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EXHIBIT 4.1
THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF
THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS
AMENDED. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION
OF
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
NOTE
UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
ONE
VOICE TECHNOLOGIES, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.
PRINCIPAL AMOUNT $__________
ISSUE DATE: SEPTEMBER ____, 2007
PURCHASE PRICE $____________
CONVERTIBLE NOTE
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FOR VALUE RECEIVED, ONE VOICE TECHNOLOGIES, INC., a Nevada
corporation
(hereinafter called "Borrower"), hereby promises to pay to ALPHA
CAPITAL
AKTIENGESELLSCHAFT, Pradafant 7, 9490 Furstentums, Vaduz,
Lichtenstein, Fax:
011-42-32323196 (the "Holder") or order, without demand, the sum
of
____________________________ Dollars ($__________),on September
___, 2008 (the
"Maturity Date").
This Note has been entered into pursuant to the terms of a
subscription
agreement between the Borrower and the Holder, dated of even date
herewith (the
"Subscription Agreement"), and shall be governed by the terms of
such
Subscription Agreement. Unless otherwise separately defined herein,
all
capitalized terms used in this Note shall have the same meaning as
is set forth
in the Subscription Agreement. The following terms shall apply to
this Note:
ARTICLE I
GENERAL PROVISIONS
1.1 PAYMENT GRACE PERIOD. The Borrower shall have a ten (10) day
grace
period to pay any monetary amounts due under this Note, after which
grace period
a default interest rate of ten percent (10%) per annum shall apply
to the
amounts owed hereunder.
1.2 CONVERSION PRIVILEGES. The Conversion Privileges set forth
in
Article II shall remain in full force and effect immediately from
the date
hereof and until the Note is paid in full regardless of the
occurrence of an
Event of Default. The Note shall be payable in full on the Maturity
Date, unless
previously converted into Common Stock in accordance with Article
II hereof;
provided, that if an Event of Default has occurred (whether or not
such Event of
Default is continuing), the Borrower may not pay this Note on or
after the
Maturity Date, without the consent of the Holders holding 80% of
the outstanding
principal amount of the Notes and aggregate Conversion Prices of
Shares still
held by the Holders.
ARTICLE II
CONVERSION RIGHTS
The Holder shall have the right to convert the principal due under
this
Note into Shares of the Borrower's Common Stock, $.001 par value
per share
("Common Stock") as set forth below.
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2.1. CONVERSION INTO THE BORROWER'S COMMON STOCK.
(a) The Holder shall have the right from and after the date of
the issuance of this Note and then at any time until this Note is
fully paid, to
convert any outstanding and unpaid principal portion of this Note,
and accrued
interest, at the election of the Holder (the date of giving of such
notice of
conversion being a "Conversion Date") into fully paid and
nonassessable shares
of Common Stock as such stock exists on the date of issuance of
this Note, or
any shares of capital stock of Borrower into which such Common
Stock shall
hereafter be changed or reclassified, at the conversion price as
defined in
Section 2.1(b) hereof (the "Conversion Price"), determined as
provided herein.
Upon delivery to the Borrower of a Notice of Conversion as
described in Section
7 of the Subscription Agreement of the Holder's written request for
conversion,
Borrower shall issue and deliver to the Holder within three (3)
business days
from the Conversion Date ("Delivery Date") that number of shares of
Common Stock
for the portion of the Note converted in accordance with the
foregoing. At the
election of the Holder, the Borrower will deliver accrued but
unpaid interest on
the Note in the manner provided in Section 1.3 through the
Conversion Date
directly to the Holder on or before the Delivery Date (as defined
in the
Subscription Agreement). The number of shares of Common Stock to be
issued upon
each conversion of this Note shall be determined by dividing that
portion of the
principal of the Note and interest to be converted, by the
Conversion Price.
(b) Subject to adjustment as provided in Section 2.1(c)
hereof, the Conversion Price per share shall be the lower of (i)
$.015 ("Maximum
Base Price"), or (ii) eighty (80%) of the average of the three
lowest closing
bid prices for the Common Stock for the thirty (30) trading days
prior to but
not including the Conversion Date for the Common Stock on the OTC
Pink Sheets,
NASD OTC Bulletin Board, NASDAQ SmallCap Market, NASDAQ National
Market System,
American Stock Exchange, or New York Stock Exchange, as applicable,
or if not
then trading on any of the foregoing, such other principal market
or exchange
where the Common Stock is listed or traded (whichever of the
foregoing is at the
time the principal trading exchange or market for the Common Stock,
the
"Principal Market"). Closing bid price shall mean the closing bid
price as
reported by Bloomberg L.P., but in no event will the Conversion
Price be greater
than $.015, subject to adjustment as described herein.
