Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - Kedem Pharmaceuticals Inc. | f8k031910_globhealth.htm |
| EX-4.1 - FORM OF SECURITIES PURCHASE AGREEMENT - Kedem Pharmaceuticals Inc. | f8k031910ex4i_globhealth.htm |
| EX-4.5 - FORM OF WARRANT - Kedem Pharmaceuticals Inc. | f8k031910ex4v_globhealth.htm |
| EX-4.4 - FORM OF SECURED PURCHASE NOTE - Kedem Pharmaceuticals Inc. | f8k031910ex4iv_globhealth.htm |
| EX-4.6 - FORM OF ESCROW AGREEMENT - Kedem Pharmaceuticals Inc. | f8k031910ex4vi_globhealth.htm |
| EX-4.3 - FORM OF PLEDGE AGREEMENT - Kedem Pharmaceuticals Inc. | f8k031910ex4iii_globhealth.htm |
Exhibit 4.2
THIS
DEBENTURE AND ANY SECURITIES INTO WHICH THIS DEBENTURE IS CONVERTIBLE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND THIS DEBENTURE, THE SECURITIES AND ANY INTEREST THEREIN MAY
NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS, WHICH, IN THE
OPINION OF COUNSEL FOR THE LENDER, WHICH COUNSEL AND OPINION ARE REASONABLY
SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS AVAILABLE.
FORM
OF DEBENTURE
|
Issue
Amount: $______
|
________,
2010
|
FOR VALUE
RECEIVED, the undersigned, ____________., a _______
corporation (referred to herein as the “Borrower”), with
offices at _________________________, hereby unconditionally promises to pay to
the order of _____________________, its endorsees, successors and/or assigns
(the “Lender”),
in lawful money of the United States, at _______________________ or such other
address as the Lender may from time to time designate, the principal sum of
_________________________ Dollars ($____________) (the “Issue Amount”), with
interest from the date of issuance at the rate of __% per annum. This
Debenture shall mature and become due and payable in full on __________, ____
(the “Maturity
Date”).
Capitalized
terms used herein have the respective meanings ascribed thereto in the
Securities Purchase Agreement dated of even date herewith unless otherwise
defined herein.
1. Original
Issue Discount. The Lender shall purchase this Debenture at a
price equal to ___% of the Issue Amount; ___% of the issue amount shall
represent Original Issue Discount. To the extent applicable, this Debenture
shall be deemed a 12 tranche Debenture equal to the sum of $______ and the
amount of $___________ for each Investor Note (the “Paid In
Amount”).
2. Terms of
Repayment. Principal of and interest on this Debenture shall
be paid by the Borrower as follows:
(a) Principal
and interest shall be due and payable in full on the Maturity Date and shall be
paid in cash, unless permitted to be paid in shares of common stock pursuant to
Section 3, below.
(b) The
Borrower further agrees that, if any payment made by the Borrower or any other
person is applied in payment of this Debenture and is at any time annulled, set
aside, rescinded, invalidated, declared to be fraudulent or preferential or
otherwise required to be refunded or repaid, or the proceeds of any property
hereafter pledged as security for this Debenture which has been applied in
payment of this Debenture is required to be returned by Lender to the pledgor,
its estate, trustee, receiver or any other party, including, without limitation,
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or repayment, the Borrower’s liability
hereunder shall be and remain in full force and effect, as fully as if such
payment had never been made, or, if prior thereto any such lien, security
interest or other collateral hereunder securing the Borrower’s liability
hereunder shall have been released or terminated, this Debenture (and such lien,
security interest or other collateral) shall be reinstated in full force and
effect, and such prior release or termination shall not diminish, release,
discharge, impair or otherwise affect the obligations of the Borrower in respect
to the amount of such payment (or any lien, security interest or other
collateral securing such obligation).
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(c) All
computations of interest, if any, shall be made by Lender on the basis of a year
of 360 days for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest is
payable. Whenever any payment to be made hereunder shall be stated to
be due on a day which is not a business day, such payment shall be made on the
next succeeding day and such extension of time shall in such case be included in
the computation of payment of interest.
