NEITHER THE ISSUANCEAND SALEOFTHE SECURITIESREPRESENTED BY THIS NOTE NOR THE SECURITIES INTO WHICH THESE SECURITIESARE CONVERTIBLEHAVE BEEN REGISTERED UNDER THESECURITIES ACTOF1933,AS AMENDED,OR APPLICABLE STATE SECURITIES LAWS.THE SECURITIESMAYNOTBE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) ANEFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B)AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIESMAY BE PLEDGEDIN CONNECTIONWITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
PrincipalAmount:$20,000
Date:May8,2014
CONYVERTIBLE PROMISSORY NOTE
NYXIOTechnologies,Corp.,(hereinaftercalledthe"Issuer','or"NYXO"), hereby promisesto pay to the order ofWHC Capital, LLC, a Delaware Limited Liability Company, or its registered assigns(the "Holder ") the sum of$20,000, together with any interest as set forth herein, on May 8, 2015(the"Maturity Date"), and to pay interest on the unpaid principal balance hereof at therate of Twelvepercent(12%) (the"Interest Rate") per annum from the date hereof(the "IssueDate") until the same becomes due and payable, whether atmaturity or uponacceleration or by prepayment or otherwise.
ThisNotemaynotbeprepaidinwholeorinpartexceptasotherwiseexplicitlysetforthherein. Anyamountof principal orinterest on this Note which is notpaid when due shall bear interest at the rateof twentytwo percent (22%) perannumfromtheduedatethereof until thesameis paid ("DefaultInterest "). Interestshall commenceaccruingon thedate that theNoteisfully paidandshall becomputedon the basisof a 365-day yearand theactual numberofdays elapsed. Allpaymentsdue hereunder(to theextentnotconverted into commonstock) shall be made in lawful moneyof the United Statesof America.
Allpaymentsshallbemadeatsuchaddressas theHoldershallhereaftergivetotheIssuerbywritten notice madeinaccordance with the provisions of this Note. Whenever any amount expressed to bedue by the termsof this Note is due on any day whichis not a businessday, the same shall insteadbe due on the next succeeding day whichis a business day and, in the case of any interest payment datewhich is not the date on which thisNote ispaid infull, the extension ofthe duedate thereof shall not be taken into account forpurposes ofdeterminingtheamountofinterestdueonsuchdate. Asused in this Note, theterm "business day"shall mean anydayother than a Saturday,Sunday oradayon which commercial banks inthecity of NewYork, New Yorkare authorized or required bylaw or executive order to remain closed. Each capitalized term used herein, and not otherwise defined, shall havethemeaning ascribed thereto in the supporting documents of same date (attached hereto).
ThisNoteisfreefromalltaxes,liens,claimsandencumbranceswithrespecttotheissue thereofandshallnot besubject to preemptive rightsor other similar rights of shareholders of theIssuer and will not impose personalliabilityupon the holderthereof.
The followingtermsshallapplytothisNote:
ARTICLEI.CONVERSIONRIGHTS
1.1 ConversionRight.TheHoldershallhavetherightandatanytimeduring theperiodbeginningonthedate of this Notetoconvertall oranypart oftheoutstanding and unpaid principal amount of this Note intofullypaid and non- assessable shares of CommonStock, assuch Common Stock exists onthe IssueDate, orany sharesof capital stock or othersecuritiesofthe Issuer into which such Common Stock shall hereafterbe changed or reclassified at the conversionprice(the "Conversion Price") determinedasprovided herein (a "Conversion");provided,however,thatinno event shalltheHolderbe entitled to convert any portion of thisNote in excess of that portion ofthisNote upon conversion ofwhich the sumof (1) thenumberofshares ofCommon Stock beneficially owned by the Holder and itsaffiliates (other than shares of CommonStock which may bedeemed beneficially owned through the ownershipoftheunconverted portion of the Notes or the unexercisedorunconverted portion of any other security of the Issuer subject to a limitation onconversion or exercise analogousto the limitations contained herein)and(2) thenumber ofsharesofCommon Stock issuable upon the conversion oftheportion of this Note with respecttowhichthe determination of this proviso isbeing made, would resultin beneficial ownership by the Holder and its affiliates of morethan 4.99% of the outstanding shares of Common Stock. Forpurposes of theproviso to the immediately preceding sentence,beneficialownership shall be determinedin accordancewith Section 13(d) ofthe Securities Exchange Act of 1934, asamended (the "Exchange Act"),and Regulations l3D-G thereunder,except as otherwise provided in clause (I ) of such proviso,provided,further, however, that thelimitations on conversion may be waived by theHolder upon, at the election of the Holder, not less than 61 days' prior notice to the Issuer, and the provisions of the conversion limitation shall continue to applyuntil such 61st day (or such later date, as determined by the Holder, asmay be specified in such notice of waiver). The number of sharesofCommon Stockto be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified i n the notice of conversion, (the "Notice of Conversion"), delivered to the Issuer by the Holder in accordancewiththe Sections below; provided that theNotice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, orreasonably expected to result in,notice) to the Issuer before 6:00 p.m., New York, New Yorktimeonsuch conversion date(the "Conversion Date").
Theterm"ConversionAmount"means,withrespecttoanyconversionofthisNote,the sumof
(1) theprincipal amountofthisNotetobeconvertedinsuchconversionplus(2)attheIssuer'soption,accruedandunpaidinterest, ifany,onsuchprincipal amount at theinterest rates provided inthisNote to the Conversion Date,plus(3) at the Issuer's option, Default Interest, if any, on the amounts referred to in the immediatelyprecedingclauses(1)and/or (2)plus(4)at theHolder'soption,anyamounts owed to theHolder.
1.2 Conversion Price.
(a) Calculation of ConversionPrice. Holder,atitsdiscretion,shallhavetherightto convertthisNoteinitsentiretyorinpart(s)intocommonstockof theCompany valuedata Forty FivePercent (45%)discountoffoftheaverageoftheThree (3) lowest intra-daytradingprices for the Company'scommon stockduringtheThirty (30) trading daysimmediately precedinga conversiondate, as reportedby Quotestream.
