PARALLAX HEALTH SCIENCES, INC. - FORM 8-K - EX-4 - EX 4.1 DEBENTURE

Attached files

file	filename
8-K - CURRENT REPORT - PARALLAX HEALTH SCIENCES, INC.	20181123form8k.htm
EX-10 - EX 10.2 EQUITY PURCHASE AGREEMENT - PARALLAX HEALTH SCIENCES, INC.	ex102equitypurchaseagreement.htm
EX-10 - EX 10.1 SECURITIES PURCHASE AGREEMENT - PARALLAX HEALTH SCIENCES, INC.	ex101securitiespurchaseagree.htm
EX-4 - EX 4.4 REGISTRATION RIGHTS AGREEMENT - PARALLAX HEALTH SCIENCES, INC.	ex44registrationrightsagreem.htm
EX-4 - EX 4.3 WARRANT - PARALLAX HEALTH SCIENCES, INC.	ex43warrant.htm
EX-4 - EX 4.2 DEBENTURE - PARALLAX HEALTH SCIENCES, INC.	ex42debenturetfk.htm

SIGNING DEBENTURE

NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON CONVERSION

HEREOF HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND

EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR

UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES ARE

RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED

EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION

REQUIREMENTS THEREOF OR EXEMPTION THEREFROM.

PARALLAX HEALTH SCIENCES, INC.

CONVERTIBLE DEBENTURE DUE NOVEMBER 14, 2021

Issuance Date: November 14, 2018

Principal Amount: $125,000.00

FOR VALUE RECEIVED, PARALLAX HEALTH SCIENCES, INC., a

corporation organized and existing under the laws of the State of Nevada (the “Company”),

hereby promises to pay to PEAK ONE OPPORTUNITY FUND, L.P., having its address at

333 South Hibiscus Drive, Miami Beach, FL 33139, or its assigns (the “Holder” and together

with the other holders of Debentures issued pursuant to the Securities Purchase Agreement (as

defined below), the “Holders”), the initial principal sum of One Hundred Twenty Five Thousand

and 00/100 Dollars ($125,000.00) (subject to adjustment as provided herein, the “Principal

Amount”) on November 14, 2021 (the “Maturity Date”). The Company has the option to redeem

this Debenture prior to the Maturity Date pursuant to Section 2(b). All unpaid principal due and

payable on the Maturity Date shall be paid in the form of Common Stock of the Company, par

value $0.001 per share (“Common Stock”) pursuant to Section 3. The Holder has the option to

cause any outstanding principal and accrued interest, if any, on this Debenture to be converted

into Common Stock at any time prior to the Redemption Date (as defined below) or the Maturity

Date pursuant to Section 2(a).

This Debenture is one of the Debentures referred to in the Securities Purchase

Agreement (the “Securities Purchase Agreement”) dated as of November 14, 2018, between the

Company and the Holder. Capitalized terms used but not defined herein shall have the meanings

set forth in the Securities Purchase Agreement. This Debenture is subject to the provisions of the

Securities Purchase Agreement and further is subject to the following additional provisions:

This Debenture has been issued subject to investment representations of the

original purchaser hereof and may be transferred or exchanged only in compliance with the

Securities Act and other applicable state and foreign securities laws. The Holder may transfer or

assign this Debenture (or any part thereof) without the prior consent of the Company, and the

Company shall cooperate with any such transfer. In the event of any proposed transfer of this

Debenture, the Company may require, prior to issuance of a new Debenture in the name of such

other Person, that it receive reasonable transfer documentation including legal opinions that the

issuance of the Debenture in such other name does not and will not cause a violation of the

Securities Act or any applicable state or foreign securities laws or is exempt from the registration

requirements of the Securities Act. Prior to due presentment for transfer of this Debenture to

which the Company has consented, the Company and any agent of the Company may treat the

Person in whose name this Debenture is duly registered on the Company's books and records of

outstanding debt securities and obligations (“Debenture Register”) as the owner hereof for the

purpose of receiving payment as herein provided and for all other purposes, whether or not this

Debenture be overdue, and neither the Company nor any such agent shall be affected by notice to

the contrary.

Conversion at Holder’s Option; Redemption at Company’s Option.

