ANPATH GROUP, INC. 8% Subordinated Convertible Promissory Note

Exhibit 10.21

THIS NOTE, THE SHARES OF COMMON STOCK AND/OR OTHER SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE (THE “ SECURITIES ”) HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”) SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE SECURITIES ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE AND ANY SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE.

ANPATH GROUP, INC.

8% Subordinated Convertible Promissory Note

FOR VALUE RECEIVED, Anpath Group, Inc. , a Delaware corporation (collectively with all of its Subsidiaries, the “ Company ”) with its principal executive office at 116 Morlake Drive, Suite 201, Mooresville, North Carolina 28117, promises to pay to the order of [________________], (the “ Holder ”), or registered assigns, the principal amount of [____________dollars ($_______)] (the “ Principal Amount ”), plus accrued interest thereon, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, which sum shall be due and payable on the Maturity Date (as defined below). Interest on this Note shall accrue and be payable in accordance with Section 3 hereof.

This Note is one of a series of similar Notes issued in connection with the Company’s private placement (the “ Offering ”) of its units (“ Units ”), each Unit consisting of (i) a Note in the aggregate principal amount of $10,000 and (ii) a Warrant to purchase 20,000 shares of common stock of the Company on a 50 Unit ($500,000) minimum and a 500 Unit ($5,000,000) maximum basis.  In the Offering, the Company sold its securities to “accredited investors” pursuant to Subscription Agreements by and between the Company and the Investors named therein (the “ Subscription Agreements ”).  In addition to the terms defined elsewhere in this Note, capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Subscription Agreements.

Each payment by the Company pursuant to this Note shall be made without set-off or counterclaim and in immediately available funds.  Any amounts which become due and payable pursuant to this Note on a day that is not a Business Day (as hereafter defined) shall be due and payable on the first Business Day after such date.  For purposes of this Note, “ Business Day ” means any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in the State of North Carolina.

The Company (i) waives presentment, demand, protest or notice of any kind in connection with this Note and (ii) agrees, in the event of an Event of Default (as defined below), to pay to the Holder of this Note, on demand, all costs and expenses (including legal fees and expenses) incurred in connection with the enforcement and collection of this Note.

Prepayment .  This Note may be prepaid by the Company at any time prior to the Maturity Date, in whole or in part, without any premium or penalty.  All such payments shall be applied first to accrued interest and then to the outstanding Principal Amount.

Interest .

.109   Interest Rate . The outstanding Principal Amount shall bear interest at the rate of eight (8%) percent per annum.

.110   Computation and Payment of Interest .  Interest on the Principal Amount shall accrue commencing on the date of this Note (the “ Issue Date ”) and shall be due and payable on the Maturity Date.  Interest shall be computed on the basis of a 360-day year for the actual number of days elapsed from the Issue Date to the Maturity Date.

Conversion .

.111   Optional Conversion .  Commencing on the Issue Date and ending on the last Business Day immediately prior to the Maturity Date (the “ Optional Conversion Period ”) and subject to the limitation provided in Section 5F below, the outstanding Principal Amount of this Note and all accrued interest may be converted into shares (the “ Conversion Shares ”) of the Company’s common stock, par value $0.0001 (the “ Common Stock ”) at any time and from time to time, at the then effective Optional Conversion Price (as defined below) at the sole discretion of the Holder of this Note, by delivering to the Company this Note (or an affidavit of lost Note, together with an applicable bond, all in form and substance reasonably satisfactory to the Company and its legal counsel) with a written notice (the “ Optional Conversion Notice ”), in the form of Exhibit A annexed hereto.

.112   Mandatory Conversion .  Notwithstanding anything to the contrary provided herein or elsewhere, on the Maturity Date, the outstanding Principal Amount of this Note and all accrued interest shall automatically convert into Conversion Shares at the then effective Mandatory Conversion Price (as defined below).  The Company will notify the Holder, in writing, of a Mandatory Conversion and the number of Conversion Shares to be issued to the Holder pursuant to such Mandatory Conversion (a “ Mandatory Conversion Notice ”) within five (5) Business Days after the Maturity Date.  In the event that the Holder disputes the number of Conversion Shares to be issued pursuant to the Mandatory Conversion Notice, within five (5) Business Days of Holder’s receipt of the Mandatory Conversion Notice, the Holder shall send to the Company a notice of such dispute which shall include Holder’s calculations and basis for such dispute (a “ Holder’s Notice of Objection ”) and such dispute shall be resolved in accordance with Section 5H below.  In the event of Mandatory Conversion, the Company shall deliver a certificate or certificates representing the Conversion Shares in accordance with Section 5E below.   Notwithstanding anything to the contrary provided herein or elsewhere, except for the provisions regarding delivery of Conversion Shares pursuant to Section 5E below, this Note shall be deemed null and void on the Maturity Date.  

Conversion Price .  The price per share at which this Note shall be convertible into Conversion Shares (the “ Conversion Price ”), is as follows:

.113   Optional Conversion Price .  During the Optional Conversion Period, the Principal Amount of this Note and all accrued interest shall be convertible into Conversion Shares at a Conversion Price equal to $0.50 per share (the “ Optional Conversion Price ”), subject to adjustment from time to time as provided in this Note.

.114   Mandatory Conversion Price .  On the Maturity Date the Principal Amount of this Note and all accrued interest shall be convertible into Conversion Shares at a Conversion Price, equal to eighty percent (80%) of the average Market Price (as defined below) for the twenty (20) Trading Days (as defined below) immediately preceding the Maturity Date (the “ Mandatory Conversion Price ”); provided, however, and the foregoing notwithstanding, in no event shall the Mandatory Conversion Price be less than $0.20 per share or more than $0.50 per share.