(b) Conversion PriceDuringMajor Announcements.Notwithstandinganythingcontainedin theprecedingsectiontothecontrary,intheeventtheIssuer(i)makes apublic announcement that it intends to consolidate or merge with any other corporation (other than a mergerin which the Issuer isthe surviving or continuing corporation and itscapital stock is unchanged) or sell or transfer all or substantially all of the assets ofthe Issuer or(ii) anyperson, group orentity(includingthe Issuer)publicly announces atenderoffer topurchase 50% or moreof the Issuer's CommonStock (oranyothertakeoverscheme)(the date ofthe announcement referred to in clause(i) or(ii) is hereinafter referred toas the "Announcement Date"),thenthe Conversion Priceshall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equalto thelowerof (x) the Conversion Price which would have been applicableforaConversion occurringonthe Announcement Date and (y) the Conversion Pricethatwould otherwise be ineffect.Fromand after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth inthis Section. Forpurposeshereof, "Adjusted ConversionPrice Termination Date" shall mean,with respect to any proposed transaction or tender offer (or takeoverscheme) for which a publicannouncement ascontemplated bythis Section hasbeen made,the date upon whichtheIssuer (i n the case of clause (i) above)or the person, groupor entity (in the caseof clause(ii) above) consummates or publicly announces thetermination or abandonment of the proposed transaction or tender offer (or takeover scheme)which caused this Section 1.2(b) tobecomeoperative.
1.3 Authorized Shares. TheIssuercovenantsthatduringtheperiodthe conversionrightexists,theIssuerwillreservefrom itsauthorized andunissued Common Stock a sufficient numberofshares, free from preemptive rights,to provide for the issuance of Common Stock upon the full conversion of this Note. The Issueris required atall times tohave authorizedandreservedfivetimes the number ofshares that is actually issuable upon full conversionof the Note(basedon theConversion Price of the Notes in effect from time to time)(the"ReservedAmount"). The Reserved Amountshall be increasedfrom time to time in accordance with the Issuer's obligations.
TheIssuerrepresentsthatuponissuance,suchshareswillbedulyandvalidlyissued,fully paid andnon-assessable. In addition,ifthe Issuershallissueany securities or make any change to its capital structure which would change the number ofshares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Issuer shall atthe same time makeproper provision sothat thereafterthere shallbe a sufficient number of sharesofCommon Stock authorizedand reserved,freefrompreemptive rights,forconversion of theoutstanding Notes.
TheIssuer(i)acknowledgesthatithasirrevocably instructed itstransferagenttoissuecertificatesfortheCommonStockissuableuponconversion of thisNote,and (i i) agrees that its issuance ofthis Note shallconstitutefull authorityto itsofficersand agentswho are charged with the duty ofexecuting stock certificates to execute and issuethe necessary certificates for shares of Common Stock in accordance with the terms andconditions ofthis Note.
If,atanytimetheIssuerdoesnotmaintaintheReservedAmountitwillbeconsidered an Event of Default as defined in this Note.
1.4 MethodofConversion.
(a) MechanicsofConversion. ThisNotemaybeconvertedbythe Holderinwholeorinpartatanytimefromtime totime after the Issue Date,by (A) submitting to the Issuer a Noticeof Conversion (by facsimile,e-mail orother reasonable means of communication dispatched on the Conversion Date prior to 6:00p.m., New York, New Yorktime).
(b) SurrenderofNote Upon Conversion.Notwithstandinganythingtothecontrarysetforthherein,uponconversionofthisNoteinaccordancewiththeterms hereof,theHolder shall notbe requiredto physically surrender thisNoteto theIssuerunless the entire unpaid principalamountofthis Noteis soconverted.The Holder and the Issuer shall maintain records showing theprincipal amountso convertedand thedatesof such conversions or shall use such othermethod, reasonablysatisfactory to theHolder andthe Issuer,soas not to requirephysical surrender of this Note upon each suchconversion. In the event of any dispute or discrepancy,such recordsof the Issuer shall,prima facie,becontrolling and determinative in the absence ofmanifest error. Notwithstanding the foregoing, ifany portion ofthisNote is converted as aforesaid, theHoldermay nottransfer this Note unless the Holder firstphysically surrenders this Note tothe Issuer, whereuponthe Issuer will forthwith issue anddeliverupon the order of the Holdera new Note oflike tenor,registeredas the Holder (uponpayment by the Holder of any applicable transfer taxes) may request, representing inthe aggregate the remaining unpaid principal amountof thisNote.The Holderandany assignee,by acceptanceof this Note, acknowledge andagreethat, by reason of the provisions of thisparagraph, followingconversion of a portionofthis Note, theunpaid and unconverted principal amountof this Note represented by this Note maybe less thanthe amount statedon the face hereof.
(c) Payment ofTaxes.TheIssuershallnotberequiredtopayanytaxwhichmaybepayable inrespect of any transfer involved in theissueand deliveryof shares ofCommon Stockorothersecuritiesor property on conversion of thisNoteina name other than that of the Holder (orin street name), andtheIssuershallnotberequired to issueordeliver any suchshares orother securities or propertyunless and untilthe person or persons (other thanthe Holder orthe custodian in whose street name such shares areto be held for theHolder's account)requesting the issuancethereof shallhave paid to the Issuer the amount ofany such tax or shall haveestablishedto thesatisfactionof the Issuer thatsuch taxhasbeen paid.
(d) Delivery of Common Stock UponConversion. Uponreceiptby theIssuerfromtheHolderofafacsimiletransmissionore-mail(orotherreasonablemeansof communication)of a Notice of Conversion meeting the requirements for conversion as providedinthisSection,theIssuershall issueand deliver or causeto be issuedand delivered to or upontheorderof theHoldercertificates for theCommon Stockissuable uponsuch conversion withinthree(3) businessdaysafter such receipt(the "Deadline") (and, solely in the caseofconversion ofthe entireunpaid principal amounthereof, surrenderof this Note) in accordance with the terms hereof and the Purchase Agreement.
