Exhibit 10.63 Form of
C5 HEALTH, INC. CONVERTIBLE NOTE
("the Note")
(Convertible into shares of Common Stock, par value $.0001
per share of C5 Health, Inc.)
THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT
OF 1933. THIS NOTE MAY BE OFFERED OR SOLD ONLY IF REGISTERED UNDER
AND SAID ACT OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
C5 Health, Inc., a Delaware corporation (the "Company"), for value
received, hereby promises to pay to _______________ ("Payee") on August 27,
2001, (or such later date as may be determined as set forth herein) ("Maturity
Date"), the principal amount of _________ ("Principal") or such lesser Principal
amount as is then outstanding, plus a premium equal to ten (10%) percent of the
Principal ("Premium") in lawful money of the United States; or, at Xxxxxx's
election, to convert an amount not less than one (1/2) half of the balance of
Principal plus Premium then due at the time of Xxxxxx's election into Common
Stock (as hereinafter defined) as hereinafter provided.
In addition to Premium, and Common Stock, if any, which Lender may obtain
through Lender's election to convert, Lender shall receive, in addition to
Principal, ten thousand (10,000) shares of Common Stock, or a pro rata number of
such shares, for each increment of Twenty thousand ($20,000.00), more or less,
that Xxxxxx has loaned to the Company hereunder, all of said shares to be
computed on a pre-dilutive basis.
The Maturity Date of this Note may be extended by agreement of the Company
and Payee. This Note is exchangeable for shares of Common Stock at the times, on
the terms and in the manner as provided hereinbefore and hereinafter. This Note
may be prepaid prior to its maturity.
1. Definitions. In this Agreement, unless the context otherwise requires,
the following terms shall have the respective meaning set forth below:
1.1 "1933 Act" shall mean the Securities Act of 1933, as amended.
1.2 "Common Stock" shall mean the common stock of the Company, par
value $.0001 per share.
2. Valid issuance of Common Stock. The Common Stock issuable upon
conversion of the Note has been duly and validly reserved for issuance and, upon
issuance in accordance with the terms hereof, shall be duly and validly issued
fully paid and nonassessable.
3. Investment of own account. The Note acquired by the Lender is for the
Lender's own account for the purpose of investment and not with a view to the
resale or distribution thereof and the Lender has no present intention of
selling, negotiating or otherwise disposing of the Note. The Lender acknowledges
that the Note has not been registered under the 1933 Act and understands that
the Note and any shares of Common Stock issued upon the conversion of the Note
must be held unless they are subsequently registered under the 1933 Act or an
exemption from such registration is available.
4. Conversion of Note.
4.1 Right to Convert. The Lender shall have the right, at its option,
to convert in whole, or in part, but in no case less than an amount equal
to fifty (50%) percent of the Principal of the Note then outstanding plus
unpaid Premium into fully paid and nonassessable shares of Common Stock on
a pre-dilutive basis at an assumed per share cost of fifty ($.50) cents at
the earlier of:
(a) not less than five (5) business days prior to the Maturity
Date of the Note (whether the initial or an extended maturity date);
or
(b) not more than five (5) business days after Xxxxxx receives
notice from the Company of its intention to pre-pay the Note.
4.2 Manner of Exercise. The Lender shall exercise its conversion right by
giving written notice to the Company of its election to exercise such right.
Promptly after the giving of notice, the Lender shall surrender the Note at the
principal executive offices of the Company accompanied by written notice to the
Company stating the name or names (with address) in which the certificate or
certificates for the shares of capital stock issuable on such conversion shall
be issued.
4.3 Issuance of Shares of Capital Stock on Conversion.
(a) As promptly as practicable after the receipt of such notice
and the surrender of the Note as set forth above, the Company shall
issue, at its expense, and shall deliver to the Lender a certificate
or certificates for the number of shares of capital stock issuable
upon the conversion of such Note.
(b) The conversion shall be deemed to have been effected
immediately prior to the close of business on the date which the
Company shall have received such notice and the surrendered Note (the
"Conversion Date"), and at that time, the person or person in whose
name any certificate for shares of the Company's capital stock shall
be issuable upon such exchange shall be deemed to have become the
holder or holders of record of the shares represented thereby.
(c) Each certificate evidencing shares of capital stock issuable
upon the Conversion Date of the Note shall bear the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED UNLESS
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT THEREUNDER OR UNLESS
PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION.
The legend shall be removed by the Company from any certificate
either (i) if the shares evidenced by such certificate have been
effectively registered under the 1933 Act and any applicable state
securities laws and sold by the holder thereof in accordance with such
registration, or (ii) upon delivery to it of an opinion satisfactory
in form and substance to the Company from counsel to the effect that
the shares evidenced by such certificate can be freely transferred
without registration under the 1933 Act and any state securities laws
and that such transfer will not jeopardize the exemption or exemptions
from registration pursuant to which the shares were issued.
4.4 Covenant to Reserve Shares for Conversion. The Company covenants
that it will at all times reserve and keep available out of its authorized
capital stock and/or shares of its capital stock then owned or held by or
for the account of the Company, solely for the purpose of delivery upon
conversion of the Note as herein provided, such number of shares of the
Company's capital stock as shall then be deliverable upon the conversion of
such Note. All shares of capital stock, which shall be so deliverable,
shall be duly and validly issued and fully paid and nonassessable.
5. Defaults.
5.1 Events of Defaults. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the principal of or interest on the Loan shall not be paid
when due;
(b) the Company shall fail to observe or perform any of its
covenants or agreements contained in this Agreement for a period of 30
business days, after having received Notice from the Lender;
(c) the Company shall commerce a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment
for the benefit of creditors, or shall fail generally to pay its debts
as they become due, or shall take any corporate action to authorize
any of the foregoing.
(d) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and
any such involuntary case or other proceeding shall remain undismissed
and unstayed for a period of 60 days;
Notices, payments, requests, and other communications to the respective
parties hereunder shall be in writing, and shall be deemed received when
delivered personally, by facsimile, or first-class certified mail, return
receipt requested and postage prepaid, as follows:
If to the Lender:
If to the Company:
C5 Health, Inc.
One Sarasota Tower
0 Xxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: President
This Note is governed by and is to be construed in accordance with the law
of the State of Virginia.
C5 Health, Inc.
--------------------------
By: Xxxxxxx X. Xxxxx
Its: President
