Contract
NEITHER
THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS.
|
November 20, 2009
|
$55,000
|
INOLIFE
TECHNOLIGIES INC.
Amended
and Restated 12% Convertible Debenture
Due
November 20,
2011
FOR VALUE
RECEIVED, INOLIFE TECHNOLGIES INC., a New York corporation (hereinafter called
the “Borrower” or the
“Company”), hereby
promises to pay to Sunny Isles
Venture LLC , a Florida limited liability company (the “Holder”), or order, without
demand, the sum of FIFTY-FIVE THOUSAND Dollars ($55,000), with simple interest
accruing at the rate described below, on November 20, 2011 (the
"Maturity
Date").
debentures
for the purposes of clarity and ease of administration and not with the intent
of creating a new security.
NOW
THEREFORE, the following terms shall apply to this Note:
ARTICLE
I
GENERAL
PROVISIONS
1.1 Payments. The entire
unpaid principal amount due under this Note (the “Principal”) shall be due and
payable on the Maturity Date. Interest on this
Note (the “Interest”) will be payable on
the Maturity Date. Interest shall be payable in cash or, at the Holder’s option,
in shares of the Company’s common stock, par value $0.001 per share (the "Common Stock").
Upon
any conversion in part by the Holder in accordance with Article II, the Holder
and the Borrower shall in good faith recalculate the outstanding principal
balance . Upon any full conversion by the Holder in accordance with Article II
of all of the Interest and the Principal due hereunder, all of the Borrower's
payment obligations shall terminate. All payments in respect of the indebtedness
evidenced hereby shall be applied in the following order: to accrued Interest,
Principal, and charges and expenses owing under or in connection with this
Note.
If
any payment of interest is paid in Common Stock, the number of shares issuable
will be determined utilizing the conversion ratio as set forth in Article II.
Notwithstanding the foregoing, the Company’s right to pay this Note, including
any Interest due thereunder, in shares of Common Stock upon the Maturity Date is
subject to the condition that: (i) the Common Stock is trading on the Pink
Sheets, OTC Bulletin Board, American Stock Exchange or Nasdaq; and (ii) there is
an effective Registration Statement on the Maturity Date or the shares are
otherwise eligible for resale pursuant to Rule 144.
1.2 Interest. Interest
shall accrue on the outstanding principal balance hereof at an annual rate equal
to twelve percent (12%) from the date Principal was advanced in connection with
this Note. Interest shall be calculated on the basis of a 360-day
year and the actual number of days elapsed, to the extent permitted
by applicable law. Interest hereunder will be paid to the
Holder or its assignee in whose name this Note is registered on the records of
the Borrower regarding registration and transfers of Notes (the
“Note
Register”).
1.3 Payment Grace Period.
From and after the 10th day
after an Event of Default under Section 3.1, the Interest Rate applicable to any
unpaid amounts owed hereunder shall be increased to eighteen percent (18%) per
annum.
1.4 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. This 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, the Holder may elect to extend the Maturity Date
by the amount of days of the pendency of the Event of Default.
1.5 Corporate
Existence. So long as this Note remains outstanding, the
Company shall not directly or indirectly consummate any merger, reorganization,
restructuring, reverse stock split, consolidation, sale of all or substantially
all of the Company's assets or any similar transaction or related transactions
(each such transaction, a “Fundamental Change”) unless,
prior to the consummation a Fundamental Change, the Company shall have given the Holder not less than fourteen (14)
days prior written notice to the Holder. In any such case, the
Company grant the Holder the right to put
this Note to the Company up to the time of the effectiveness of the Fundamental Change at 125% of the then outstanding Principal plus any
unpaid and accrued Interest.
1.6 Security. The
Company shall provide as security for its obligations hereunder, the number of
25,000,000 (Twenty Five Million) of its common shares to be held in Escrow as
per the Escrow Agreement attached hereto as Exhibit D.