(d) At
anytime after the issuance of this Debenture, the Borrower may prepay all or any
part of the outstanding principal amount of this Debenture, together with
interest accrued, if any, upon not fewer than ten (10) trading days’ prior
written notice to the Lender. In the event the Borrower elects to
prepay any portion of this Debenture prior to the Maturity Date, the Borrower
shall be entitled to satisfy a portion of the amount outstanding under this
Debenture by offsetting the amount owed under this Debenture by an amount equal
to 125% of the amount owed under the Investor Notes which amount will satisfy a
corresponding portion of this Debenture. Such satisfaction of the
Debenture shall be considered an offset of liabilities and shall be considered,
in full or partial, payment and satisfaction of this Debenture.
For the
avoidance of any doubt, if the Borrower elects to offset this Debenture with the
Investor Notes at a time when no Investor Notes have been paid and satisfied by
the Lender, then the Borrower shall be entitled to offset the amount owed under
this Debenture by $__________ (which is the amount of Investor Notes
outstanding, $_________, times ____%).
(e) The Issue
Amount may be increased to include any costs, fees or other reasonable expenses
incurred by the Lender in connection with this Debenture and the related
documents.
3. Repayment
in Common Stock.
(a) From the
date that is six (6) months from the date hereof, the Lender shall have the
option, at any time, to request to be re-paid (the “Request for
Repayment”) its Paid In Amount and accrued interest, in full
or in part, in fully-paid and nonassessable shares of Borrower’s Common Stock at
the rate per share equal to the Fixed Re-Payment Price (the “Re-Payment Rate”),
provided, however, that the Lender shall not be permitted to deliver a Request
for Repayment where the dollar amount of the Request for Repayment would exceed
the dollar amount represented by the difference between (i) the amount
outstanding under this Debenture at the time of the Request for Repayment; and
(ii) ______________ percent (____%) of the aggregate principal amount of all of
the notes issued by the Lender to the Borrower on the date hereof (the “Investor Notes”) and
remaining outstanding and not satisfied in cash by the Lender as of the date of
such Request for Repayment. For purposes of this Debenture, the term
“Fixed Re-Payment Price” means the Market Price.
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For purposes of this Debenture, the
term “Market Price” shall mean: (i) 100% of the average of three closing bid
prices of the Company’s common stock as selected by the Lender, within the prior
twenty (20) trading days on the OTC Bulletin Board; or (ii) in the event the
Market Price falls below $____ per share on any for any three of the twenty
(20) trading days, prior to delivery of a Request
for Repayment, the Market Price will be defined as 80% of the
average of three closing bid prices selected by the Lender within the prior
twenty (20) trading days, in each case as recorded by Bloomberg,
L.P.
(b) As
promptly as practicable after notice of the Request for Repayment, pursuant to
this Section 3, the Borrower shall deliver or cause to be delivered to the
Lender certificates for the full number of shares of Common Stock issuable upon
Request for Repayment of this Debenture, in accordance with the provisions
hereof. Any such repayment shall be deemed to have been made at the time that
such notice for the Request for Repayment shall have been received by the
Borrower. If, however, the Borrower fails to deliver the full number
of shares due upon any repayment of common stock within three (3) business days
following the Borrower’s receipt of the request for repayment in common stock
(the “Delivery
Date”), the Borrower shall pay liquidated damages in cash equal to $1,500
per day for each day the Shares are not delivered to the Lender. The Lender is
not obligated nor required to surrender this Debenture upon the Request for
Repayment. A Request for Repayment shall be effectuated by faxing a Notice of
Conversion to the Borrower as provided in this paragraph. The Notice of
Conversion shall be executed by the Lender of this Debenture and shall evidence
such Lender’s intention to request repayment of this Debenture or a specified
portion hereof in the form annexed hereto as Exhibit A. Unless the
Request for Repayment convert the entire remaining principal of this Debenture,
the Lender shall not be required to deliver to the Borrower the original
Debentures. Facsimile delivery of the Notice of Conversion shall be
accepted by the Borrower at facsimile number (604) 324-4845; Attn: Dr. Hassan
Salari, Chief Executive Officer. Certificates representing Common Stock will be
delivered to the Lender at the address specified in the Notice of Conversion
(which may be the Lender’s address for notices as contemplated by the Securities
Purchase Agreement or a different address), by electronic transfer, by crediting
the account of the Lender’s prime broker with DTC through its Deposit Withdrawal
Agent Commission (“DWAC”)
system.