(c) The Maximum Base Price and number and kind of shares or
other securities to be issued upon conversion determined pursuant
to Section
2.1(a), shall be subject to adjustment from time to time upon the
happening of
certain events while this conversion right remains outstanding, as
follows:
A. Merger, Sale of Assets, etc. If the Borrower at
any time shall consolidate with or merge into or sell or convey all
or
substantially all its assets to any other corporation, this Note,
as to the
unpaid principal portion thereof and accrued interest thereon,
shall thereafter
be deemed to evidence the right to purchase such number and kind of
shares or
other securities and property as would have been issuable or
distributable on
account of such consolidation, merger, sale or conveyance, upon or
with respect
to the securities subject to the conversion or purchase right
immediately prior
to such consolidation, merger, sale or conveyance. The foregoing
provision shall
similarly apply to successive transactions of a similar nature by
any such
successor or purchaser. Without limiting the generality of the
foregoing, the
anti-dilution provisions of this Section shall apply to such
securities of such
successor or purchaser after any such consolidation, merger, sale
or conveyance.
B. Reclassification, etc. If the Borrower at any time
shall, by reclassification or otherwise, change the Common Stock
into the same
or a different number of securities of any class or classes that
may be issued
or outstanding, this Note, as to the unpaid principal portion
thereof and
accrued interest thereon, shall thereafter be deemed to evidence
the right to
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purchase an adjusted number of such securities and kind of
securities as would
have been issuable as the result of such change with respect to the
Common Stock
immediately prior to such reclassification or other change.
C. Stock Splits, Combinations and Dividends. If the
shares of Common Stock are subdivided or combined into a greater or
smaller
number of shares of Common Stock, or if a dividend is paid on the
Common Stock
in shares of Common Stock, the Conversion Price shall be
proportionately reduced
in case of subdivision of shares or stock dividend or
proportionately increased
in the case of combination of shares, in each such case by the
ratio which the
total number of shares of Common Stock outstanding immediately
after such event
bears to the total number of shares of Common Stock outstanding
immediately
prior to such event..
D. Share Issuance. So long as this Note is
outstanding, if the Borrower shall issue any shares of Common Stock
except for
the Excepted Issuances (as defined in the Subscription Agreement)
for a
consideration less than the Conversion Price in effect at the time
of such
issue, then, and thereafter successively upon each such issue, the
Conversion
Price shall be reduced to such other lower issue price. For
purposes of this
adjustment, the issuance of any security carrying the right to
convert such
security into shares of Common Stock or of any warrant, right or
option to
purchase Common Stock shall result in an adjustment to the
Conversion Price upon
the issuance of security and again upon the issuance of shares of
Common Stock
upon exercise of such conversion or purchase rights if such
issuance is at a
price lower than the then applicable Conversion Price.
(d) Whenever the Conversion Price is adjusted pursuant to
Section 2.1(c) above, the Borrower shall promptly mail to the
Holder a notice
setting forth the Conversion Price after such adjustment and
setting forth a
brief statement of the facts requiring such adjustment.
(e) During the period the conversion right exists, Borrower
will reserve from its authorized and unissued Common Stock a
sufficient number
of shares to provide for the issuance of Common Stock upon the full
conversion
of this Note, but not less than the amount of shares of Common
Stock required to
be reserved pursuant to the Subscription Agreement. Borrower
represents that
upon issuance, such shares will be duly and validly issued, fully
paid and
non-assessable. Borrower agrees that its issuance of this Note
shall constitute
full authority to its officers, agents, and transfer agents who are
charged with
the duty of executing and issuing stock certificates to execute and
issue the
necessary certificates for shares of Common Stock upon the
conversion of this
Note.
2.2 METHOD OF CONVERSION. This Note may be converted by the
Holder in whole or in part as described in Section 2.1(a) hereof
and the
Subscription Agreement. Upon partial conversion of this Note, a new
Note
containing the same date and provisions of this Note shall, at the
request of
the Holder, be issued by the Borrower to the Holder for the
principal balance of
this Note and interest which shall not have been converted or
paid.
2.3. MANDATORY CONVERSION. Provided
