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8% CONVERTIBLE DEBENTURE
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON
CONVERSION HEREOF HAVE BEEN REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"). THE SECURITIES ARE RESTRICTED AND MAY NOT BE
OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED
UNDER THE ACT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
No. __ US $xx,000
MW Medical, Inc.
8% CONVERTIBLE DEBENTURE DUE JULY 31, 2000
THIS DEBENTURE is issued by MW Medical, Inc., a corporation
organized and existing under the laws of the State of Nevada
(the "Company") and is designated as its 8% Convertible
Debenture Due July 31, 2000.
FOR VALUE RECEIVED, the Company promises to pay to
______________________, or permitted assigns (the "Holder"), the
principal sum of _________________ Thousand and 00/100 (US
$xx,000) Dollars on July 31, 2000 (the "Maturity Date") and to
pay interest on the principal sum outstanding from time to time
quarterly in arrears at the rate of 8% per annum accruing from
the date of initial issuance. Accrual of interest shall
commence on the first business day to occur after the date of
initial issuance and continue until payment in full of the
principal sum has been made or duly provided for. Quarterly
interest payments shall be due and payable on September 30,
December 31, March 31 and June 30 of each year, commencing with
September 30, 1999. If any interest payment date or the
Maturity Date is not a business day in the State of New York,
then such payment shall be made on the next succeeding business
day. The interest on this Debenture is payable at the option of
the Company, upon notice to the Holder, in cash or in shares of
Common Stock of the Company, $.001 par value per share ("Common
Stock") valued at the Conversion Price (as defined herein) on
the interest payment date, at the address last appearing on the
Debenture Register of the Company as designated in writing by
the Holder from time to time, and in the absence of notice is
payable in cash. The Company will pay the principal of and any
accrued but unpaid interest due upon this Debenture on the
Maturity Date, less any amounts required by law to be deducted,
to the registered holder of this Debenture as of the tenth day
prior to the Maturity Date and addressed to such holder at the
last address appearing on the Debenture Register. The
forwarding of such check shall constitute a payment of principal
and interest hereunder and shall satisfy and discharge the
liability for principal and
NY:71729.3 1
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interest on this Debenture to the extent of the sum represented by
such check plus any amounts so deducted.
This Debenture is subject to the following additional
provisions:
1. The Company shall be entitled to withhold from all
payments of principal of, and interest on, this Debenture any
amounts required to be withheld under the applicable provisions
of the United States income tax laws or other applicable laws at
the time of such payments, and Holder shall execute and deliver
all required documentation in connection therewith.
2. This Debenture has been issued subject to investment
representations of the original purchaser hereof and may be
transferred or exchanged only in compliance with the Securities
Act of 1933, as amended (the "Act"), and other applicable state
and foreign securities laws. The Holder shall deliver written
notice to the Company of any proposed transfer of this Debenture.
In the event of any proposed transfer of this Debenture, the
Company may require, prior to issuance of a new Debenture in the
name of such other person, that it receive reasonable transfer
documentation including legal opinions that the issuance of the
Debenture in such other name does not and will not cause a
violation of the Act or any applicable state or foreign
securities laws. Prior to due presentment for transfer of this
Debenture, the Company and any agent of the Company may treat the
person in whose name this Debenture is duly registered on the
Company's Debenture Register as the owner hereof for the purpose
of receiving payment as herein provided and for all other
purposes, whether or not this Debenture be overdue, and neither
the Company nor any such agent shall be affected by notice to the
contrary. This Debenture has been executed and delivered pursuant
to the Debenture and Warrants Purchase Agreement dated as of July
14, 1999 between the Company and the original Holder (the
"Purchase Agreement"), and is subject to the terms and conditions
of the Purchase Agreement, which are, by this reference,
incorporated herein and made a part hereof. Capitalized terms
used and not otherwise defined herein shall have the meanings set
forth for such terms in the Purchase Agreement.
3. (a) The Holder of this Debenture is entitled, at its
option, to convert at any time commencing on the date hereof, the
principal amount of this Debenture or any portion thereof,
together with accrued but unpaid interest, into shares of Common
Stock of the Company ("Conversion Shares") at a conversion price
for each share of Common Stock ("Conversion Price") equal to the
lower of (a) 75% of the Market Price at the Conversion Date (as
defined in Section 6 hereof) or (b) $2.75. The term "Market
Price" shall have the meaning set forth in the Purchase
Agreement.
