FORM OF NOTE
EXHIBIT
10.3
FORM
OF NOTE
THIS
NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE
COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED
FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO LOTUS PHARMACEUTICALS, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.
| Principal Amount: $_______________ |
Issue
Date: February ___,
2007
|
FOR
VALUE
RECEIVED, LOTUS PHARMACEUTICALS, INC., a Nevada corporation (hereinafter called
"Borrower"), hereby promises to pay to
_____________________________________
______________________________________________,
Fax: ______________ (the "Holder") or order, without demand, the sum of
___________________________ Dollars ($__________), with simple and unpaid
interest thereon, on February ____, 2008 (the "Maturity Date"), if not paid
sooner.
This
Note
has been entered into pursuant to the terms of a subscription agreement between
the Borrower and the Holder, dated of even date herewith (the “Subscription
Agreement”), and shall be governed by the terms of such Subscription Agreement.
Unless otherwise separately defined herein, all capitalized terms used in this
Note shall have the same meaning as is set forth in the Subscription Agreement.
The following terms shall apply to this Note:
ARTICLE
I
GENERAL
PROVISIONS
1.1 Payment
Grace Period.
The
Borrower shall have a five (5) business day grace period to pay any monetary
amounts due under this Note, after which grace period and during the pendency
of
an Event of Default (as defined in Article III) a default interest rate of
eighteen percent (18%) per annum shall apply to the amounts owed hereunder.
The
interest rate payable on Note principal corresponding to the Withdrawn
Registrable Securities (as defined in Section 11.4 of the Subscription Agreement
and such Note principal referred to hereinafter as “Unregistered Note
Principal”) shall accrue at the annual rate of 18% during the pendency of a
Non-Registration Event which would have occurred in connection with such
Unregistered Note Principal if the Rule 415 Waiver (described in Section 11.4
of
the Subscription Agreement) had not been in effect (such period referred to
herein as the “Rule 415 Exclusion Period”).
1.2. Interest
Rate.
Simple
interest payable on this Note shall accrue at the annual rate of fourteen
percent (14%). Interest will be payable on April 30, 2007 and on the last
business day of each calendar quarter thereafter and on the Maturity Date,
accelerated or otherwise, when the principal and remaining accrued but unpaid
interest shall be due and payable, or sooner as described below. Interest will
be payable in cash so long as neither an Event of Default, nor an event which
with the passage of time or the giving of notice could become an Event of
Default has occurred, at the election of the Holder, by the Borrower’s delivery
of registered Common Stock which were registered exclusively for the purpose
of
satisfying the payment of interest and not principal (“Interest Shares”) valued
at 75% of the average of the three lowest closing bid prices of the Common
Stock
as reported by Bloomberg L.P. for the Principal Market for the twenty trading
days ending on the trading day preceding the relevant interest payment date.
The
Borrower must notify the Holder, in writing, not less than fifteen trading
days
prior to the relevant interest payment date of its intention to pay interest
with shares of Common Stock otherwise such payment must be made in cash. The
Interest Shares must be delivered not later than two trading days after the
date
the cash interest payment would otherwise be payable.
1
1.3. Conversion
Privileges.
The
Conversion Privileges set forth in Article II shall remain in full force and
effect immediately from the date hereof and until the Note is paid in full
regardless of the occurrence of an Event of Default. The Note shall be payable
in full on the Maturity Date, unless previously converted into Common Stock
in
accordance with Article II hereof; provided, that if an Event of Default has
occurred that has not been timely cured, the Borrower may not pay this Note,
without the consent of the Holder, until one year after the later of the date
the Event of Default has been cured or one year after the Maturity
Date.
ARTICLE
II
CONVERSION
RIGHTS
The
Holder shall have the right to convert the principal due under this Note into
Shares of the Borrower's Common Stock, $.001 par value per share (“Common
Stock”) as set forth below.
2.1. Conversion
into the Borrower's Common Stock.