The Holder is entitled to, at any time or from time to time, convert the

Conversion Amount (as defined below) into Conversion Shares, at a conversion price for each

share of Common Stock (the “Conversion Price”) equal to either: (i) if no Event of Default (as

defined herein) has occurred and the date of conversion is prior to the date that is one hundred

eighty (180) calendar days after the Issuance Date, $0.12, or (ii) if an Event of Default has

occurred or the date of conversion is on or after the date that is one hundred eighty (180)

calendar days after the Issuance Date, the lesser of (a) $0.12 or (b) Seventy percent (70%) of the

second lowest traded price (as reported by Bloomberg LP) of the Common Stock for the twenty

(20) Trading Days immediately preceding the date of the date of conversion of the Debentures

(for clarification purposes, if the lowest traded price during the applicable period is equal to the

second lowest traded price during the applicable period, then such lowest traded price shall still

be utilized for purposes of this calculation), provided, further, that if either the Company is not

DWAC Operational at the time of conversion or the Common Stock is traded on the OTC Pink

(“OTCP”) at the time of conversion, then Seventy percent (70%) shall automatically adjust to

Sixty percent (60%) of the second lowest traded price (as reported by Bloomberg LP) of the

Common Stock for the twenty (20) Trading Days immediately preceding the date of conversion

of the Debentures (for clarification purposes, if the lowest traded price during the applicable

period is equal to the second lowest traded price during the applicable period, then such lowest

traded price shall still be utilized for purposes of this calculation), subject in each case to

equitable adjustments resulting from any stock splits, stock dividends, recapitalizations or similar

events. The Company shall issue irrevocable instructions to its Transfer Agent regarding

conversions such that the transfer agent shall be authorized and instructed to issue Conversion

Shares upon its receipt of a Notice of Conversion without further approval or authorization from

the Company. For purposes of this Debenture, the “Conversion Amount” shall mean the sum of

(A) all or any portion of the outstanding Principal Amount of this Debenture, as designated by

the Holder upon exercise of its right of conversion plus (B) any interest, pursuant to Section 10

or otherwise, that has accrued on the portion of the Principal Amount that has been designated

for payment pursuant to (A).

Conversion shall be effectuated by delivering by facsimile, email or other delivery

method to the Transfer Agent of the completed form of conversion notice attached hereto as

Annex A (the “Notice of Conversion”), executed by the Holder of the Debenture evidencing

such Holder's intention to convert this Debenture or a specified portion hereof. No fractional

shares of Common Stock or scrip representing fractions of shares will be issued on conversion,

but the number of shares issuable shall be rounded to the nearest whole share. The Holder may,

at its election, deliver a Notice of Conversion to either the Company or the Transfer Agent. The

date on which notice of conversion is given (the “Conversion Date”) shall be deemed to be the

date on which the Company or the Transfer Agent, as the case may be, receives by fax, email or

other means of delivery used by the Holder the Notice of Conversion (such receipt being

evidenced by electronic confirmation of delivery by facsimile or email or confirmation of

delivery by such other delivery method used by the Holder). Delivery of a Notice of Conversion

to the Transfer Agent may be given by the Holder by facsimile, or by delivery to the Transfer

Agent at the address set forth in the Transfer Agent Instruction Letter (or such other contact

facsimile number, email or street address as may be designated by the Transfer Agent to the

Holder). Delivery of a Notice of Conversion to the Company shall be given by the Holder

pursuant to the notice provisions set forth in Section 10 of the Agreement. The Conversion

Shares must be delivered to the Holder within two (2) business days from the date of delivery of

the Notice of Conversion to the Transfer Agent or Company, as the case may be. Conversion

shares shall be delivered by DWAC so long as the Company is then DWAC Operational, unless

the Holder expressly requests delivery in certificated form or the Conversion Shares are in the

form of Restricted Stock and are required to bear a restrictive legended. Conversion Shares shall

be deemed delivered (i) if delivered by DWAC, upon deposit into the Holder’s brokerage

account, or (ii) if delivered in certificated form, upon the Holder’s actual receipt of the

Conversion Shares in certificated form at the address specified by the Holder in the Notice of

Conversion, as confirmed by written receipt. All expenses incurred by Holder, for the issuance

and clearing of the Common Stock into which this Debenture is convertible into, shall

immediately and automatically be added to the balance of the Debenture at such time as the

expenses are incurred by Holder.

If at any time the Conversion Price as determined hereunder for any conversion

would be less than the par value of the Common Stock, then at the sole discretion of the Holder,

the Conversion Price hereunder may equal such par value for such conversion and the

Conversion Amount for such conversion may be increased to include Additional Principal,

where “Additional Principal” means such additional amount to be added to the Conversion

Amount to the extent necessary to cause the number of conversion shares issuable upon such

conversion to equal the same number of conversion shares as would have been issued had the

Conversion Price not been adjusted by the Holder to the par value price.

