THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES
LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii)
TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE
UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION
OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL
TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND
APPLICABLE STATE LAW IS AVAILABLE .
PNG VENTURES, INC.
CONVERTIBLE PROMISSORY NOTE
March 31, 2006
March 31, 2007
PNG Ventures, Inc, a Nevada corporation (the “Company”) hereby promises to pay to the order of
James B. Panther, II (the Noteholder), at such place as Noteholder may from time to time designate, in lawful
money of the United States of America, and in immediately payable funds, $120,000 due and payable on March
31, 2007 .
PREPAYMENT . This Convertible Promissory Note (the “Note”) may be prepaid, in whole
or in part, by the Company without the prior written consent of the Noteholder.
TRANSFER and ASSIGNMENT . This Note shall be freely transferable and assignable by
the Noteholder provided such transfer is in compliance with applicable federal and state securities laws.
CONVERSION OF NOTE .
The Noteholder 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, into fully paid and nonassessable shares of the common stock of the
Company as such stock exists on the date of issuance of this Note, or is hereafter be changed or reclassified, at a
“Conversion Price” equal to the lesser of: (i