(a) The
Holder shall have the right from and after the Issue 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, and accrued interest
if
any, at the election of the Holder (the date of giving of such notice of
conversion being a "Conversion Date") into fully paid and nonassessable shares
of Common Stock as such stock exists on the date of issuance of this Note,
or
any shares of capital stock of Borrower into which such Common Stock shall
hereafter be changed or reclassified, at the conversion price as defined in
Section 2.1(b) hereof (the "Conversion Price"), determined as provided herein.
Upon delivery to the Borrower of a completed Notice of Conversion, a form of
which is annexed hereto, Borrower shall issue and deliver to the Holder within
three (3) business days after the Conversion Date (such third day being the
“Delivery Date”) that number of shares of Common Stock for the portion of the
Note converted in accordance with the foregoing. At the election of the Holder,
the Borrower will deliver accrued but unpaid interest on the Note in the manner
provided in Section 1.3 through the Conversion Date directly to the Holder
on or
before the Delivery Date (as defined in the Subscription Agreement). The number
of shares of Common Stock to be issued upon each conversion of this Note shall
be determined by dividing that portion of the principal of the Note and interest
to be converted, by the Conversion Price.
(b) Subject
to adjustment as provided in Section 2.1(c) hereof, the Conversion Price per
share shall be $1.00, except that the Conversion Price in connection with
Unregistered Note Principal shall be 75% of the Conversion Price otherwise
in
effect during the Rule 415 Exclusion Period.
(c)
The
Conversion Price and number and kind of shares or other securities to be issued
upon conversion determined pursuant to Section 2.1(a), shall be subject to
adjustment from time to time upon the happening of certain events while this
conversion right remains outstanding, as follows:
2
X. Xxxxxx,
Sale of Assets, etc. If the Borrower at any time shall consolidate with or
merge
into or sell or convey all or substantially all its assets to any other
corporation, this Note, as to the unpaid principal portion thereof and accrued
interest thereon, shall thereafter be deemed to evidence the right to purchase
such number and kind of shares or other securities and property as would have
been issuable or distributable on account of such consolidation, merger, sale
or
conveyance, upon or with respect to the securities subject to the conversion
or
purchase right immediately prior to such consolidation, merger, sale or
conveyance. The foregoing provision shall similarly apply to successive
transactions of a similar nature by any such successor or purchaser. Without
limiting the generality of the foregoing, the anti-dilution provisions of this
Section shall apply to such securities of such successor or purchaser after
any
such consolidation, merger, sale or conveyance.
B. Reclassification,
etc. If the Borrower at any time shall, by reclassification or otherwise, change
the Common Stock into the same or a different number of securities of any class
or classes that may be issued or outstanding, this Note, as to the unpaid
principal portion thereof and accrued interest thereon, shall thereafter be
deemed to evidence the right to purchase an adjusted number of such securities
and kind of securities as would have been issuable as the result of such change
with respect to the Common Stock immediately prior to such reclassification
or
other change.
C. Stock
Splits, Combinations and Dividends. If the shares of Common Stock are subdivided
or combined into a greater or smaller number of shares of Common Stock, or
if a
dividend is paid on the Common Stock in shares of Common Stock, the Conversion
Price shall be proportionately reduced in case of subdivision of shares or
stock
dividend or proportionately increased in the case of combination of shares,
in
each such case by the ratio which the total number of shares of Common Stock
outstanding immediately after such event bears to the total number of shares
of
Common Stock outstanding immediately prior to such event..
D. Share
Issuance. So long as this Note is outstanding, if the Borrower shall issue
or
agree to issue any shares of Common Stock except for the Excepted Issuances
(as
defined in the Subscription Agreement) for a consideration less than the
Conversion Price in effect at the time of such issue, then, and thereafter
successively upon each such issue, the Conversion Price shall be reduced to
such
other lower issue price. For purposes of this adjustment, the issuance of any
security carrying the right to convert such security into shares of Common
Stock
or of any warrant, right or option to purchase Common Stock shall result in
an
adjustment to the Conversion Price upon the issuance of the above-described
security and again upon the issuance of shares of Common Stock upon exercise
of
such conversion or purchase rights if such issuance is at a price lower than
the
then applicable Conversion Price. The reduction of the Conversion Price
described in this paragraph is in addition to other rights of the Holder
described in this Note and the Subscription Agreement.
