THE
SECURITIES REPRESENTED HEREBY AND THE SECURITIES INTO WHICH THIS
SECURITY IS CONVERTIBLE HAVE BEEN OFFERED IN AN OFFSHORE
TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED
HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE “1933
ACT”).
NONE OF THE SECURITIES
REPRESENTED HEREBY NOR THE SECURITIES INTO WHICH THESE SECURITIES
ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY
U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE
OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS
DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION,
HEDGING TRANSACTIONS INVOLVING THIS SECURITY AND THE SECURITIES
INTO WHICH THIS SECURITY IS CONVERTIBLE MAY NOT BE CONDUCTED UNLESS
IN COMPLIANCE WITH THE 1933 ACT. “UNITED STATES” AND
“U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE
1933 ACT.
Issue Date: ______________,
2009
Conversion Price
(subject to adjustment herein):
USD $2.25 per Unit
Principle Amount: USD
$ ____________________
ANAVEX LIFE SCIENCES CORP
.
8% CONVERTIBLE LOAN
FOR VALUE RECEIVED, ANAVEX
LIFE SCIENCES CORP . (the “ Company ”)
promises to pay to ________________________________ or its
registered assigns (the “ Holder ”), the
principal sum of ____________________Thousand Dollars ($
_______,000) in lawful currency of the United States (the
“Principal Amount” ) on ______________________,
2011 or such earlier date as the Convertible Loan may be 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
Convertible Loan at the rate of 8% per annum, payable on the
earlier of (i) the Conversion Date (as hereafter defined) (and
subject in any event to the terms of Section 3, below) and (ii) the
Maturity Date. Interest shall be calculated on the basis of a
360-day year and shall accrue daily commencing on the Issue Date
until payment in full of the Principal Amount, 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 part of the Principal Amount converted, provided
that the Company in fact delivers the Units, comprising one Common
Share and one half of one Warrant (each as defined below) within
the time period required by Section 3.3. Interest hereunder will be
paid to the Person in whose name this Convertible Loan is
registered on the records of the Company regarding registration and
transfers of Convertible Loans. The Company may prepay any
portion of the principal amount of this Convertible Loan without
the prior written consent of the Holder.
This Convertible Loan is part
of an offering in which all Holders of such Convertible Loans are
equal as to all rights and the amounts owing to each will be
treated pari passu.
Each Unit consists of one common
share in the capital of the Company (a “ Common Share
”) and one half of one common share purchase warrant (“
Warrant ”) exercisable at USD $3.50 (subject to
adjustment) for a period of two years from the Conversion Date (as
hereafter defined). The form of Warrant Agreement and Certificate
will be the form delivered by the Company on the Conversion
Date.
This
Convertible Loan is subject to the following additional
provisions:
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1.
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Subscription Agreement
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(a)
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This Convertible Loan has been
issued pursuant to a subscription agreement between the Company and
the Holder dated June 18, 2009 (the “ Subscription
Agreement ”) pursuant to which the Holder purchased this
Convertible Loan, and this Convertible Loan is subject in all
respects to the terms of the Subscription Agreement and
incorporates the terms of the Subscription Agreement to the extent
that they do not conflict with the terms of this Convertible Loan.
This Convertible Loan is not transferable and may be exchanged or
converted only in compliance with the terms hereof, the terms of
the Subscription Agreement and applicable securities laws and
regulations.
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(b)
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The Holder acknowledges that
finder’s fees may be payable by the Company in connection
with this Convertible Loan.
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2.