Notwithstanding the foregoing, unless the Holder delivers to the Company written

notice at least sixty-one (61) days prior to the effective date of such notice that the provisions of

this paragraph (the “Limitation on Ownership”) shall be adjusted to 9.99% with respect to the

Holder, in no event shall a holder of Debentures have the right to convert Debentures into, nor

shall the Company issue to such Holder, shares of Common Stock to the extent that such

conversion would result in the Holder and its affiliates together beneficially owning more than

4.99% of the then issued and outstanding shares of Common Stock. For purposes hereof,

beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act

and Regulation 13D-G under the Exchange Act.

So long as no Event of Default (as defined in Section 10) shall have

occurred and be continuing (whether such Event of Default has been declared by the Holder)

(unless the Holder consents to such redemption notwithstanding such Event of Default, as

described in clause (v), below), the Company may at its option call for redemption all or part of

the Debentures, with the exception of any portion thereof which is the subject of a previously-

delivered Notice of Conversion, prior to the Maturity Date, as follows:

(i)

The Debentures called for redemption shall be redeemable by the

Company, upon not more than two (2) days written notice, for an amount (the “Redemption

Price”) equal to: (i) if the Redemption Date (as defined below) is ninety (90) calendar days or

less from the date of issuance of this Debenture, One Hundred Ten percent (110%) of the sum of

the Principal Amount so redeemed plus accrued interest, if any; (ii) if the Redemption Date is

greater than or equal to ninety-one (91) calendar days from the date of issuance of this Debenture

and less than or equal to one hundred twenty (120) calendar days from the date of issuance of

this Debenture, One Hundred Twenty percent (120%) of the sum of the Principal Amount so

redeemed plus accrued interest, if any; (iii) if the Redemption Date is greater than or equal to one

hundred twenty one (121) calendar days from the date of issuance of this Debenture and less than

or equal to one hundred eighty (180) calendar days from the date of issuance of this Debenture,

One Hundred Thirty percent (130%) of the sum of the Principal Amount so redeemed plus

accrued interest, if any; and (iv) if either (1) the Debentures are in default but the Holder

consents to the redemption notwithstanding such default or (2) the Redemption Date is greater

than or equal to one hundred eighty one (181) calendar days from the date of issuance of this

Debenture, One Hundred Forty percent (140%) of the sum of the Principal Amount so redeemed

plus accrued interest, if any. The date upon which the Debentures are redeemed and paid shall

be referred to as the “Redemption Date” (and, in the case of multiple redemptions of less than the

entire outstanding Principal Amount, each such date shall be a Redemption Date with respect to

the corresponding redemption).

(ii)

If fewer than all outstanding Debentures are to be redeemed and are held

by different investors, then all Debentures shall be partially redeemed on a pro rata basis.

(iii) [Reserved]

(iv)

On the Redemption Date, the Company shall cause the Holders whose

Debentures have been presented for redemption to be issued payment of the Redemption Price.

In the case of a partial redemption, the Company shall also issue new Debentures to the Holders

for the Principal Amount remaining outstanding after the Redemption Date promptly after the

Holders’ presentation of the Debentures called for redemption.

(v)

To effect a redemption the Company shall provide a written notice to the

Holder(s) not more than two (2) days prior to the Redemption Date (the “Redemption Notice”),

setting forth the following:

the Redemption Date;

the Redemption Price;

the aggregate Principal Amount of the Debentures being called for

redemption;

a statement instructing the Holders to surrender their Debentures

for redemption and payment of the Redemption Price, including

the name and address of the Company or, if applicable, the paying

agent of the Company, where Debentures are to be surrendered for

redemption;

a statement advising the Holders that the Debentures (or, in the

case of a partial redemption, that portion of the Principal Amount

being called for redemption) as of the Redemption Date will cease

to be convertible into Common Stock as of the Redemption Date;

and

in the case of a partial redemption, a statement advising the

Holders that after the Redemption Date a substitute Debenture will

be issued by the Company after deduction the portion thereof

called for redemption, at no cost to the Holder, if the Holder so

requests.

Notwithstanding the foregoing, in the event the Company issues a Redemption Notice but fails to

fund the redemption on the Redemption Date, then such Redemption Notice shall be null and

void, and (i) the Holder(s) shall be entitled to convert the Debentures previously the subject of

the Redemption Notice, and (ii) the Company may not redeem such Debentures for at least thirty

(30) days following the intended Redemption Date that was voided, and the Company shall be

required to pay to the Holder(s) the Redemption Price simultaneously with the issuance of a

Redemption Notice in connection with any subsequent redemption pursued by the Company.