(c) If, on the relevant Delivery Date,
the Company fails for any reason to deliver the Repayment Shares to be DWAC
Eligible, and the Lender purchases, in an arm’s-length open market
transaction or otherwise, shares of Common Stock (the “Covering Shares”) in
order to make delivery in satisfaction of a sale of Common Stock by the
Lender (the “Sold Shares”), which
delivery such Lender anticipated to make using the shares to be issued upon such
Request for Repayment (a “Buy-In”), the Lender
shall have the right to require the Company to pay to the Lender, in addition to
and not in lieu of the amounts contemplated in other provisions of
the Transaction Agreements, including, but not limited to, the provisions of the
immediately preceding Section, the Buy-In Adjustment Amount (as defined below).
The “Buy-In Adjustment Amount” is the amount equal to the number of Sold Shares
multiplied by the excess, if any, of (x) the Lender’s total purchase price per
share (including brokerage commissions, if any) for the Covering Shares over (y)
the net proceeds per share (after brokerage commissions, if any) received by the
Lender from the sale of the Sold Shares. The Company shall pay the
Buy-In Adjustment Amount to the Lender in immediately available funds
immediately upon demand by the Lender. By way of illustration and not
in limitation of the foregoing, if the Lender purchases shares of Common Stock
having a total purchase price (including brokerage commissions) of $11,000 to
cover a Buy-In with respect to shares of Common Stock it sold for net proceeds
of $10,000, the Buy-In Adjustment Amount which Company will be required to pay
to the Lender will be $1,000.
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(c) Percentage
Cap. Notwithstanding the provisions of this Debenture, in no
event (except as specifically provided in the Debenture as an exception to this
provision), (i) during the forty-five (45) day period prior to the Maturity
Date, or (ii) while there is outstanding a tender offer for any or all of the
shares of the Borrower’s Common Stock) shall the Lender be entitled to request
re-payment of this Debenture, or the Borrower have the obligation or option to
issue shares upon such request or in lieu of cash payments hereunder, to the
extent that, after such payment of common stock or issuance the sum of (1) the
number of shares of Common Stock beneficially owned by the Lender and its
affiliates, and (2) the number of shares of Common Stock issuable upon the
request of repayment of the Debenture with respect to which the determination of
the proviso is being made, would result in beneficial ownership by the Lender
and its affiliates of more than 9.99% (the “Percentage Cap”) of
the outstanding shares of Common Stock (after taking into account the shares to
be issued to the Lender upon such repayment). For purposes of the
proviso to the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 12(d) of the Securities Exchange Act of
1934, as amended.
4. Liability
of the Borrower. The Borrower is unconditionally, and without
regard to the liability of any other person, liable for the payment and
performance of this Debenture and such liability shall not be affected by an
extension of time, renewal, waiver, or modification of this Debenture or the
release, substitution, or addition of collateral for this
Debenture. Each person signing this Debenture consents to any and all
extensions of time, renewals, waivers, or modifications, as well as to release,
substitution, or addition of guarantors or collateral security, without
affecting the Borrower’s liabilities hereunder.
