Exhibit 4.3
THE SALE AND ISSUANCE OF THE SECURITIES REPRESENTED BY THIS 10%
CONVERTIBLE NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ ACT ”), OR UNDER THE
SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION. THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
TO, OR IN CONNECTION WITH, THE DISTRIBUTION THEREOF. THESE
SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED, OR TRANSFERRED UNLESS
(I) A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO THESE
SECURITIES AND SUCH OFFER, SALE, PLEDGE, OR TRANSFER IS IN
COMPLIANCE WITH APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER
JURISDICTION OR (II) AN EXEMPTION FROM THE ACT IS AVAILABLE AND
SUCH OFFER, SALE, PLEDGE, OR TRANSFER IS IN COMPLIANCE WITH
APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION.
10% CONVERTIBLE NOTE
$_________
(Date)
For value
received, Validian Corporation, a Nevada corporation (together with
its successors and assigns, the “ Company ”),
with an address at 30 Metcalfe Street, Ottawa, Ontario, Canada K1P
5L4, promises to pay to __________ (the “ Holder
”) with an address at __________________ the principal amount
of ________________ ($_______) and to pay interest thereon, all as
hereinafter specified.
1.
Identification of Note . This Note is issued as part
of the Holder’s investment into the Company.
2.
Maturity .
2.1
Maturity Date . Unless earlier converted as provided
in Section 3 hereof, this Note will automatically mature and
be due and payable on the earlier of (a) __________(the “
Maturity Date ”) or (b) the occurrence of an Event of
Default (as defined in Section 8 hereof).
2.2
Interest . Interest shall accrue from the date of this
Note on the unpaid principal amount at a rate equal to ten percent
(10%) per annum, computed on the basis of the actual number of days
elapsed and a year of 365 days from the date of this Note until the
principal amount and all interest accrued thereon are paid (or
converted, as provided in Section 3 hereof). Interest
shall be due and paid to the Holder quarterly. The first
quarterly payment shall be paid to the Holder on ____________.
At the Company’s option, interest can be paid in either
(a) cash or (b) shares of common stock, calculated at a ten percent
(10%) discount to the average closing price of the common stock, as
listed on the exchange where the Company’s Common Stock is
traded, for the ten (10) trading days prior to the date the
interest is due to the Holder. The stock referenced in this
Section 2.2 shall be included in the registration rights
provisions in Section 5 and be subject to the calculation
for purposes of Section 4 .
2.3
Prepayment . The Company shall not have the right to
prepay this Note without first obtaining prior written consent from
the Holder. Such consent shall not be unreasonably
withheld.
3.
Conversion .
3.1
Voluntary Conversion . The holder may voluntarily
convert the Note, in whole or in part, into Common Stock of the
Company at any time.
3.2
Mechanics and Effect of Conversion .
(a)
The principal and any unpaid and accrued interest of this Note
shall convert into shares of Common Stock at a conversion price of
ten cents ($____) per share (“ Conversion Price
”).
(b)
No fractional shares will be issued upon conversion of this Note.
In lieu of any fractional shares to which the Holder would
otherwise be entitled, the Company will pay to the Holder in cash
the unconverted amount that would otherwise be converted into such
fractional shares.
(c)
In the event that the Outstanding Amount under this Note is
converted into Common Stock pursuant to Section 3.1 hereof,
the Holder shall surrender this Note, duly endorsed, to the Company
and the Note shall thereupon be canceled, provided that if
Holder partially converts pursuant to Section 3.2(a) hereof,
the Company shall issue a Note to Holder for the remaining amount
of principal that was not converted. At its expense, the
Company will issue and deliver to such Holder, a certificate or
certificates representing the number of duly authorized, validly
issued, fully paid and non-assessable shares of Common Stock to
which such Holder is entitled upon such conversion, together with a
check payable to the Holder for any cash amounts payable pursuant
to Section 3.2(b) hereof.
(d)
Unless a registration statement under the Securities Act of 1933,
as amended, with respect to the shares of Common Stock issued upon
conversion of this Note has been filed with the Securities and
Exchange Commission, each share issued upon conversion of this Note
shall be stamped or otherwise imprinted with a legend substantially
in the following form:
“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THE 1933 ACT AND
SUCH LAWS OR AN EXCEPTION FROM REGISTRATION IS
AVAILABLE.”
(e)
Upon conversion of this Note in accordance with Section 3
hereof, all rights with respect to this Note shall terminate,
whether or not th