Unless demand has otherwise been made by the Holder in writing for payment in

cash as provided hereunder, and so long as no Event of Default shall exist (whether or not notice

thereof has been delivered by the Holder to the Company), any Debentures not previously

tendered to the Company for conversion as of the Maturity Date shall be deemed to have been

surrendered for conversion, without further action of any kind by the Company or any of its

agents, employees or representatives, as of the Maturity Date at the Conversion Price applicable

on the Maturity Date (“Mandatory Conversion”).

No provision of this Debenture shall alter or impair the obligation of the

Company, which is absolute and unconditional to convert this Debenture into Common Stock, at

the time, place, and rate herein prescribed. This Debenture is a direct obligation of the

Company.

If the Company (a) merges or consolidates with another corporation or business

entity and the Company is not the surviving entity or (b) sells or transfers all or substantially all

of its assets to another Person and the holders of the Common Stock are entitled to receive stock,

securities or property in respect of or in exchange for Common Stock, then as a condition of such

merger, consolidation, sale or transfer, the Company and any such successor, purchaser or

transferee will agree that this Debenture may thereafter be converted on the terms and subject to

the conditions set forth above into the kind and amount of stock, securities or property receivable

upon such merger, consolidation, sale or transfer by a holder of the number of shares of Common

Stock into which this Debenture might have been converted immediately before such merger,

consolidation, sale or transfer, subject to adjustments which shall be as nearly equivalent as may

be practicable. In the event of any (i) proposed merger or consolidation where the Company is

not the surviving entity or (ii) sale or transfer of all or substantially all of the assets of the

Company (in either such case, a “Sale”), the Holder shall have the right to convert by delivering

a Notice of Conversion to the Company within fifteen (15) days of receipt of notice of such Sale

from the Company.

If, at any time while any portion of this Debenture remains outstanding, the

Company effectuates a stock split or reverse stock split of its Common Stock or issues a dividend

on its Common Stock consisting of shares of Common Stock or otherwise recapitalizes its

Common Stock, the Conversion Price shall be equitably adjusted to reflect such action. By way

of illustration, and not in limitation, of the foregoing (i) if the Company effectuates a 2:1 split of

its Common Stock, thereafter, with respect to any conversion for which the Company issues the

shares after the record date of such split, the Conversion Price shall be deemed to be one-half of

what it had been calculated to be immediately prior to such split; (ii) if the Company effectuates

a 1:10 reverse split of its Common Stock, thereafter, with respect to any conversion for which the

Company issues the shares after the record date of such reverse split, the Conversion Price shall

be deemed to be the amount of such Conversion Price calculated immediately prior to the record

date multiplied by 10; and (iii) if the Company declares a stock dividend of one share of

Common Stock for every 10 shares outstanding, thereafter, with respect to any conversion for

which the Company issues the shares after the record date of such dividend, the Conversion Price

shall be deemed to be the amount of such Conversion Price calculated immediately prior to such

record date multiplied by a fraction, of which the numerator is the number of shares for which a

dividend share will be issued and the denominator is such number of shares plus the dividend

share(s) issuable or issued thereon.

All payments contemplated hereby to be made “in cash” shall be made by wire

transfer of immediately available funds in such coin or currency of the United States of America

as at the time of payment is legal tender for payment of public and private debts. All payments

of cash and each delivery of shares of Common Stock issuable to the Holder as contemplated

hereby shall be made to the Holder to an account designated by the Holder to the Company and

if the Holder has not designated any such accounts at the address last appearing on the Debenture

the Holder may designate, by notice to the Company, a different delivery address for any one or

more specific payments or deliveries.

The Holder of the Debenture, by acceptance hereof, agrees that this Debenture is

being acquired for investment and that such Holder will not offer, sell or otherwise dispose of

this Debenture or the Shares of Common Stock issuable upon conversion thereof except in

compliance with the terms of the Securities Purchase Agreement and under circumstances which

will not result in a violation of the Securities Act or any applicable state Blue Sky or foreign laws

or similar laws relating to the sale of securities.

