10(a)
Neither the
(Convertible Promissory Note represented by this document ( "Note")
nor the shares of common stock which may be acquired upon its
conversion been registered under the Securities Act of 1933 ("The
Act") and they fall within the definition of "restricted
securities" as that term is defined the Rule 144 under the Act. In
addition to the restrictions on transferability of the Note
contained herein, neither the Note nor the shares of common stock
which may be acquired upon conversion may be offered for sale,
sold, or otherwise transferred except pursuant to an effective
Registration Statement under the Act or pursuant to an exemption
from registration under the Act, the availability of which is to be
established to the satisfaction of the Company."
DURAVEST,
INC.
CONVERTIBLE SECURED
PROMISSORY NOTE
|
$650,000.00
|
September 27, 2006
|
FOR
VALUE RECEIVED, DURAVEST, INC., a Florida corporation
("Company") promises to pay to ABSOLUTE RETURN EUROPE FUND LTD.
("Holder"), the principal sum of Six Hundred and Fifty Thousand
Dollars and no cents ($650,000.00) payable in legal tender of the
United States of America or in shares of common stock of the
Company (the "Common Stock") as provided herein on the dates and as
hereinafter specified with the principal to bear simple interest at
the rate per annum set forth below during the term hereof through
the Maturity Date defined below and similarly payable as
hereinafter specified.
The principal
of the Note shall be due and payable, together with any then unpaid
interest on September 27, 2007 (the "Maturity Date"). Simple
interest shall accrue on the unpaid balance of the principal at the
rate set forth below from the date of this Note through the
Maturity Date and shall accrue and be payable in either (i) shares
of Common Stock at a fifteen percent (15%) annual interest rate or
(ii) cash or additional promissory notes as set forth herein at a
ten percent (10%) annual interest rate on or as soon as practicable
following the Maturity Date.
No provision of the Note shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the
principal of and interest on this Note at the time, at the rate and
in the currency or shares of Common Stock herein prescribed.
Interest on this Note shall be payable as soon as practicable
following the Maturity Date in, at the option of the Company in its
sole discretion, either (i) a number of shares of Common Stock
calculated as follows: (A) the interest rate of this Note equal to
fifteen percent (15%) multiplied by the outstanding principal
amount of this Note divided by (B) the Current Market Price (as
defined below) on the Maturity Date; or (ii) the interest rate of
this Note equal to ten percent (10%) multiplied by the outstanding
principal amount of this Note payable at the Company's option in
its sole discretion in either cash or an additional convertible
promissory note having one-year term and otherwise terms
substantially similar to those contained herein.
For purposes of
this Note the following terms shall have the
meanings set forth below:
"Current Market
Price" means, in respect of any share of Common Stock on any date
herein specified, the average of the daily market prices for twenty
(20) consecutive Trading Days immediately preceding such date. The
daily market price for each such Trading Day shall be (i) the last
sale price on such day on the principal stock exchange on which
such Common Stock is then listed or admitted to trading, (ii) if no
sale takes place on such day on any such exchange, the average of
the last reported closing bid and asked prices on such day as
officially quoted on any such exchange, (iii) if the Common Stock
is not then listed or admitted to trading on any stock exchange,
the average of the last reported closing bid and asked prices on
such day in the over-the-counter market, as furnished by the
National Association of Securities Dealers Automatic Quotation
System or the National Quotation Bureau, Tnc., (iv) if neither such
corporation at the time is engaged in the business of reporting
such prices, as furnished by any similar firm then engaged in such
business, or (v) if there is no such firm, as furnished by any
member of the NASD selected mutually by the holder of this Note and
the Company or, if they cannot agree upon such selection, as
selected by two such members of the NASD, one of which shall be
selected by holder of this Note and one of which shall be selected
by the Company. Notwithstanding the foregoing, for purposes of this
Note in no event shall the Current Market Price be deemed to be
greater than $0.70 (subject to adjustments for stock splits after
the date hereof).
"Trading Day"
means any day on which the primary market on which shares of Common
Stock are listed is open for trading.
In the event
the Company is unable to repay the outstanding principal amount of
this Note in cash on the Maturity Date, the Holder of this Note is
entitled, at the Holder's option, at any time after the Maturity
Date, to convert any or all of the unpaid principal of this Note
into a number of shares of Common Stock determined by dividing such
outstanding principal amount by the Conversion Price. The
Conversion Price shall be 80% multiplied by the Current Market
Price on the date of repayment.
Except as
hereinafter provided,
(a) The Company
shall at all times reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common Stock or out of
its issued but not outstanding Common Stock that is held in its
treasury, for the purpose of effecting the conversion of this Note
the full number of shares of Common Stock then deliverable upon the
conversion of this Note.
(b) The Company
covenants that all shares of Common Stock which may be delivered
upon conversion of this Note will upon delivery be
duly issued, fully paid and non-assesessable.
(c) In case of
any reclassification of the Common Stock, or in case of any
consolidation on the Company with, or merger of the
Company
