Exhibit 10.1
NEITHER THIS SECURITY NOR THE
SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
Original Issue Date: __,
2008
Original Conversion Price
(subject to adjustment herein): $0.30
10% SERIES A CONVERTIBLE DEBENTURE
DUE DECEMBER 31, 2008
THIS
DEBENTURE is one of a series of duly authorized and issued 10%
Series A Convertible Debentures of Almadoro Minerals Corp., a
Nevada corporation, having a principal place of business at 9620
Williams Road, Richmond British Columbia Canada V7A 1H2 (the
“ Company ”), designated as its 10% Series A
Convertible Debenture, due December 31, 2008 (the “
Debenture(s) ”).
FOR
VALUE RECEIVED, the Company promises to pay to
________________________ or its registered assigns (the “
Holder ”), or shall have paid pursuant to the terms
hereunder, the principal sum of $_______________ by _____, 2008 or
such earlier date as the Debentures are required or permitted to be
repaid as provided hereunder (the “ Maturity Date
”), and to pay interest to the Holder on the aggregate
unconverted and then outstanding principal amount of this Debenture
in accordance with the provisions hereof. This Debenture is subject
to the following additional provisions:
Section 1 . Definitions
. For the purposes hereof, in addition to the terms defined
elsewhere in this Debenture and the following terms shall have the
following meanings:
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“
Alternate Consideration ” shall have the meaning set
forth in Section 5(b).
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“
Business Day ” means any day except Saturday, Sunday
and any day which shall be a federal legal holiday in the United
States or a day on which banking institutions in the State of
Nevada are authorized or required by law or other government action
to close.
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“
Change of Control Transaction ” means the occurrence
after the date hereof of any of (i) an acquisition after the date
hereof by an individual or legal entity or “group” (as
described in Rule 13d-5(b)(1) promulgated under the Exchange Act)
of effective control (whether through legal or beneficial ownership
of capital stock of the Company, by contract or otherwise) of in
excess of 33% of the voting securities of the Company, or (ii) the
Company merges into or consolidates with any other Person, or any
Person merges into or consolidates with the Company and, after
giving effect to such transaction, the stockholders of the Company
immediately prior to such transaction own less than 33% of the
aggregate voting power of the Company or the successor entity of
such transaction, or (iii) the Company sells or transfers its
assets, as an entirety or substantially as an entirety, to another
Person and the stockholders of the Company immediately prior to
such transaction own less than 33% of the aggregate voting power of
the acquiring entity immediately after the transaction, or (iv) the
execution by the Company of an agreement to which the Company is a
party or by which it is bound, providing for any of the events set
forth above in (i) or (iii).
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“
Common Stock ” means the common stock, par value
$0.001 per share, of the Company and stock of any other class into
which such shares may hereafter have been reclassified or
changed.
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“
Conversion Date ” shall have the meaning set forth in
Section 4(a).
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“
Conversion Price ”shall have the meaning set forth in
Section 4(b).
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“
Conversion Shares ” means the shares of Common Stock
issuable upon conversion of Debentures.
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“
Debenture Register ” shall have the meaning set forth
in Section 2(b).
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“Event of Default” shall have the meaning set forth
in Section 8.
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“
Exchange Act ” means the Securities Exchange Act of
1934, as amended.
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“
Fundamental Transaction ” shall have the meaning set
forth in Section 5(d).
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“
Interest Conversion Rate ” means one share of Common
Stock (as adjusted for splits, recapitalizations and the like) for
each $0.30 dollars in interest due.
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“
Interest Payment Date ” shall have the meaning set
forth in Section 2(a).
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“
Late Fees ” shall have the meaning set forth in
Section 2(c).
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“
New York Courts ” shall have the meaning set forth in
Section 9(d).
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“
Notice of Conversion ” shall have the meaning set
forth in Section 4(a).
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Original Issue Date ” shall mean the date of the first
issuance of the Debentures regardless of the number of transfers of
any Debenture and regardless of the number of instruments which may
be issued to evidence such Debenture.
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“
Person ”means a corporation, an association, a
partnership, organization, a business, an individual, a government
or political subdivision thereof or a governmental
agency.