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Events of Default
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(a)
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“ Event of Default
”, wherever used herein, means any one of the following
events (whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any
judgment, decree or order of any court, or any order, rule or
regulation of any administrative or governmental body):
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(i)
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any default in the payment of (A)
the Principal Amount, or (B) interest on, or liquidated damages in
respect of, this Convertible Loan, in each case free of any claim
of subordination, as and when the same shall become due and payable
(whether on a Conversion Date or the Maturity Date or by
acceleration or otherwise) which default, solely in the case of an
interest payment or other default under item (B) above, is not
cured within 10 Trading Days (as defined in Section 5.1(j), below)
after notice of such default is sent by the Holder to the
Company;
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(ii)
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the Company shall fail to observe
or perform any other covenant or agreement contained in this
Convertible Loan or the Subscription Agreement [other than a breach
by the Company of its obligations to deliver Units to the Holder
upon conversion which breach is addressed in Section 2.1(e) below]
which failure is not cured, if possible to cure, within 10 calendar
days after notice of such default is sent by the Holder to the
Company;
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(iii)
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the Company or any of its
subsidiaries (each a “ Subsidiary ”) shall
commence, or there shall be commenced against the Company or any
Subsidiary a case under any applicable bankruptcy or insolvency
laws as now or hereafter in effect or any successor thereto, or the
Company or any Subsidiary commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the
Company or any Subsidiary or there is commenced against the Company
or any Subsidiary any such bankruptcy, insolvency or other
proceeding which remains undismissed for a period of 60 days; or
the Company or any Subsidiary is adjudicated insolvent or bankrupt;
or any order of relief or other order approving any such case or
proceeding is entered; or the Company or any Subsidiary suffers any
appointment of any custodian or the like for it or any substantial
part of its property which continues undischarged or unstayed for a
period of 60 days; or the Company or any Subsidiary makes a general
assignment for the benefit of creditors; or the Company shall fail
to pay, or shall state that it is unable to pay, or shall be unable
to pay, its debts generally as they become due; or the
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Company or any Subsidiary shall
call a meeting of its creditors with a view to arranging a
composition, adjustment or restructuring of its debts; or the
Company or any Subsidiary shall by any act or failure to act
expressly indicate its consent to, approval of or acquiescence in
any of the foregoing; or any corporate or other action is taken by
the Company or any Subsidiary for the purpose of effecting any of
the foregoing;
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(iv)
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the Common Stock shall not be
eligible for quotation on or quoted for trading on its principal
trading market and shall not again be eligible for and quoted or
listed for trading thereon within five Trading Days;
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(v)
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the Company shall fail for any
reason to deliver certificates to the Holder prior to the tenth
Trading Day after a Conversion Date pursuant to and in accordance
with Section 3.3 or the Company shall provide notice to the Holder,
including by way of public announcement, at any time, of its
intention not to comply with any request for conversion of this
Convertible Loan in accordance with the terms hereof; or
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(b)
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If any Event of Default occurs,
the full Principal Amount, together with interest and other amounts
owing in respect thereof to the date of acceleration shall become,
at the Holder’s election, immediately due and payable in
cash. Commencing 5 days after the occurrence of any Event of
Default that results in the eventual acceleration of this
Convertible Loan, the interest rate on this Convertible Loan shall
accrue at the rate of % per annum, or such lower maximum amount of
interest permitted to be charged under applicable law. Upon payment
of the full Principal Amount, together with interest and other
amounts owing in respect thereof, in accordance herewith, this
Convertible Loan shall promptly be surrendered to or as directed by
the Company. The Holder need not provide and the Company hereby
waives any presentment, demand, protest or other notice of any
kind, and the Holder may immediately and without expiration of any
grace period enforce any and all of its rights and remedies
hereunder and all other remedies available to it under applicable
law. Such declaration may be rescinded and annulled by the Holder
at any time prior to payment hereunder and the Holder shall have
all rights as a Convertible Loan holder until such time, if any, as
the full payment under this Section shall have been received by it.
No such rescission or annulment shall affect any subsequent Event
of Default or impair any right consequent thereon.
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THE OBLIGATIONS UNDER THIS
CONVERTIBLE LOAN AGREEMENT ARE UNSECURED AGAINST THE ASSETS OF THE
COMPANY AND THEREFORE OTHER CHARGES MAY HAVE PRIORITY AGAINST THE
COMPANY’S ASSETS BEFORE THE HOLDER OF THIS CONVERTIBLE LOAN.
THERE IS NO GUARANTEE THAT THE COMPANY WILL HAVE SUFFICIENT ASSETS
UPON AN EVENT OF DEFAULT TO PAY THE HOLDER WHAT IS OWED.
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3.
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Conversion
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(a)
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At any time after the Issue Date
until this Convertible Loan is no longer outstanding, and subject
to Section 3(i), this Convertible Loan may be converted into Units
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 to be converted. The date
on which such conversion is to be effected (a “ Conversion
Date ”) shall be the date that is five business days
following delivery of the Notice of Conversion to the Company. To
effect conversions hereunder, the Holder shall not be required to
physically surrender the Convertible Loan to the Company unless the
entire principal amount of this Convertible Loan plus all accrued
and unpaid interest thereon has been so converted. Conversions
hereunder shall have the effect of lowering the
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