Exhibit 4.12
THIS NOTE AND THE COMMON STOCK
ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE
COMMON STOCK 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 THE ISSUER THAT
SUCH REGISTRATION IS NOT REQUIRED
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Principal Amount: $
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Issue Date: July __, 2009
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ORIGINAL ISSUE DISCOUNT CONVERTIBLE
NOTE
FOR VALUE RECEIVED, Visual
Management Systems, Inc., a Nevada corporation (hereinafter called
“Borrower”), hereby promises to pay to
________________________________________________________, the
principal amount of $__________, with 12% annual interest thereon,
at such place as Holder shall direct in writing on January __, 2010
(the “Maturity Date”).
The
following terms shall apply to this Note:
ARTICLE I.
GENERAL PROVISIONS
1.1.
Maturity . Principal and accrued interest under this Note
shall become due and payable on the Maturity Date. Borrower may
prepay this note upon not less than thirty (30) days prior written
notice to the Holder; provided, however, that Holder shall have the
right to exercise the conversion rights set forth in Article II
during such notice period.
1.2.
Conversion Privileges . The conversion rights 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 that has not been timely cured, the
Holder may extend the Maturity Date an amount of time equal to the
duration of the Event of Default.
1.3.
Interest Rate . Simple interest payable on this Note shall
accrue at the annual rate of twelve percent (12%) and be payable at
the request of the Holder upon or after each conversion of
principal pursuant to Article II, and on the Maturity Date,
accelerated or otherwise, when the principal and remaining accrued
but unpaid interest shall be due and payable, or sooner as
described below.
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
(“Common Stock”) as set forth below.
2.1.
Conversion into the Borrower’s Common Stock
.
(a) The
Holder shall have the right from and after 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, 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 completed
Notice of Conversion, a form of which is annexed hereto, Borrower
shall issue and deliver to the Holder within three (3) business
days after the Conversion Date (such third day being the
“Delivery Date”) that number of shares of Common Stock
for the portion of the Note converted in accordance with the
foregoing. 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 to be converted, by the
Conversion Price, with all converted fractional shares issuable
rounded up to whole shares.
(b) Subject
to adjustment as provided in Section 2.1(c) hereof, the Conversion
Price per share shall be $0.01 per share.
(c) The
Conversion 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, shall thereafter be
deemed to evidence the right to acquire upon conversion 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, shall thereafter be deemed to evidence
the right to acquire upon conversion 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 num