This Note
is subject to the following additional provisions:
ARTICLE
II
CONVERSION
RIGHTS AND REDEMPTION RIGHTS
The
Holder shall have the right to convert the principal and accrued and unpaid
interest due under this Note into Shares of the Borrower's 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 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, at the election
of the Holder (the date of giving of such notice of conversion being a "Conversion Date") into fully
paid and non-assessable shares of Common Stock as such stock exists on the date
of issuance of this Note (such shares, the “Conversion Shares”), or any
shares of capital stock of Borrower into which such Common Stock shall hereafter
be changed or reclassified (the “Other Securities”), 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 attached hereto as Exhibit
A, Borrower shall issue and deliver to the Holder within two (2) business
days from the Conversion Date (such second day being the “Delivery Date”) that number of
Conversion Shares 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 principal amount of the Note being converted in the
manner provided in Section 1.1 through the Conversion Date directly to the
Holder on or before the Delivery Date. The number of Conversion Shares to be
issued upon each conversion of this Note shall be determined by dividing that
portion of the principal of this Note and
accrued 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 75% of the lowest closing price for the Company’s stock during
the previous 20 trading days.
2
(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:
A. Reorganization,
Consolidation, Merger, etc.; Reclassification. In case at any
time or from time to time, the Company shall, subject to Section 1.5 hereof,
effect a Fundamental Change, then, in each such case, as a condition to the
consummation of such a transaction, proper and adequate provision shall be made
by the Company whereby the Holder of this Note, on the conversion hereof as
provided in Article II, at any time after the consummation of such Fundamental
Change, shall receive, in lieu of the Conversion Shares (or Other Securities)
issuable on such conversion prior to such consummation or such effective date,
the stock and other securities and property (including cash) to which such
Holder would have been entitled upon such consummation of a Fundamental Change
if such Holder had so converted this Note, immediately prior thereto, all
subject to further adjustment thereafter as provided in Section
2.1(c)(E).
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.
B. Dissolution. In the
event of any dissolution of the Company following the transfer of all or
substantially all of its properties or assets, the Company, prior to such
dissolution, shall at its expense deliver or cause to be delivered the stock and
other securities and property (including cash, where applicable) receivable by
the Holder of this Note after the effective
date of such dissolution pursuant to this Article II to a bank or trust company
(a “Trustee”) having its
principal office in New York, NY, as trustee for the Holder of the
Notes.
C. Continuation of
Terms. Upon any Fundamental Change or transfer (and any dissolution
following any transfer) referred to in this Article II, this Note shall continue
in full force and effect and the terms hereof shall be applicable to the Other
Securities and property receivable on the conversion of this Note after the
consummation of such Fundamental Change or transfer or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any other securities, including, in the case of any
such transfer, the person acquiring all or substantially all of the properties
or assets of the Company, whether or not such person shall have expressly
assumed the terms of this Note as provided in Section 2.1(c)(E). In the event
this Note does not continue in full force and effect after the consummation of
the transaction described in this Article II, then only in such event will the
Company's securities and property (including cash, where applicable) receivable
by the Holder of this Note be delivered to
the Trustee as contemplated by Section 2.1(c)(B).
D. Share
Issuance. If at any time this Note is outstanding the Company
shall offer, issue or agree to issue any common stock or securities convertible
into or exercisable for shares of common stock (or modify any of the foregoing
which may be outstanding) to any person or entity at a price per share or
conversion or exercise price per share which shall be less than the then
applicable Conversion Price in respect of the Shares, without the consent of
the Holders of this Note, except with respect to Excepted Issuances,
then the Company shall issue, for each such occasion, additional shares of
Common Stock to each Holder so that the average per share purchase price of the
shares of Common Stock issued to the Holder (of only the Conversion Shares still
owned by the Holder) is equal to such other lower price per share and the
Conversion Price shall automatically be reduced to such other lower price per
share. For the purposes hereof,
"Excepted Issuances" means any offer, issuance or agreement to issue any common stock or securities
convertible into or exercisable for shares of common stock (or modify any of the
foregoing which may be outstanding) in connection with (i) full or partial
consideration in connection with a strategic merger,
consolidation or purchase of substantially all of the securities or assets
of corporation or other entity, (ii) the
Company’s issuance of securities in connection with strategic
license agreements and other partnering arrangements so long as such issuances are not for the purpose of raising capital,
(iii) the Company’s issuance of Common Stock or the issuance or grants of
options to purchase Common Stock pursuant to the Company’s stock option
plans and employee stock purchase plans, (iv) the conversion of any of
the Notes, (v) the payment of any interest on the Notes, and (vi) as has been
described in the Reports filed with the Commission or delivered to the Holder
prior to the issuance of this Note (collectively, the “Excepted Issuances”). The delivery to the Holder of the
additional shares of Common Stock shall be not later than the closing date of
the transaction giving rise to the requirement to issue additional shares of
Common Stock. For purposes of the issuance and adjustment described
in this paragraph, the issuance of any security of the Company 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 the issuance of the
additional shares of Common Stock upon the issuance of such convertible
security, warrant, right or option and again at any time upon any subsequent
issuances of shares of Common Stock upon exercise of such conversion or purchase
rights if such issuance is at a price lower than the Conversion Price in effect
upon such issuance. The rights of the Holder set forth in this
Section 2.1 (c)(D), are in addition to any other rights the Holder
has pursuant to this Note, any Transaction Document and any other agreement
referred to or entered into in connection herewith.
