) the
amount by which (A) the Holder's total purchase price (including brokerage
commissions, if any) for the shares of common stock so purchased exceeds (B) the
aggregate Purchase Price of the Warrant Shares required to have been delivered
together with interest thereon at a rate of 15% per annum, accruing until such
amount and any accrued interest thereon is paid in full (which amount shall be
paid as liquidated damages and not as a penalty).  For example, if a
Holder purchases shares of Common Stock having a total purchase price of $11,000
to cover a Buy-In with respect to $10,000 of Purchase Price of Warrant Shares to
have been received upon exercise of this Warrant, the Company shall be required
to pay the Holder $1,000, plus interest. The Holder shall provide the Company
written notice indicating the amounts payable to the Holder in respect of the
Buy-In.

     

    2.           Cashless
Exercise.

     

    (a)           Payment
upon exercise may be made at the option of the Holder either in (i) cash,
wire transfer or by certified or official bank check payable to the order of the
Company equal to the applicable aggregate Purchase Price, (ii) by delivery of
Common Stock issuable upon exercise of the Warrants in accordance with
Section (b) below or (iii) by a combination of any of the
foregoing methods, for the number of Common Stock specified in such form (as
such exercise number shall be adjusted to reflect any adjustment in the total
number of shares of Common Stock issuable to the holder per the terms of this
Warrant) and the holder shall thereupon be entitled to receive the number of
duly authorized, validly issued, fully-paid and non-assessable shares of Common
Stock (or Other Securities) determined as provided herein.

     

    (b)           Subject
to the provisions herein to the contrary, if the Fair Market Value of one share
of Common Stock is greater than the Purchase Price (at the date of calculation
as set forth below), in lieu of exercising this Warrant for cash, the holder may
elect to receive shares equal to the value (as determined below) of this Warrant
(or the portion thereof being cancelled) by delivery of a properly endorsed
Subscription Form delivered to the Company by any means described in Section 13,
in which event the Company shall issue to the holder a number of shares of
Common Stock computed using the following formula:

     

    X=Y (A-B)

              A

    

    Where           X=           the
number of shares of Common Stock to be issued to the holder

    

    
      	
               
      

            	
              Y=

            	
              the
      number of shares of Common Stock purchasable under the Warrant or, if only
      a portion of the Warrant is being exercised, the portion of the Warrant
      being exercised (at the date of such
  calculation)

            

    

     

    
      	
               
      

            	
              A=

            	
              Fair
      Market Value

            

    

     

    
      	
               
      

            	
              B=

            	
              Purchase
      Price (as adjusted to the date of such
  calculation)

            

    

     

    For purposes of Rule 144 promulgated
under the 1933 Act, it is intended, understood and acknowledged that the Warrant
Shares issued in a cashless exercise transaction in the manner described above
shall be deemed to have been acquired by the Holder, and the holding period for
the Warrant Shares shall be deemed to have commenced, on the date this Warrant
was originally issued pursuant to the Subscription
Agreement.  Notwithstanding anything herein to the contrary, on
the Expiration Date, this Warrant shall be automatically exercised via
cashless exercise pursuant to this Section 2(b)  to the extent
permitted under Section 10. 

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    3.           Adjustment for
Reorganization, Consolidation, Merger, etc.

     

    3.1.          Fundamental Transaction. 
If, at any time while this Warrant is outstanding, (A) the
Company effects any merger or  consolidation  of the Company with
or into another entity, (B) the Company effects any sale of all or
substantially all of its assets in one or
a series of related transactions,  (C)
any tender offer or exchange offer (whether by the
Company or another entity) is completed pursuant to which holders of Common
Stock are permitted to tender or exchange their
shares for other securities, cash or property, (D) the Company
consummates a stock purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, or spin-off) with one or
more persons or entities whereby such other persons or entities acquire more
than the 50% of the outstanding shares of Common Stock (not including any shares
of Common Stock held by such other persons or entities making or party to, or
associated or affiliated with the other persons or entities making or party to,
such stock purchase agreement or other business combination), (E) any "person"
or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of
the 1934 Act) is or shall become the "beneficial owner" (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate
Common Stock of the Company, or (F) 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 (in any such
case, a “Fundamental  Transaction”), then, upon
any subsequent exercise of this Warrant, the Holder shall have the
right to receive, for each Warrant Share that would have been issuable upon such
exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder, (a) upon
exercise of this Warrant, the number of shares of Common Stock of the
successor or acquiring corporation or of the Company, if it is the
surviving corporation, and any additional consideration (the
“Alternate Consideration”) receivable upon or as a result of
such reorganization, reclassification, merger,
consolidation or disposition of assets by a Holder of the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event or (b) if the Company is
acquired in (1) a transaction where the consideration paid to the holders
of the Common Stock consists solely of cash, (2) a “Rule 13e-3 transaction” as
defined in Rule 13e-3 under the 1934 Act, or (3) a transaction involving a
person or entity not traded on a national securities exchange, the Nasdaq Global
Select Market, the Nasdaq Global Market or the Nasdaq Capital
Market, cash equal to the Black-Scholes Value. 
For purposes of any such exercise, the determination of the
Purchase Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common
Stock in such fundamental Transaction, and the Company shall
apportion the Purchase Price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different components of
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 Transaction, then the Holder shall be given the same choice as to
the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction.  To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or
surviving entity in such Fundamental Transaction shall issue to the Holder a
new warrant consistent with
the foregoing provisions and evidencing the
Holder's right to exercise such warrant into Alternate
Consideration.  The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of
this Section 3.1 and insuring that this Warrant (or any such
replacement security) will be similarly adjusted upon any subsequent transaction
analogous to a Fundamental Transaction.  “Black-Scholes
Value” shall be determined in accordance with the Black-Scholes Option Pricing
Model obtained from the “OV” function on Bloomberg L.P. using (i) a price per
share of Common Stock equal to the VWAP of the Common Stock for the Trading Day
immediately preceding the date of consummation of the applicable Fundamental
Transaction, (ii) a risk-free interest rate corresponding to the U.S. Treasury
rate for a period equal to the remaining term of this Warrant as of the date of
such request and (iii) an expected volatility equal to the 100 day volatility
obtained from the HVT function on Bloomberg L.P. determined as of the Trading
Day immediately following the public announcement of the applicable Fundamental
Transaction.

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    3.2.          Continuation of
Terms.  Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) referred to in this
Section 3, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the Other Securities and property receivable
on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any Other
Securities, including, in the case of any such transfer, the person acquiring
all or substantially all of the properties or assets of the Company, whether or
not such person shall have expressly assumed the terms of this Warrant as
provided in Section 4.  In the event this Warrant does not
continue in full force and effect after the consummation of the transaction
described in this Section 3, then only in such event will the Company's
securities and property (including cash, where applicable) receivable by the
Holder of the Warrants be delivered to the Trustee as contemplated by
Section 3.2.