This Debenture shall be governed by and construed in accordance with the laws

of the State of Nevada. Each of the parties consents to the exclusive jurisdiction and venue of

the state and/or federal courts located in Miami-Dade County, Florida in connection with any

dispute arising under this Agreement, and each waives any objection based on forum non

conveniens. This provision is intended to be a “mandatory” forum selection clause and

governed by and interpreted consistent with Florida law (Nevada law governing all other,

substantive matters). Each of the parties hereby consents to the exclusive jurisdiction and venue

of any state or federal court having its situs in Miami-Dade County, Florida, and each waives

any objection based on forum non conveniens. To the extent determined by such court, the

Company shall reimburse the Holder for any reasonable legal fees and disbursements incurred by

the Holder in enforcement of or protection of any of its rights under this Debenture or the

Securities Purchase Agreement.

10.

The following shall constitute an “Event of Default”:

The Company fails in the payment of principal or interest (to the extent

that interest is imposed under this Section 10) on this Debenture as required to be paid in cash

hereunder, and payment shall not have been made for a period of five (5) business days

following the payment due date (as to which no further cure period shall apply); or

Any of the representations or warranties made by the Company herein, in

the Securities Purchase Agreement or in any certificate or financial or other written statements

heretofore or hereafter furnished by the Company to the Holder in connection with the issuance

of this Debenture, shall be false or misleading (including without limitation by way of the

misstatement of a material fact or the omission of a material fact) in any material respect at the

time made (as to which no cure period shall apply); or

The Company fails to remain listed on OTCP, OTCQB, or OTCQX, or a

more senior stock exchange any time from the date hereof to the Maturity Date for a period in

excess of five (5) Trading Days (as to which no further cure period shall apply); or

The Company (i) fails to timely file required SEC reports when due

(including extensions), becomes, is deemed to be or asserts that it is a “shell company” at any

time for purposes of the 1933 Act, and Rule 144 promulgated thereunder or otherwise takes any

action, or refrains from taking any action, the result of which makes Rule 144 under the 1933

unavailable to the Holder for the sale of their Securities, (ii) fails to issue shares of Common

Stock to the Holder or to cause its Transfer Agent to issue shares of Common Stock upon

exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this

Debenture, (iii) fails to transfer or to cause its Transfer Agent to transfer any certificate for

shares of Common Stock issued to the Holder upon conversion of this Debenture as and when

required by this Debenture and such transfer is otherwise lawful, (iv) fails to remove any

restrictive legend or to cause its Transfer Agent to transfer any certificate or any shares of

Common Stock issued to the Holder upon conversion of this Debenture as and when required by

the relevant Transaction Document(s) and such legend removal is otherwise lawful, or (v) the

Company fails to perform or observe any of its obligations under the Section 5 of the Agreement

or under the Transfer Agent Instruction Letter (no cure period shall apply in the case of clauses

(i) through (v) above, inclusive); or

The Company fails to perform or observe, in any material respect (i) any

other covenant, term, provision, condition, agreement or obligation set forth in the Debenture,

(subject to a cure period of five (5) days other than in the case of a failure under Section 5

hereof, as to which no cure period shall apply), or (ii) any other covenant, term, provision,

condition, agreement or obligation of the Company set forth in the Securities Purchase

Agreement and such failure shall continue uncured for a period of either (1) three (3) days after

the occurrence of the Company’s failure under Section 4(d), (e) (except as described in Section

10(c) hereof, as to which Section 10(c) hereof shall control), (f), (g) or (h) of the Securities

Purchase Agreement, or (2) ten (10) days after the occurrence of the Company’s failure under

any other provision of the Securities Purchase Agreement not otherwise specifically addressed in

the Events of Default set forth in this Section 10; or

The Company shall (1) admit in writing its inability to pay its debts

generally as they mature; (2) make an assignment for the benefit of creditors or commence

proceedings for its dissolution; or (3) apply for or consent to the appointment of a trustee,

liquidator or receiver for its or for a substantial part of its property or business (as to which no

cure period shall apply); or

A trustee, liquidator or receiver shall be appointed for the Company or for

a substantial part of its property or business without its consent and shall not be discharged

within sixty (60) days after such appointment (as to which no cure period shall apply); or

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 and shall not be dismissed within

sixty (60) days thereafter (as to which no cure period shall apply); or

Any money judgment, writ or warrant of attachment, or similar process

(including an arbitral determination), in excess of Fifty Thousand Dollars ($50,000) in the

aggregate shall be entered or filed against the Company or any of its properties or other assets (as

to which no cure period shall apply); or

The occurrence of a breach or an event of default under the terms of any

indebtedness or financial instrument of the Company or any subsidiary (including but not limited

to any Subsidiary) of the Company in an aggregate amount in excess of Fifty Thousand Dollars