5. Representations
and Warranties. The Borrower represents and warrants as
follows:
(i) the
Borrower is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada;
(ii) the
execution, delivery and performance by the Borrower of this Debenture are within
the Borrower’s powers, have been duly authorized by all necessary action, and do
not contravene: (A) the Borrower’s certificate of incorporation or by-laws; or
(B) any law or agreement or document binding on or affecting the
Borrower;
(iii) no
authorization or approval or other action by, and no notice to or filing with,
any governmental authority, regulatory body or third person is required for the
due execution, delivery and performance by the Borrower of this
Debenture;
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(iv) this
Debenture constitutes the legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms except as
enforcement hereof may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors’ rights generally and subject to the
applicability of general principles of equity;
(v) the
Borrower has all requisite power and authority to own and operate its property
and assets and to conduct its business as now conducted and proposed to be
conducted and to consummate the transactions contemplated hereby;
(vi) the
Borrower is duly qualified to conduct its business and is in good standing in
each jurisdiction in which the character of the properties owned or leased by
it, or in which the transaction of its business makes such qualification
necessary except to the extent such failure to qualify would not have a material
adverse effect on the Company;
(vii) there is
no pending or, to the Borrower ‘s knowledge, threatened action or proceeding
affecting the Borrower before any governmental agency or arbitrator which
challenges or relates to this Debenture or which may otherwise have a material
adverse effect on the Borrower;
(viii) after
giving effect to the transactions contemplated by this Debenture, the Borrower
is Solvent;
(ix) the
Borrower is not in violation or default of any provision of its certificate of
incorporation or by-laws, each as currently in effect, or any instrument,
judgment, order, writ, decree or contract, statute, rule or regulation to which
the Borrower is subject;
(x) this
Debenture is validly issued, free of any taxes, liens, and encumbrances related
to the issuance, hereof and is not subject to preemptive right or other similar
right of members of the Borrower; and
(xi) the
Borrower has taken all required action to reserve for issuance fifty million
(50,000,000) shares of Common Stock as may be issuable from time to time upon a
request for repayment of this Debenture in common stock.
6. Covenants. So
long as any principal or interest, if any, is due hereunder and shall remain
unpaid, the Borrower will, unless the Lender shall otherwise consent in
writing:
(a) Maintain
and preserve its existence, rights and privileges;
(b) Not: (i)
directly or indirectly sell, lease or otherwise dispose of any of its property
or assets other than in its ordinary course of business, in the aggregate, to
any person(s), whether in one transaction or in a series of transactions over
any period of time; (ii) merge into, with or consolidate with any other person
unless this Debenture is assumed by the surviving entity; or (iii) adopt any
plan or arrangement for the dissolution or liquidation of the
Borrower;
(c) Give
written notice to Lender upon the occurrence of a Event of Default (as defined
below) within five (5) Business Days of such event;
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(d) Not use
the proceeds from the issuance of this Debenture in any way for any purpose that
entails a violation of, or is inconsistent with, Regulation U of the Board of
Governors of the Federal Reserve System of the United States of
America;
(e) Comply in
all material respects with all applicable laws (whether federal, state or local
and whether statutory, administrative or judicial or other) and with every
applicable lawful governmental order (whether administrative or
judicial);
(f) Not
redeem or repurchase any of its capital stock;
(g) Not: make
any advance or loan to any person, firm or corporation, except for reasonable
travel or business expenses advanced to the Company’s employees or independent
contractors in the ordinary course of business;
(h) Cause its
transfer agent to issue shares of common stock upon written notice of Lender’s
request to receive repayment of this Debenture in shares of common stock
pursuant to the terms herein within five (5) business days of notification; or
(b) at the request of the Lender, cause the removal of any restrictive legend on
any certificate or cause its transfer agent to remove such legend where such
removal is lawful within five (5) business days;
(i) Not take
any action which would impair the rights and privileges of this Debenture set
forth herein or the rights and privileges of the holder of this Debenture;
and
(j) Timely
file all reports required to be filed under the Securities Exchange Act of
1934.
7. Event of
Default. Upon the occurrence of one of the following Events of
Default, (i) the amount due under this Debenture will be immediately due and
payable at the rate of 110% of the sum of such principal amount outstanding
immediately before such Event of Default, and all interest, fees,
costs and penalties then due and, if unsatisfied such amount will
accrue interest at a rate of twelve percent (12%) per annum until fully paid or
exercised; and (ii) the Lender may, at its sole and exclusive option, accelerate
the maturity of this Debenture and demand immediate payment in full, whereupon
the outstanding principal amount of the Debenture and all obligations of
Borrower to Lender hereunder, together with accrued interest thereon and accrued
charges and costs, if any, shall become immediately due and payable without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived, provided, however, that this remedy shall not preclude
the Lender from exchanging this Debenture for shares of Common Stock pursuant to
Section 3 hereof; and (iii) exercise all legally available rights and
privileges.