     

    3.3           Share
Issuance.  Until the Expiration Date, if the Company shall
issue any Common Stock except for the Excepted Issuances (as defined in the
Subscription Agreement), prior to the complete exercise of this Warrant for a
consideration less than the Purchase Price that would be in effect at the time
of such issuance, then, and thereafter successively upon each such issuance, the
Purchase Price shall be reduced to such other lower price for then outstanding
Warrants.  For purposes of this adjustment, the issuance of any
security or debt instrument of the Company carrying the right to convert such
security or debt instrument into Common Stock or of any warrant, right or option
to purchase Common Stock shall result in an adjustment to the Purchase Price
upon the issuance of the above-described security, debt instrument, warrant,
right, or option if such issuance is at a price lower than the Purchase Price in
effect upon such issuance and again at any time upon any subsequent issuances of
shares of Common Stock upon exercise of such conversion or purchase rights if
such issuance is at a price lower than the Purchase Price in effect upon such
issuance.  Common Stock issued or issuable by the Company for no
consideration will be deemed issuable or to have been issued for $0.001 per
share of Common Stock.  Upon any reduction of the Purchase Price, the
number of shares of Common Stock that the Holder of this Warrant shall
thereafter, on the exercise hereof, be entitled to receive shall be adjusted to
a number determined by multiplying the number of shares of Common Stock that
would otherwise (but for the provisions of this Section 3.3) be issuable on such
exercise by a fraction of which (a) the numerator is the Purchase Price that
would otherwise (but for the provisions of this Section 3.3) be in effect, and
(b) the denominator is the Purchase Price in effect on the date of such
exercise.

     

    4.           Extraordinary Events
Regarding Common Stock.  In the event that the Company shall
(a) issue additional shares of the Common Stock as a dividend or other
distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock, or (c) combine its outstanding shares of the Common
Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Purchase Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then Purchase Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Purchase Price then in effect. The
Purchase Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this
Section 4. The number of shares of Common Stock that the Holder of this
Warrant shall thereafter, on the exercise hereof, be entitled to receive shall
be adjusted to a number determined by multiplying the number of shares of Common
Stock that would otherwise (but for the provisions of this Section 4) be
issuable on such exercise by a fraction of which (a) the numerator is the
Purchase Price that would otherwise (but for the provisions of this Section 4)
be in effect, and (b) the denominator is the Purchase Price in effect on the
date of such exercise.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    5.           Certificate as to
Adjustments.  In each case of any adjustment or readjustment in
the shares of Common Stock (or Other Securities) issuable on the exercise of the
Warrants, the Company at its expense will promptly cause its Chief Financial
Officer or other appropriate designee to compute such adjustment or readjustment
in accordance with the terms of the Warrant and prepare a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Purchase Price and the
number of shares of Common Stock to be received upon exercise of this Warrant,
in effect immediately prior to such adjustment or readjustment and as adjusted
or readjusted as provided in this Warrant. The Company will forthwith mail a
copy of each such certificate to the Holder of the Warrant and any Warrant Agent
of the Company (appointed pursuant to Section 11 hereof).

     

    6.           Reservation of Stock, etc.
Issuable on Exercise of Warrant; Financial
Statements.   Subject to the filing of the Amendment, the
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrants, all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of the
Warrant.  This Warrant entitles the Holder hereof, upon written
request, to receive copies of all financial and other information distributed or
required to be distributed to the holders of the Company's Common
Stock.

     

    7.           Assignment; Exchange of
Warrant.  Subject to compliance with applicable securities
laws, this Warrant, and the rights evidenced hereby, may be transferred by any
registered holder hereof (a “Transferor”). On the surrender for exchange of this
Warrant, with the Transferor's endorsement in the form of Exhibit B
attached hereto (the “Transferor Endorsement Form”) and together with an opinion
of counsel reasonably satisfactory to the Company that the transfer of this
Warrant will be in compliance with applicable securities laws, the Company will
issue and deliver to or on the order of the Transferor thereof a new Warrant or
Warrants of like tenor, in the name of the Transferor and/or the transferee(s)
specified in such Transferor Endorsement Form (each a “Transferee”), calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant so surrendered by the
Transferor.

     

    8.           Replacement of
Warrant.  On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction of this Warrant, on delivery of
an indemnity agreement or security reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at its expense, twice only, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.

     

    9.           Registration
Rights.  The Holder of this Warrant has been granted certain
piggy-back registration rights by the Company.  These registration
rights are set forth in the Subscription Agreement.  The terms of the
Subscription Agreement are incorporated herein by this reference.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    10.           Maximum
Exercise.  The Holder shall not be entitled to exercise this
Warrant on an exercise date, in connection with that number of shares of Common
Stock which would be in excess of the sum of (i) the number of shares of
Common Stock beneficially owned by the Holder and its affiliates on an exercise
date, and (ii) the number of shares of Common Stock issuable upon the
exercise of this Warrant with respect to which the determination of this
limitation is being made on an exercise date, which would result in beneficial
ownership by the Holder and its affiliates of more than 4.99% of the outstanding
shares of Common Stock on such date.  For the purposes of the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the 1934 Act and Rule 13d-3
thereunder.  Subject to the foregoing, the Holder shall not be limited
to aggregate exercises which would result in the issuance of more than
4.99%.  The restriction described in this paragraph may be
waived, in whole or in part, upon sixty-one (61) days prior notice from the
Holder to the Company to increase such percentage to up to 9.99%, but not in
excess of 9.99%.  The Holder may decide whether to convert a
Convertible Note or exercise this Warrant to achieve an actual 4.99% or up to
9.99% ownership position as described above, but not in excess of
9.99%.

     

    11.           Warrant
Agent.  The Company may, by written notice to the Holder of the
Warrant, appoint an agent (a “Warrant Agent”) for the purpose of issuing Common
Stock (or Other Securities) on the exercise of this Warrant pursuant to
Section 1, exchanging this Warrant pursuant to Section 7, and
replacing this Warrant pursuant to Section 8, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be, shall
be made at such office by such Warrant Agent.

     

    12.           Transfer on the Company's
Books.  Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the
contrary.

     

    13.           Notices.   All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur.  The
addresses for such communications shall be:  if to the Company, to:
Conspiracy Entertainment Holdings, Inc., 612 Santa Monica Boulevard, Santa
Monica, CA 90401, Attn: Keith Tanaka, CFO, telecopier: (310) 260-1450, with a
copy by telecopier only to: Sichenzia Ross Friedman Ference LLP, 61 Broadway,
32nd
Floor, New York, NY 10006, Attn: Marc J. Ross, Esq., telecopier: (212) 930-9725,
and (ii) if to the Holder, to the address and telecopier number listed on the
first paragraph of this Warrant, with a copy by telecopier only to: Grushko
& Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York 10176,
telecopier number: (212) 697-3575.

     

    14.           Law Governing This
Warrant.  This Warrant shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of laws.  Any action brought by either party against the
other concerning the transactions contemplated by this Warrant shall be brought
only in the state courts of New York or in the federal courts located in the
state and county of New York.  The parties to this Warrant hereby
irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non
conveniens.  The Company and Holder waive trial by
jury.  The prevailing party shall be entitled to recover from the
other party its reasonable attorney's fees and costs.  In the event
that any provision of this Warrant or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law.  Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of any agreement.   Each party hereby
irrevocably waives personal service of process and consents to process being
served in any suit, action or proceeding in connection with this Agreement or
any other Transaction Document 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 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 other manner permitted by law.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.

     

     

    
      	 
      	
              CONSPIRACY
      ENTERTAINMENT HOLDINGS, INC.

               

               

               

              By:           _________________________________________

              Name:

               

               

               

               

            
	 
      	 
      	 
      

    

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    Exhibit A

    

    FORM OF
SUBSCRIPTION

    (to be
signed only on exercise of Warrant)

    TO:  CONSPIRACY
ENTERTAINMENT HOLDINGS, INC.

     

    The
undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable
box):

    

    ___  ________
shares of the Common Stock covered by such Warrant; or

     

    ___  the
maximum number of shares of Common Stock covered by such Warrant pursuant to the
cashless exercise procedure set forth in Section 2.