(d) Whenever
the Conversion Price is adjusted pursuant to Section 2.1(c) above, the Borrower
shall promptly mail to the Holder a notice setting forth the Conversion Price
after such adjustment and setting forth a statement of the facts requiring
such
adjustment.
(e) Borrower
will reserve from its authorized and unissued Common Stock the number of shares
of Common Stock during the time periods and in the amounts described in the
Subscription Agreement. Borrower represents that upon issuance, such shares
will
be duly and validly issued, fully paid and non-assessable. Xxxxxxxx agrees
that
its issuance of this Note shall constitute full authority to its officers,
agents, and transfer agents who are charged with the duty of executing and
issuing stock certificates to execute and issue the necessary certificates
for
shares of Common Stock upon the conversion of this Note.
3
2.2 Method
of Conversion.
This
Note may be converted by the Holder in whole or in part as described in Section
2.1(a) hereof and the Subscription Agreement. Upon partial conversion of this
Note, a new Note containing the same date and provisions of this Note shall,
at
the request of the Holder, be issued by the Borrower to the Holder for the
principal balance of this Note and interest which shall not have been converted
or paid.
2.3 Maximum
Conversion.
The
Holder shall not be entitled to convert on a Conversion Date that amount of
the
Note in connection with that number of shares of Common Stock which would be
in
excess of the sum of (i) the number of shares of Common Stock beneficially
owned
by the Holder and its affiliates on a Conversion Date, (ii) any Common Stock
issuable in connection with the unconverted portion of the Note, and (iii)
the
number of shares of Common Stock issuable upon the conversion of the Note with
respect to which the determination of this provision is being made on a
Conversion Date, which would result in beneficial ownership by the Holder and
its affiliates of more than 4.99% of the outstanding shares of Common Stock
of
the Borrower on such Conversion Date. For the purposes of the provision to
the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder
shall not be limited to aggregate conversions of only 4.99% and aggregate
conversion by the Holder may exceed 4.99%. The Holder shall have the authority
and obligation to determine whether the restriction contained in this Section
2.3 will limit any conversion hereunder and to the extent that the Holder
determines that the limitation contained in this Section applies, the
determination of which portion of the Notes are convertible shall be the
responsibility and obligation of the Holder. The
Subscriber may increase the permitted beneficial ownership amount up to 9.99%
upon and effective after 61 days prior written notice to the
Company.
The
Holder may allocate which of the equity of the Borrower deemed beneficially
owned by the Holder shall be included in the 4.99% amount described above and
which shall be allocated to the excess above 4.99%.
2.4. Optional
Redemption of Principal Amount.
Provided an Event of Default or an event which with the passage of time on
the
giving of notice could become an Event of Default has not occurred, whether
or
not such Event of Default has been cured, the Borrower will have the option
of
prepaying the outstanding initial principal amount of this Note ("Optional
Redemption"), in whole or in part, by paying to the Holder a sum of money equal
to one hundred and fifteen percent (115%) of the Principal Amount to be
redeemed, together with accrued but unpaid interest thereon and any and all
other sums due, accrued or payable to the Holder arising under this Note or
any
Transaction Document through the Redemption Payment Date as defined below (the
"Redemption Amount"). Xxxxxxxx’s election to exercise its right to prepay must
be by notice in writing (“Notice of Redemption”). The Notice of Redemption shall
specify the date for such Optional Redemption (the "Redemption Payment Date"),
which date shall be thirty (30) days after the date of the Notice of Redemption
(the "Redemption Period"). A Notice of Redemption shall not be effective with
respect to any portion of the Principal Amount for which the Holder has a
pending election to convert pursuant to Section 2.1, or for conversions
initiated or made by the Holder pursuant to Section 2.1 during the Redemption
Period. A Redemption Notice may be given not more frequently than one time
each
sixty days. A Redemption Notice may be given for an amount of principal which
is
not greater than an amount of Note Principal which when converted into Common
stock would not exceed the limitation described in Section 2.3 above. On the
Redemption Payment Date, the Redemption Amount, less any portion of the
Redemption Amount against which the Holder has exercised its rights pursuant
to
Section 2.1, shall be paid in good funds to the Holder. In the event the
Borrower fails to pay the Redemption Amount on the Redemption Payment Date
as
set forth herein, then (i) such Notice of Redemption will be null and void,
(ii)
Borrower will not have the right to deliver another Notice of Redemption, and
(iii) Borrower’s failure may be deemed by Holder to be a non-curable Event of
Default. A Notice of Redemption may be cancelled at the option of the Holder,
if
at any time during the Redemption Period an Event of Default, or an event which
with the passage of time or giving of notice could become an Event of Default
(whether or not such Event of Default has been cured), has
occurred.
