THE SECURITIES REPRESENTED BY THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN

REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT. CONVERTIBLE PROMISSORY NOTE $____________ ____________ ___, 2010 Los Angeles, California

For value received, ______________________, a Nevada corporation (the “Company”), promises to pay to _________________________________ (the “Holder”), the principal sum of $__________________. Interest shall accrue from the date of this Note on the unpaid principal amount at a rate equal to ten percent (10%) per annum, based on a 360 day year. This Note is one of a series of Convertible Promissory Notes containing substantially identical terms and conditions issued pursuant to that certain Convertible Note Purchase Agreement dated as of ____________, 2010 (the “Purchase Agreement”). Such Notes are referred to herein as the “Notes,” and the holders thereof are referred to herein as the “Holders.” The Holders of at least 75% of the then-outstanding principal amount of the Notes are referred to herein as “75% Holders.” This Note is subject to the following terms and conditions. 1. Maturity. Subject to Section 2, principal and any accrued but unpaid interest under this Note shall be due and payable as of ___________, 2012 (the “Maturity Date”). 2. Conversion.

(a) Optional Conversion. The Holder shall have the right, exercisable at any time prior to the Maturity Date, to convert all (but not part) of the principal amount then outstanding hereunder, plus all accrued but unpaid interest thereon, into shares of the Company’s common stock, par value $.001 per share (the “Common Stock”). In such event, the number of shares of Common Stock to be issued upon conversion shall equal the quotient of (x) the principal amount of this Note then outstanding, plus all accrued but unpaid interest thereon, divided by (y) one (1) (the “Conversion Price”). Upon conversion of this Note, all the principal balance hereunder, together with all accrued but unpaid interest thereon, shall be deemed fully paid and satisfied. (b) Mechanics and Effect of Conversion. No fractional shares of the Company’s Common Stock will be issued upon conversion of this Note. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company will pay to the Holder in cash the amount of the unconverted principal and interest balance of this

DIRECT

ENTERPRISES, INC. – CONVERTIBLE PROMISSORY NOTE

1

– CONVERTIBLE PROMISSORY NOTE 2 . 2. INC. When any adjustment is required to be made in this Note or the Conversion Price under this Section 4. upon the conversion hereof at any time thereafter shall be entitled to receive. as applicable. reclassification. Payment. Adjustments to Conversion Price. (b) Merger Sale.Note that would otherwise be converted into such fractional share. at the principal offices of the Company or any transfer agent of the Company. then the Conversion Price shall be proportionately adjusted. change or conversion of the outstanding securities of the Company or of any reorganization of the Company (or any other corporation the stock or securities of which are at the time receivable upon the conversion of this Note) or any similar corporate reorganization on or after the date hereof. DIRECT ENTERPRISES. Upon conversion of this Note pursuant to this Section 2. or reclassification. sale or other disposition. the stock or other securities or property to which such Holder would have been entitled upon such consummation if such Holder had converted this Note immediately prior thereto. including a check payable to the Holder for any cash amounts payable as described herein. the Company will be forever released from all of its obligations and liabilities under this Note with regard to that portion of the principal amount and accrued interest being converted including without limitation the obligation to pay such portion of the principal amount and accrued interest. in lieu of the stock or other securities and property receivable upon the conversion hereof prior to such consolidation. the Company shall promptly mail to the Holder a certificate setting forth a brief statement of the facts requiring such adjustment and the Conversion Price after such adjustment. All payments shall be made in lawful money of the United States of America at such place as the Holder hereof may from time to time designate in writing to the Company. the Holder shall surrender this Note. At its expense. Reclassification. Etc. the Company will. (a) Adjustments for Stock Splits and Combinations and Stock Dividends. Any adjustments under this Section 4(a) shall be effective at the close of business on the date the stock split or combination becomes effective or the date of payment of the stock dividend. Prepayment. duly endorsed. as soon as practicable thereafter. conversion or reorganization. (B) sale or other disposition of all or substantially all of the Company’s assets or distribution of property to shareholders (other than distributions payable out of earnings or retained earnings). In case of any (A) consolidation or merger (including a merger in which the Company is the surviving entity). This Note may be pre-paid by the Company at any time prior to the Maturity Date or date of conversion (as applicable) without premium or penalty. merger. a certificate or certificates for the number of shares of Common Stock to which such Holder is entitled upon such conversion. effect a stock split or combination of the outstanding Common Stock or pay a stock dividend in shares of Common Stock. (c) Adjustment Certificate. then and in each such case the Holder of this Note. change. at such principal office. 1. Upon conversion of this Note. If the Company shall at any time or from time to time after the date hereof. issue and deliver to such Holder.

7. a new note for the same principal amount and interest will be issued to. pledge. Any amendment or waiver effected in accordance with this Section 8 with respect to the Notes shall be binding upon the Company. except for transfers to affiliates that agree in writing to be bound by a “Lock-up Agreement” as described in Section 4 of the Purchase Agreement. The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. this Note may be transferred only upon surrender of the original Note for registration of transfer. the transferee. Governing Law. Stockholders. mail as certified or registered mail with postage prepaid. or accompanied by a duly executed written instrument of transfer in form satisfactory to the Company. This Note may be executed in any number of counterparts. overnight delivery service or confirmed facsimile. In no event shall any stockholder.S. without giving effect to principles of conflicts of law. Thereupon. construed and interpreted in accordance with the laws of the State of California. and registered in the name of. Subject to the preceding sentence. 4. when delivered personally or by courier. 6. or otherwise transfer this Note without the prior written consent of the Company. This Note and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed. officer or director of the Company be liable for any amounts due or payable pursuant to this Note. Counterparts. Notwithstanding the foregoing. Officers and Directors Not Liable. Amendments and Waivers. INC. each Holder and each transferee of any Note. each of which will be deemed to be an original and all of which together will constitute a single agreement. or similar agreement. the Holder may not assign. if such notice is addressed to the party to be notified at such party’s address or facsimile number as provided in the Purchase Agreement or as subsequently modified by written notice pursuant to the Purchase Agreement. – CONVERTIBLE PROMISSORY NOTE 3 . Interest and principal are payable only to the registered holder of this Note. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt. or 48 hours after being deposited in the U. duly endorsed. 8. 5.3. Any term of this Note may be amended only with the written consent of the Company and the 75% Holders. Notices. Transfer. [Signature Page Follows] DIRECT ENTERPRISES. Successors and Assigns.

This Convertible Promissory Note has been executed and delivered by the Company as of this ___ day of __________. COMPANY: ______________________ President AGREED TO AND ACCEPTED: Date:__________________ ______________________________________ (Name of Purchaser) ______________________________________ (Signature) ______________________________________ (Authorized Representative) ______________________________________ (Title) 4 . 2010.

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