If an
Event of Default occurs, then such Event of Default shall constitute a
continuing default which will permit the Lender to exercise its rights under
this Section at any time.
An “Event
of Default” shall be when any of the following occur:
(a) The
Company shall default in the payment of principal or interest on this Debenture
or any other amount due hereunder; or
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(b) Any
material default, material misrepresentation, or material breach of a covenant,
representation or warranty or other agreement under the Transaction Documents;
or
(c) Any
transfer, conveyance, or assignment of substantial Company assets or substantial
assets of any of its subsidiaries, in each case not in the ordinary course of
business, except for a merger in which the Company is the surviving Corporation
or in which the surviving corporation assumes the Company’s obligations under
the Transaction Documents; or
(d) Any money
judgment, writ or warrant of attachment, or similar process against Company or
any of its properties or other assets, or defaults on obligations, in amount in
excess of $100,000 unless such are being contested by the Company;
or
(e) The
Company (i) fails to cause its transfer agent to issue shares of common
stock upon written notice of Lender’s request to receive repayment of this
Debenture in shares of common stock pursuant to the terms herein within five (5)
business days of receipt of a Request for Repayment; (ii) upon written request
of the Lender, fails to remove any restrictive legend on any certificate or
fails to cause its transfer agent to remove such legend where such removal is
lawful within five (5) business days of receipt of a written demand therefore or
(b) the value of the Collateral Shares under the Pledge Agreement shall
fall below the Required Level; or
(f) The
average dollar volume of Common Stock for any consecutive ten (10) trading-day
period is less than Forty Thousand Dollars ($40,000) per day (the “Volume Default”). For
purposes of measuring compliance with this covenant, the dollar volume for
each trading day shall be deemed to be equal to the average of the VWAP of
Common Stock times the volume, each as reported by Bloomberg, L.P.;
or
(g) Any
governmental agency or any court of competent jurisdiction at the instance of
any governmental agency shall assume custody or control of the whole or any
substantial portion of the properties or assets of the Company; or
(h) The entry
of a decree or order by a court having jurisdiction adjudging the Company a
bankrupt or insolvent, or approving a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company, under
federal bankruptcy law, as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar law; or the
commencement against the Company of a proceeding under the federal bankruptcy
law or any applicable federal or state bankruptcy, insolvency or similar law and
the continuance of any such proceedings unstayed and in effect for a period of
90 days or more; or the commencement by the Company of a voluntary case under
federal bankruptcy law, as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency, or other similar law, or the consent by
it to the institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or relief
under federal bankruptcy law or any other applicable federal or state law, or
the consent by it to the filing of such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator or similar official of the
Company or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such action;
or
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(i) Failure
of Company to continuously maintain its status as a reporting company under the
federal securities laws or as a DWAC Eligible issuer; or
(j) Failure
to timely file all reports required to be filed by it with the SEC pursuant to
Section 12, 13 or 15(d) of the Securities Exchange Act of 1934, or otherwise
required by the Securities Exchange Act of 1934 (the Company can cure any late
filing by filing a timely notice of late filing and filing such periodic report,
provided, however, that any such late filing shall not prevent the Lender from
listing or selling its shares under Rule 144); or
8. Lender’s
Rights Upon Default. Upon the occurrence of any Event of
Default pursuant to this Debenture, the Lender may, at its sole and exclusive
option, do any or all of the following, either concurrently or separately: (a)
accelerate the maturity of this Debenture and demand immediate payment in full,
whereupon the outstanding principal amount of the Debenture and all obligations
of Borrower to Lender hereunder, together with accrued interest thereon and
accrued charges and costs, including costs incurred by the Company with respect
to the collection of this Purchase Note (including reasonable legal fees), if
any, shall become immediately due and payable without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived;
(b) offset, recoup or exercise any other legal remedy to offset any liabilities
due by the Lender, including but not limited to any offset of this Debenture
against the Investor Notes being delivered by the Lender to the Borrower at
Closing, as provided under Section 3 of the Investor Notes issued by the Lender
to the Company on the date hereof; and (c) exercise all legally available rights
and privileges. If an Event of Default occurs hereunder, the Borrower
will be responsible for all costs incurred by the Lender in collection of this
Debenture, including reasonable legal fees, which costs will constitute part of
the obligations of the Borrower hereunder.