(e) ObligationofIssuertoDeliver Common Stock.UponreceiptbytheIssuerofa Notice ofConversion,theHoldershallbedeemedtobetheholder of record of theCommon Stock issuableupon suchconversion, the outstanding principal amountand theamountof accrued andunpaid interest onthis Noteshall bereduced to reflect such conversion, and, unlessthe Issuerdefaults on itsobligations underthisArticleI,all rights with respecttothe portionof thisNotebeingsoconverted shall forthwithterminate exceptthe right to receivethe Common Stock orothersecurities,cashor other assets, as hereinprovided, on suchconversion. If the Holder shall have given a Notice of Conversionas provided herein, theIssuer's obligation to issue and deliver the certificates for Common Stock shall beabsolute and unconditional, irrespectiveof theabsenceof any actionby the Holder to enforce thesame,any waiver or consentwith respect to any provisionthereof,the recoveryof any judgmentagainst any person orany action toenforce the same,any failure or delay in the enforcement of anyother obligation of the Issuer to the holder of record, or any setoff, counterclaim, recoupment, limitationortermination, or anybreach or alleged breach by the Holder of any obligationto the Issuer, andirrespective of anyothercircumstancewhichmightotherwise limitsuch obligationof theIssuertothe Holder in connection withsuchconversion. The Conversion Datespecified in the Notice of Conversionshallbethe ConversionDate so long as the Notice ofConversionis receivedby the Issuer before6:00 p.m., NewYork,New York time, on such date.
(f) Delivery ofCommonStock by Electronic Transfer. Inlieu of delivering physical certificates representing theCommon Stock issuable upon conversion, provided the Issuer isparticipating in theDepository Trust Company("DTC") Fast AutomatedSecurities Transfer ("FAST") program, upon request of the Holder and its compliancewiththeprovisions containedinSection1.1andinthis Section 1.4, theIssuer shall use itsbestefforts to cause itstransfer agent to electronically transmit the Common Stock issuable upon conversion tothe Holder by creditingtheaccountofHolder 's Broker with DTC throughits Deposit WithdrawalAgent Commission("DWAC") system.
(g) FailuretoDeliver Common StockPriorto Deadline.WithoutinanywaylimitingtheHolder'srighttopursueotherremedies,including actual damages and/or equitable relief, the parties agree thatif deliveryof the Common Stock issuableupon conversionof this Note isnot delivered by theDeadline (other than a failure due to the circumstances described in Section 1.3above,which failure shall be governed bysuch Section) theIssuer shall pay to the Holder $2,000 per day incash, foreach day beyond the Deadlinethat the Issuer fails todeliver such Common Stock. Such cashamountshallbe paid toHolder bythe fifth dayofthe month following the month in which ithas accrued or, atthe option of the Holder(by written noticetothe Issuer by the first day of the month following themonth in which ithas accrued), shall be added to the principal amount ofthisNote,in which event interest shall accrue thereon inaccordance withtheterms ofthis Note and such additionalprincipal amountshall be convertible into Common Stock in accordance with the terms of this Note. The Issuer agreesthat the right to convertisavaluable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with suchconversion right are difficult ifnot impossible toqualify. Accordinglytheparties acknowledge that the liquidated damages provision contained inthis Section are justified.Any delay or failure of performance by theIssuer hereundershall be excused if and to the extent causedby Force Majeure.For purposes of this agreement, Force Majeure shall mean a cause or event thatis not reasonablyforeseeableand/or caused by the Issuer, includingacts of God,fires,floods,explosions,riots wars, hurricanes, etc.
1.5 Concerningthe Shares. The shares of CommonStock issuable uponconversion ofthisNotemaynotbesoldortransferredunless(i)suchsharesaresoldpursuantto an effective registration statementunder the Act or (ii)the Issuer or itstransfer agent shall have been furnished with anopinion of counsel (which opinion shallbe in form, substance and scope customaryforopinionsof counsel in comparable transactions) totheeffect that the shares to be sold or transferred maybe soldor transferred pursuantto an exemption from such registration or (iii) such shares aresold or transferred pursuantto Rule 144under the Act (ora successor rule) ("Rule 144")or (iv)such shares are transferred to an "affiliate"(as defined in Rule 144) of theIssuer who agreestosell orotherwise transfertheshares on l yinaccordance with thisSection 1.5 andwho is an Accredited Investor. Except asotherwise providedherein (andsubject totheremoval provisions setforthbelow),untilsuch timeas the sharesof Common Stockissuable upon conversion ofthis Note have been registered under theAct or otherwise may be sold pursuant to Rule 144 without anyrestriction as to the numberof securities as ofa particular datethat can then be immediately sold, each certificateforsharesof Common Stock issuableupon conversion of this Note thathasnot been so included in aneffective registration statement or that has not been sold pursuanttoaneffective registration statementor an exemptionthatpermits removal of thelegend, shall bear a legend substantiallyin the followingform, as appropriate:
"NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BYTHISCERTIFICATE NOR THE SECURITIESINTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTEREDUNDERTHESECURITIESACTOF1933,ASAMENDED,OR APPLICABLE STATESECURITIESLAWS. THESECURITIES MAYNOTBE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THEABSENCE OF (A) ANEFFECTIVE REGISTRATIONSTATEMENT FOR THE SECURITIESUNDER THE SECURITIES ACTOF1933, ASAMENDED, OR (B) AN OPINIONOF COUNSEL (WHICH COUNSELSHALL BE SELECTEDBY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANTTO RULE 144OR RULE 144A UNDERSAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITHA BONA FIDE MARGIN ACCOUNT OR OTHER LOAN ORFINANCING ARRANGEMENT SECURED BY THE SECURITIES."
ThelegendsetforthaboveshallberemovedandtheIssuershallissuetothe Holder a new certificatetherefore freeof any transfer legendif (i) the Issuer orits transfer agentshallhavereceived an opinion ofcounsel, in form,substance and scopecustomaryfor opinions of counsel in comparabletransactions,to the effect that a public sale or transfer of such Common Stock may be made without registrationunder the Act, which opinion shall be accepted by theCompanyso thatthe sale or transfer iseffected or(ii)inthecaseof theCommon Stock issuable uponconversionof this Note,such security is registered for sale by the Holderunder an effectiveregistration statement filed under theActorotherwise may be soldpursuant toRule 144 withoutany restriction as to thenumberof securities as of a particulardate thatcan then be immediately sold. In the event that the Company does not acceptthe opinion of counsel provided bytheBuyerwith respect tothetransfer ofSecurities pursuant toanexemption from registration, suchasRule144 or Regulation S, at the Deadline,it willbeconsidered an Event of Default pursuant to this note.