3
E. Extraordinary Events
Regarding Common Stock. In the event that the Company shall (a) issue
additional shares of the Common Stock as a dividend or other distribution on
outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock,
or (c) subject to Section 1.5 hereof, combine its outstanding shares of the
Common Stock into a smaller number of shares of the Common Stock, then, in each
such event, the Conversion Price shall, simultaneously with the happening of
such event, be adjusted by multiplying the then Conversion Price by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Conversion Price then in effect. The
Conversion Price, as so adjusted, shall be readjusted in the same manner upon
the happening of any successive event or events described herein in this Section
2.1(c)(E). The number of Conversion Shares that the Holder of this Note shall
thereafter, on the conversion hereof as provided in Article II, be entitled to
receive shall be adjusted to a number determined by multiplying the number of
Conversion Shares that would otherwise (but for the provisions of this Section
2.1(c)(E)) be issuable on such conversion by a fraction of which (a) the
numerator is the Conversion Price that would otherwise (but for the provisions
of this Section 2.1(c)(E)) be in effect, and (b) the denominator is the
Conversion Price in effect on the date of such conversion.
F. Certificate as to
Adjustments. In each case of any adjustment or readjustment in the shares
of Common Stock (or Other Securities) issuable on the conversion of the Notes,
the Company at its expense will promptly cause its Chief Financial Officer or
other appropriate designee to compute such adjustment or readjustment in
accordance with the terms of the Note and prepare a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Conversion Price and the
number of Conversion Shares to be received upon conversion of this Note, in
effect immediately prior to such adjustment or readjustment and as adjusted or
readjusted as provided in this Note. The Company will forthwith mail a copy of
each such certificate to the Holder of the Note and any transfer agent of the
Company.
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 Issuance Below
Par. The Parties hereto agree that New York Business
Corporations Law Section 504 allows for the issuance of conversion shares under
this section even if such conversion price is less than the shares’ stated par
value, and that such shares shall be issued in response to a Conversion Request
regardless of Conversion Price.
2.4 Intentionally
Left Blank.
2.5 Conversion of
Note.
4
(a) Upon
the conversion of this Note or part
thereof, the Company shall, at its own cost and expense, take all necessary
action, including obtaining and delivering, an opinion of counsel to assure that
the Company's transfer agent shall issue stock certificates in the name of
Holder (or its nominee) or such other persons as designated by Holder and in
such denominations to be specified at conversion representing the number of
Conversion Shares issuable upon such conversion. The Company warrants that no
instructions other than these instructions have been or will be given to the
transfer agent of the Company's Common Stock and that, unless waived by the
Holder, the Conversion Shares will be free-trading, and freely transferable, and
will not contain a legend restricting the resale or transferability of the
Conversion Shares provided the Conversion Shares are being sold pursuant to an
effective registration statement covering the Conversion Shares or are otherwise
exempt from registration.
