FORM OF FALL 2007 NOTES
Published on December 20, 2007
EXHIBIT
9.2
EXHIBIT
A
FORM
OF CONVERTIBLE NOTE
THE
SECURITIES EVIDENCED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR QUALIFIED FOR SALE UNDER ANY STATE SECURITIES LAWS
(COLLECTIVELY, “SECURITIES LAWS”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED UNLESS REGISTERED OR QUALIFIED FOR SALE UNDER ALL APPLICABLE
SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER,
IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, ANY SUCH OFFER, SALE OR OTHER
TRANSFER IS EXEMPT FROM THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF SUCH
SECURITIES LAWS.
| $_____xxxxxx_______ |
_________,___,
2007
(“Issuance
Date”)
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FOR
VALUE
RECEIVED, SAVE THE WORLD AIR, INC., a corporation organized
under the laws of the State of Nevada (the “Company”), promises to pay to the
order of “Investor”, as that term is defined on the Acknowledgement and
Acceptance page of this Note (hereafter, together with any subsequent holder
hereof, called “Holder”), at “Investor’s Address”, as that term is set forth on
such page or at such other place as Holder may direct, the “Subscription
Amount”, noted above (the “Loan”), payable in full on the first anniversary of
the date hereof (the “Maturity Date”).
If
this
Note is not paid in full on or prior to the Maturity Date the remaining balance
shall be increased by 10% and the Company shall pay interest thereon at the
rate
of 10% per annum until all sums due hereunder are paid in full.
Payments
of both principal and interest will be made in immediately available funds
in
lawful money of the United States of America to the Holder at the Investor’s
Address.
The
Note
is subject to the following additional provisions:
1. The
Company shall be entitled to withhold from all payments of principal and/or
interest of this Note any amounts required to be withheld under the applicable
provisions of the U.S. Internal Revenue Code of 1986, as amended, or other
applicable laws at the time of such payments.
2. This
Note
has been issued subject to representations, warranties and covenants of the
original Holder hereof and may be transferred or exchanged only in compliance
with the Securities Act of 1933, as amended, and applicable state and other
securities laws. Prior to the due presentment for such transfer of this Note,
the Company and any agent of the Company may treat the person in whose name
this
Note is duly registered on the Company's Note register as the owner hereof
for
the purpose of receiving payment as herein provided and all other purposes,
whether or not this Note is overdue, and neither the Company nor any such agent
shall be affected by notice to the contrary. The transferee shall be bound,
as
the original Holder by the same representations and terms described herein
and
under the Agreement.
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3. The
Holder may, at such Holder’s option, at any time while any sums are outstanding
and unpaid hereunder, convert the then-outstanding principal amount of this
Note
or any portion thereof, and any interest and any penalties accrued and unpaid
thereon (the “Conversion Amount”), into a number shares of fully paid and
nonassessable Common Stock of the Company (the “Conversion Shares”) pursuant to
the following formula: the Conversion Amount divided by
$__XXX__ (as the same may be adjusted from time to time
pursuant to the provisions of this Note, the “Conversion Price”). The
Holder may exercise the right to convert all or any portion of the Conversion
Amount by delivering to the Company (i) an executed and completed notice of
conversion in the form attached to this Note (the "Notice of Conversion") to
the
Company and (ii) this Note. The business day on which a Notice of
Conversion and this Note are delivered to the Company in accordance with the
provisions hereof shall be deemed a "Conversion Date". The Company will transmit
the certificates representing Conversion Shares issuable upon such conversion
of
this Note (together with the certificates representing the amount of this Note
not so converted) to the Holder via express courier within ten Business Days
after the Conversion Date. No fractional shares shall be issued upon
conversion of this Note. The amount of any of the Conversion Amount
which is less than a whole share of Common Stock shall be paid to the Holder
in
cash. Any delay due to such circumstance shall not be an event of
default under this Note. Company shall promptly take action to affect
such amendments to its charter.
4. The
principal amount of this Note, and any accrued interest thereon, shall be
reduced as per that principal amount indicated on the Notice of Conversion
upon
the proper receipt by the Holder of such Conversion Shares due upon such Notice
of Conversion.