1.6 EffectofCertainEvents.
(a) EffectofMerger, Consolidation, Etc.AttheoptionoftheHolder,thesale,conveyanceordispositionof allorsubstantially alloftheassets of the Issuer, the effectuationby the Issuer ofa transaction or series of relatedtransactions inwhichmorethan 50% of thevoting power ofthe Issuer is disposed of,or the consolidation, merger orother business combination of the Issuerwith or into any other Person (asdefined below) orPersonswhenthe Issuer is notthe survivor shall either: (i) be deemed tobe anEvent of Default (as definedinArticle UT) pursuant to which theIssuer shallbe required to pay to the Holder upontheconsummation of and asacondition tosuch transactionanamount equal to the Default Amount (asdefined in Article III) or(ii) be treated pursuant to Section l.6(b) hereof. "Person" shall mean any individual, corporation, limited liability company, partnership,association, trust or other entity or organization.
(b) Adjustment DuetoMerger,Consolidation,Etc. If,at anytimewhenthisNoteisissuedandoutstandingandprior toconversion ofallof theNotes, there shallbe any merger, consolidation, exchange of shares, recapitalization,reorganization, or other similarevent, as aresult of which shares of Common Stock ofthe Issuer shall be changed into thesame oradifferent number of shares of another classorclasses of stockor securities of theIssuer or another entity,or in case of any sale or conveyance of all or substantiallyallof theassetsoftheIssuer otherthan in connection with a plan of complete liquidation ofthe Issuer, then the Holder ofthisNote shallthereafterhave theright to receive upon conversion of this Note,upon the basis and upon theterms andconditions specified herein andinlieu of theshares of Common Stock immediatelytheretofore issuable upon conversion, such stock, securitiesor assets whichthe Holder wouldhave beenentitled to receive in suchtransactionhad thisNote been converted in full immediatelypriorto such transaction (without regard to anylimitationson conversion setforth herein), and in anysuch case appropriateprovisions shall be made withrespect tothe rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the ConversionPrice and of the numberofshares issuable upon conversion oftheNote) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Issuer shallnot affectanytransaction described in this Section l.6(b) unless (a) it firstgives, tothe extent practicable, thirty (30) days prior writtennotice(but in any event atleastfifteen (15) days priorwritten notice)of therecord dateof thespecialmeeting ofshareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation,exchange ofshares, recapitalization, reorganization or othersimilar eventorsaleof assets(duringwhich timethe Holder shallbe entitledto convert this Note) and (b) the resulting successor or acquiring entity (if not the Issuer) assumes by written instrument the obligations of this Section1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers orshare exchanges.
(c) Adjustment DuetoDistribution.IftheIssuershalldeclareor makeanydistributionofitsassets(orrightsto acquire itsassets) toholdersofCommonStockas a dividend, stockrepurchase, byway of return of capital orotherwise(includinganydividend or distribution to the Issuer's shareholders in cash or shares (or rightsto acquire shares)of capital stock of asubsidiary (i.e.,aspin-off)) (a "Distribution"), then the Holder ofthis Noteshall beentitled,upon any conversion of this Note afterthe date of record for determining shareholders entitled tosuchDistribution, to receive theamountof such assets whichwould have been payable to the Holder with respect to the shares of Common Stock issuableupon such conversionhad suchHolderbeenthe holder ofsuch shares ofCommon Stock ontherecord date for the determinationof shareholders entitled tosuchDistribution.
(d) Adjustment Due to Dilutive Issuance.If,atanytimewhenanyNotesareissuedandoutstanding,theIssuerissuesor sells, or in accordancewith this Section hereof is deemed to have issuedor sold, any shares of Common Stock for noconsideration or for aconsideration per share(before deduction of reasonable expenses or commissions or underwriting discounts or allowancesin connection therewith) less thanthe Conversion Price in effect onthedate ofsuchissuance (ordeemed issuance) of suchshares ofCommon Stock (a "Dilutive Issuance"), then immediately upontheDilutiveIssuance, theConversionPricewill be reducedto the amount of theconsiderationpershare received bythe Issuer in such Dilutive Issuance.
TheIssuershallbedeemedtohaveissuedorsoldsharesofCommon Stockifthe Issuerinanymannerissuesor grantsany warrants, rights oroptions(not includingemployeestock option plans),whether or notimmediately exercisable,to subscribe for or to purchaseCommon Stock orother securities convertibleinto orexchangeable forCommon Stock ("Convertible Securities") (suchwarrants, rights and optionstopurchase CommonStock orConvertible Securitiesare hereinafter referred to as"Options")and theprice per shareforwhich CommonStock isissuable upon the exerciseof suchOptionsisless than the Conversion Price then in effect, then theConversionPrice shall beequal to such priceper share. For purposes of the precedingsentence, the "price per sharefor which Common Stock isissuable upon the exercise of such Options" is determined by dividing (i)the totalamount, if any, received or receivable by the Issuer as consideration for the issuance or granting of all such Options,plus the minimum aggregate amount of additionalconsideration, if any,payableto the Issuer upon the exercise of all suchOptions, plus, in the case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration payable upon the conversion or exchange thereof atthe time such Convertible Securities firstbecome convertible or exchangeable, by (ii) the maximum total number of shares of CommonStockissuable upon theexercise ofall suchOptions (assumingfull conversion of Convertible Securities,ifapplicable).No further adjustmentto the Conversion Pricewill bemade upon the actual issuanceof such Common Stockupontheexercise of such Options or upon the conversion or exchange ofConvertibleSecurities issuable upon exercise ofsuchOptions.
Additionally,theIssuershallbedeemedtohaveissuedorsoldsharesof Common StockiftheIssuer inanymannerissuesorsellsany Convertible Securities, whetheror notimmediately convertible (other than where the same are issuable uponthe exercise ofOptions),andthe priceper share for whichCommonStockis issuableupon such conversion orexchange is less than the Conversion Pricethen in effect, then theConversion Price shallbeequaltosuchpricepershare. Forthepurposes of theprecedingsentence,the "price per share for which Common Stock is issuableupon suchconversion or exchange" is determined bydividing(i) the total amount, ifany,received orreceivable by the Issuer as consideration for the issuance or sale ofall such Convertible Securities, plus the minimum aggregate amountof additional consideration, ifany, payable tothe Issuer upon the conversion or exchange thereof at the timesuch ConvertibleSecurities firstbecome convertible orexchangeable, by (ii) themaximumtotal number of shares of Common Stock issuable upon the conversion or exchange ofallsuch Convertible Securities. No further adjustment totheConversion Pricewillbe made upon theactualissuance of such CommonStock uponconversion or exchange ofsuch Convertible Securities.