    

    The
undersigned herewith makes payment of the full purchase price for such shares at
the price per share provided for in such Warrant, which is
$___________.  Such payment takes the form of (check applicable box or
boxes):

    ___      $__________
in lawful money of the United States; and/or

     

    ___      the
cancellation of such portion of the attached Warrant as is exercisable for a
total of _______ shares of Common Stock (using a Fair Market Value of $_______
per share for purposes of this calculation); 

    and/or

    

    ___           the
cancellation of such number of shares of Common Stock as is necessary, in
accordance with the formula set forth in Section 2, to exercise this
Warrant with respect to the maximum number of shares of 

    Common
Stock purchasable pursuant to the cashless exercise procedure set forth in
Section 2.

     

    The
undersigned requests that the certificates for such shares be issued in the name
of,  and delivere to_____________________________________________________
whose address is _________________________________________________

    ______________________________________ .

    

    The
undersigned represents and warrants that all offers and sales by the undersigned
of the securities issuable upon exercise of the within Warrant shall be made
pursuant to registration of the Common Stock under the Securities Act of 1933,
as amended (the “Securities Act”), or pursuant to an exemption from registration
under the Securities Act.

    

    
      	
              Dated:___________________

            	
              ___________________________________________

              (Signature
      must conform to name of holder as 

              specified
      on the face of the Warrant)

               

              ___________________________________________

              ___________________________________________

              (Address)

            

    

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    Exhibit B

    
 

    

    FORM OF
TRANSFEROR ENDORSEMENT

    (To be
signed only on transfer of Warrant)

     

    For value
received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading "Transferees" the right represented by
the within Warrant to purchase the percentage and number of shares of Common
Stock of CONSPIRACY ENTERTAINMENT HOLDINGS, INC. to which the within Warrant
relates specified under the headings "Percentage Transferred" and "Number
Transferred," respectively, opposite the name(s) of such person(s) and appoints
each such person Attorney to transfer its respective right on the books of
CONSPIRACY ENTERTAINMENT HOLDINGS, INC. with full power of substitution in the
premises.

     

    

    
      	
              Transferees

            	
              Percentage Transferred

            	
              Number Transferred

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

    

    

    

    
      	
              Dated:  ______________,
      ___________

               

               

               

              Signed
      in the presence of:

               

              _____________________________________

              (Name)

               

               

              ACCEPTED
      AND AGREED:

              [TRANSFEREE]

               

               

              _____________________________________

              (Name)

               

            	
              ________________________________________________________________

              (Signature
      must conform to name of holder as specified on the face of the
      warrant)

               

               

               

              _________________________________________________

              _________________________________________________

              (address)

               

               

              _________________________________________________

              _________________________________________________

              (address)

            

    

    

    
      
         

      

      
        14f10k2009ex4xxviii_conspiracy.htm

     

    Exhibit 4.28

    
 

    AMENDMENT
AGREEMENT

    

    THIS AMENDMENT AGREEMENT (this
“Agreement”),
dated as of December 16, 2009 is entered into by and between Conspiracy
Entertainment Holdings,  Inc., a Utah corporation (the “Company”) and each of
the purchasers holders identified on the signature pages hereof (the “Purchasers”). Capitalized terms used herein, but
not otherwise defined, shall have the meanings ascribed to such terms in the
Purchase Agreements (each as defined below).

    

    WHEREAS, pursuant to the
Securities Purchase Agreement, dated August 31, 2004 as amended, by and among
the Company and the purchasers signatory thereto (the “August 2004 Purchase
Agreement” and such purchasers, the “August 2004
Purchasers”, the Company issued to the August 2004 Purchasers 5% Secured
Convertible Debentures in the aggregate principal amount of $1,050,000 dated
August 31, 2004 due on August 31, 2006 (the “August 2004
Debentures”) and Class 2004-A (the “August 2004 Class-A
Warrants”) and Class 2004-B common stock purchase warrants dated August
31, 2004 (the “August
2004 Class-B Warrants”, and together with the August 2004 Class-A
Warrants, the “August
2004 Warrants” and together with the August 2004 Purchase Agreement and
the August 2004 Debentures, the “August 2004 Transaction
Documents”);

    

    WHEREAS, on October 6 2004,
the Company issued to one accredited investor (the “October 2004
Purchaser”) a 5% Secured Convertible Debenture in the principal amount of
$50,000 (the “October
2004 Debenture”) and Class 2004-A (the “October Class 2004-A
Warrants”) and Class 2004-B common stock purchase warrants dated October
6, 2004 (the “October
Class B-2004 Warrants” and together with the October Class 2004-A
Warrants, the “October
2004 Warrants” and together with the October 2004 Debenture, the “October 2004 Transaction
Documents”);

    

    WHEREAS, pursuant to the
Securities Purchase Agreement, dated February 9, 2005, as amended, by and among
the Company and the purchaser signatory thereto (the “February 2005 Purchase
Agreement” and such purchasers, the “February 2005
Purchasers”), the Company issued to the February 2005 Purchasers 5%
Secured Convertible Debenture in the aggregate principal amount of $650,000
dated February 9, 2005 (the “February 2005
Debentures”) and Class 2005-A (the “February Class 2005-A
Warrants”) and Class 2005-B common stock purchase warrants dated February
9, 2005 (the “February
Class 2005-B Warrants, and together with the February Class 2005-A
Warrants, the “February 2005
Warrants”, and together with the February 2005 Purchase Agreement and the
February 2005 Debenture, the “February 2005 Transaction
Documents”);

    

    WHEREAS, on August 5, 2005 and
August 8, 2005, the Company issued to two accredited investors (the “August 2005
Purchasers”) Notes in the aggregate principal amount of $223,600 (the
“August 2005
Notes”.  In connection with the issuance of the August 2005
Notes, the Company entered into an Amendment Agreement (the “August 2005 Amendment
and together with the August 2005 Notes, the “August 2005 Transaction
Documents”), pursuant to which the August 2005 Notes were added to the
Security interest agreements entered into in connection with the August 2004
Purchase Agreement and the February 2005 Purchase Agreement.  In
addition, the conversion price of the August 2004 Debentures and the February
2005 Debentures was amended to the lesser of $0.05 or 70% of the average of the
five lowest closing bid prices for the Company’s common stock for the 30 trading
days prior to a conversion date;

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    WHEREAS, on August 11, 2006,
the Company entered into a Second Amendment Agreement, by and among the Company
and the subscribers signatory thereto (the “August 2006
Amendment”), and such subscribers, the “August 2006
Purchasers”) pursuant to which the Company issued 15% Secured Convertible
Notes in the aggregate principal amount of $247,000 (the “August 2006 Notes”
and together with the August 2006 Amendment, the “August 2006 Transaction
Documents”).  Pursuant to the August 2006 Amendment, the
conversion price of the August 2004 Debentures and the February 2005 Debentures
was amended to the lesser of $0.02 or 70% of the average of the 5 lowest closing
bid prices for the Company’s common stock for the 30 trading days prior to a
conversion date.  In addition, certain officers of the Company
delivered signed resignations which were to be effective in the event certain
revenue targets were not met during the year ended December 31,
2006,

    

    WHEREAS, pursuant to the
Subscription Agreement dated March 30, 2007, by and among the Company and the
subscribers signatory thereto (the :”March 2007 Subscription
Agreement”), and such subscribers, the “March 2007
Purchasers”), the Company issued to the March 2007 Purchasers 15% Secured
Convertible Notes in the aggregate principal amount of $80,000 dated March 30,
2007 (the “March 2007
Notes”) and together with the March 2007 Subscription Agreement, the
“March 2007
Transaction Documents”);