($50,000) or more which is not waived by the creditors under such indebtedness (as to which no

cure period shall apply); or

Bankruptcy, reorganization, insolvency or liquidation proceedings or other

proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be

instituted by or against the Company and, if instituted against the Company, shall not be

dismissed within sixty (60) days after such institution or the Company shall by any action or

answer approve of, consent to, or acquiesce in any such proceedings or admit the material

allegations of, or default in answering a petition filed in any such proceeding (as to which no

further cure period shall apply); or

The issuance of an order, ruling, finding or similar adverse determination

the SEC, the Secretary of State of the State of Nevada or other applicable state of incorporatin of

the Company, the National Association of Securities Dealers, Inc. or any other securities

regulatory body (whether in the United States, Canada or elsewhere) having proper jurisdiction

that the Company and/or any of its past or present directors or officers have committed a material

violation of applicable securities laws or regulations (as to which no cure period shall apply); or

The Company shall have its Common Stock suspended or delisted from a

national securities exchange or an electronic quotation service such as the OTCP, OTCQB, or

OTCQX for a period in excess of five (5) Trading Days (as to which no further cure period shall

apply); or

Any of the following shall occur and be continuing: a breach or default by

any party under (a) any agreement identified by the Company in its SEC filings as a material

agreement or (b) any note or other form of indebtedness in favor of the Company representing

indebtedness of at least Fifty Thousand Dollars ($50,000.00), irrespective of whether such

breach or default was waived (as to which no cure period shall apply); or

Notice of a Material Adverse Effect is provided by the Company or the

determination in good faith by the Holder that a Material Adverse Effect has occurred (as to

which no cure period shall apply); or

The Company attempts to modify, amend, withdraw, rescind, disavow or

repudiate any part of the Irrevocable Instructions (as to which no cure period shall apply).

Any attempt by the Company or its officers, directors, and/or affiliates to

transmit, convey, disclose, or any actual transmittal, conveyance, or disclosure by the Company

or its officers, directors, and/or affiliates of, material non-public information concerning the

Company, to the Holder or its successors and assigns, which is not immediately cured by

Company’s filing of a Form 8-K pursuant to Regulation FD on that same date.

At any time while this Debenture is outstanding, the lowest traded price on

the OTCP, OTCQB, or OTCQX, or other applicable principal trading market for the Common

Stock, is equal to or less than $0.0001.

Then, or at any time thereafter, the Company shall immediately give

written notice of the occurrence of such Event of Default to the Holders of all Debentures then

outstanding, and in each and every such case, unless such Event of Default shall have been

waived in writing by a majority in interest of the Holders of the Debentures (which waiver shall

not be deemed to be a waiver of any subsequent default), then at the option of a majority in

interest of the Holders and in the discretion of a majority in interest of the Holders, take any or

all of the following actions: (i) pursue remedies against the Company in accordance with any of

the Holder’s rights, (ii) increase the interest rate applicable to the Debentures to the lesser of

eighteen percent (18%) per annum and the maximum interest rate allowable under applicable

law, (iii) in the case of an Event of Default under Section 10(e)(ii)(1) based on the Company’s

failure to be DWAC Operational, increase the Principal Amount to an amount equal to one

hundred ten percent (110%) of the then-outstanding Principal Amount, (iv) in the case of an

Event of Default under Section 10(d)(i), increase the Principal Amount to an amount equal to

one hundred twenty percent (120%) of the then-outstanding Principal Amount and an additional

ten percent (10%) discount shall be factored into the Conversion Price until this Debenture is no

longer outstanding, (v) in the case of an Event of Default under Section 10(d)(i) through (v),

increase the Principal Amount of the relevant Holder’s Debenture by One Thousand Dollars and

00/100 ($1,000.00) for each day the related failure continues, (vi) in the case of an Event of

Default under Section 10(d)(ii) through (v) arising from an untimely delivery to the Holder of

Conversion Shares or shares of Common Stock in de-legended form, if the lowest traded price of

the Common Stock on the Trading Day immediately prior to the actual date of delivery of

Conversion Shares or de-legended shares, as the case may be, is less than the lowest traded price

on the Trading Day immediately prior to the date when Conversion Shares or de-legended shares

were required to be delivered, increase the Principal Amount of the relevant Holder’s Debenture

by an amount per share equal to such difference, and (vii) following the expiration of the

applicable grace period (if any), at the option and discretion of the Holder, accelerate the full

indebtedness under this Debenture, in an amount equal to one hundred forty percent (140%) of

the outstanding Principal Amount and accrued and unpaid interest (the “Acceleration Amount”),

whereupon the Acceleration Amount shall be immediately due and payable, without

presentment, demand, protest or notice of any kinds, all of which are hereby expressly waived,

anything contained herein, in the Securities Purchase Agreement or in any other note or

instruments to the contrary notwithstanding. In the case of an Event of Default under Section