(e) PurchaseRights.If,atanytimewhenanyNotesareissuedandoutstanding,theIssuerissuesanyconvertiblesecuritiesorrights topurchasestock, warrants, securitiesor other property (the "Purchase Rights")prorata to therecord holders ofany classof CommonStock, thenthe Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights whichsuchHoldercouldhave acquired ifsuch Holder had held the number of shares of Common Stock acquirable upon complete conversion ofthis Note (without regard to any limitations on conversion contained herein)immediatelybeforethedate onwhich arecord istaken for the grant,issuance or sale of such Purchase Rights or,ifno such record is taken, the dateasofwhich the recordholdersof CommonStock are to be determined for thegrant, issueor saleof such Purchase Rights.
(f) Notice ofAdjustments. UpontheoccurrenceofeachadjustmentorreadjustmentoftheConversionPriceasaresultoftheevents described inthis Section 1.6, the Issuer, atits expense,shall promptly compute such adjustment or readjustment and prepareand furnish to theHolderof a certificate setting forth suchadjustment or readjustment and showing in detailthe facts upon which such adjustment or readjustment is based. TheIssuer shall,upon the written request at any time of theHolder, furnish to such Holder a like certificate setting forth(i) such adjustmentorreadjustment, (ii) theConversion Priceat the time in effect and (iii) the number ofsharesof Common Stock and theamount, if any,of othersecurities or property which at thetime would be received upon conversion of the Note.
1.7 TradingMarketLimitations.Unlesspermittedbytheapplicablerulesand regulations oftheprincipal securitiesmarket onwhichtheCommon Stock isthen listed or traded,innoeventshall the Issuerissueupon conversion of or otherwise pursuant to this Note and the otherNotes issued pursuant tothe Purchase Agreementmorethan themaximum number of sharesof Common Stock that the Issuer canissue pursuant to any ruleofthe principal United States securities marketon which the Common Stock is then traded (the "Maximum Share Amount"), which shallbe 4.99% of the total shares outstanding on the Closing Date (as definedin the Purchase Agreement), subject to equitable adjustmentfromtime totime forstocksplits, stockdividends, combinations, capital reorganizations and similar eventsrelatingto theCommon Stock occurring afterthe date hereof. Once the Maximum Share Amount has been issued,if the Issuerfails toeliminate any prohibitions underapplicable law or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over theIssueror any ofits securitieson the Issuer's ability to issue shares of Common Stockin excess of the Maximum Share Amount, in lieu of any further right to convertthis Note, thiswill be considered anEvent of Default under Section 3.3 of the Note.
1.8 Statusas Shareholder.UponsubmissionofaNoticeofConversionbyaHolder,(i)thesharescoveredthereby(other than the shares,if any,whichcannotbeissued because their issuance would exceed suchHolder's allocatedportion of the Reserved Amount or MaximumShare Amount) shall bedeemedconvertedinto shares of CommonStockand (i i) the Holder's rights as a Holderofsuch converted portionof this Noteshall cease and terminate, excepting onlythe rightto receivecertificatesfor such sharesof Common Stock and to any remediesprovidedherein or otherwise available at law or inequity to such Holder because ofa failure by theIssuer to comply with the terms of this Note. Notwithstandingthe foregoing, if a Holder has not received certificates for all shares of CommonStock prior to the tenth(10th) business dayafter theexpirationof theDead linewith respectto aconversion of any portion of this Notefor anyreason, then (unless the Holder otherwise elects toretain its status as aholder of CommonStock by sonotifying the Issuer) the Holder shall regain the rights of a Holder ofthis Notewithrespect to such unconvertedportions of this Note andthe Issuer shall, assoon as practicable, return such unconverted Note to the Holder or, if the Note hasnot been surrendered, adjust its records to reflectthat such portion ofthis Note hasnot beenconverted. In all cases, the Holder shall retainallof its rights and remedies(including, without limitation,(i) the rightto receive Conversion Default Payments pursuant to Section 1.3to the extent required thereby forsuch Conversion Defaultand any subsequentConversion Default and (ii) theright to have the ConversionPrice with respect tosubsequentconversions determined in accordance with Section 1.3) for the Issuer's failure toconvert this Note.
1.9 Prepayment.MakermayprepaythisNote,inaccordancewiththe followingschedule:Ifwithin 180calendardaysoftheexecution ofthisNote, $135%ofall outstanding principal and interest dueon eachoutstanding Note in one payment;After 18 calendardays of this Note beingexecuted,any prepayments must be approved by bothpartiesinwriting.
ARTICLEII.CERTAINCOVENANTS
2.1 Distributions onCapital Stock.SolongastheIssuershallhaveany obligationunderthisNote,theIssuershallnotwithoutthe Holder's written consent (a) pay, declareor setapart for such payment, any dividend or other distribution (whether in cash,property or other securities) on shares of capitalstock other thandividendson shares of Common Stock solelyinthe formofadditional shares ofCommon Stockor (b) directlyor indirectlyor through any subsidiarymake anyotherpayment or distribution inrespect ofitscapital stock except for distributions pursuant to any shareholders'rights plan whichis approved bya majority of the Issuer'sdisinterested directors.
2.2 Restriction onStockRepurchases.SolongastheIssuershallhaveany obligationunderthisNote,theIssuershallnotwithout the Holder's written consent redeem, repurchase or otherwiseacquire(whetherfor cashorin exchangefor propertyor other securities orotherwise) in any onetransactionorseriesof relatedtransactions any shares of capital stock of the Issuer or any warrants, rightsoroptionsto purchaseor acquire anysuch shares.
2.3 Borrowings.SolongastheIssuershallhaveanyobligationunderthisNote, the Issuer shall not, without the Holder'swritten consent,create,incur, assume guarantee, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any person, firm,partnership, joint venture or corporation, exceptby the endorsementofnegotiable instruments for depositor collection, orsufferto exist any liability for borrowed money, except (a) borrowings inexistence orcommitted onthe date hereof and of which theIssuer hasinformedHolder inwriting prior to the date hereof, (b) indebtedness to trade creditors or financial institutionsincurredin the ordinary course of business or (c)borrowings,the proceeds ofwhich shall be used to repay thisNote.