    

    WHEREAS, pursuant to the
Subscription Agreement dated July 9, 2007, by and among the Company and the
subscribers signatory thereto (the :”July 2007 Subscription
Agreement”), and such subscribers, the “July 2007
Purchasers”), the Company issued to the July 2007 Purchasers 15% Secured
Convertible Notes in the aggregate principal amount of $200,000 dated July 9,
2007 (the “July 2007
Notes”) and together with the July 2007 Subscription Agreement, the
“July 2007 Transaction
Documents”);

    

    WHEREAS, on February 21, 2008,
the Company issued to two accredited investors (the “February 2008
Purchasers”) secured notes in the aggregate principal amount of $227,778
(the “February 2008
Notes”);

    

    WHEREAS, pursuant to the
Subscription Agreement, dated May 21, 2009, as amended, by and among the Company
and the subscribers signatory thereto (the “May 2009 Subscription
Agreement” and such subscribers, the “May 2009 Purchasers”
and together with the August 2004 Purchasers, the October 2004 Purchasers, the
February 2005 Purchasers, the August 2005 Purchasers, the August 2006
Purchasers, the March 2007 Purchasers, the July 2007 Purchasers, and the
February 2008 Purchasers, the “Purchasers”), the
Company issued to the May 2009 Purchasers 15% Secured Convertible Notes dated
May 21, 2009 (the “May
2009 Notes” and together with the August 2004 Debentures, the October
2004 Debentures, the February 2005 Debentures, the August 2005 Notes, the August
2006 Notes, the March 2007 Notes, the July 2007 Notes and the February 2008
Notes, the “Notes” and together
with the August 2004 Transaction Documents, the October 2004 Transaction
Documents, the February 2005 Transaction Documents, the August 2005 Transaction
Documents, the August 2006 Transaction Documents, the March 2007 Transaction
Documents, the July 2007 Transaction Documents and the February 2008 Notes, the
“Transaction
Documents”);

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    WHEREAS, the Company and the
Purchasers have agreed to certain amendments to the Transaction Documents
subject to the terms and conditions of this Agreement.

    

    NOW, THEREFORE, in
consideration of the terms and conditions contained in this Agreement, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound hereby, agree as
follows:

    

    1. Waiver of Existing
Defaults. The Purchasers hereby waive any defaults or breaches that may
have resulted by way of the Company's failure to pay any and all amounts
outstanding under the Notes by their stated maturity dates.

     

    2. Extension of Maturity
Dates. The Maturity Dates of each of the Notes shall be extended until
June 30, 2011.

     

    

     

    3. Adjustment to Conversion
Price.  The definition of the Conversion Price in each of the
Notes shall be deleted in its entirety and replaced with the
following:

    

    “Conversion Price”
means the lesser of (i) $0.01 or (ii) 70% of the average of the 5 lowest closing
bid prices of the Common Stock of the Company for the 30 Trading Days prior to
the Conversion Date.

    

    4. Addition of Conversion
Feature to August 2005 Notes.

     

    (a) The
following Section 1.5 shall be added to the August 2005 Notes:

     

    1.5    The
Holder shall have the right to convert the principal and any interest due under
this Note into shares of the Borrower’s Common Stock, $0.001 par value per share
(“Common
Stock”) as set forth below:

     

    (a)            The
Holder shall have the right from and after the date of the issuance of this Note
and then at any time until this Note is fully paid, to convert any outstanding
and unpaid principal portion of this Note, and accrued interest, at the election
of the Holder (the date of giving of such notice of conversion being a "Conversion Date") into fully
paid and nonassessable shares of Common Stock as such stock exists on the date
of issuance of this Note, or any shares of capital stock of Borrower into which
such Common Stock shall hereafter be changed or reclassified, at the conversion
price as defined in Section 1.5(b) hereof (the "Conversion Price"), determined
as provided herein.  Upon delivery to the Borrower of a completed
Notice of Conversion, a form of which is annexed hereto as Exhibit A, Borrower shall
issue and deliver to the Holder within three (3) business days after the
Conversion Date (such third day being the “Delivery Date”) that number of
shares of Common Stock for the portion of the Note converted in accordance with
the foregoing.  At the election of the Holder, the Borrower will
deliver accrued but unpaid interest on the Note, if any, through the Conversion
Date directly to the Holder on or before the Delivery Date (as defined in the
Second Amendment).  The number of shares of Common Stock to be issued
upon each conversion of this Note shall be determined by dividing that portion
of the principal of the Note and interest, if any, to be converted, by the
Conversion Price.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (b)            Subject
to adjustment as provided in Section 1.5(c) hereof, the conversion price per
share shall be equal to the lesser of (i) $0.01 or (ii) 70% of the average of
the 5 lowest closing bid prices of the Common Stock of the Company for the 30
Trading Days prior to a Conversion Date  (“Conversion
Price”).

     

    (c)            The Conversion Price and number and
kind of shares or other securities to be issued upon conversion determined
pursuant to Section 1.5(a), shall be subject to adjustment from time to time
upon the happening of certain events while this conversion right remains
outstanding, as follows:

     

    A.           Merger, Sale of Assets,
etc.  If (A) the Borrower effects any merger
or  consolidation of the Borrower with or into another entity, (B) the
Borrower effects any sale of all or substantially all of its assets in one or a
series of related transactions,  (C) any tender offer or exchange
offer (whether by the Borrower or another entity) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, (D) the Borrower consummates a stock
purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with one
or more persons or entities whereby such other persons or entities acquire more
than the 50% of the outstanding shares of Common Stock (not including any shares
of Common Stock held by such other persons or entities making or party to, or
associated or affiliated with the other persons or entities making or party to,
such stock purchase agreement or other business combination), (E) any "person"
or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of
the 1934 Act) is or shall become the "beneficial owner" (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate
Common Stock of the Borrower, or (F) the Borrower 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 (in any such case, a "Fundamental  Transaction"),
this Note, as to the unpaid principal portion thereof and accrued interest
thereon, shall thereafter be deemed to evidence the right to convert into such
number and kind of shares or other securities and property as would have been
issuable or distributable on account of such Fundamental Transaction, upon or
with respect to the securities subject to the conversion right immediately prior
to such Fundamental Transaction.  The foregoing provision shall
similarly apply to successive Fundamental Transactions of a similar nature by
any such successor or purchaser.  Without limiting the generality of
the foregoing, the anti-dilution provisions of this Section shall apply to such
securities of such successor or purchaser after any such Fundamental
Transaction.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    B.           Reclassification,
etc.  If the Borrower at any time shall, by reclassification or
otherwise, change the Common Stock into the same or a different number of
securities of any class or classes that may be issued or outstanding, this Note,
as to the unpaid principal portion thereof and accrued interest thereon, shall
thereafter be deemed to evidence the right to purchase an adjusted number of
such securities and kind of securities as would have been issuable as the result
of such change with respect to the Common Stock immediately prior to such
reclassification or other change.

     

    C.           Stock Splits, Combinations
and Dividends.  If the shares of Common Stock are subdivided or
combined into a greater or smaller number of shares of Common Stock, or if a
dividend is paid on the Common Stock in shares of Common Stock, the Conversion
Price shall be proportionately reduced in case of subdivision of shares or stock
dividend or proportionately increased in the case of combination of shares, in
each such case by the ratio which the total number of shares of Common Stock
outstanding immediately after such event bears to the total number of shares of
Common Stock outstanding immediately prior to such event.