(b) The Company shall have the right at any time prior
to the Maturity Date to require conversion of the entire
principal amount of this Debenture, together with all other
Debentures of the series of which this Debenture is one part, if
and only if all of the following conditions are met:
(i) the closing bid price for the Common Stock
(adjusted for any subsequent splits, reverse splits or dividends
in the form of additional shares of Common Stock)
NY:71729.3 2
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shall equal or
exceed $7.00 for each of the twenty-two (22) Trading Days
preceding the Company's notice of mandatory conversion;
(ii) the trading volume of the Common Stock shall
equal or exceed 100,000 shares for each of the twenty-two (22)
Trading Days preceding the Company's notice of mandatory
conversion; and
(iii) the Registration Statement shall be
effective for resales of the Conversion Shares by the holder on
the Mandatory Conversion Date.
The Company shall provide the holder with written notice of
mandatory conversion setting forth the date of such mandatory
conversion (the "Mandatory Conversion Date") and certifying that
the foregoing conditions have all been met. The Mandatory
Conversion Date shall be no later than five (5) Trading Days
following the date on which the notice of mandatory conversion is
delivered to the holder, and shall be automatically effective on
the Mandatory Conversion Date at the Conversion Price in effect
on such Mandatory Conversion Date. No interest shall accrue on
this Debenture from and after the Mandatory Conversion Date, and
following the Mandatory Conversion Date, this Debenture shall
only represent the right to receive the applicable number of
Conversion Shares and any accrued but unpaid interest through and
including the Mandatory Conversion Date.
4. Notwithstanding the provisions of Section 3, the
Conversion Price shall not be less than $0.75 if all of the
following conditions are satisfied:
(a) The Registration Statement shall be effective;
(b) The Common Stock shall have traded (since the
effective date of the Registration Statement) for thirty (30)
consecutive Trading Days with an average daily volume of 140,000
shares at a volume-weighted average price (as shown on the
Bloomberg AQR function) of at least 150% of the closing bid price
on the first Closing Date; and
(c) The Company's microwave hair removal product
shall have received FDA approval in writing.
In addition, the minimum Conversion Price shall be further
increased as follows if the foregoing conditions continue to be
met and any or all of the following conditions are met:
(d) The Company's most recent timely filed Form 10-Q
or QSB shows net revenues for such quarter of at least
$10,000,000 (an increase of $0.25 in the minimum Conversion
Price);
(e) The Company's most recent timely filed Form 10-K
or KSB shows net revenues for such fiscal year of at least
$50,000,000 (an increase of $0.35 in the minimum Conversion
Price);
NY:71729.3 3
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(f) The Common Stock shall have traded (since the
effective date of the Registration Statement) for thirty (30)
consecutive Trading Days with an average daily volume of 250,000
shares (an increase of $0.25 in the minimum Conversion Price.
By way of example, if all six of the foregoing conditions are
met, the minimum Conversion Price (irrespective of the actual
Market Price) would be $1.60.
The ceiling Conversion Price of $2.75 and the minimum
Conversion Price as described in this Section 4 shall be subject
to proportionate adjustment for any stock split, reverse stock
split or dividend payable in shares of Common Stock for which
the record date applicable thereto is after the date of issuance
of this Debenture.
5. In the event that the Conversion Price of the Common
Stock is less than $1.00 per share on any Conversion Date, the
Company may elect to deliver to the Holder in consideration of
any such conversion (i) cash, (ii) Conversion Shares or (iii) any
combination thereof. The amount of cash to be delivered shall
equal the closing ask price on the Conversion Date multiplied by
the number of shares of Common Stock as would have been issued at
the Conversion Price upon such conversion. The Company's ability
to deliver cash as full or partial conversion consideration in
accordance with this Section 5 shall be conditioned on the
Company's delivery of notice to the Holder of such election by
the Company no later than two business hours following the
Company's receipt of a Notice of Conversion. The Holder shall
then have a further twenty-four (24) hour period in which to
withdraw his Notice of Conversion, or else the Holder shall be
deemed to have accepted such alternative cash consideration. Such
cash shall be paid within three (3) Trading Days, or else the
Company shall be deemed to have elected not to honor a conversion
in cash and shall instead deliver shares of Common Stock.