10(d)(ii), the Holder may either (i) declare the Acceleration Amount to exclude the Conversion

Amount that is the subject of the Event of Default, in which case the Acceleration Amount shall

be based on the remaining Principal Amount and accrued interest (if any), in which case the

Company shall continue to be obligated to issue the Conversion Shares, or (ii) declare the

Acceleration Amount to include the Conversion Amount that is the subject of the Event of

Default, in which case the Acceleration Amount shall be based on the full Principal Amount,

including the Conversion Amount, and accrued interest (if any), whereupon the Notice of

Conversion shall be deemed withdrawn. At its option, the Holder may elect to convert the

Debenture pursuant to Section 2 notwithstanding the prior declaration of a default and

acceleration, in the sole discretion of such Holder. A majority in interest of the Holders may

immediately enforce any and all of the Holder's rights and remedies provided herein or any other

rights or remedies afforded by applicable law. Notwithstanding the foregoing, in the case of a

default under Section 10(d)(ii) through (iv), the Holder of the Debenture sought to be converted,

transferred or de-legended, as the case may be, acting singly, shall have the sole and absolute

discretion to increase the applicable interest rate on the Debentures held by such Holder and/or to

accelerate the Debenture(s) held by such Holder. The Company expressly acknowledges and

agrees that the Holder’s exercise of any or all of the remedies provided herein or under

applicable law, including without limitation the increase(s) in the Principal Amount and the

Acceleration Amount as may be declared in the case of a default, is reasonable and appropriate

due to the inability to define the financial hardship that the Company’s default would impose on

the Holders. To the extent that the Holder’s exercise of any of its remedies in the case of an

Event of Default shall be construed to exceed the maximum interest rate allowable under

applicable law, then such remedies shall be reduced to equal the maximum interest rate

allowable under applicable law

11.

Nothing contained in this Debenture shall be construed as conferring upon the

Holder the right to vote or to receive dividends or to consent or receive notice as a shareholder in

respect of any meeting of shareholders or any rights whatsoever as a shareholder of the

Company, unless and to the extent converted in accordance with the terms hereof.

12.

So long as this Debenture is outstanding, upon any issuance by the Company or

any of its subsidiaries of any security with any term more favorable to the holder of such security

or with a term in favor of the holder of such security that was not similarly provided to the

Holder in this Debenture, then the Company shall notify the Holder of such additional or more

favorable term and such term, at Holder’s option, shall become a part of the transaction

documents with the Holder. The types of terms contained in another security that may be more

favorable to the holder of such security include, but are not limited to, terms addressing

conversion discounts, prepayment rate, conversion lookback periods, interest rates, original issue

discounts, stock sale price, private placement price per share, and warrant coverage.

13.

This Debenture may be amended only by the written consent of the parties hereto.

Notwithstanding the foregoing, the Principal Amount of this Debenture shall automatically be

reduced by any and all Conversion Amounts (to the extent that the same relate to principal

hereof). In the absence of manifest error, the outstanding Principal Amount of the Debenture on

the Holder’s book and records shall be the correct amount.

14.

In the event of any inconsistency between the provisions of this Debenture and

the provisions of any other Transaction Document, the provisions of this Debenture shall prevail.

Without limiting the generality of the foregoing, in the event the Transfer Agent is not required

to transfer any Common Stock, issue Conversion Shares or de-legended shares of Restricted

Stock pursuant to the Transfer Agent Instruction Letter, this shall not operate as an excuse,

extension or waiver of the Company’s obligation to issue and deliver Conversion Shares or de-

legended Restricted Stock.

15.

The Company specifically acknowledges and agrees that in the event of a breach

or threatened breach by the Company of any provision hereof or of any other Transaction

Document, the Holder will be irreparably damaged, and that damages at law would be an

inadequate remedy if this Debenture or such other Transaction Document were not specifically

enforced. Therefore, in the event of a breach or threatened breach by the Company, the Holder

shall be entitled, in addition to all other rights and remedies, to an injunction restraining such

breach, without being required to show any actual damage or to post any bond or other security,

and/or to a decree for a specific performance of the provisions of this Debenture and the other

Transaction Documents.

16.

No waivers or consents in regard to any provision of this Debenture may be given

other than by an instrument in writing signed by the Holder.

17.