     

    D.           Share
Issuance.   So long as this
Note is outstanding, if the Borrower shall issue any Common Stock except for the
Excepted Issuances (as defined in the respective Purchase Agreements), prior to
the complete conversion or payment of this Note, for a consideration per share
that is less than the Conversion Price that would be in effect at the time of
such issue, then, and thereafter successively upon each such issuance, the
Conversion Price shall be reduced to such other lower issue
price.  For purposes of this adjustment, the issuance of any security
or debt instrument of the Borrower carrying the right to convert such security
or debt instrument into Common Stock or of any warrant, right or option to
purchase Common Stock shall result in an adjustment to the Conversion Price upon
the issuance of the above-described security, debt instrument, warrant, right,
or option and again upon the issuance of shares of Common Stock upon exercise of
such conversion or purchase rights if such issuance is at a price lower than the
then applicable Conversion Price.  The reduction of the Conversion
Price described in this paragraph is in addition to the other rights of the
Holder described in the respective Purchase Agreement.  Common Stock issued or issuable by
the Borrower for no consideration will be deemed issuable or to have been issued
for $0.001 per share of Common Stock.  The reduction of the
Conversion Price described in this paragraph is in addition to the other rights
of the Holder described in the respective Purchase
Agreement.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (d)           Whenever
the Conversion Price is adjusted pursuant to Section 1.5(c) above, the Borrower
shall promptly mail to the Holder a notice setting forth the Conversion Price
after such adjustment and setting forth a statement of the facts requiring such
adjustment.

     

    (e)           During the period the conversion
right exists, Borrower will reserve from its authorized and unissued Common
Stock not less than an amount of Common Stock equal to 150% of the amount of
shares of Common Stock issuable upon the full conversion of this
Note.  Borrower represents that upon issuance, such shares will be
duly and validly issued, fully paid and non-assessable.  Borrower
agrees that its issuance of this Note shall constitute full authority to its
officers, agents, and transfer agents who are charged with the duty of executing
and issuing stock certificates to execute and issue the necessary certificates
for shares of Common Stock upon the conversion of this Note.

     

    (b) The
following Section 1.6 shall be added to the August 2005 Notes:

     

    1.6           Method of
Conversion.  This Note may be converted by the Holder in whole
or in part as described in Section 1.5(a) hereof.  Upon partial
conversion of this Note, a new Note containing the same date and provisions of
this Note shall, at the request of the Holder, be issued by the Borrower to the
Holder for the principal balance of this Note and interest which shall not have
been converted or paid.

     

    (c) The
following Section 1.7 shall be added to the August 2005 Notes

     

    1.7           Maximum
Conversion.  The Holder shall not be entitled to convert on a
Conversion Date that amount of the Note in connection with that number of shares
of Common Stock which would be in excess of the sum of (i) the number of shares
of Common Stock beneficially owned by the Holder and its affiliates on a
Conversion Date, (ii) any Common Stock issuable in connection with the
unconverted portion of the Note, and (iii) the number of shares of Common Stock
issuable upon the conversion of the Note with respect to which the determination
of this provision is being made on a Conversion Date, which would result in
beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock of the Borrower on such Conversion
Date.  For the purposes of the provision to the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3
thereunder.  Subject to the foregoing, the Holder shall not be limited
to aggregate conversions of only 4.99% and aggregate conversion by the Holder
may exceed 4.99%.  The Holder shall have the authority and obligation
to determine whether the restriction contained in this Section 2.3 will limit
any conversion hereunder and to the extent that the Holder determines that the
limitation contained in this Section applies, the determination of which portion
of the Notes are convertible shall be the responsibility and obligation of the
Holder.  The Holder may waive the conversion limitation described in
this Section 1.7, in whole or in part, upon and effective after 61 days prior
written notice to the Borrower to increase such percentage to up to
9.99%.

     

    (d) The
Notice of Conversion in the form annexed hereto as Exhibit A shall be added to
the August 2005 Notes.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    5. Addition of Conversion
Feature to February 2008 Notes.

     

    (a) The
following Section 1.3 shall be added to the February 2008 Notes:

     

    1.3
The Holder shall have the right to convert the principal and any interest due
under this Note into shares of the Borrower’s Common Stock, $0.001 par value per
share (“Common
Stock”) as set forth below:

     

    (a) The
Holder shall have the right from and after the date of the issuance of this Note
and then at any time until this Note is fully paid, to convert any outstanding
and unpaid principal portion of this Note, and accrued interest, at the election
of the Holder (the date of giving of such notice of conversion being a "Conversion Date") into fully
paid and nonassessable shares of Common Stock as such stock exists on the date
of issuance of this Note, or any shares of capital stock of Borrower into which
such Common Stock shall hereafter be changed or reclassified, at the conversion
price as defined in Section 1.3(b) hereof (the "Conversion Price"), determined
as provided herein.  Upon delivery to the Borrower of a completed
Notice of Conversion, a form of which is annexed hereto as Exhibit A, Borrower shall
issue and deliver to the Holder within three (3) business days after the
Conversion Date (such third day being the “Delivery Date”) that number of
shares of Common Stock for the portion of the Note converted in accordance with
the foregoing.  At the election of the Holder, the Borrower will
deliver accrued but unpaid interest on the Note, if any, through the Conversion
Date directly to the Holder on or before the Delivery Date (as defined in the
Second Amendment).  The number of shares of Common Stock to be issued
upon each conversion of this Note shall be determined by dividing that portion
of the principal of the Note and interest, if any, to be converted, by the
Conversion Price.

     

    (b) Subject
to adjustment as provided in Section 1.3(c) hereof, the conversion price per
share shall be equal to the lesser of (i) $0.01 or (ii) 70% of the average of
the 5 lowest closing bid prices of the Common Stock of the Company for the 30
Trading Days prior to a Conversion Date (“Conversion
Price”..

     

    (c)            The Conversion Price and number and
kind of shares or other securities to be issued upon conversion determined
pursuant to Section 1.3(a), shall be subject to adjustment from time to time
upon the happening of certain events while this conversion right remains
outstanding, as follows:

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    A.           Merger, Sale of Assets,
etc.  If (A) the Borrower effects any merger
or  consolidation of the Borrower with or into another entity, (B) the
Borrower effects any sale of all or substantially all of its assets in one or a
series of related transactions,  (C) any tender offer or exchange
offer (whether by the Borrower or another entity) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, (D) the Borrower consummates a stock
purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with one
or more persons or entities whereby such other persons or entities acquire more
than the 50% of the outstanding shares of Common Stock (not including any shares
of Common Stock held by such other persons or entities making or party to, or
associated or affiliated with the other persons or entities making or party to,
such stock purchase agreement or other business combination), (E) any "person"
or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of
the 1934 Act) is or shall become the "beneficial owner" (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate
Common Stock of the Borrower, or (F) the Borrower 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 (in any such case, a "Fundamental  Transaction"),
this Note, as to the unpaid principal portion thereof and accrued interest
thereon, shall thereafter be deemed to evidence the right to convert into such
number and kind of shares or other securities and property as would have been
issuable or distributable on account of such Fundamental Transaction, upon or
with respect to the securities subject to the conversion right immediately prior
to such Fundamental Transaction.  The foregoing provision shall
similarly apply to successive Fundamental Transactions of a similar nature by
any such successor or purchaser.  Without limiting the generality of
the foregoing, the anti-dilution provisions of this Section shall apply to such
securities of such successor or purchaser after any such Fundamental
Transaction.