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“
Securities Act ” means the Securities Act of 1933, as
amended, and the rules and regulations promulgated
thereunder.
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“
Subscription Agreement ” means the subscription
agreement to which the Company and each original Holder is a party,
with respect to the private placement which commenced on July 10,
2008.
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“
Trading Day ” means a day on which the Common Stock is
traded on a Trading Market.
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“
Trading Market ” means the following markets or
exchanges on which the Common Stock is listed or quoted for trading
on each date in question: the Nasdaq Over-the-Counter Bulletin
Board, the Nasdaq SmallCap Market, the American Stock Exchange, the
New York Stock Exchange or the Nasdaq National Market.
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“
Transaction Documents ” shall mean this Debenture, the
Subscription Agreement and any other documents or agreements
executed in connection with the transactions contemplated under the
Subscription Agreement.
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Section 2.
Interest .
a)
Payment of Interest in Cash or Kind . The Company shall pay
interest to the Holder on the aggregate unconverted and then
outstanding principal amount of this Debenture at the rate of 10%
per annum, payable on the earlier of the Conversion Date or the
Maturity Date with respect to the principal amount converted or
maturing on such date, as applicable (each such date, an
“Interest Payment Date ”), in cash or shares of
Common Stock at the Interest Conversion Rate, or a combination
thereof, at the Company’s option.
b)
Interest Calculations . Interest shall be calculated on the
basis of a 365-day year and shall accrue daily and be compounded
quarterly commencing on the Original Issue Date, until payment in
full of the principal sum, together with all accrued and unpaid
interest and other amounts which may become due hereunder, has been
made. Interest shall cease to accrue with respect to any principal
amount converted, provided that the Company in fact delivers the
Conversion Shares within the time period required by Section
4(d)(ii). Interest hereunder will be paid to the Person in whose
name this Debenture is registered on the records of the Company
regarding registration and transfers of Debentures (the “
Debenture Register ”). Except as otherwise provided
herein, if at any time the Company pays interest partially in cash
and partially in shares of Common Stock, then such payment shall be
distributed ratably among the Holders based upon the principal
amount of Debentures held by each Holder, unless otherwise agreed
to in writing by all of the Holders.
c)
Late Fee . All overdue accrued and unpaid interest to be
paid hereunder shall entail a late fee at the rate of 12% per annum
(or such lower maximum amount of interest permitted to be charged
under applicable law) (“ Late Fees ”) which will
accrue daily, from the date such interest is due hereunder through
and including the date of payment.
d)
Prepayment . Except as otherwise set forth in this
Debenture, the Company may prepay any portion of the principal
amount of this Debenture at any time without the prior written
consent of the Holder.
Section 3
.
Registration of Transfers and Exchanges .
a)
Different Denominations . This Debenture is exchangeable for
an equal aggregate principal amount of Debentures of different
authorized denominations, as requested by the Holder surrendering
the same. No service charge will be made for such registration of
transfer or exchange.
b)
Investment Representations . This Debenture has been issued
subject to certain investment representations of the original
Holder set forth in the Subscription Agreement and may be
transferred or exchanged only in compliance with the Subscription
Agreement and applicable federal and state securities laws and
regulations.
c)
Reliance on Debenture Register . Prior to due presentment to
the Company for transfer of this Debenture, the Company and any
agent of the Company may treat the Person in whose name this
Debenture is duly registered on the Debenture Register as the owner
hereof for the purpose of receiving payment as herein provided and
for all other purposes, whether or not this Debenture is overdue,
and neither the Company nor any such agent shall be affected by
notice to the contrary.
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Section 4
.
Conversion.