6. (a) Conversion shall be effectuated by surrendering
this Debenture to the Company (if such Conversion will convert
all outstanding principal) together with the form of conversion
notice attached hereto as Exhibit A (the "Notice of Conversion"),
executed by the Holder of this Debenture evidencing such Holder's
intention to convert this Debenture or a specified portion (as
above provided) hereof, and accompanied, if required by the
Company, by proper assignment hereof in blank. Interest accrued
but, unpaid at the date of issuance to the date of conversion
shall, at the option of the Company, be paid in cash as set forth
above or in Common Stock upon conversion at the Conversion Price
on the Conversion Date. No fraction of a share or scrip
representing a fraction of a share will be issued on conversion,
but the number of shares issuable shall be rounded to the nearest
whole share. The date on which Notice of Conversion is given
(the "Conversion Date") shall be deemed to be the date on which
the Holder faxes the Notice of Conversion duly executed to the
Company. Facsimile delivery of the Notice of Conversion shall be
accepted by the Company at facsimile number (602) 443-1235 Attn.:
Jan Wallace. Certificates representing Common Stock upon
conversion will be delivered to the Holder within five (5)
Trading Days from the date the Notice of Conversion is delivered
to the Company. Delivery of shares upon conversion shall be made
to the address specified by the Holder in the Notice of
Conversion.
NY:71729.3 4
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(b) The Company understands that a delay in the
issuance of shares of Common Stock upon a conversion beyond the
five (5) Trading Day period described in Section 6(a) could
result in economic loss to the Holder. As compensation to the
Holder for such loss, the Company agrees to pay late payments to
the Holder for late issuance of shares of Common Stock upon
conversion in accordance with the following schedule (where "No.
Trading Days Late" is defined as the number of Trading Days
beyond five (5) Trading Days from the date the Notice of
Conversion is delivered to the Company).
- ------------------------------------------------------------------
No. Trading Days Late | Late Payment for Each
| $5,000 of Principal Amount
| Being Converted
- ------------------------------------------------------------------
1 $100
- ------------------------------------------------------------------
2 $200
- ------------------------------------------------------------------
3 $300
- ------------------------------------------------------------------
4 $400
- ------------------------------------------------------------------
5 $500
- ------------------------------------------------------------------
6 $600
- ------------------------------------------------------------------
7 $700
- ------------------------------------------------------------------
8 $800
- ------------------------------------------------------------------
9 $900
- ------------------------------------------------------------------
10 $1,000
- ------------------------------------------------------------------
More than 10 $1,000 +$200 for each Trading Day
Late beyond 10 Trading Days
- ------------------------------------------------------------------
The Company shall pay any payments incurred under this Section
6(b) in immediately available funds upon demand. Nothing herein
shall limit Holder's right to pursue injunctive relief and/or
actual damages for the Company's failure to issue and deliver
Common Stock to the holder, including, without limitation, the
Holder's actual losses occasioned by any "buy-in" of Common Stock
necessitated by such late delivery. Furthermore, in addition to
any other remedies which may be available to the Holder, in the
event that the Company fails for any reason to effect delivery of
such shares of Common Stock within five (5) Trading Days from the
date the Notice
NY:71729.3 5
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of Conversion is delivered to the Company, the
Holder will be entitled to revoke the relevant Notice of
Conversion by delivering 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 delivery of such
Notice of Conversion, and in such event no late payments shall be
due in connection with such withdrawn conversion.