     

    B.           Reclassification,
etc.  If the Borrower at any time shall, by reclassification or
otherwise, change the Common Stock into the same or a different number of
securities of any class or classes that may be issued or outstanding, this Note,
as to the unpaid principal portion thereof and accrued interest thereon, shall
thereafter be deemed to evidence the right to purchase an adjusted number of
such securities and kind of securities as would have been issuable as the result
of such change with respect to the Common Stock immediately prior to such
reclassification or other change.

     

    C.           Stock Splits, Combinations
and Dividends.  If the shares of Common Stock are subdivided or
combined into a greater or smaller number of shares of Common Stock, or if a
dividend is paid on the Common Stock in shares of Common Stock, the Conversion
Price shall be proportionately reduced in case of subdivision of shares or stock
dividend or proportionately increased in the case of combination of shares, in
each such case by the ratio which the total number of shares of Common Stock
outstanding immediately after such event bears to the total number of shares of
Common Stock outstanding immediately prior to such event.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    D.           Share
Issuance.   So long as this
Note is outstanding, if the Borrower shall issue any Common Stock except for the
Excepted Issuances (as defined in the respective Purchase Agreements), prior to
the complete conversion or payment of this Note, for a consideration per share
that is less than the Conversion Price that would be in effect at the time of
such issue, then, and thereafter successively upon each such issuance, the
Conversion Price shall be reduced to such other lower issue
price.  For purposes of this adjustment, the issuance of any security
or debt instrument of the Borrower carrying the right to convert such security
or debt instrument into Common Stock or of any warrant, right or option to
purchase Common Stock shall result in an adjustment to the Conversion Price upon
the issuance of the above-described security, debt instrument, warrant, right,
or option and again upon the issuance of shares of Common Stock upon exercise of
such conversion or purchase rights if such issuance is at a price lower than the
then applicable Conversion Price.  The reduction of the Conversion
Price described in this paragraph is in addition to the other rights of the
Holder described in the respective Purchase Agreement.  Common Stock issued or issuable by
the Borrower for no consideration will be deemed issuable or to have been issued
for $0.001 per share of Common Stock.  The reduction of the
Conversion Price described in this paragraph is in addition to the other rights
of the Holder described in the respective Purchase
Agreement.

     

    (d)           Whenever
the Conversion Price is adjusted pursuant to Section 1.3(c) above, the Borrower
shall promptly mail to the Holder a notice setting forth the Conversion Price
after such adjustment and setting forth a statement of the facts requiring such
adjustment.

     

    (e)           During the period the conversion
right exists, Borrower will reserve from its authorized and unissued Common
Stock not less than an amount of Common Stock equal to 150% of the amount of
shares of Common Stock issuable upon the full conversion of this
Note.  Borrower represents that upon issuance, such shares will be
duly and validly issued, fully paid and non-assessable.  Borrower
agrees that its issuance of this Note shall constitute full authority to its
officers, agents, and transfer agents who are charged with the duty of executing
and issuing stock certificates to execute and issue the necessary certificates
for shares of Common Stock upon the conversion of this Note.

    

    (b) The
following Section 1.4 shall be added to the February 2008 Notes:

     

    1.4           Method of
Conversion.  This Note may be converted by the Holder in whole
or in part as described in Section 1.3(a) hereof.  Upon partial
conversion of this Note, a new Note containing the same date and provisions of
this Note shall, at the request of the Holder, be issued by the Borrower to the
Holder for the principal balance of this Note and interest which shall not have
been converted or paid.

     

    (c) The
following Section 1.5 shall be added to the February 2008 Notes:

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    1.5           Maximum
Conversion.  The Holder shall not be entitled to convert on a
Conversion Date that amount of the Note in connection with that number of shares
of Common Stock which would be in excess of the sum of (i) the number of shares
of Common Stock beneficially owned by the Holder and its affiliates on a
Conversion Date, (ii) any Common Stock issuable in connection with the
unconverted portion of the Note, and (iii) the number of shares of Common Stock
issuable upon the conversion of the Note with respect to which the determination
of this provision is being made on a Conversion Date, which would result in
beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock of the Borrower on such Conversion
Date.  For the purposes of the provision to the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3
thereunder.  Subject to the foregoing, the Holder shall not be limited
to aggregate conversions of only 4.99% and aggregate conversion by the Holder
may exceed 4.99%.  The Holder shall have the authority and obligation
to determine whether the restriction contained in this Section 2.3 will limit
any conversion hereunder and to the extent that the Holder determines that the
limitation contained in this Section applies, the determination of which portion
of the Notes are convertible shall be the responsibility and obligation of the
Holder.  The Holder may waive the conversion limitation described in
this Section 1.5, in whole or in part, upon and effective after 61 days prior
written notice to the Borrower to increase such percentage to up to
9.99%.

     

    (d)            The
Notice of Conversion in the form annexed hereto as Exhibit A shall be
added to the February 2008 Note.

     

    6. Addition of Cashless
Exercise Feature to August 2004 Class-B Warrants.

     

    (a) The
following Section 2.4 shall be added to the August 2004  Class-B
Warrants:

     

    2.4  Cashless
Exercise.

     

    (i) Payment upon
exercise may be made at the option of the Holder either in (i) cash, wire
transfer or by certified or official bank check payable to the order of the
Company equal to the applicable aggregate Purchase Price, (ii) by delivery of
Common Stock issuable upon exercise of the Warrants or (iii) by a
combination of any of the foregoing methods, for the number of Common Stock
specified in such form (as such exercise number shall be adjusted to reflect any
adjustment in the total number of shares of Common Stock issuable to the holder
per the terms of this Warrant) and the holder shall thereupon be entitled to
receive the number of duly authorized, validly issued, fully-paid and
non-assessable shares of Common Stock (or Other Securities) determined as
provided herein.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (ii) Subject to the
provisions herein to the contrary, if the Fair Market Value of one share of
Common Stock is greater than the Purchase Price (at the date of calculation as
set forth below), in lieu of exercising this Warrant for cash, the holder may
elect to receive shares equal to the value (as determined below) of this Warrant
(or the portion thereof being cancelled) by delivery of a properly endorsed
Subscription Form delivered to the Company, in which event the Company shall
issue to the holder a number of shares of Common Stock computed using the
following formula:

     

    X=Y (A-B)

              A

     

    
      	
                                  
      Where   

            	
              X= 

               

              Y=

            	
              the
      number of shares of Common Stock to be issued to the holder

               

              the
      number of shares of Common Stock purchasable under the Warrant or, if only
      a portion of the Warrant is being exercised, the portion of the Warrant
      being exercised (at the date of such
  calculation)

            

    

     

    
      	
               
      

            	
              A=

            	
              Fair
      Market Value

            

    

     

    
      	
               
      

            	
              B=

            	
              Purchase
      Price (as adjusted to the date of such
  calculation)

            

    

     

    For
purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood
and acknowledged that the Warrant Shares issued in a cashless exercise
transaction in the manner described above shall be deemed to have been acquired
by the Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued pursuant to the
Subscription Agreement.

    

    Notwithstanding
anything herein to the contrary, on the Expiration Date, this Warrant shall be
automatically exercised via cashless exercise pursuant to this Section 2.4
subject to any limitations on exercise contained herein.

    

    7. Addition of Cashless
Exercise Feature to October Class B-2004 Warrants.

     

    (b) The
following Section 2.1(e) shall be added to the October Class B-2004
Warrants:

     

    (e)           Cashless
Exercise.