5. The
number of Conversion Shares shall be adjusted as follows:
a. If
the
Company shall at any time after the Issuance Date subdivide its outstanding
shares of Common Stock into a greater number of shares of Common Stock, the
number of Conversion Shares in effect immediately prior to such subdivision
shall be proportionately increased, and conversely, in case the outstanding
shares of Common Stock shall be combined into a smaller number of shares of
Common Stock, the Conversion Price in effect immediately prior to such
combination shall be proportionately reduced.
b. If
the Company shall at
any time or from time to time after the Issuance Date makes, or fixes a record
date for the determination of holders of Common Stock entitled to receive,
a
dividend or other distribution payable in additional shares of Common Stock,
then and in each such event the number of Conversion Shares issuable upon
conversion of this Note shall be proportionately increased; provided, however,
that if such record date is fixed and such dividend is not fully paid, or if
such distribution is not fully made on the date fixed therefor, the number
of
Conversion Shares shall be recomputed to reflect that such dividend was not
fully paid or that such distribution was not fully made.
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c. If
Company at any time or
from time to time after the Issuance Date makes, or fixes a record date for
the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in securities of Company other than shares of Common
Stock, then and in each such event provision shall be made so that Holder shall
receive upon exercise of the conversion right of this Note, in addition to
the
number of shares of Common Stock receivable thereupon, the amount of securities
of Company which Holder would have received had the Conversion Amount of this
Note been exercised on the date of such event and had it thereafter, during
the
period from the date of such event to and including the date of conversion
or
purchase, retained such securities receivable during such period.
d. If
the Common Stock
issuable upon the conversion of this Note or option to purchase is changed
into
the same or a different number of shares of any class or classes of stock,
whether by recapitalization, reclassification or otherwise (other than a
transaction described elsewhere in Section 5 of this Note), then, and in any
such event, each Holder shall have the right thereafter, upon conversion of
this
Note or purchase pursuant to option to receive the kind and amount of stock
and
other securities and property receivable upon such reorganization or other
change, in an amount equal to the amount that Holder would have been entitled
to
had it immediately prior to such reorganization, reclassification or change
converted this Note, but only to the extent this Note is actually converted,
all
subject to further adjustment as provided herein.
6. No
provision of this Note shall alter or impair the obligation of the Company,
which is absolute and unconditional, upon an Event of Default (as defined
below), to pay the principal of, and interest on this Note at the place, time,
and rate, and in the coin or currency herein prescribed.
7. Events
of
Default. Each of the following occurrences is hereby defined as an
“Event of Default”:
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Nonpayment. The
Company shall fail to make any payment of principal, interest, or
other
amounts payable hereunder when and as due;
or
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Dissolutions,
etc. The Company or any subsidiary shall fail to comply
with any provision concerning its existence or any prohibition against
dissolution, liquidation, merger, consolidation or sale of assets;
or
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Noncompliance
with this Agreement. The Company shall fail to comply in
any material respect with any provision hereof, which failure does
not
otherwise constitute an Event of Default;
or
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Insolvency. The
institution of bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy
law or
any law for the relief of debtors shall be instituted by or against
Company, which proceedings shall not have been vacated by appropriate
court order within sixty (60) days of such
institution.
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If
one or
more "Events of Default" shall occur, then, or at any time thereafter, and
in
each and every such case, unless such Event of Default shall have been waived
in
writing by the Holder (which waiver shall not be deemed to be a waiver of any
subsequent default) or cured as provided herein, at the option of the Holder,
and in the Holder's sole discretion, the Holder may elect to consider this
Note
(and all interest through such date) immediately due and payable. In order
to so
elect, the Holder must deliver written notice of the election and the amount
due
to the Company via certified mail, return receipt requested, at the Company’s
address as set forth herein (or any other address provided to the Holder),
and
thereafter the Company shall have ten (10) business days upon receipt to cure
the Event of Default or pay this Note, or convert the amount due on the Note
pursuant to the conversion formula set forth above.
8. In
case
any provision of this Note is held by a court of competent jurisdiction to
be
excessive in scope or otherwise invalid or unenforceable, such provision shall
be adjusted rather than voided, if possible, so that it is enforceable to the
maximum extent possible, and the validity and enforceability of the remaining
provisions of this Note will not in any way be affected or impaired
thereby.