2.4 SaleofAssets.SolongastheIssuershallhaveanyobligationunderthisNote, theIssuer shall not, without the Holder'swritten consent, sell, lease or otherwise dispose ofany significant portionof its assets outside the ordinary course of business. Any consent to the disposition of any assetsmay be conditioned ona specified useofthe proceedsof disposition.
2.5 AdvancesandLoans.SolongastheIssuershallhaveanyobligation underthisNote,theIssuershallnot,withouttheHolder's writtenconsent, lend money, give creditormake advances to any person, firm,joint venture orcorporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Issuer, except loans, credits or advances (a) in existence orcommitted on the date hereof and whichthe Issuerhas informed Holder in writing prior to the datehereof, (b)made in the ordinary course of business or (c) not inexcessof $100,000.
ARTICLEIII.EVENTSOFDEFAULT
Ifanyofthefollowingeventsofdefault(each,an"EventofDefault")shal1occur:
3.1 FailuretoPayPrincipalorInterest. The Issuer fails to paythe principalhereof or interestthereon when due onthis Note, whether at maturity, upon accelerationorotherwise.
3.2 Conversion and the Shares. The Issuer fails to issue shares of CommonStocktotheHolder(orannouncesorthreatensinwritingthatitwillnothonoritsobligationtodo so) upon exercisebytheHolder ofthe conversion rights of theHolder in accordancewith the termsofthis Note,fails to transferor causeits transfer agentto transfer (issue)(electronicallyor in certificated form) any certificate for shares of Common Stockissued to the Holder upon conversionof or otherwise pursuant to this Note as and when requiredby this Note,the Issuer directsits transferagent not to transfer or delays, impairs, and/orhinders its transfer agent in transferring (or issuing) (electronically or in certificated form) anycertificate for shares of CommonStock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note,or fails to remove (or directs its transfer agent not toremove or impairs, delays, and/or hinders its transferagentfrom removing) any restrictive legend (or to withdraw any stop transfer instructionsin respect thereof) on any certificate for any shares of Common Stock issued to theHolderupon conversion of or otherwise pursuantto this Note as and when required by this Note (or makes any written announcement, statement or threat thatit does not intend to honorthe obligations describedin this paragraph)and any such failure shall continue uncured (or any writtenannouncement, statement or threat not to honor itsobligations shall notberescinded inwriting) forthree (3)businessdays afterthe Holdershall have delivered a Notice of Conversion. Itis an obligationof the Issuer to remain current in itsobligations to its transferagent. It shall be an event of default of this Note, if a conversionof this Note is delayed, hinderedor frustrated due to a balance owed by the Issuer to its transfer agent.If atthe option of theHolder, theHolderadvances any funds to theIssuer's transfer agent in order to process a conversion,such advanced funds shallbe paid by the Issuer to the Holder within forty eight (48) hours of a demand from the Holder.
3.3 Breach of Covenants. TheIssuerbreachesanymaterialcovenantor othermaterialtermorconditioncontainedinthisNoteandanycollateraldocumentsincluding butnot limited to thePurchase Agreement andsuchbreachcontinues fora period of ten (10) days after written notice thereof to the Issuer from the Holder.
3.4 Breach of RepresentationsandWarranties. Anyrepresentation or warrantyoftheIssuermadehereinorinanyagreement,statementorcertificategivenin writingpursuantheretoorinconnectionherewith (including, without l imitation,thePurchaseAgreement), shall be false or misleading inany material respect whenmade and the breachof which has (or with the passage of time will have)a materialadverse effecton the rightsof the Holder with respect tothis Note orthe Purchase Agreement.
3.5 Receiver orTrustee.TheIssueroranysubsidiaryoftheIssuershall makeanassignmentforthebenefitofcreditors,or applyfor or consenttotheappointmentof a receiver or trustee for it or for a substantialpart of its property or business, or sucha receiver or trustee shall otherwise be appointed.
3.6 Judgments.Anymoneyjudgment,writorsimilarprocessshallbeenteredorfiledagainsttheIssueroranysubsidiary ofthe Issuer orany of its property orother assets formorethan $50,000, andshall remainunvacated, unbonded or unstayedfor aperiod of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.
3.7 Bankruptcy.Bankruptcy, insolvency,reorganization orliquidationproceedingsorotherproceedings,voluntaryorinvoluntary,forreliefunder any bankruptcy law or any law for the relief of debtorsshall be institutedbyor against the Issuer or anysubsidiary of the Issuer.
3.8 Delistingof Common Stock.TheIssuershallfailtomaintainthelistingoftheCommon Stockon at leastoneoftheOTCBB oran equivalentreplacement exchange,theNasdaq National Market,theNasdaq SmallCapMarket, the New York Stock Exchange, or the American Stock Exchange.
3.9 Failureto Comply with the Exchange Act.TheIssuershallfailto complywiththereportingrequirementsoftheExchangeAct;and/or the Issuer shallcease tobe subject tothe reporting requirements of the Exchange Act.
3.10 Liquidation.Anydissolution,liquidation,orwindingupofIssueroranysubstantialportionofitsbusiness.
3.11 CessationofOperations.AnycessationofoperationsbyIssuerorIssuer admitsitisotherwisegenerallyunabletopayitsdebtsas suchdebtsbecome due, provided, however, that any disclosureof the Issuer's abilityto continue as a "going concern" shall not be anadmission that theIssuer cannot pay its debtsas theybecome due.
3.12 Maintenance ofAssets. Thefailure by Issuer to maintain anymaterialintellectualpropertyrights,personal,realpropertyorotherassetswhicharenecessaryto conductitsbusiness(whethernowor inthefuture).
3.13 Financial StatementRestatement. The restatementof any financial statementsfiledbytheIssuerwiththeSECforanydateorperiodfromtwoyearspriortothe IssueDate of this Noteand until thisNote is no longer outstanding, if the resultof such restatement would, bycomparison to theoriginal financial statement, haveconstituted a material adverse effect on the rightsof the Holder with respect to this Note or supporting documents.
3.14 ReverseSplits. The Issuer effectuatesa reverse split ofits CommonStock withoutatleasttwenty(20)dayspriorwrittennoticetotheHolder.