a)
Voluntary
Conversion . At any time after the Original Issue Date until
this Debenture is no longer outstanding, this Debenture shall be
convertible into shares of Common Stock, at the option of the
Holder, in whole or in part at any time and from time to time. The
Holder shall effect conversions by delivering to the Company the
form of Notice of Conversion attached hereto as Annex A (a
“ Notice of Conversion ”), specifying therein
the principal amount of Debentures to be converted and the date on
which such conversion is to be effected (a “Conversion
Date ”). If no Conversion Date is specified in a Notice
of Conversion, the Conversion Date shall be the date that such
Notice of Conversion is provided hereunder. However, the Conversion
Date shall not be a date that is earlier than the date of receipt
of the Notice of Conversion by the Company. To effect conversions
hereunder, the Holder shall not be required to physically surrender
Debentures to the Company unless the entire principal amount of
this Debenture plus all accrued and unpaid interest thereon has
been so converted. Conversions hereunder shall have the effect of
lowering the outstanding principal amount of this Debenture in an
amount equal to the applicable conversion. The Holder and the
Company shall maintain records showing the principal and/or accrued
interest amounts converted and the date of such conversions. The
Company shall deliver any objection to any Notice of Conversion
within 1 Business Day of receipt of such notice. In the event of
any dispute or discrepancy, the records of the Company shall be
controlling and determinative in the absence of manifest error. The
Holder and any assignee, by acceptance of this Debenture,
acknowledge and agree that, by reason of the provisions of this
paragraph, following conversion of a portion of this Debenture, the
unpaid and unconverted principal amount of this Debenture may be
less than the amount stated on the face hereof.
b)
Conversion Price
. The conversion price in effect on any Conversion Date shall be
equal to $0.30 (subject to adjustment herein)(the “
Conversion Price ”).
c)
Intentionally
omitted .
d)
Mechanics of
Conversion
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i.
Conversion Shares
Issuable Upon Conversion . The number of shares of Common Stock
issuable upon a conversion hereunder shall be determined by the
quotient obtained by dividing (x) the outstanding principal amount
of this Debenture to be converted by (y) the Conversion
Price.
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ii.
Delivery of
Certificate Upon Conversion . Not later than five (5) Trading
Days after any Conversion Date (the “ Share Delivery
Date ”), the Company will deliver to the Holder (A) a
certificate or certificates representing the Conversion Shares
representing the number of shares of Common Stock being acquired
upon the conversion of Debentures (including, if so elected by the
Company, shares of Common Stock representing payment of accrued
interest) and (B) a check in the amount of accrued and unpaid
interest (if the Company has elected to pay accrued interest in
cash).
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iii.
Reservation of Shares
Issuable Upon Conversion . The Company covenants that it will
at all times reserve and keep available out of its authorized and
unissued shares of Common Stock solely for the purpose of issuance
upon conversion of the Debentures and payment of interest on the
Debenture, each as herein provided, free from preemptive rights or
any other actual contingent purchase rights of persons other than
the Holders, not less than such number of shares of the Common
Stock as shall (subject to any additional requirements of the
Company as to reservation of such shares set forth in the
Subscription Agreement) be issuable (taking into account the
adjustments and restrictions of Section 5) upon the conversion of
the outstanding principal amount of the Debentures and payment of
interest hereunder. The Company covenants that all shares of Common
Stock that shall be so issuable shall, upon issue, be duly and
validly authorized, issued and fully paid and
nonassessable.
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iv.
Fractional Shares
. Upon a conversion hereunder, in the event the conversion yields a
fractional share, the Holder shall be entitled to receive, in lieu
of the final fraction of a share, one whole share of Common
Stock.
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v.
Transfer Taxes .
The issuance of certificates for shares of the Common Stock on
conversion of the Debentures shall be made without charge to the
Holders thereof for any documentary stamp or similar taxes that may
be payable in respect of the issue or delivery of such certificate,
provided that the Company shall not be required to pay any tax that
may be payable in respect of any transfer involved in the issuance
and delivery of any such certificate upon conversion in a name
other than that of the Holder of such Debentures so converted and
the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company
that such tax has been paid.
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Section 5
.
Certain Adjustments .
a)
Stock Dividends and Stock Splits . If the Company, at any
time while the Debentures are outstanding: (A) shall pay a stock
dividend or otherwise make a distribution or distributions on
shares of its Common Stock or any other equity or equity equivalent
securities payable in shares of Common Stock, (B) subdivide
outstanding shares of Common Stock into a larger number of shares,
(C) combine (including by way of reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, or (D)
issue by reclassification of shares of the Common Stock any shares
of capital stock of the Company, then the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number
of shares of Common Stock (excluding treasury shares, if any)
outstanding before such event and of which the denominator shall be
the number of shares of Common Stock outstanding after such event.
Any adjustment