     

    (i) Payment upon
exercise may be made at the option of the Holder either in (i) cash, wire
transfer or by certified or official bank check payable to the order of the
Company equal to the applicable aggregate Purchase Price, (ii) by delivery of
Common Stock issuable upon exercise of the Warrants or (iii) by a
combination of any of the foregoing methods, for the number of Common Stock
specified in such form (as such exercise number shall be adjusted to reflect any
adjustment in the total number of shares of Common Stock issuable to the holder
per the terms of this Warrant) and the holder shall thereupon be entitled to
receive the number of duly authorized, validly issued, fully-paid and
non-assessable shares of Common Stock (or Other Securities) determined as
provided herein.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (ii) Subject to the
provisions herein to the contrary, if the Fair Market Value of one share of
Common Stock is greater than the Purchase Price (at the date of calculation as
set forth below), in lieu of exercising this Warrant for cash, the holder may
elect to receive shares equal to the value (as determined below) of this Warrant
(or the portion thereof being cancelled) by delivery of a properly endorsed
Subscription Form delivered to the Company, in which event the Company shall
issue to the holder a number of shares of Common Stock computed using the
following formula:

     

    X=Y (A-B)

              A

     

    
      	
               
      Where 

            	
              X=  

               

              Y=

            	
              the
      number of shares of Common Stock to be issued to the holder

               

              the
      number of shares of Common Stock purchasable under the Warrant or, if only
      a portion of the Warrant is being exercised, the portion of the Warrant
      being exercised (at the date of such
  calculation)

            

    

     

    
      	
               
      

            	
              A=

            	
              Fair
      Market Value

            

    

     

    
      	
               
      

            	
              B=

            	
              Purchase
      Price (as adjusted to the date of such
  calculation)

            

    

     

    For
purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood
and acknowledged that the Warrant Shares issued in a cashless exercise
transaction in the manner described above shall be deemed to have been acquired
by the Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued pursuant to the
Subscription Agreement.

     

    Notwithstanding
anything herein to the contrary, on the Expiration Date, this Warrant shall be
automatically exercised via cashless exercise pursuant to this Section 2.1(e)
subject to any limitations on exercise contained herein.

     

    8. Addition of Cashless
Exercise Feature to February Class 2005-A Warrants and February Class 2005-B
Warrants.

     

    (a) The
following Section 2.4 shall be added to the February Class 2005-A Warrants and
the February Class 2005-B Warrants:

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    2.4  Cashless
Exercise.

     

    (i) Payment upon
exercise may be made at the option of the Holder either in (i) cash, wire
transfer or by certified or official bank check payable to the order of the
Company equal to the applicable aggregate Purchase Price, (ii) by delivery of
Common Stock issuable upon exercise of the Warrants or (iii) by a
combination of any of the foregoing methods, for the number of Common Stock
specified in such form (as such exercise number shall be adjusted to reflect any
adjustment in the total number of shares of Common Stock issuable to the holder
per the terms of this Warrant) and the holder shall thereupon be entitled to
receive the number of duly authorized, validly issued, fully-paid and
non-assessable shares of Common Stock (or Other Securities) determined as
provided herein.

     

    (ii) Subject to the
provisions herein to the contrary, if the Fair Market Value of one share of
Common Stock is greater than the Purchase Price (at the date of calculation as
set forth below), in lieu of exercising this Warrant for cash, the holder may
elect to receive shares equal to the value (as determined below) of this Warrant
(or the portion thereof being cancelled) by delivery of a properly endorsed
Subscription Form delivered to the Company, in which event the Company shall
issue to the holder a number of shares of Common Stock computed using the
following formula:

     

    X=Y (A-B)

              A

     

    
      	
               
      Where 

            	
              X=  

               

              Y=

            	
              the
      number of shares of Common Stock to be issued to the holder

               

              the
      number of shares of Common Stock purchasable under the Warrant or, if only
      a portion of the Warrant is being exercised, the portion of the Warrant
      being exercised (at the date of such
  calculation)

            

    

     

    
      	
               
      

            	
              A=

            	
              Fair
      Market Value

            

    

     

    
      	
               
      

            	
              B=

            	
              Purchase
      Price (as adjusted to the date of such
  calculation)

            

    

     

    For
purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood
and acknowledged that the Warrant Shares issued in a cashless exercise
transaction in the manner described above shall be deemed to have been acquired
by the Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued pursuant to the
Subscription Agreement.

     

    Notwithstanding
anything herein to the contrary, on the Expiration Date, this Warrant shall be
automatically exercised via cashless exercise pursuant to this Section 2.4
subject to any limitations on exercise contained herein.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    9. Extension of Expiration
Dates.  The Expiration Date of the February Class 2005-A
Warrants is hereby extended to February 28, 2012.

     

    10. Required Payments Under
Notes.  There shall be no cash payments required under the
Notes until their Maturity Dates.  Any statements to the contrary
contained in the Notes shall be deleted in their entirety.

     

    11. Issuance of
Warrants.  The Company shall issue to the Purchasers an
aggregate of 10,000,000 shares of the Company’s Common Stock for a term of 5
years exercisable at the lesser of (i) $0.01 or (ii) 70% of the average of the 5
lowest closing bid prices of the Common Stock of the Company for the 30 Trading
Days prior to the Exercise Date in the form attached hereto as Exhibit B (the “December 2009
Warrants”).

    

    12. Issuance of Notes in Lieu of
Outstanding Interest.  The Company shall issue to the
Purchasers notes in the aggregate principal amount of $721,146.27 in
consideration of any and all outstanding interest on the Notes in the form
annexed hereto as Exhibit C (the “Interest
Notes”).  The Interest Notes shall bear interest at a rate of
15% per annum, shall be convertible into shares of the Company’s Common Stock at
a Conversion Price equal to $0.01 per Share and shall be due on December 31,
2011.

    

    13. Representations and
Warranties of the Company.  The Company hereby makes the
representations and warranties set forth below to the Purchasers as of the date
of its execution of this Agreement

     

    (a) Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder in accordance
with the terms hereof.  The execution and delivery of this Agreement
by the Company and the consummation by it of the transactions contemplated
hereby have been duly authorized by all necessary action on the part of the
Company and no further action is required by the Company, the Board of Directors
or the Company's stockholders in connection therewith.  This Agreement
has been duly executed by the Company and, when delivered in accordance with the
terms hereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    (b) No
Conflicts.  The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby, subject to the terms hereof and thereof, do not and will
not: (i) conflict with or violate any provision of the Company's or any
Subsidiary's certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected; except in
the case of each of clauses (ii) and (iii), such as could not have or reasonably
be expected to result in a Material Adverse Effect.

     

    (c) Issuance of the Interest
Notes and Warrants.  The Interest Notes and December 2009
Warrants are duly authorized and, upon the execution of this Agreement by the
Purchasers will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens imposed by the Company other than restrictions on
transfer provided for in the Transaction Documents.  The underlying
shares, when issued in accordance with the terms of the Interest Notes ad
Warrants will be validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company.  The Company will have reserved from
its duly authorized capital stock a number of shares of Common Stock for
issuance of the underlying shares sufficient for the conversion in full of the
Notes, the Interest Notes and the Warrants.

     

    (d) Holding Period for
Notes. Pursuant to Rule 144, the holding period of the Notes (and
underlying shares issuable upon conversion and redemption thereof) shall tack
back to the original issue date of each of the Notes.  The Company
agrees not to take a position contrary to this Section 9(d).  The
Company agrees to take all actions, including, without limitation, the issuance
by its legal counsel of any necessary legal opinions (which may be satisfied
pursuant to Section 11), necessary to issue to the underlying shares issuable
upon conversion and redemption thereof) without restriction and not containing
any restrictive legend without the need for any action by the
Purchaser.