3.15 ReplacementofTransferAgent.Intheevent thattheIssuerproposesto replaceitstransfer agent,theIssuerfailstoprovide,prior to theeffective dateofsuch replacement, a fully executed Irrevocable Transfer AgentInstructions in aform asinitially delivered pursuanttothe Purchase Agreement (including but notlimitedtothe provision to irrevocably reserve shares of Common Stock in the ReservedAmount)signed by the successor transfer agent toIssuerand the Issuer.
3.16 Cross-Default.NotwithstandinganythingtothecontrarycontainedinthisNoteortheotherrelatedorcompaniondocuments, a breach or defaultby the Issuer ofanycovenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods,shall,atthe option ofthe Issuer, beconsidered adefault underthisNote and theOtherAgreements,in which event theHolder shall beentitled (butin no event required)toapplyall rights and remediesof theHolderunderthe terms ofthis NoteandtheOther Agreements byreason ofa defaultunder saidOther Agreement or hereunder. "Other Agreements" means, collectively, all agreements and instrumentsbetween, amongorby: (1)the Issuer,and, or for the benefit of, (2) the Holder and any affiliateof the Holder, including, withoutlimitation,promissory notes; provided,however, the term "OtherAgreements" shall notincludethe related or companiondocuments to this Note. Eachof the loantransactionswillbecross-defaulted with each otherloantransactionand with all other existing andfuture debtofIssuerto the Holder.
UpontheoccurrenceandduringthecontinuationofanyEventofDefaultspecifiedinSection3.1(solely withrespect to failure to pay the principal hereof or interest thereon when due at the Maturity Date),the Note shall become immediately due andpayable andthe Issuer shall pay totheHolder, infull satisfaction of its obligations hereunder, an amountequal tothe Default Sum (as defined herein). UPONTHE OCCURRENCE AND DURINGTHE CONTINUATION OF ANYEVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE ANDTHEISSUER SHALL PAY TOTHE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO(2). Upontheoccurrenceandduringthe continuation of any Event of Defaultspecified in Sections 3.1 (solely withrespectto failureto pay the principal hereof or interest thereon when dueon thisNote upon a Trading MarketPrepayment Event pursuant toSection 1.7 or uponacceleration), 3.3, 3.4,3.6, 3.8, 3.9,3.11, 3.12, 3.13, 3.14, and/or 3. 15 exercisablethroughthedeliveryof written notice to theIssuer bysuchHolders (the "Default Notice"),and upon the occurrence of an Event ofDefault specified the remaining sectionsof ArticlesIII (other thanfailuretopay theprincipal hereofor interest thereon at the Maturity Date specified inSection 3, Ihereof), the Note shallbecome immediatelydueand payableand theIssuershall pay to the Holder, in full satisfaction of its obligations hereunder,an amountequal to the greater of (i)150% times the sum of (w) the thenoutstanding principal amountof this Note plus(x)accruedand unpaid interestonthe unpaidprincipal amount of this Noteto the date of payment (the "Mandatory PrepaymentDate")plus(y) DefaultInterest,if any, on theamounts referred to in clauses (w)and/or(x) (z) any amounts owed totheHolder pursuanttoSections1.3 and 1.4(g) hereof (the then outstanding principalamount of this Noteto the date of paymentplusthe amounts referredto inclauses (x), (y) and(z) shallcollectivelybe known as the "Default Sum") or(ii) the "parity value" of theDefault Sum to be prepaid,where parity value means(a) the highest numberof shares of Common Stockissuableuponconversion of orotherwisepursuant tosuch Default Sum in accordancewithArticle I, treating the Trading Day immediately preceding the Mandatory PrepaymentDate as the"Conversion Date" for purposes ofdeterminingthe lowest applicableConversionPrice, unlessthe Default Event arises as aresultofabreach inrespect ofaspecific ConversionDate in whichcase suchConversion Dateshall be the ConversionDate), multi plied by (b) the highestClosing Pricefor the Common Stockduring the period beginning onthe dateof first occurrence of theEventofDefaultand endingoneday priortotheMandatoryPrepayment Date (the"Default Amount") and allother amounts payable hereunder shallimmediately become due and payable, al l without demand, presentment or notice, al lof whichhereby are expressly waived, together with all costs, including, without limitation, legal feesand expenses,of collection, andthe Holder shallbe entitled to exercise allother rights and remediesavailable at law or inequity.
If theIssuerfailstopaytheDefaultAmountwithinfive(5)businessdaysofwritten noticethatsuchamountisdueandpayable,then the Holdershallhavetherightatany time,so longasthe Issuer remains in default(andso long andtothe extent that thereare sufficient authorized shares), torequire theIssuer,uponwritten notice,to immediatelyissue,inlieu of the Default Amount, the number of shares of CommonStock of the Issuer equal to the Default Amount divided by the ConversionPrice thenin effect.
ARTICLEIV.MISCELLANEOUS
4.1 FailureorIndulgenceNot Waiver.NofailureordelayonthepartoftheHolder inthe exerciseofany power, right or privilegehereundershall operate asa waiver thereof,norshall anysingleorpartial exerciseofany suchpower, right orprivilege preclude other or furtherexercise thereof or of any other right, power or privileges. All rights and remedies existing hereunderare cumulative to, and not exclusive of, any rights or remediesotherwise available.
4.2 Notices.Allnotices,demands,requests,consents,approvals,andothercommunicationsrequiredorpermittedhereundershallbe in writing and, unless otherwise specified herein, shall be(i)personally served, (ii) depositedin the mail, registeredorcertified, returnreceipt requested,postage prepaid, (iii) delivered by reputableaircourier service with charges prepaid,or (iv) transmitted by hand delivery, telegram, or facsimile, addressedas set forth below or to suchother address assuch party shallhave specified most recently by written notice.Any notice or other communication required or permitted tobe given hereunder shall be deemedeffective (a) upon handdelivery or deliveryby facsimile, with accurate confirmation generated by thetransmitting facsimile machine, atthe address or number designated below (if delivered on abusiness day during normal businesshours where such noticeisto be received), or the first businessdayfollowing such delivery (if delivered otherthan ona businessday during normal businesshours where such notice is to be received) or (b) on the secondbusiness day following the date of mailingby expresscourier service, fully prepaid , addressed to such address, orupon actual receipt ofsuchmailing, whichever shall first occur.The addressesfor such communications shall be:
IftotheIssuer,to:
_________________
_________________
_________________
_________________
Attn: Facsimile:
IftotheHolder:
WHCCapital,LLC.