9. Default
Interest Rate. Upon an Event of Default, without any
further action on the part of Lender, interest will thereafter accrue at the
rate of twelve percent (12%) per annum (the “Default Rate”), until
all outstanding principal, interest and fees are repaid in full by
Borrower.
10. Usury. In
no event shall the amount of interest paid or agreed to be paid hereunder exceed
the highest lawful rate permissible under applicable law. Any excess
amount of deemed interest shall be null and void and shall not interfere with or
affect the Borrower’s obligation to repay the principal of and interest on the
Debenture. This confirms that the Borrower and, by its acceptance of
this Debenture, the Lender intend to contract in strict compliance with
applicable usury laws from time to time in effect. Accordingly, the
Borrower and the Lender stipulate and agree that none of the terms and
provisions contained herein shall ever be construed to create a contract to pay,
for the use or forbearance of money, interest in excess of the maximum amount of
interest permitted to be charged by applicable law from time to time in
effect.
11. Costs of
Enforcement. Borrower hereby covenants and agrees to indemnify, defend
and hold Lender harmless from and against all costs and expenses, including
reasonable attorneys’ fees and their costs, together with interest thereon at
the Prime Rate, incurred by Lender in enforcing its rights under this Debenture;
or if Lender is made a party as a defendant in any action or proceeding arising
out of or in connection with its status as a lender, or if Lender is requested
to respond to any subpoena or other legal process issued in connection with this
Debenture; or reasonable disbursements arising out of any costs and expenses,
including reasonable attorneys’ fees and their costs incurred in any bankruptcy
case; or for any legal or appraisal reviews, advice or counsel performed for
Lender following a request by Borrower for waiver, modification or amendment of
this Debenture or any of the other Transaction Documents.
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12. Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial. This
Debenture shall be governed by, and construed in accordance with, the internal
laws of the State of Illinois, without reference to the choice of law provisions
thereof. The Borrower and, by accepting this Debenture, the Lender,
each irrevocably submits to the exclusive jurisdiction of the courts of the
State of Illinois located in Cook County and any United States District Court
for the Northern District of Illinois for the purpose of any suit, action,
proceeding or judgment relating to or arising out of this Debenture and the
transactions contemplated hereby. Service of process in connection
with any such suit, action or proceeding may be served on each party hereto
anywhere in the world by the same methods as are specified for the giving of
notices under this Debenture. The Company and, by accepting this
Debenture, the Lender, each irrevocably consents to the jurisdiction of any such
court in any such suit, action or proceeding and to the laying of venue in such
court. The Borrower and, by accepting this Debenture, the Lender,
each irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. EACH OF THE BORROWER AND, BY ITS
ACCEPTANCE HEREOF, THE LENDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY
IN ANY LITIGATION WITH RESPECT TO THIS DEBENTURE AND REPRESENTS THAT COUNSEL HAS
BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
13. Miscellaneous.
(a)
Borrower hereby waives protest, notice of protest, presentment, dishonor, and
demand.
(b) The
rights and privileges of Lender under this Debenture shall inure to the benefit
of its successors and assigns. All obligations of Borrower in
connection with this Debenture shall bind Borrower’s successors and assigns, and
Lender’s repayment rights shall succeed to any successor securities to
Borrower’s common stock.
(c) If
any provision of this Debenture shall for any reason be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision hereof, but this Debenture shall be construed as if such invalid or
unenforceable provision had never been contained herein.
