Exhibit 10.2
 
 
Dated:  March 11, 2014
 
NEITHER THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE 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.
 
No. SVFC-01 $2,100,000
 
INTELLICELL BIOSCIENCES, INC.
 
Secured Convertible Debenture
 

 
Due March 11, 2015
 
This Convertible Debenture (this “Debenture”) is issued by INTELLICELL
BIOSCIENCES, INC., a Nevada corporation (the “Obligor”), to YA GLOBAL MASTER
SPV, LTD. (the “Holder”), pursuant to that certain Securities Purchase Agreement
(the “Securities Purchase Agreement”) of even date herewith.
 
FOR VALUE RECEIVED, on the date hereof, the Obligor hereby promises to pay to
the Holder or its successors and assigns the principal sum of $2,100,000
together with accrued but unpaid interest on or before March 11, 2015 (the
“Maturity Date”) in accordance with the following terms:
 
Interest.  Interest shall accrue on the outstanding principal balance hereof at
an annual rate equal to 7.5%.  Interest shall be calculated on the basis of a
360-day year and the actual number of days elapsed, to the extent permitted by
applicable law.  Interest hereunder will be paid to the Holder or its successors
and assigns in whose name this Debenture is registered on the records of the
Obligor regarding registration and transfers of Debentures.
 
 
Security.  The obligations of the Obligor under this Debenture are (i)
guaranteed by each direct and indirect subsidiary of the Obligor pursuant to the
Guaranty Agreement and (ii) secured by a security interest and lien in all of
the assets of the Obligor and each direct and indirect subsidiary of the Obligor
pursuant to, among other documents instruments and agreements, the Security
Agreement, Intellectual Property Security Agreement and Pledge Agreement.
 

 
Rights of First Refusal.  For a period beginning on the date hereof and ending
on the date that is eighteen (18) months after the date hereof, if the Obligor
intends to raise additional capital by the issuance or sale of capital stock of
the Obligor, including without limitation shares of any class of its Common
Stock, any class of preferred stock, options, warrants or any other securities
convertible or exercisable into shares of Common Stock (whether the offering is
conducted by the Obligor, underwriter, placement agent or any third party) the
Obligor shall be obligated to offer to the Holder such issuance or sale of
capital stock, by providing in writing the principal amount of capital it
intends to raise and outline of the material terms of such capital raise, prior
to the offering such issuance or sale of capital stock  to any third parties
including, but not limited to, current or former officers or directors, current
or former shareholders and/or investors of the obligor, underwriters, brokers,
agents or other third parties.  The Holder shall have three (3) business days
from receipt of such notice of the sale or issuance of capital stock to accept
or reject all or a portion of such capital raising offer.
 
 
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This Debenture is subject to the following additional provisions:
 
Section 1.                      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.
 
Section 2.                      Events of Default.
 
(a)           An “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):
 
(i)           Any default in the payment of the principal of, interest on or
other charges in respect of this Debenture and the other Transaction Documents,
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);
 
(ii)           The Obligor shall fail to observe or perform any other covenant,
agreement or warranty contained in, or otherwise commit any breach or default of
any provision of this Debenture (except as may be covered by Section 2(a)(i)
hereof) or any Transaction Document (as defined in Section 5) which is not cured
with in the time prescribed or if no such time is prescribed than within fifteen
(15) days;
 
(iii)           The Obligor or any subsidiary of the Obligor shall commence, or
there shall be commenced against the Obligor or any subsidiary of the Obligor
under any applicable bankruptcy or insolvency laws as now or hereafter in effect
or any successor thereto, or the Obligor or any subsidiary of the Obligor
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
Obligor or any subsidiary of the Obligor or there is commenced against the
Obligor or any subsidiary of the Obligor any such bankruptcy, insolvency or
other proceeding which remains undismissed for a period of sixty-one (61) days;
or the Obligor or any subsidiary of the Obligor is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Obligor or any subsidiary of the Obligor suffers
any appointment of any custodian, private or court appointed receiver or the
like for it or any substantial part of its property which continues undischarged
or unstayed for a period of sixty-one (61) days; or the Obligor or any
subsidiary of the Obligor makes a general assignment for the benefit of
creditors; or the Obligor or any subsidiary of the Obligor 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 Obligor or any subsidiary of the Obligor
shall call a meeting of its creditors with a view to arranging a composition,
adjustment or restructuring of its debts; or the Obligor or any subsidiary of
the Obligor 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 Obligor or any subsidiary of the Obligor for the
purpose of effecting any of the foregoing;
 
(iv)           The Obligor or any subsidiary of the Obligor shall default in any
of its obligations under any other debenture or any mortgage, credit agreement
or other facility, indenture agreement, factoring agreement or other instrument
under which there may be issued, or by which there may be secured or evidenced
any indebtedness for borrowed money or money due under any long term leasing or
factoring arrangement of the Obligor or any subsidiary of the Obligor in an
aggregate principal or face amount exceeding $250,000, whether such indebtedness
now exists or shall hereafter be created, and such indebtedness becomes due and
payable or such default shall result in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise become
due and payable;
 