4
ARTICLE
III
EVENT
OF DEFAULT
The
occurrence of any of the following events of default ("Event of Default") shall,
at the option of the Holder hereof, make all sums of principal and interest
then
remaining unpaid hereon and all other amounts payable hereunder immediately
due
and payable, upon demand, without presentment, or grace period, all of which
hereby are expressly waived, except as set forth below:
3.1 Failure
to Pay Principal or Interest.
The
Borrower fails to pay any installment of principal, interest or other sum due
under this Note when due and such failure continues for a period of five (5)
business days after the due date. The five (5) day period described in this
Section 3.1 is the same five (5) business day period described in Section 1.1
hereof.
3.2 Breach
of Covenant.
The
Borrower breaches any material covenant or other material term or condition
of
the Subscription Agreement or this Note in any material respect and such breach,
if subject to cure, continues for a period of ten (10) business days after
written notice to the Borrower from the Holder.
3.3 Breach
of Representations and Warranties.
Any
material representation or warranty of the Borrower made herein, in the
Subscription Agreement, or in any agreement, statement or certificate given
in
writing pursuant hereto or in connection therewith shall be false or misleading
in any material respect as of the date made and the Closing Date.
3.4 Receiver
or Trustee.
The
Borrower shall make an assignment for the benefit of creditors, or apply for
or
consent to the appointment of a receiver or trustee for it or for a substantial
part of its property or business; or such a receiver or trustee shall otherwise
be appointed without the consent of the Borrower is not dismissed within
forty-five (45) days of appointment.
3.5 Judgments.
Any
money judgment, writ or similar final process shall be entered or filed against
Borrower or any of its property or other assets for more than $100,000, and
shall remain unpaid, unvacated, unbonded or unstayed for a period of forty-five
(45) days.
3.6 Bankruptcy.
Bankruptcy, insolvency, reorganization or liquidation proceedings or other
proceedings or relief under any bankruptcy law or any law, or the issuance
of
any notice in relation to such event, for the relief of debtors shall be
instituted by or against the Borrower and if instituted against Borrower are
not
dismissed within forty-five (45) days of initiation.
3.7 Delisting.
Failure
of the Common Stock to be listed for trading or quotation on a Principal
Market.
3.8 Non-Payment.
A
default by the Borrower under any one or more obligations in an aggregate
monetary amount in excess of $150,000 for more than thirty days after the due
date, unless the Borrower is contesting the validity of such obligation in
good
faith and has segregated cash funds equal to not less than one-half of the
disputed amount.
5
3.9 Stop
Trade.
An SEC
or judicial stop trade order or Principal Market trading suspension that lasts
for ten or more consecutive trading days.
3.10 Failure
to Deliver Common Stock or Replacement Note.
Xxxxxxxx's failure to deliver Common Stock to the Holder pursuant to and in
the
form required by this Note and Sections 7 and 11 of the Subscription Agreement,
or, if required, a replacement Note more than five Business Days after the
required delivery date of such Common Stock or Note.
3.11 Non-Registration
Event.