(b) Subscriber
will give notice of its decision to exercise its right to convert this Note or part thereof by telecopying an
executed and completed Notice of Conversion (a form of which is attached as
Exhibit
A to the Note) to the Company via confirmed telecopier transmission or
overnight courier or otherwise pursuant to Section 4.2 of this Note. The
Subscriber will not be required to surrender this Note until this Note has been fully converted or satisfied,
with each date on which a Notice of Conversion is telecopied to the Company in
accordance with the provisions hereof shall be deemed a Conversion Date (as
defined above). The Company will itself or cause the Company’s transfer agent to
transmit the Company's Common Stock certificates representing the Conversion
Shares issuable upon conversion of this
Note to the Subscriber via express courier for receipt by such Subscriber on or
before the Delivery Date (as defined above). In the event the Conversion Shares
are electronically transferable, then delivery of the Conversion Shares must be
made by electronic transfer provided request for such electronic transfer has
been made by the Subscriber and the Subscriber has complied with all applicable
securities laws in connection with the sale of the Common Stock, including,
without limitation, the prospectus delivery requirements. A Note
representing the balance of this Note not
so converted will be provided by the Company to the Subscriber if requested by
Subscriber, provided the Subscriber delivers the original Note to the
Company.
(c) The
Company understands and agrees that a delay in the delivery of the Conversion
Shares in the form required pursuant to Section 2.5(a) hereof, after the
Delivery Date (as hereinafter defined) could result in economic loss to the
Holder. As compensation to the Holder for such loss, the Company agrees to pay
(as liquidated damages and not as a penalty) to the Holder for late issuance of
Conversion Shares upon Conversion of the Note in the amount of $1,000 per
business day after the Delivery Date for each $10,000 of Note principal amount
being converted of the corresponding Conversion Shares which are not timely
delivered. The Company shall pay any payments incurred under this Section in
immediately available funds upon demand. Furthermore, in addition to any other
remedies which may be available to theHolder, in the event that the Company
fails for any reason to effect delivery of the Conversion Shares by the
Delivery Date the Holder will be entitled to revoke all or part of the relevant
Notice of Conversion by delivery of a notice to such effect to the
Company whereupon the Company and the Holder shall each be restored to their
respective positions immediately prior to the delivery of such notice, except
that the liquidated damages described above shall be payable through the date
notice of revocation or rescission is given to the Company.(d)Nothing contained
herein or in any document referred to herein or delivered in connection herewith
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 or dividends 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 Company to the Holder
and thus refunded to the Company.
2.6 Injunction Posting of Bond. In the event
a Holder shall elect to convert a Note or part thereof in whole or in part, the
Company may not refuse conversion based on any claim that such Holder or any one
associated or affiliated with such Holder has been engaged in any violation of
law, or for any other reason, unless an injunction from a court, on notice,
restraining and or enjoining conversion of all or part of such Note shall have
been sought and obtained by the Company and the Company has posted a surety bond
for the benefit of such Holder in the amount of 120% of the amount of the Note,
which bond shall remain in effect until the completion of arbitration/litigation
of the dispute and the proceeds of which shall be payable to such Holder to the
extent Holder obtains judgment.
5
2.7 Optional
Redemption.
(a) Provided
that the Company has a number of authorized but unissued shares of Common Stock
sufficient for the issuance of all Conversion Shares underlying the remaining
principal amount of this Note, such Common Stock is listed or quoted (and is not
suspended from trading) on the Principal Market and such shares of Common Stock
are approved for listing on such Principal Market upon issuance if applicable,
such Common Stock is registered for resale under the Registration Statement and
the prospectus under such Registration Statement is available for the sale of
all Registrable Securities held by the Subscriber, such issuance would be
permitted in full without violating Section 2.3 herein or the rules or
regulations of any trading market on which such Common Stock may be listed or
quoted, and both immediately before and after giving effect thereto, no Event of
Default under the Subscription Agreement or this Note shall or would exist, the
Borrower will have the option of prepaying the outstanding principal amount of
this Note ("Optional
Redemption"), in whole or in part, together with interest accrued
thereon, by paying to the Holder a sum of money equal to one hundred fifty
percent (150%) of the principal amount to be redeemed, together with accrued but
unpaid interest thereon and interest that will accrue until the actual repayment
date and any and all other sums due, accrued or payable to the Holder arising
under the Note, the Subscription Agreement or any Transaction Document (the
"Redemption Amount") on
the day written notice of redemption (the "Notice of Redemption") is
given to the Holder. The Notice of Redemption shall specify the date for such
Optional Redemption (the "Redemption Payment Date"),
which date shall be not less than five (5) business 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 this Note for which the Holder has a pending
election to convert, or for Conversion Notices given by the Holder prior to the
Redemption Payment Date. On the Redemption Payment Date, the Redemption Amount
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
have no further 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.