 
 
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(v)           The Common Stock shall cease to be listed or quoted for trading or
listed on the OTC  Markets, (the “OTC”) and shall not again be quoted or listed
for trading thereon within ten (10) Trading Days of such delisting;
 
(vi)           The Obligor or any subsidiary of the Obligor shall be a party to
any Change of Control Transaction (as defined in Section 5);
 
(vii)    The Obligor shall fail for any reason to deliver Common Stock
certificates to a Holder prior to the end of the third (3rd) Trading Day after a
Conversion Date or the Obligor shall provide notice to the Holder, including by
way of public announcement, at any time, of its intention not to comply with
requests for conversions of this Debenture in accordance with the terms hereof;
 
(x) The Obligor shall fail for any reason to deliver the payment in cash
pursuant to a Buy-In (as defined herein) within three (3) days after notice is
claimed delivered hereunder;
 
 (b)           During the time that any portion of this Debenture is
outstanding, if any Event of Default, other than an Event of Default under
Section 2(a)(iii), has occurred, the full principal amount of this Debenture,
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, provided however, the Holder may request (but shall have no
obligation to request) payment of such amounts in Common Stock of the
Obligor.  During the time that any portion of this Debenture is outstanding, if
any Event of Default under Section 2(a)(iii), has occurred, the full principal
amount of this Debenture, together with interest and other amounts owing in
respect thereof, to the date of acceleration shall automatically, without any
further action of any party, become immediately due and payable in cash,
provided however, the Holder may request (but shall have no obligation to
request) payment of such amounts in Common Stock of the Obligor.  In addition to
any other remedies, the Holder shall have the right (but not the obligation) to
convert this Debenture at any time after (x) an Event of Default or (y) the
Maturity Date at the Conversion Price then in-effect.  The Holder need not
provide and the Obligor 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 Holder at any time prior to payment hereunder. No such
rescission or annulment shall affect any subsequent Event of Default or impair
any right consequent thereon.  Upon an Event of Default, notwithstanding any
other provision of this Debenture or any Transaction Document, the Holder shall
have no obligation to comply with or adhere to any limitations, if any, on the
conversion of this Debenture or the sale of the Underlying Shares.
 
Section 3.                      Conversion.
 
(a)           Conversion at Option of Holder.
 
(i)           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,
after the Original Issue Date (as defined in Section 5) (subject to the
limitations on conversion set forth in Section 3(b) hereof). The number of
shares of Common Stock issuable upon a conversion hereunder equals the quotient
obtained by dividing (x) the outstanding amount of this Debenture to be
converted by (y) the Conversion Price (as defined in Section 3(c)(i)).  The
Obligor shall deliver Common Stock certificates to the Holder prior to the third
(3rd) Trading Day after a Conversion Date.
 
(ii)           Notwithstanding anything to the contrary contained herein, if on
any Conversion Date:  (1) the number of shares of Common Stock at the time
authorized, unissued and unreserved for all purposes, or held as treasury stock,
is insufficient to pay principal and interest hereunder in shares of Common
Stock; (2) the Common Stock is not listed or quoted for trading on the OTC; (3)
the Obligor has failed to timely satisfy its conversion; or (4) the issuance of
such shares of Common Stock would result in a violation of Section 3(b), then,
at the option of the Holder, the Obligor, in lieu of delivering shares of Common
Stock pursuant to Section 3(a)(i), shall deliver, within three (3) Trading Days
of each applicable Conversion Date, an amount in cash equal to the product of
the outstanding principal amount to be converted plus any interest due therein
divided by the Conversion Price, chosen by the Holder, and multiplied by the
highest closing price of the stock from date of the conversion notice till the
date that such cash payment is made.
 
Further, if the Obligor shall not have delivered any cash due in respect of
conversion of this Debenture or as payment of interest thereon by the third
(3rd) Trading Day after the Conversion Date, the Holder may, by notice to the
Obligor, require the Obligor to issue shares of Common Stock pursuant to Section
3(c), except that for such purpose the Conversion Price applicable thereto shall
be the lesser of the Conversion Price on the Conversion Date and the Conversion
Price on the date of such Holder demand. Any such shares will be subject to the
provisions of this Section.
 
(iii)           The Holder shall effect conversions by delivering to the Obligor
a completed notice in the form attached hereto as Exhibit A (a “Conversion
Notice”).  The date on which a Conversion Notice is delivered is the “Conversion
Date.” Unless the Holder is converting the entire principal amount outstanding
under this Debenture, the Holder is not required to physically surrender this
Debenture to the Obligor in order to effect conversions.  Conversions hereunder
shall have the effect of lowering the outstanding principal amount of this
Debenture plus all accrued and unpaid interest thereon in an amount equal to the
applicable conversion. The Holder and the Obligor shall maintain records showing
the principal amount converted and the date of such conversions. In the event of
any dispute or discrepancy, the records of the Holder shall be controlling and
determinative in the absence of manifest error.
 
 
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(b)           Certain Conversion Restrictions.
 