The
occurrence of a Non-Registration Event as described in Section 11.4 of the
Subscription Agreement.
3.12 Reservation
Default.
Failure
by the Borrower to have reserved for issuance upon conversion of the Note the
amount of Common stock as set forth in this Note and the Subscription
Agreement.
3.13 Cross
Default.
A
default by the Borrower of a material term, covenant, warranty or undertaking
of
any other agreement to which the Borrower and Holder are parties, or the
occurrence of a material event of default under any such other agreement which
is not cured after any required notice and/or cure period.
ARTICLE
IV
SECURITY
INTEREST
4. Security
Interest/Waiver of Automatic Stay.
This
Note is secured by a security interest granted to the Collateral Agent for
the
benefit of the Holder pursuant to a Security Agreement, as delivered by Borrower
to Holder. The Borrower acknowledges and agrees that should a proceeding under
any bankruptcy or insolvency law be commenced by or against the Borrower, or
if
any of the Collateral (as defined in the Security Agreement) should become
the
subject of any bankruptcy or insolvency proceeding, then the Holder should
be
entitled to, among other relief to which the Holder may be entitled under the
Transaction Documents and any other agreement to which the Borrower and Holder
are parties (collectively, "Loan Documents") and/or applicable law, an order
from the court granting immediate relief from the automatic stay pursuant to
11
U.S.C. Section 362 to permit the Holder to exercise all of its rights and
remedies pursuant to the Loan Documents and/or applicable law. THE BORROWER
EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11 U.S.C. SECTION
362. FURTHERMORE, THE BORROWER EXPRESSLY ACKNOWLEDGES AND AGREES THAT NEITHER
11
U.S.C. SECTION 362 NOR ANY OTHER SECTION OF THE BANKRUPTCY CODE OR OTHER STATUTE
OR RULE (INCLUDING, WITHOUT LIMITATION, 11 U.S.C. SECTION 105) SHALL STAY,
INTERDICT, CONDITION, REDUCE OR INHIBIT IN ANY WAY THE ABILITY OF THE HOLDER
TO
ENFORCE ANY OF ITS RIGHTS AND REMEDIES UNDER THE LOAN DOCUMENTS AND/OR
APPLICABLE LAW. The Borrower hereby consents to any motion for relief from
stay
that may be filed by the Holder in any bankruptcy or insolvency proceeding
initiated by or against the Borrower and, further, agrees not to file any
opposition to any motion for relief from stay filed by the Holder. The Borrower
represents, acknowledges and agrees that this provision is a specific and
material aspect of the Loan Documents, and that the Holder would not agree
to
the terms of the Loan Documents if this waiver were not a part of this Note.
The
Borrower further represents, acknowledges and agrees that this waiver is
knowingly, intelligently and voluntarily made, that neither the Holder nor
any
person acting on behalf of the Holder has made any representations to induce
this waiver, that the Borrower has been represented (or has had the opportunity
to he represented) in the signing of this Note and the Loan Documents and in
the
making of this waiver by independent legal counsel selected by the Borrower
and
that the Borrower has discussed this waiver with counsel.
6
ARTICLE
V
MISCELLANEOUS
5.1 Failure
or Indulgence Not Waiver.
No
failure or delay on the part of Holder hereof in the exercise of any power,
right or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. All
rights and remedies existing hereunder are cumulative to, and not exclusive
of,
any rights or remedies otherwise available.
5.2 Notices.
All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted
to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery
by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (i) if to the Borrower to: Lotus
Pharmaceuticals, Inc., Boca Corporate Plaza, 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxx
Xxxxx, XX 00000, Attn: Xx. Xxxxxxx Xxx,
CEO,
telecopier: (000) 000-0000, with a copy by telecopier only to: Xxxxxx Alliance,
LLP, 0000 00xx
Xxxxxx,
Xxxxx 000, Xxxxx Xxxxxx, XX 00000, telecopier number: (000) 000-0000, and (ii)
if to the Holder, to the name, address and telecopy number set forth on the
front page of this Note, with a copy by telecopier only to Grushko &
Xxxxxxx, P.C., 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000,
telecopier number: (000) 000-0000.