If at any time (a) the Company challenges, disputes or denies the
right of the Holder to effect the conversion of this Debenture
into Common Stock or otherwise dishonors or rejects any Notice of
Conversion delivered in accordance with this Section 6 or (b) any
Company stockholder who is not and has never been an Affiliate
(as defined in Rule 405 under the Securities Act of 1933, as
amended) of the Holder obtains a judgment or any injunctive
relief from any court or public or governmental authority which
denies, enjoins, limits, modifies, delays or disputes the right
of the holder hereof to effect the conversion of this Debenture
into Common Stock, then the Holder shall have the right, by
written notice, to require the Company to promptly redeem this
Debenture for cash at a redemption price equal to one hundred
thirty percent (130%) of the outstanding principal amount hereof
and all accrued and unpaid interest hereon. Under any of the
circumstances set forth above, the Company shall be responsible
for the payment of all costs and expenses of the Holder,
including reasonable legal fees and expenses, as and when
incurred in disputing any such action or pursuing its rights
hereunder (in addition to any other rights of the Holder),
subject in the case of clause (b) to the Company's right to
control and assume the defense of any such action. In the
absence of an injunction precluding the same, the Company shall
issue shares upon a properly noticed conversion.
The Holder shall be entitled to exercise its conversion privilege
notwithstanding the commencement of any case under 11 U.S.C.
101 et seq. (the "Bankruptcy Code") to the fullest extent
permitted by the Bankruptcy Code. In the event the Company is a
debtor under the Bankruptcy Code, the Company hereby waives to
the fullest extent permitted any rights to relief it may have
under 11 U.S.C. 362 in respect of the Holder's conversion
privilege.
7. No provision of this Debenture shall alter or impair
the obligation of the Company, which is absolute and
unconditional, to pay the principal of, and interest on, this
Debenture at the time, place, and rate, and in the coin or
currency or shares of Common Stock, herein prescribed. This
Debenture is a direct obligation of the Company.
8. If the Company merges or consolidates with another
corporation or sells or transfers all or substantially all of its
assets to another person and the holders of the Common Stock are
entitled to receive stock, securities or property in respect of
or in exchange for Common Stock, then as a condition of such
merger, consolidation, sale or transfer, the Company and any such
successor, purchaser or transferee agree that the Debenture may
thereafter be converted on the terms and subject to the
conditions set forth above into the kind and amount of stock,
securities or property receivable upon such merger,
consolidation, sale or transfer by a holder of the number of
shares of Common Stock into which this Debenture might have been
converted immediately before such merger, consolidation, sale or
transfer, subject to adjustments which shall be as nearly
equivalent as may be practicable. In the event of any proposed
merger, consolidation or sale or transfer of all or substantially
all of the assets of the Company (a "Sale"),
NY:71729.3 6
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the Holder hereof
shall have the right to convert by delivering a Notice of
Conversion to the Company within fifteen (15) days of receipt of
notice of such Sale from the Company. In the event the Holder
hereof shall elect not to convert, the Company may prepay all
outstanding principal and accrued interest on this Debenture,
less all amounts required by law to be deducted, upon which
tender of payment following such notice, the right of conversion
shall terminate.
9. The Holder of the Debenture, by acceptance hereof,
agrees that this Debenture is being acquired for investment and
that such Holder will not offer, sell or otherwise dispose of
this Debenture or the Shares of Common Stock issuable upon
conversion thereof except under circumstances which will not
result in a violation of the Act or any applicable state Blue Sky
or foreign laws or similar laws relating to the sale of
securities.
10. This Debenture shall be governed by and construed in
accordance with the laws of the State of New York. Each of the
parties consents to the jurisdiction of the federal courts whose
districts encompass any part of the City of New York or the state
courts of the State of New York sitting in the City of New York
in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on forum non conveniens,
to the bringing of any such proceeding in such jurisdictions.