(d) The
waiver of any Event of Default or the failure of Lender to exercise any right or
remedy to which it may be entitled shall not be deemed a waiver of any
subsequent Event of Default or Lender’s right to exercise that or any other
right or remedy to which Lender is entitled. No delay or
omission by Lender in exercising, or failure by Lender to exercise on any one or
more occasions, shall be construed as a waiver or novation of this Debenture or
prevent the subsequent exercise of any or all such rights.
(e) This
Debenture may not be waived, changed, modified, or discharged orally, but only
in writing.
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14. Notice,
Etc. Any notice required by the provisions of this Debenture
will be in writing and will be deemed effectively given: (a) upon
personal delivery to the party to be notified; (b) when sent by confirmed telex
or facsimile if sent during normal business hours of the recipient; if not, then
on the next business day; (c) five (5) days after having been sent by registered
or certified mail, return receipt requested, postage prepaid; or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt, and delivered as
follows:
If to the
Borrower:
With a
copy to (which shall not constitute notice):
If to
Lender:
With a
copy to (which shall not constitute notice):
or, as to
each party, at such other address as shall be designated by such party in a
written notice to the other parties.
15. Definitions. As
used herein, the following terms shall have the meaning ascribed to them
below:
(a) “Solvent”
shall mean, with respect to any person or entity on a particular date, that on
such date: (i) the fair value of the property of such person or entity is not
less than the total amount of the liabilities of such person or entity; (ii) the
present fair salable value of the assets of such person or entity is not less
than the amount required to pay the probable liability on such person’s existing
debts as they become absolute and matured; and (iii) such person is able to
realize upon its assets an amount sufficient to and pay its debts and other
liabilities;
(b)
“Securities Purchase Agreement” shall mean the Securities Purchase Agreement
dated the date hereof among the Borrower, the Lender and the other purchasers
identified therein.
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|
[SIGNATURE
PAGE TO SELLER DEBENTURE]
|
IN WITNESS WHEREOF, the
undersigned has executed this Debenture as of the date first set forth
above.
|
|
By:
_________________________
|
||
| Name | |||
| Its: | |||
|
STATE
OF
_______________ )
) ss:
COUNTY
OF
_______________ )
|
On this
_____ day of February, 2010, before me, personally came _____________, to me
known, who being by me duly sworn, did depose and say that he resides in
____________________________________, that he is the President and Chief
Executive Officer of
the corporation described in and which executed
the above instrument; and that he signed his name by authority of the board of
directors of said corporation.
_______________________________
Notary
Public
11
EXHIBIT
A
REQUEST
FOR REPAYMENT IN COMMON SHARES
| Date:_______________________
VIA
FAX: __________________
Attn: ______________________
|
CONVERSION
NOTICE
The above-captioned Holder hereby
gives notice to ____________, a _______ corporation (the “Company”), pursuant
to that certain Debenture made by the Company in favor of the Holder on
________, 2010 (the “Note”), that the
Holder elects to convert the portion of the Note balance set forth below into
fully paid and non-assessable shares of Common Stock, $0.001 par value, of the
Company as of the Conversion Date specified above. Said conversion
shall be based on the Conversion Price set forth below.
|
A.
|
Date
of
conversion: ____________
|
|
B.
|
Conversion
#: ____________
|
|
C.
|
Conversion
Amount: ____________
|
|
D.
|
(i)
If the Market Price is $0.05 or above: the average VWAP for the
3 trading days chosen by the Holder from the last 20 trading days:
____________
|
or
(ii) If
the Market Price is below $0.05: 80% of the average VWAP for the 3 trading days
chosen by the Holder from the last 20 trading days: ____________
|
E.
|
Conversion
Shares: _______________ (C divided by
D)
|
|
F.
|
Remaining
Note
Balance: ____________
|
Please
transfer the Conversion Shares electronically (DTC or DWAC) to the following
account:
| Broker:________________________
DTC#:_________________________
Account
#:______________________
Account
Name:___________________
Sincerely,
By:_________________________________ |
Address: |
_______________________________
_______________________________
_______________________________
|
12