5.3 Amendment
Provision.
The
term "Note" and all reference thereto, as used throughout this instrument,
shall
mean this instrument as originally executed, or if later amended or
supplemented, then as so amended or supplemented.
5.4 Assignability.
This
Note shall be binding upon the Borrower and its successors and assigns, and
shall inure to the benefit of the Holder and its successors and
assigns.
5.5 Cost
of Collection.
If
default is made in the payment of this Note, Borrower shall pay the Holder
hereof reasonable costs of collection, including reasonable attorneys'
fees.
7
5.6 Governing
Law.
This
Note shall be governed by and construed in accordance with the laws of the
State
of New York. Any action brought by either party against the other concerning
the
transactions contemplated by this Agreement shall be brought only in the civil
or state courts of New York or in the federal courts located in the State and
county of New York. Both parties and the individual signing this Agreement
on
behalf of the Borrower agree to submit to the jurisdiction of such courts.
The
prevailing party shall be entitled to recover from the other party its
reasonable attorney's fees and costs. In
the
event that any provision of this Note is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity
or unenforceability of any other provision of this Note. Nothing contained
herein shall be deemed or operate to preclude the Holder from bringing suit
or
taking other legal action against the Borrower in any other jurisdiction to
collect on the Borrower's obligations to Holder, to realize on any collateral
or
any other security for such obligations, or to enforce a judgment or other
decision in favor of the Holder. This
Note shall be deemed an unconditional obligation of Borrower for the payment
of
money and, without limitation to any other remedies of Holder, may be enforced
against Borrower by summary proceeding pursuant to New York Civil Procedure
Law
and Rules Section 3213 or any similar rule or statute in the jurisdiction where
enforcement is sought. For purposes of such rule or statute, any other document
or agreement to which Holder and Borrower are parties or which Borrower
delivered to Holder, which may be convenient or necessary to determine Holder’s
rights hereunder or Xxxxxxxx’s obligations to Holder are deemed a part of this
Note, whether or not such other document or agreement was delivered together
herewith or was executed apart from this Note.
5.7 Maximum
Payments.
Nothing
contained herein shall be deemed to establish or require the payment of a rate
of interest or other charges in excess of the maximum permitted by applicable
law. In the event that the rate of interest required to be paid or other charges
hereunder exceed the maximum permitted by such law, any payments in excess
of
such maximum shall be credited against amounts owed by the Borrower to the
Holder and thus refunded to the Borrower.
5.8 Shareholder
Status.
The
Holder shall not have rights as a shareholder of the Borrower with respect
to
unconverted portions of this Note. However, the Holder will have all the rights
of a shareholder of the Borrower with respect to the shares of Common Stock
to
be received by Holder after delivery by the Holder of a Conversion Notice to
the
Borrower.
[THIS
SPACE INTENTIONALLY LEFT BLANK]
8
IN
WITNESS WHEREOF,
Xxxxxxxx has caused this Note to be signed in its name by an authorized officer
as of the ____ day of February, 2007.
| LOTUS PHARMACEUTICALS, INC. | ||
| |
|
|
| By: | /s/ | |
|
Name: |
||
| Title | ||
| WITNESS: | ||
|
|
||
9
NOTICE
OF CONVERSION
(To
be
executed by the Registered Holder in order to convert the Note)
The
undersigned hereby elects to convert $_________ of the principal and $_________
of the interest due on the Note issued by Lotus Pharmaceuticals, Inc. on
February ___, 2007 into Shares of Common Stock of Lotus Pharmaceuticals, Inc.
(the "Borrower") according to the conditions set forth in such Note, as of
the
date written below.
Date
of
Conversion:____________________________________________________________________
Conversion
Price:______________________________________________________________________
Shares
To
Be
Delivered:_________________________________________________________________
Signature:____________________________________________________________________________
Print
Name:__________________________________________________________________________
Address:_____________________________________________________________________________
____________________________________________________________________________
10