11. The following shall constitute an "Event of Default":
(a) The Company shall default in the payment of
principal or interest or honoring a conversion on this Debenture
and same shall continue for a period of three (3) days; or
(b) Any of the representations or warranties made by
the Company herein, in the Purchase Agreement, the Registration
Rights Agreement, or in any agreement, certificate or financial
or other written statements heretofore or hereafter furnished by
the Company in connection with the execution and delivery of this
Debenture or the Purchase Agreement shall be false or misleading
in any material respect at the time made; or
(c) The Company fails to issue shares of Common Stock
to the Holder or to cause its Transfer Agent to issue shares of
Common Stock upon exercise by the Holder of the conversion rights
of the Holder in accordance with the terms of this Debenture,
fails to transfer or to cause its Transfer Agent to transfer any
certificate for shares of Common Stock issued to the Holder upon
conversion of this Debenture as and when required by this
Debenture or the Registration Rights Agreement, and such transfer
is otherwise lawful, or fails to remove any restrictive legend or
to cause its Transfer Agent to transfer any certificate or any
shares of Common Stock issued to the Holder upon conversion of
this Debenture as and when required by this Debenture, the
Purchase Agreement or the Registration Rights Agreement and such
legend removal is otherwise lawful, and any such failure shall
continue uncured for five (5) Trading Days; or
NY:71729.3 7
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(d) The Company shall fail to perform or observe, in
any material respect, any other covenant, term, provision,
condition, agreement or obligation of the Company under the
Purchase Agreement, the Registration Rights Agreement or this
Debenture and such failure shall continue uncured for a period of
thirty (30) days after written notice from the Holder of such
failure; or
(e) The Company shall (1) admit in writing its
inability to pay its debts generally as they mature; (2) make an
assignment for the benefit of creditors or commence proceedings
for its dissolution; or (3) apply for or consent to the
appointment of a trustee, liquidator or receiver for its or for a
substantial part of its property or business; or
(f) A trustee, liquidator or receiver shall be
appointed for the Company or for a substantial part of its
property or business without its consent and shall not be
discharged within sixty (60) days after such appointment; or
(g) Any governmental agency or any court of competent
jurisdiction at the instance of any governmental agency shall
assume custody or control of the whole or any substantial portion
of the properties or assets of the Company and shall not be
dismissed within sixty (60) days thereafter; or
(h) Any money judgment, writ or warrant of attachment,
or similar process in excess of One Hundred Thousand ($100,000)
Dollars in the aggregate shall be entered or filed against the
Company or any of its properties or other assets and shall remain
unpaid, unvacated, unbonded or unstayed for a period of sixty
(60) days or in any event later than five (5) days prior to the
date of any proposed sale thereunder; or
(i) Bankruptcy, reorganization, insolvency or
liquidation proceedings or other proceedings for relief under any
bankruptcy law or any law for the relief of debtors shall be
instituted by or against the Company and, if instituted against
the Company, shall not be dismissed within sixty (60) days after
such institution or the Company shall by any action or answer
approve of, consent to, or acquiesce in any such proceedings or
admit the material allegations of, or default in answering a
petition filed in any such proceeding; or
(j) The Company shall have its Common Stock suspended
or delisted from trading on a Principal Market for in excess of
two (2) Trading Days;
Then, or at any time thereafter, and in each and every such
case, unless such Event of Default shall have been waived in
writing by the Holder (which waiver shall not be deemed to be a
waiver of any subsequent default) at the option of the Holder
and in the Holder's sole discretion, the Holder may consider
this Debenture immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby
expressly waived, anything herein or in any note or other
instruments contained to the contrary notwithstanding, and the
Holder may immediately enforce any and all of the Holder's
rights and remedies provided herein or any other rights or
remedies afforded by law.
NY:71729.3 8
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12. Nothing contained in this Debenture shall be construed
as conferring upon the Holder the right to vote or to receive
dividends or to consent or receive notice as a shareholder in
respect of any meeting of shareholders or any rights whatsoever
as a shareholder of the Company, unless and to the extent
converted in accordance with the terms hereof.