Each time, while this Debenture is outstanding, the Company enters into a Section

3(a)(9) transaction (including but not limited to the issuance of new promissory notes or

debentures, or of a replacement promissory note or debenture), or Section 3(a)(10) transaction, in

which any 3rd party has the right to convert monies owed to that 3rd party (or receive shares

pursuant to a settlement or otherwise) at a discount to market greater than the Conversion Price

in effect at that time (prior to all other applicable adjustments in this Debenture), then the

Conversion Price shall be automatically adjusted to such greater discount percentage (prior to all

applicable adjustments in this Debenture) until this Debenture is no longer outstanding. Each

time, while this Debenture is outstanding, the Company enters into a Section 3(a)(9) transaction

(including but not limited to the issuance of new promissory notes or debentures, or of a

replacement promissory note or debenture), or Section 3(a)(10) transaction, in which any 3rd

party has a look back period greater than the look back period in effect under this Debenture at

that time, then the Holder’s look back period shall automatically be adjusted to such greater

number of days until this Debenture is no longer outstanding. The Company shall give written

notice to the Holder, with the adjusted Conversion Price and/or adjusted look back period (each

adjustment that is applicable due to the triggering event), within one (1) business day of an event

that requires any adjustment described in this section. So long as this Note is outstanding, the

Company shall not enter into any transaction or arrangement structured in accordance with,

based upon, or related or pursuant to, in whole or in part, either Section 3(a)(9) of the Securities

Act (a “3(a)(9) Transaction”) or Section 3(a)(l0) of the Securities Act (a “3(a)(l0) Transaction”).

In the event that the Company does enter into, or makes any issuance of Common Stock related

to a 3(a)(9) Transaction or a 3(a)(l0) Transaction while this note is outstanding, a liquidated

damages charge of 20% of the outstanding principal balance of this Note, but not less than

Fifteen Thousand Dollars, will be assessed and will become immediately due and payable to the

Holder at its election in the form of cash payment or addition to the balance of this Note.

18.

So long as this Debenture is outstanding, upon any issuance by the Company or

any of its subsidiaries of any security with any term more favorable to the holder of such security

or with a term in favor of the holder of such security that was not similarly provided to the

Holder in this Debenture, then the Company shall notify the Holder of such additional or more

favorable term and such term, at Holder’s option, shall become a part of the transaction

documents with the Holder (regardless of whether the Company notifies the Holder or not). The

types of terms contained in another security that may be more favorable to the holder of such

security include, but are not limited to, terms addressing conversion discounts, prepayment rate,

conversion lookback periods, interest rates, original issue discounts, stock sale price, private

placement price per share, and warrant coverage.

19.

If the Company fails to redeem (i) this Debenture or (ii) the entirety of the

$600,000.00 in convertible promissory notes issued by the Company between April and June of

2018, on or before the date which is 180 calendar days after the Issuance Date, then the principal

amount of this Debenture shall increase by $18,750.00 (under Holder’s and the Company’s

expectation that any principal amount increase will tack back to the Issuance Date).

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused this Debenture to be duly executed

by an officer thereunto duly authorized as of the date of issuance set forth above.

PARALLAX HEALTH SCIENCES, INC.

By: ______________________________________

Name: Paul Arena

Title: Chief Executive Officer

[Signature Page to Convertible Debenture]

ANNEX A

PARALLAX HEALTH SCIENCES, INC.

NOTICE OF CONVERSION

(To Be Executed by the Registered Holder in Order to Convert the Debenture)

The undersigned hereby irrevocably elects to convert $ ________________ of the Principal

Amount of the above Debenture into Shares of Common Stock of Parallax Health Sciences, Inc.,

a Nevada corporation (the “Company”), according to the conditions hereof, as of the date written

below. After giving effect to the conversion requested hereby, the outstanding Principal Amount

of such debenture is $____________________, absent manifest error.

Pursuant to the Debenture, certificates representing Common Stock upon conversion must be

delivered (including delivery by DWAC or DRS) to the undersigned within two (2) business

days from the date of delivery of the Notice of Conversion to the Transfer Agent.

Conversion Date

____________________________________________________________________________

Applicable Conversion Price

____________________________________________________________________________

Signature

____________________________________________________________________________

Print Name

____________________________________________________________________________

Address

____________________________________________________________________________

PARALLAX HEALTH SCIENCES, INC. - FORM 8-K - EX-4 - EX 4.1 DEBENTURE - November 23, 2018

Attached files

PARALLAX HEALTH SCIENCES, INC. Reports