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EXHIBIT 4.1
THE SECURITIES REPRESENTED BY THIS DEBENTURE AND THE WARRANTS AND
STOCK REFERENCED HEREIN HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR UNDER THE OKLAHOMA SECURITIES ACT OR ANY
OTHER STATE SECURITIES LAW, AND SUCH SECURITIES MAY NOT BE OFFERED,
RESOLD, ASSIGNED OR TRANSFERRED BY A PURCHASER THEREOF WITHOUT
BEING REGISTERED UNDER THE SECURITIES ACT OF 1933, THE OKLAHOMA
SECURITIES ACT AND ANY OTHER APPLICABLE STATE SECURITIES LAW OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE IN THE OPINION
OF COUNSEL TO THE COMPANY. THIS IS A LIMITED OFFERING TO
BE MADE ONLY PURSUANT TO EXEMPTIONS PROVIDED BY THE SECURITIES ACT
OF 1933 AND APPLICABLE STATE SECURITIES LAWS. NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE AGENCY HAS
PASSED UPON THE VALUE OF THESE SECURITIES, APPROVED OR DISAPPROVED
THIS OFFERING OR PASSED UPON THE ADEQUACY OR ACCURACY OF ANY
INFORMATION PROVIDED TO THE UNDERSIGNED.
SUBORDINATED DEBENTURE WITH WARRANTS
| $______________ |
___________,
2007 |
FOR
VALUE RECEIVED, HQHealthQuest
Medical & Wellness Centers ,
Ltd., an Oklahoma corporation (the "Company"), promises to pay
to the order of ___________________________________, whose
address is ____________________
___________________________________ (the "Holder")
the principal sum of _____________________________ and no/100
Dollars ($_________) (the "Principal Amount"), together with
interest thereon as set forth below, at the Holder’s
office or such other place as the Holder may designate in
writing to the Company. As additional consideration for the
Holder's loan to the Company, the Company shall issue to the
Holder warrants to purchase shares of the common stock of the
Company for a discounted price, on the terms and in the form
attached hereto as EXHIBIT “A” (the
"Warrant”).
1. Interest
Rate. Except as provided in this Section,
from the date hereof until repayment of this
Debenture in full, interest shall accrue on the unpaid
outstanding balance of the Principal Amount of this Debenture
at the fixed rate of ten percent (10%) per annum, simple (the
"Interest Rate") and shall be paid in arrears on a quarterly
basis. Interest shall be calculated on the basis of the
actual number of days elapsed over a 360 day
year. If the Company shall fail to make a payment
of principal or interest when due, and such failure shall not
be cured within ten (10) days of the Company’s receipt
of written notice from the Holder of the failure, interest
shall accrue on the unpaid outstanding balance of the
Principal Amount of this Debenture from the date which is ten
(10) days after the Company’s receipt of the notice to
cure until the late payment is made at the fixed
rate of thirteen percent (13%) per annum,
simple.
2. Payment
Provisions.
(a) Interest
Payments. Commencing on December 31, 2006 and
continuing on or before the fifth day after the expiration of
each calendar quarter thereafter until this Debenture is paid
in full, the Company shall pay to the Holder installments of
interest only (in arrears).
(b) Principal
Payments. On March 31, 2008, (the "Maturity Date")
the outstanding balance of the Principal Amount shall be due
and payable in full by the Company to the
Holder.
(c) Prepayments;
Application of Payments. The Company may at any
time and from time to time prepay all or any part of the
outstanding balance of the Principal Amount, together with
all or any part of the interest, evidenced by this Debenture,
without penalty upon at least three business days' prior
written or electronic notice (or telephone notice promptly
confirmed by written or electronic notice) to the
Holder. If the Company is current on all of
its payment obligations under this Debenture, the Holder
shall apply payments received from the Company on this
Debenture against the outstanding balance of the Principal
Amount.
3. Subordination. The rights of the
Holder under this Debenture to collect the amounts
due under this Debenture are subordinated to the rights of
the Banks from which the Company has borrowed or may borrow
money under the terms of the notes, security agreements and
other instruments governing those debts.
4. Representations and Warranties of Company The
Company hereby represents and warrants to the Holder that,
the statements contained in the following paragraphs of this
Section 4 are all true and correct as of the date this
Debenture is signed by the Company:
(a) Organization
and Standing. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Oklahoma and has all requisite corporate power and
authority to carry on its business as now
conducted.
(b) Corporate
Authority. The Company has all requisite legal and corporate
authority to enter into, execute and deliver this Debenture
and the Warrant. This Debenture, and upon issuance, the
Warrant will be valid and binding obligations of the Company,
enforceable in accordance with their terms, except as the
same may be limited by bankruptcy, insolvency, moratorium,
and other laws of general application affecting the
enforcement of creditors' rights.
(c) Authorization.
(1) Corporate Action. All
corporate and legal action on the part of the Company, its
officers, directors and shareholders necessary for the
execution and delivery of this Debenture and the Warrant, the
sale and issuance of the Warrant and the shares to be issued
upon exercise of the Warrant and the performance of Company's
obligations hereunder and under the Warrant have been
taken.
(2) Valid Issuance. This
Debenture and the Warrant, and shares of the Company’s
Common Stock issued upon exercise of the Warrant
(collectively, the "SECURITIES"), when issued in compliance
with the provisions of this Debenture and the Warrant will be
validly issued and will be free of any liens or encumbrances;
provided,
however, that the Securities are subject to restrictions on
transfer under state or federal securities laws, and as may
be required by future changes in such
laws.
5. Representations and
Warranties By Holder. The Holder represents and
warrants to the Company as of the date of this Debenture as
follows:
(a) Investment
Intent Authority. This Debenture is executed and
delivered to the Holder in reliance upon the Holder's
representation to Company that: (i) the Holder is
acquiring this Debenture and the Warrant for investment for
the Holder's own account, not as nominee or agent, for
investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof
within the meaning of the Securities Act of 1933, as amended,
(the "SECURITIES ACT"); and (ii) the Holder has the full
right, power, authority and capacity to make the loan
evidenced by this Debenture.
(b) Securities Not
Registered. The Holder understands and
acknowledges that the offering of the Securities represented
by this Debenture, the Warrant or the Stock is not and will
not be registered under any federal or State securities laws
or regulations.
6. Assignment. This Debenture and the
obligations hereunder may not be assigned by the Company
without the prior written consent of the
Holder. The Holder may freely assign all or any
portion of its right, title and interest in and to the
Debenture.
7. Default and
Remedies. The occurrence of an event of default
under the Debenture shall constitute a default hereunder and
during the continuation thereof shall entitle the Holder to
exercise the rights and remedies of a creditor under law or
in equity.
8. Waivers. The Company hereby waives
presentment, demand, protest or further notice of any kind to
the extent permitted by applicable law.
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