200StonehingeLane,
Suite3
CarlePlace,NY. 11514
Tel:718.530.0182
4.3 Amendments.ThisNoteandanyprovisionhereofmayonlybeamended byaninstrumentinwritingsignedbytheIssuer andthe Holder. Theterm "Note" andall referencethereto,as usedthroughout this instrument,shallmean this instrument(andtheother Notesissued pursuantto the PurchaseAgreement) asoriginallyexecuted, oriflateramended or supplemented, thenas so amendedor supplemented.
4.4 Assignability. ThisNoteshallbebindingupontheIssuerandits successorsandassigns,andshallinuretobethebenefitofthe Holderand its successors and assigns. Each transferee ofthisNote must be an "accredited investor" (as definedin Rule 501(a) of the 1933 Act). Notwithstandinganything inthisNoteto thecontrary, this Note may be pledged as collateral in connection with a bonafide marginaccount or otherlending arrangement.
4.5 CostofCollection. Ifdefaultismade inthepayment ofthisNote,the IssuershallpaytheHolderhereofcostsofcollection , including reasonableattorneys' fees.
4.6 GoverningLaw.ThisNote shallbegovernedbyandconstruedinaccordancewiththelawsoftheStateofNewYorkwithoutregard toprinciplesof conflicts of laws. Any action brought by either party againsttheother concerning the transactions contemplatedby this Note shall be brought onl1y in the statecourts of NewYork or inthe federalcourts located in thestate and county ofNassau . The parties to thisNote hereby irrevocably waive anyobjection to jurisdiction and venueof anyaction instituted hereunder andshall not assert any defense based on Jack of jurisdiction or venue or based uponforum non conveniens.TheIssuer and Holder waive trialby jury.The prevailing partyshallbe entitled torecover fromthe other party its reasonable attorney's feesand costs. In theeventthat any provision of thisNoteorany other agreement deliveredinconnection herewith isinvalid orunenforceable under any applicablestatuteor ruleof law,then such provision shall bedeemed inoperativeto theextent that itmay conflict therewith and shall be deemedmod ified toconformwith such statute orrule oflaw. A n ysuch provisionwhichmay proveinvalidor unenforceable underany lawshall notaffect the validityor enforceabilityof any other provision of any agreement. Eachparty hereby irrevocably waives personal service of process and consents to processbeing served in any suit, action orproceed ingin connection withthisAgreement orany other Transaction Documentbymailinga copy thereofviaregistered or certified mail or overn ghtdelivery(with evidenceof delivery) to such party at the addressin effect for notices to it underthis Agreement and agrees thatsuchservice shall constitutegoodandsufficientservice of process and notice thereof. Nothing containedherein shall be deemed to limit in any way anyright to serve processin anyother manner permitted by law.
4.7 Certain Amounts. WheneverpursuanttothisNotetheIssueris requiredtopayanamountinexcessoftheoutstanding principal amount (or theportion thereofrequiredtobe paid at that time)pl us accrued and unpaid interest plus DefaultInterestonsuch interest, the Issuer and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may bedifficult todetermine and the amounttobeso paid by theIssuerrepresentsstipulated damagesand not a penalty and isintended tocompensate the Holder in part forlossof the opportunity to convertthisNote andto earnareturnfromthe sale of shares of CommonStock acquireduponconversionofthis Noteat apricein excess of the price paidfor such shares pursuant to this Note . The Issuerandthe Holderherebyagreethat suchamount ofstipulated damages isnotplainlydisproportionate to thepossible loss tothe Holder from the receipt of a cash payment without the opportunity to convertthisNote into shares of CommonStock.
4.8 Purchase Agreement.ByitsacceptanceofthisNote,eachpartyagreestobeboundbytheapplicabletermsofthe PurchaseAgreement.
4.9 Notice of Corporate Events.Except asotherwise providedbelow,theHolderofthisNoteshallhavenorightsasaHolderofCommonStockunless and only to theextent that it converts this Noteinto Common Stock. The Issuer shall provide the Holder withprior notificationof any meetingof theIssuer'sshareholders(andcopiesof proxymaterials and other information sent to shareholders). In the eventof anytakingby the Issuer of a record of its shareholdersfor the purpose of determining shareholders whoare entitled to receive payment of any dividendorother distribution,any righttosubscribe for,purchaseor otherwise acquire (including byway of merger, consolidation,reclassification or recapitalization) any share ofany classor any other securitiesor property, or to receive any otherright,or for the purpose of determining shareholders who are entitled to votein connection withany proposedsale, lease or conveyance of allor substantiallyallof the assets of the Issuer or any proposedliquidation, dissolutionor winding up of the Issuer,theIssuer shall maila notice to the Holder,at least twenty(20) days prior to the record date specified therein(orthirty(30) days prior tothe consummationof the transactionor event, whicheverisearlier), ofthedate onwhich anysuch recordis to be takenfor thepurposeof such dividend , distribution,rightor otherevent, anda brief statementregarding theamountand character of such dividend, distribution, right or other event to the extent known at suchtime.The Issuer shall make apublic announcementof anyevent requiring notification to the Holder hereunder substantially simultaneously with the notificationto the Holder in accordance with the terms ofthis Section 4.9.
4.10 Remedies. TheIssueracknowledgesthatabreachbyitofits obligationshereunderwillcauseirreparableharmtotheHolder,by vitiating the intent and purposeof the transaction contemplated hereby. Accordingly, theIssuer acknowledgesthat the remedy at lawfor abreach of its obligations under this Note will beinadequate and agrees,in the event of a breach orthreatened breachby the Issuerof theprovisions of thisNote, that the Holder shallbeentitled, inaddition toallotheravailableremedies atlawor inequity, andin addition to the penaltiesassessable herein , to an injunction or injunctionsrestraining, preventing or curingany breach of this Note and toenforce specifically the terms and provisions thereof, without the necessity of showingeconomic loss andwithoutany bondorother security being required.
INWITNESSWHEREOF,IssuerhascausedthisNotetobesignedinitsnamebyits dulyauthorizedofficer:
NYXIOTechnologies,Corp.
By:/s/ Giorgio Johnson
Print: GiorgioJohnson
Title/Date: CE0
05/09/2014