     

    (e) No
Novation.  The Amended and Restated Notes are being issued in
substitution for and not in satisfaction of the Notes.  The Amended
and Restated Notes shall not constitute a novation or satisfaction and accord of
any of the Notes.  The Company hereby acknowledges and agrees that the
Amended and Restated Notes shall amend, restate, modify, extend, renew and
continue the terms and provisions contained in the Notes and shall not
extinguish or release the Company or any of its Subsidiaries under any
Transaction Document (as defined in the Purchase Agreements) or otherwise
constitute a novation of its obligations thereunder.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    (f) Equal
Consideration.  No consideration has been offered or paid to
any person to amend or consent to a waiver, modification, forbearance or
otherwise of any provision of any of the Amended and Restated Notes or
Transaction Documents.

     

    14. Representations and
Warranties of the Purchasers.  Each Purchaser hereby makes the
representation and warranty set forth below to the Company as of the date of its
execution of this Agreement. Such Purchaser represents and warrants that (a) the
execution and delivery of this Agreement by it and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
action on its behalf and (b) this Agreement has been duly executed and delivered
by such Purchaser and constitutes the valid and binding obligation of such
Purchaser, enforceable against it in accordance with its terms except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

     

    15. Public
Disclosure.  On or before 5:30 pm (Eastern Time) on the fourth
Trading Day following the date hereof, the Company shall file a Current Report
on Form 8-K, reasonably acceptable to the Purchasers disclosing the material
terms of the transactions contemplated hereby and attaching this Agreement as an
exhibit thereto. The Company shall consult with the Purchasers in issuing any
other press releases with respect to the transactions contemplated
hereby

     

    16. Effect on Transaction
Documents. Except as expressly set
forth above, all of the terms and conditions of the Purchase Agreements and
Notes shall continue in full force and effect after the execution of this
Agreement and shall not be in any way changed, modified or superseded by the
terms set forth herein, including, but not limited to, any other obligations the
Company may have to the Purchasers under the Purchase Agreements and
Notes.  Notwithstanding the foregoing, this Agreement shall be deemed for
all purposes as an amendment to any and all of the Purchase Agreements and Notes
as required to serve the purposes hereof, and in the event of any conflict
between the terms and provisions of any other of the Purchase Agreements or
Notes, on the one hand, and the terms and provisions of this Agreement, on the
other hand, the terms and provisions of this Agreement shall
prevail.

     

    17. Fees and
Expenses.  Except as expressly set forth herein, each party
shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this
Agreement.

     

    18. Entire
Agreement.  This Agreement, together with the exhibits and
schedules hereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    19. Notices. Any and all
notices or other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (a) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number set forth on the signature
pages attached hereto prior to 5:30 p.m. (New York City time) on a Trading Day,
(b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (c) the second Trading
Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (d) upon actual receipt by the party to whom such
notice is required to be given.  The address for such notices and
communications shall be as set forth on the signature pages attached
hereto.

     

    20. Amendments and
Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the
same shall be in writing and signed by the Company and the Purchasers holding at
least 67% of the principal amount of the Amended and Restated Notes then
outstanding or, in the case of a waiver, by the party against whom enforcement
of any such waived provision is sought.  No waiver of any default with
respect to any provision, condition or requirement of this Agreement 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 any party to exercise any right hereunder in any
manner impair the exercise of any such right.

     

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

     

    22. Successors and
Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors and permitted assigns of each of the parties; provided, however, that no
party may assign this Agreement or the obligations and rights of such party
hereunder without the prior written consent of the other parties
hereto.

     

    23. Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents 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 agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York.  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 or is an inconvenient venue for such proceeding.  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 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 other manner
permitted by law.   If either party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its reasonable attorneys’ fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    24. Execution and
Counterparts. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.  In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

     

    25. Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

     

    26. Independent Nature of
Purchasers' Obligations and Rights.  The obligations of each
Purchaser hereunder are several and not joint with the obligations of any other
Purchasers hereunder, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser hereunder. Nothing
contained herein or in any other agreement or document delivered at any closing,
and no action taken by any Purchaser pursuant hereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Purchasers are in any
way acting in concert with respect to such obligations or the transactions
contemplated by this Agreement. Each Purchaser shall be entitled to protect and
enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose. Each Purchaser has been
represented by its own separate legal counsel in their review and negotiation of
the Transaction Documents.

     

    27. Construction. The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise this Agreement and, therefore, the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments hereto. In addition, each and every reference to share prices in
this Agreement shall be subject to adjustment for reverse and forward stock
splits, stock dividends, stock combinations and other similar transactions of
the Common Stock that occur after the date of this Agreement.

     

    28. Re-Issuance of Amended and
Restated Notes. Upon the written request of either any of the Purchasers
or the Company, each party shall use commercially reasonable efforts to deliver
the instruments representing the original Notes to the Company in exchange for
replacement instruments that reflect the revised terms of such securities as set
forth in this Agreement.

     

     [SIGNATURE
PAGE FOLLOWS]

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be
duly executed by their respective authorized signatories as of the date first
indicated above.

     

    
      
        	 	CONSPIRACY ENTERTAINMENT
      HOLDINGS, INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 

      

    

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
PAGE FOR PURCHASERS FOLLOW]

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    [PURCHASER'S
SIGNATURE PAGE TO CPYE AMENDMENT AGREEMENT]

     

    IN
WITNESS WHEREOF, the undersigned have caused this Amendment Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.

     

    Name of
Purchaser:

    Signature of Authorized Signatory of
Purchaser: __________________________

    Name of
Authorized Signatory: _________________________

    Title of
Authorized Signatory: __________________________

    

    

    

    

    [SIGNATURE
PAGES CONTINUE]

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    [PURCHASER'S
SIGNATURE PAGE TO CPYE AMENDMENT AGREEMENT]

     

    IN
WITNESS WHEREOF, the undersigned have caused this Amendment Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.

     

    Name of
Purchaser:

    Signature of Authorized Signatory of
Purchaser: __________________________

    Name of
Authorized Signatory: _________________________

    Title of
Authorized Signatory: __________________________

    

    Name of
Purchaser:

    Signature of Authorized Signatory of
Purchaser: __________________________

    Name of
Authorized Signatory: _________________________

    Title of
Authorized Signatory: __________________________

     

    Name of
Purchaser:

    Signature of Authorized Signatory of
Purchaser: __________________________

    Name of
Authorized Signatory: _________________________

    Title of
Authorized Signatory: __________________________

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    EXHIBIT
A

    

    NOTICE OF
CONVERSION

    

    (To be
executed by the Registered Holder in order to convert the Note)

     

    The
undersigned hereby elects to convert $_________ of the principal and $_________
of the interest due on the Note issued by Conspiracy Entertainment Holdings,
Inc. on February __, 2008 into Shares of Common Stock of Conspiracy
Entertainment Holdings, Inc. (the "Borrower") according to the conditions set
forth in such Note, as of the date written below.

    

    

    

    Date of
Conversion:____________________________________________________________________

    

    

    Conversion
Price:______________________________________________________________________

    

    

    Shares To
Be
Delivered:_________________________________________________________________

    

    

    Signature:____________________________________________________________________________

    

    

    Print
Name:__________________________________________________________________________

    

    

    Address:_____________________________________________________________________________

    

       ____________________________________________________________________________

     

     

     

     

     

     22

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