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EXHIBIT 1
AGREEMENT TO CONVERT DEBT
THIS AGREEMENT TO CONVERT DEBT ("Agreement") is entered into as of this
the 30th day of September, 1999, by and between AMARILLO BIOSCIENCES, INC., a
Texas corporation ("ABI"), and HAYASHIBARA BIOCHEMICAL LABORATORIES, INC., a
corporation organized under the laws of Japan ("HBL").
WHEREAS, ABI is currently indebted to HBL under a promissory note dated
July 22, 1999, having a principal amount of three million dollars ($3,000,000)
to be advanced in three (3) installments as follows: one million dollars
($1,000,000) by August 31, 1999, one million dollars ($1,000,000) by November
30, 1999, and one million dollars ($1,000,000) by February 29, 2000
(hereinafter, the "Note"); and bearing interest at the rate of four and one-half
percent (4 1/2%) per annum; and further
WHEREAS, it is the desire and intention of both ABI and HBL that the
Note be converted to common stock in ABI, under the terms and conditions
hereinafter set forth;
THEREFORE, in consideration of these presents and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
As used in this agreement, the term Market Price shall refer to the
average daily closing price per share of ABI common stock, weighted by the total
daily volume, as recorded on the NASDAQ Smallcap Market and reported on the
NASDAQ web site (xxx.xxxxxx.xxx), for the ten (10) trading days immediately
preceding the date on which the Market Price is determined.
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Effective October 15, 1999 ("Effective Date"), the Note shall be
canceled and HBL shall be entitled to receive newly issued shares of ABI common
stock (the "Shares"), in consideration for the cancellation of the Note and
promises by HBL to advance funds in the future, as follows:
1. On the Effective Date, ABI shall issue to HBL a number of Shares
equal to the outstanding debt owed by ABI to HBL under the Note as of the
Effective date, divided by the Market Price of the Shares as of the Effective
Date, rounded up to the next whole Share, which issuance shall constitute full
payment of all amounts owed under the Note as of the Effective Date. The parties
agree and stipulate that the accrued interest payable under the Note is
$5,486.30 as of the Effective Date, and that the total outstanding debt owed by
ABI to HBL under the Note (principal plus interest) is $1,005,486.30 as of the
Effective Date.
2. On November 30, 1999, HBL shall advance to ABI one million dollars
($1,000,000), and ABI shall issue to HBL a number of Shares equal to one million
dollars ($1,000,000) divided by the Market Price of the Shares as of November
30, 1999, rounded up to the next whole Share.
3. On February 29, 2000, HBL shall advance to ABI one million dollars
($1,000,000), and ABI shall issue to HBL a number of Shares equal to one million
dollars ($1,000,000) divided by the Market Price of the Shares as of February
29, 2000, rounded up to the next whole Share.
Whenever ABI is required to issue Shares under this Agreement, ABI
will, on that date, initiate a request with its transfer agent, American Stock
Transfer & Trust Company of New York City, New York, to issue to HBL the number
of shares determined pursuant to this Agreement.
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4. HBL acknowledges that the Shares issued to it will be "restricted
stock" within the meaning of Rule 144 promulgated under the U.S. Securities act
of 1933, that they must be held for one (1) year before they can be resold under
such Rule, that all sales pursuant to such Rule must comply with the volume
limitations and other applicable conditions of such Rule, and that the
certificates evidencing such Shares, as issued to HBL, shall bear an appropriate
legend identifying the Shares as "restricted stock".
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
ABI: HBL:
AMARILLO BIOSCIENCES, INC. HAYASHIBARA BIOCHEMICAL
LABORATORIES, INC.
By: /s/ XXXXXX X. XXXXXXX By: /s/ XXX XXXXXXXXXXX
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Xxxxxx X. Xxxxxxx, Xxx Xxxxxxxxxxx, President
President
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