2.8 Mandatory Redemption at
Subscriber’s
Election. In the event the Company is prohibited from issuing
Conversion Shares, or fails to timely deliver Shares on a Delivery Date, or upon
the occurrence of any other Event of Default (as defined in this Note or in the
Subscription Agreement) or for any reason other than pursuant to the limitations
set forth in Section 2.3 hereof, then at the Subscriber's election, the Company
must pay to the Subscriber ten (10) business days after request by the
Subscriber, at the Subscriber's election, a sum of money in immediately
available terms equal to the greater of (i) the product of the outstanding
principal amount of the Note designated by the Subscriber multiplied by 120%, or
(ii) the product of the number of Conversion Shares otherwise deliverable upon
conversion of an amount of Note principal and/or interest designated by the
Subscriber (with the date of giving of such designation being a “Deemed Conversion Date”) at
the then Conversion Price that would be in effect on the Deemed Conversion Date
multiplied by the average of the closing bid prices for the Common Stock for the
five consecutive trading days preceding either: (1) the date the Company becomes
obligated to pay the Mandatory Redemption Payment, or (2) the date on which the
Mandatory Redemption Payment is made in full, whichever is greater, together
with accrued but unpaid interest thereon and any liquidated damages then payable
(“Mandatory Redemption
Payment”). The Mandatory Redemption Payment must be received
by the Subscriber on the same date as the Company Shares otherwise deliverable
or within ten (10) business days after request, whichever is sooner (“Mandatory Redemption Payment
Date”). Upon receipt of the Mandatory Redemption Payment, the
corresponding Note principal and interest will be deemed paid and no longer
outstanding. Liquidated damages calculated pursuant to Section 2.5(c) hereof,
that have been paid or accrued for the twenty (20) day period prior to the
actual receipt of the Mandatory Redemption Payment by the Subscriber shall be
credited against the Mandatory Redemption Payment.
2.9 Buy-In. In
addition to any other rights available to the Subscriber, but without any duplicative recovery by the Subscriber,
if the Company fails to deliver to the Subscriber the Conversion Shares
issuable upon conversion of this Note by
the Delivery Date and if after five (5) business days after the Delivery Date
the Subscriber purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by such Subscriber of the
Common Stock which the Subscriber was entitled to receive upon such conversion
(a “Buy-In”), then the
Company shall pay in cash to the Subscriber (in addition to any remedies
available to or elected by the Subscriber) the amount by which (A) the
Subscriber's total purchase price (including brokerage commissions, if any) for
the shares of Common Stock so purchased exceeds (B) the aggregate principal
and/or interest amount of the Note for which such conversion was not timely
honored, together with interest thereon at a rate of 15% per annum, accruing
until such amount and any accrued interest thereon is paid in full (which amount
shall be paid as liquidated damages and not as a penalty). For
example, if the Subscriber purchases shares of Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted
conversion of $10,000 of note principal and/or interest, the Company shall be
required to pay the Subscriber $1,000, plus interest. The Subscriber
shall provide the Company written notice indicating the amounts payable to the
Subscriber in respect of the Buy-In.
6
2.10 Reservation. During
the period the conversion right exists, Borrower will reserve from its
authorized and unissued Common Stock a number of shares of Common Stock equal to
150% of the amount of Common Stock issuable upon the full conversion of this
Note. 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.