.115   Definitions .  For purposes hereof:

.1   “ Conversion Date ” shall mean the earlier to occur of (i) date that the Company receives a Conversion Notice and (ii) the Maturity Date.

.2   “ Market Price ” for any Trading Day shall mean (a) if the Common Stock is then quoted on the Over-the-Counter Bulletin Board (the “ Bulletin Board ”) the closing sale price of one share of Common Stock on the Bulletin Board or such other quotation system or association or, if no such closing sale price is available, the average of the high bid and the low asked price quoted thereon(b) if the Common Stock is then listed on the Nasdaq Market (“ Nasdaq ”) or another national stock exchange, the closing sale price of one share of Common Stock on such exchange; (c) if the Common Stock is then included in the “pink sheets,” the closing sale price of one share of Common Stock on the “pink sheets”, if no such closing sale price is available, the average of the high bid and the low ask price quoted on the “pink sheets”; or (d) if the Common Stock is not then listed on a national stock exchange or quoted on the Bulletin Board, the “pink sheets” or such other quotation system or association, the fair market value of one share of Common Stock as of the Conversion Date, as determined in good faith by the Board of Directors of the Company.

.3   “ Principal Market ” means the Bulletin Board and shall also include the NYSE Alternext (formerly known as the American Stock Exchange) or Nasdaq, whichever is at the time the principal trading exchange or market for the Common Stock, based upon share volume.

.4   “ Trading Day ” means any day during which the Principal Market shall be open for business.

.116   Conversion Shares Issuable Upon Conversion .  The number of Conversion Shares to be issued upon conversion of this Note shall be determined by dividing (i) the outstanding Principal Amount plus all accrued and unpaid interest thereon to be converted by (ii) the Conversion Price, in effect at the time of conversion.

.117   Conversion Mechanics .

.1   Surrender of Note Upon Optional Conversion .   In order to convert all or any portion of the Principal Amount of this Note (and accrued and unpaid interest thereon) into Conversion Shares pursuant to an Optional Conversion, the Holder shall be required to physically surrender this Note (or an affidavit of lost Note, together with an applicable bond, all in form and substance reasonably satisfactory to the Company and its legal counsel) along with a Conversion Notice to the Company (at its principal place of business) as a condition precedent to receive a certificate or certificates representing the Conversion Shares.

.2   Surrender of Note Upon Mandatory Conversion .  In the event of a Mandatory Conversion, the Holder shall be required to physically surrender this Note (or an affidavit of lost Note, together with an applicable bond, all in form and substance reasonably satisfactory to the Company and its legal counsel) no later than five (5) business days after the Maturity Date, to the Company (at its principal place of business) as a condition precedent to receive a certificate or certificates representing the Conversion Shares.

.3   Delivery of Conversion Share Certificates Upon Conversion .    Upon receipt by the Company of this Note (or an affidavit of lost Note, together with an applicable bond, all in form and substance reasonably satisfactory to the Company and its legal counsel) and provided this Note has been converted in accordance with the requirements of this Note, the Company shall promptly issue and deliver (and in any event within three (3) Business Days following the date the Company receives the documentation necessary to effect the conversion, including any documentation required under Section 5H below) or cause to be issued and delivered to or upon the order of the Holder a certificate or certificates representing the Conversion Shares.

.118   Limitation on Optional Conversion .  Notwithstanding anything to the contrary contained herein, the number of Conversion Shares that may be acquired by the Holder upon an Optional Conversion of this Note shall be limited to the extent necessary to insure that, following such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), does not exceed 4.9% (the “ Maximum Percentage ”) of the total number of issued and outstanding shares of Common Stock (including for such purpose the Conversion Shares issuable upon such exercise) (the “ Conversion Limit ”). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. This restriction may not be waived.  In the event that the number of Conversion Shares to be issued will cause the Holder’s ownership of Common Stock to exceed the Conversion Limit, the Principal Amount of this Note to be converted shall be reduced such that the number of Conversion Shares to be issued shall not cause the Holder to exceed the Conversion Limit and the Company shall issue the Holder a new Note, for the portion of the Principal Amount that was not converted to Conversion Shares.

.119   Sale or Transfer of Conversion Shares .  Conversion Shares may not be sold or transferred unless  (i) such Conversion Shares are sold pursuant to an effective registration statement under the Securities Act or (ii) the Company or its transfer agent shall have been furnished with an opinion of  counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration.   Each certificate for Conversion Shares that has not been sold pursuant to an effective registration statement or that has not been sold pursuant to an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

.120   Dispute Resolution .  In the case of any dispute with respect to the number of Conversion Shares to be issued upon conversion of this Note, the Company shall promptly issue such number of Conversion Shares that is not disputed and shall submit the disputed determinations or arithmetic calculations to the Holder via fax (or, it the Holder has not provided the Company with a fax number, by overnight courier) within five (5) Business Days of receipt of: (i) in the case of an Optional Conversion, the Holder’s Optional Conversion Notice and (ii) in the case of a Mandatory Conversion, the Holder’s Notice of Objection.  If the Holder and the Company are unable to agree as to the determination of the Conversion Price within five (5) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall in accordance with this Section, submit via facsimile the disputed determination to its independent auditor.  The Company shall cause its independent auditor to perform the determinations or calculations and notify the Company and the Holder of the results promptly, in writing and in sufficient detail to give the Holder and the Company a clear understanding of the issue.  The determination by the Company’s independent auditor shall be binding upon all parties absent manifest error.  The Company shall then on the next Business Day instruct its transfer agent to issue certificate(s) representing the appropriate number of Conversion Shares in accordance with the independent auditor’s determination and this Section.&nb