9. This
Note
does not entitle the Holder hereof to any voting rights or other rights as
a
shareholder of the Company prior to the conversion into Common Stock thereof,
except as provided by applicable law. If, however, at the time of the surrender
of this Note and conversion the Holder hereof shall be entitled to convert
this
Note, the Conversion Shares so issued shall be and be deemed to be issued to
such holder as the record owner of such shares as of the close of business
on
the Conversion Date.
10. The
Holder shall pay all
issue and transfer taxes and other incidental expenses in respect of the
issuance of certificates for Conversion Shares upon the conversion of this
Note,
and such certificates shall be issued in the name of the Holder of this
Note.
11. This
Note may be prepaid
in whole or in part at any time or from time to time without premium or penalty
upon 10 days’ prior written notice from the Company to the Holder.
12. Upon
receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Note, and in case of loss, theft or
destruction of this Note, upon delivery of an indemnity agreement or security
reasonably satisfactory in form and amount to the Company or, in the case of
any
such mutilation, upon surrender and cancellation of such Note, and upon
reimbursement to the Company of all reasonable expenses incidental thereto,
the
Company will make and deliver to the Holder, in lieu thereof, a new Note in
substantially identical form and dated as of such cancellation.
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13. If
the last or appointed
day for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday or a Sunday or shall be a legal holiday
in
the United States or the State of California, then such action may be taken
or
such right may be exercised on the next succeeding business day.
14. (a) This
Note shall be governed by
and construed in accordance with the laws of the State of California applicable
to contracts made and to be performed wholly within such state.
(b) Except as
otherwise provided herein, any notice or demand which, by the provisions hereof,
is required or which may be given to or served upon the parties hereto shall
be
in writing and, if by telegram, telecopy or telex, shall be deemed to have
been
validly served, given or delivered when sent, if by personal delivery, shall
be
deemed to have been validly served, given or delivered upon actual delivery
and,
if mailed, shall be deemed to have been validly served, given or delivered
three
(3) business days after deposit in the United States mails, as registered or
certified mail, with proper postage prepaid and addressed to the party or
parties to be notified.
(c) The
Holder acknowledges
that the Conversion Shares acquired upon the exercise of this Note may have
restrictions upon its resale imposed by state and federal securities
laws.
(d) With
regard to any power,
remedy or right provided herein or otherwise available to any party hereunder
(i) no waiver or extension of time shall be effective unless expressly contained
in a writing signed by the waiving party; and (ii) no alteration, modification
or impairment shall be implied by reason of any previous waiver, extension
of
time, delay or omission in exercise, or other indulgence.
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(e) This
Note may not be
amended, altered or modified except by a writing signed by the Company and
the
Holder.
IN
WITNESS WHEREOF, the Company has caused this Convertible Note to be duly
executed by an officer thereunto duly authorized.
SAVE
THE WORLD AIR, INC.
By_____SPECIMEN_____________
Name: Charles
R. Blum
Title: Chief
Executive Officer
ACKNOWLEDGED
AND ACCEPTED:
_______________________________
Investor
Name (Signature)
_______________________________
Print
Name
_______________________________
Investor
Address
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NOTICE
OF EXERCISE OF CONVERSION
RIGHT
TO: SAVE
THE
WORLD AIR, INC.
(1) The
undersigned hereby elects to convert $______________ of the attached Note into
______________ shares of Common Stock (the "Shares") of Save the World Air,
Inc.
pursuant to the terms of the attached Note.
(2) Please
issue
a certificate or certificates representing the Shares in the name of the
undersigned or in such other name as is specified below:
______________________________
(Print
Name)
Address:
______________________________
______________________________
______________________________
(3) The
undersigned confirms that the Shares are being acquired for the account of
the
undersigned for investment only and not with a view to, or for resale in
connection with, the distribution thereof and that the undersigned has no
present intention of distributing or selling the Shares.
(4) The
undersigned accepts such shares subject to the restrictions on transfer set
forth in the attached Note.
| ____________________ | ____________________ | ||
| (Date) |
(Signature)
____________________
(Signature)
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