13. In no event shall the Holder be permitted to convert
this Debenture for shares of Common Stock in excess of the amount
of this Debenture upon the conversion of which, (x) the number of
shares of Common Stock owned by such Holder (other than shares of
Common Stock issuable upon conversion of this Debenture) plus (y)
the number of shares of Common Stock issuable upon conversion of
this Debenture, would be equal to or exceed 9.9% of the number of
shares of Common Stock then issued and outstanding, including
shares issuable upon conversion of this Debenture held by such
Holder after application of this Section 13. As used herein,
beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder. To the extent that the
limitation contained in this Section 13 applies, the
determination of whether this Debenture is convertible (in
relation to other securities owned by the Holder) and of which a
portion of this Debenture is convertible shall be in the sole
discretion of such Holder, and the submission of a Notice of
Conversion shall be deemed to be such Holder's determination of
whether this Debenture is convertible (in relation to other
securities owned by such holder) and of which portion of this
Debenture is convertible, in each case subject to such aggregate
percentage limitation, and the Company shall have no obligation
to verify or confirm the accuracy of such determination. Nothing
contained herein shall be deemed to restrict the right of a
holder to convert this Debenture into shares of Common Stock at
such time as such conversion will not violate the provisions of
this Section 13. The provisions of this Section 13 may be waived
by the Holder of this Debenture upon not less than 75 days' prior
notice to the Company, and the provisions of this Section 13
shall continue to apply until such 75th day (or such later date
as may be specified in such notice of waiver). No conversion of
this Debenture in violation of this Section 13 but otherwise in
accordance with this Debenture shall affect the status of the
Common Stock issued upon such conversion as validly issued,
fully-paid and nonassessable. If on the Maturity Date or any
Mandatory Conversion Date the conversion of this Debenture into
Common Stock pursuant to Section 3 would cause the limit
contained in the first sentence of this Section 13 to be
exceeded, such conversion of this Debenture shall occur up to
such limit and the remaining unconverted portion of this
Debenture shall be converted into Common Stock (1) in accordance
with one or more Notices of Conversion delivered by the Holder or
(2) 65 days after the Maturity Date or Mandatory Conversion Date,
whichever is earlier. Notwithstanding anything contained herein
to the contrary, no interest shall accrue after the Maturity Date
on any such unconverted portion of this Debenture.
14. The Company shall have the right to cause Holder to
exchange this Debenture for shares of the Company's Convertible
Preferred Stock upon the following terms and conditions:
(a) The Convertible Preferred Stock to be issued shall
have been duly authorized by the Company's Board of Directors and
stockholders, and the exchange of such shares for this Debenture
shall have been duly authorized by the Company's Board of
Directors, and the holder shall have received an opinion of
counsel to the Company to such effect.
NY:71729.3 9
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(b) The Convertible Preferred Stock shall have
economic rights identical with that of this Debenture (e.g. the
dividend rate and times of accrual and payment shall be identical
to the interest under this Debenture, the conversion rights and
Conversion Price shall be identical to this Debenture, the
liquidation preference shall be equal to the principal amount of
this Debenture) other than priority with creditors of the Company
upon liquidation or dissolution of the Company.
(c) The Registration Statement shall have been
declared effective and shall remain effective following the date
of such exchange.
(d) There shall be no Event of Default in existence
under this Debenture.
(e) There shall have been no Material Adverse Effect
with respect to the Company since the issuance date of this
Debenture.
If all of the foregoing conditions have been met, then the
Company shall have the right, by written notice to the Holder,
accompanied by the opinion of counsel and a certified copy of the
Certificate of Designations for the Convertible Preferred Stock,
to demand that the Holder tender this Debenture to the Escrow
Agent to be held in escrow against delivery to the Escrow Agent
of the certificates representing the Convertible Preferred Stock
(which shall have a liquidation preference equal to the
outstanding principal balance hereof plus all accrued but unpaid
interest). The Escrow Agent shall then deliver such Convertible
Preferred Stock certificates to the Holder and shall deliver this
Debenture to the Company. The Holder shall be entitled to convert
all or any part of this Debenture prior to receipt by the Escrow
Agent of such Convertible Preferred Stock certificates.
NY:71729.3 10
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IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed by an officer thereunto duly authorized.
Dated: July 20, 1999
MW Medical, Inc.
By: \s\ Jan Wallace
-----------------------------
Name: Jan Wallace
---------------------------
Title: President, CEO
--------------------------
NY:71729.3 11
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EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert
the Debenture)
The undersigned hereby irrevocably elects to convert
$ ________________ of the principal amount of the above
Debenture No. ___ into Shares of Common Stock of MW Medical,
Inc. (the "Company") according to the conditions hereof, as
of the date written below.
Date of Conversion* ____________________________________________
Applicable Conversion Price ____________________________________
Accrued and unpaid Interest ____________________________________
Signature_______________________________________________________
[Name]
Address:________________________________________________________
________________________________________________________
* If such conversion represents the remaining principal
balance of the Debenture, the original Debenture must be
delivered to the Company within three Trading Days.
NY:71729.3 12