2.11 Maximum
Conversion
(a)
Notwithstanding anything to the contrary contained herein, the number of
Conversion Shares that may be acquired by the Holder upon conversion of this
Note (or otherwise in respect hereof) shall be limited to the extent necessary
to ensure that, following such conversion (or other issuance), the total number
of shares of Common Stock then beneficially owned by such HOlder and its
affiliates and any other persons whose beneficial ownership of Common Stock
would be aggregated with the Holder’s for purposes of Section 13(d) of the 1934
Act, does not exceed 4.999% of the total number of issued and outstanding shares
of Common Stock (including for such purpose the shares of Common Stock issuable
upon such conversion). For such purposes, beneficial ownership shall be
determined in accordance with Section 13(d) of the 1934 Act and the rules and
regulations promulgated thereunder. By written notice to the Company, a
Subscriber may waive the provisions of this Section 2.3(a) as to itself but any
such waiver will not be effective until the 61st day
after delivery thereof and such waiver shall have no effect on any other
Subscriber.
(b) Notwithstanding
anything to the contrary contained herein, the number of Conversion Shares that
may be acquired by the Holder upon conversion of this Note (or otherwise in
respect hereof) shall be limited to the extent necessary to ensure that,
following such conversion (or other issuance), the total number of shares of
Common Stock then beneficially owned by such Holder and its affiliates and any
other persons whose beneficial ownership of Common Stock would be aggregated
with the Holder’s for purposes of Section 13(d) of the 1934 Act, does not exceed
9.999% of the total number of issued and outstanding shares of Common Stock
(including for such purpose the shares of Common Stock issuable upon such
conversion). For such purposes, beneficial ownership shall be determined in
accordance with Section 13(d) of the 1934 Act and the rules and regulations
promulgated thereunder. This provision may not be waived.
2.12 Short
sales. The Holder shall not sell short the common shares of
the Company without first having sent a conversion request to the Company or
having such shares available to cover such short sale prior to entering into
such short sale.
ARTICLE
III
EVENTS
OF DEFAULT
An “Event
of Default,” wherever used herein,
means any one of the following events (whatever the reason
and whether it shall be voluntary or involuntary or
effected by operation of law or pursuant to any judgment, decree or
order of any court, or any order, rule or regulation of any administrative or
governmental body):
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.
3.2 Breach of Covenant.
The Borrower breaches any other covenant or other 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.
7
3.3 Breach of Representations
and Warranties. Any 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.
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 unvacated, unbonded or unstayed for a period of thirty (30)
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 thirty (30) days of initiation.
3.7 Non-Payment. A
default by the Borrower under any one or more obligations in an aggregate
monetary amount in excess of $50,000 for more than twenty (20) days after the
due date.
3.8 Stop Trade. An SEC or
judicial stop trade order or Principal Market trading suspension that lasts for
five or more consecutive trading days.
3.9 Failure to Deliver Common
Stock or Replacement Note. Xxxxxxxx's failure to timely deliver Common
Stock to the Holder pursuant to and in the time required by this
Note.
3.10 Intentionally
Left Blank.
3.11 Reverse
Splits. The Borrower effectuates a reverse split of its Common
Stock without the prior written consent of at
least two-thirds (2/3rds) of the Holders.
3.12 Reservation
Default. Failure by the Borrower to have reserve for issuance
upon conversion of the Note the amount of Common stock as set forth in 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.
3.14 Change in Control. A
change in control of the Company without at least
fourteen (14) days prior written notice to
Xxxxxx. A change in control shall mean that more than 30% of the shares of
common stock are consolidated in one person or entity so that the person or
entity (other than any one or more of the Holders) may
control the election of the board of directors or the passage of a proposal that
would normally require a shareholder vote without such shareholder vote and that
such person or entity was not a holder of shares of the Company at the date of
execution hereof.
3.15 Asset
Sales. Any instance, undertaken without written
consent of the Holder, whereby the Company or any of its
subsidiaries, sells, transfers, leases or otherwise disposes (including pursuant
to a merger) of substantially all of the Company’s assets, including any asset
constituting an equity interest in any other person, except sales, transfers,
leases and other dispositions of inventory, used, obsolete or surplus equipment
or other property, in each case in the ordinary course of the Company’s business
and consistent with past practice.
3.16 Delisting. Delisting
of the Common Stock from the American Stock Exchange or such other Principal
Market, including the Over-the-Counter Bulletin Board, on which the Common Stock
is then listed or quoted for trading.
8
During
the time that any portion of this Note is outstanding, if any Event
of Default has occurred, the full principal amount of this Note,
together with interest and other amounts owing in
respect hereof, to the date
of acceleration shall become, at
the Holder's election, immediately due
and payable in cash, provided however, the
Holder may request (but shall have no obligation to
request) payment of such amounts in Common Stock of the Borrower. In
addition to any other remedies, the Holder shall have the right (but
not the obligation) to convert this Note at any time after (x) an
Event of Default or (y) the Maturity Date at the Conversion Price then in- effect. The
Holder need not provide and the Borrower hereby waives
any presentment, demand, protest or other
notice of any kind, and the Holder may immediately and
without expiration of any grace period enforce any and all of its
rights and remedies hereunder and all other remedies available to it under
applicable law. Such declaration may be rescinded and annulled by Xxxxxx at any
time prior to payment hereunder. No such rescission or
annulment shall affect any subsequent Event of Default or
impair any right consequent thereon. Upon an
Event of Default, notwithstanding any other provision of
this Note or any Transaction Document, the Holder shall have no
obligation to comply with or adhere to any limitations, if
any, on the conversion of this Note or the sale of the Conversion Shares, Shares
or Other Securities.
ARTICLE
IV
MISCELLANEOUS
4.1 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.
4.2 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: InoLife Technologies Inc.,
__________________________________________________, Attn: _____________________,
CEO, telecopier number: (___) ___-____, and (ii) if to the Holder, to Sunny
Isles Venture LLC, attention Xxx Xxxxxx, 0000 X. Xxxxx Xx., XX0, Xxxxxxxxxx
Xxxxx, XX 00000, with a copy to Xxxxxxxx X. Xxxxxxxx PA, 00000 Xxxxxxxx Xxxx.,
Xxxxx 000, Xxxxxxxx, XX 00000, Telecopier (000) 000-0000.
4.3 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.
4.4 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.
4.5 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.
9
4.6 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 state
courts of Florida or in the federal courts located in the state of Florida
located in Broward County, Florida. 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.
4.7 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.
4.8
Waiver of Jury
Trial. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
ANY TRANSACTION DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE PARTIES' ACCEPTANCE OF THIS AGREEMENT.
4.9 Redemption. This Note
may not be redeemed or paid without the consent of the Holder except as
described in this Note or in the Subscription Agreement.
4.10 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.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOLLOWS]
10
IN WITNESS WHEREOF, Xxxxxxxx
has caused this Note to be signed in its name by an authorized officer as of the
20th
day of November 2009.
|
INOLIFE
TECHNOLOGIES INC.
|
|
|
By:
/s/ Xxxx Xxxxxxxx
|
|
|
Name:
Xxxx Xxxxxxxx
|
|
|
Title:
CEO
|
11
Exhibit
A
NOTICE OF
CONVERSION
(To be
executed by the Holder in order to Convert the Note)
TO:
The
undersigned hereby irrevocably elects to convert $_________________ of the
principal amount of the above Note into Shares of Common Stock of InoLife
Technologies Inc., according to the conditions stated therein, as of the
Conversion Date written below.
|
Conversion
Date:
|
______________________________________
|
|
Applicable
Conversion Price:
|
______________________________________
|
|
Signature:
|
______________________________________
|
|
Name:
|
______________________________________
|
|
Address:
|
______________________________________
|
|
Amount
to be converted:
|
$_____________________________________
|
|
Amount
of Note unconverted:
|
$_____________________________________
|
|
Conversion
Price per share:
|
$_____________________________________
|
|
Number
of shares to be issued:
|
______________________________________
|
|
Amount
of Interest Converted:
|
$_____________________________________
|
|
Conversion
Price per share:
|
$_____________________________________
|
|
Number
of shares of to be issued:
|
______________________________________
|
|
Please issue the shares of to:
|
______________________________________
|
|
Issue
to:
|
______________________________________
|
|
Authorized
Signature:
|
______________________________________
|
|
Name:
|
______________________________________
|
|
Title:
|
______________________________________
|
|
Phone
Number:
|
______________________________________
|
|
Broker
DTC Participant Code:
|
______________________________________
|
|
Account
Number:
|
______________________________________
|
12