(i)           A Holder may not convert this Debenture or receive shares of
Common Stock as payment of interest hereunder to the extent such conversion or
receipt of such interest payment would result in the Holder, together with any
affiliate thereof, beneficially owning (as determined in accordance with Section
13(d) of the Exchange Act and the rules promulgated thereunder) in excess of
9.99% of the then issued and outstanding shares of Common Stock, including
shares issuable upon conversion of, and payment of interest on, this Debenture
held by such Holder after application of this Section.  Since the Holder will
not be obligated to report to the Obligor the number of shares of Common Stock
it may hold at the time of a conversion hereunder, unless the conversion at
issue would result in the issuance of shares of Common Stock in excess of 9.99%
of the then outstanding shares of Common Stock without regard to any other
shares which may be beneficially owned by the Holder or an affiliate thereof,
the Holder shall have the authority and obligation to determine whether the
restriction contained in this Section will limit any particular conversion
hereunder and to the extent that the Holder determines that the limitation
contained in this Section applies, the determination of which portion of the
principal amount of this Debenture is convertible shall be the responsibility
and obligation of the Holder.  If the Holder has delivered a Conversion Notice
for a principal amount of this Debenture that, without regard to any other
shares that the Holder or its affiliates may beneficially own, would result in
the issuance in excess of the permitted amount hereunder, the Obligor shall
notify the Holder of this fact and shall honor the conversion for the maximum
principal amount permitted to be converted on such Conversion Date in accordance
with the periods described in Section 3(a)(i) and, at the option of the Holder,
either retain any principal amount tendered for conversion in excess of the
permitted amount hereunder for future conversions or return such excess
principal amount to the Holder. The provisions of this Section may be waived by
a Holder (but only as to itself and not to any other Holder) upon not less than
sixty-five (65) days prior notice to the Obligor. Other Holders shall be
unaffected by any such waiver.
 
(c)           Conversion Price and Adjustments to Conversion Price.
 
(i)           The Holder shall be entitled to convert, at its sole option, at
any time a portion or all amounts of principal and interest due and outstanding
under this Debenture into shares of the Obligor’s Common Stock at a price equal
to forty-eight and one half percent (48.5%) of the average three (3) Lowest
Trades (not on the same day) of the Common Stock for the twenty (20) Trading
Days immediately preceding the Conversion Date as quoted by Bloomberg, LP (the
“Market Conversion Price”).  The Market Conversion Price shall also be referred
to as the “Conversion Price.”  The Conversion Price may be adjusted pursuant to
the other terms of this Debenture.
 
(ii)           In case of any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is converted into
other securities, cash or property, the Holder shall have the right thereafter
to, at its option,  (A) convert the then outstanding principal amount, together
with all accrued but unpaid interest and any other amounts then owing hereunder
in respect of this Debenture into the shares of stock and other securities, cash
and property receivable upon or deemed to be held by holders of the Common Stock
following such reclassification or share exchange, and the Holder of this
Debenture shall be entitled upon such event to receive such amount of
securities, cash or property as the shares of the Common Stock of the Obligor
into which the then outstanding principal amount, together with all accrued but
unpaid interest and any other amounts then owing hereunder in respect of this
Debenture could have been converted immediately prior to such reclassification
or share exchange would have been entitled, or (B) require the Obligor to prepay
the outstanding principal amount of this Debenture, plus all interest and other
amounts due and payable thereon. The entire prepayment price shall be paid in
cash.  This provision shall similarly apply to successive reclassifications or
share exchanges.
 
(iii)           The Obligor shall at all times reserve and keep available out of
its authorized Common Stock the full number of shares of Common Stock issuable
upon conversion of all outstanding amounts under this Debenture; and within
three (3) Business Days following the receipt by the Obligor of a Holder's
notice that such minimum number of Underlying Shares is not so reserved, the
Obligor shall promptly reserve a sufficient number of shares of Common Stock to
comply with such requirement.
 
(iv)           All calculations under this Section 3 shall be rounded up to the
nearest whole share.
 
(v)           Whenever the Conversion Price is adjusted pursuant to Section 3
hereof, the Obligor shall promptly mail to the Holder a notice setting forth the
Conversion Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment.
 
(vi)           If (A) the Obligor shall declare a dividend (or any other
distribution) on the Common Stock; (B) the Obligor shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock; (C) the
Obligor shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights; (D) the approval of any stockholders of the Obligor
shall be required in connection with any reclassification of the Common Stock,
any consolidation or merger to which the Obligor is a party, any sale or
transfer of all or substantially all of the assets of the Obligor, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; or (E) the Obligor shall authorize the voluntary
or involuntary dissolution, liquidation or winding up of the affairs of the
Obligor; then, in each case, the Obligor shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Debenture, and shall
cause to be mailed to the Holder at its last address as it shall appear upon the
stock books of the Obligor, at least twenty (20) calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange, provided, that the
failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice.  The Holder is entitled to convert this Debenture during the
20-day calendar period commencing the date of such notice to the effective date
of the event triggering such notice.
 
(vii)           In case of any (1) merger or consolidation of the Obligor or any
subsidiary of the Obligor with or into another Person, or (2) sale by the
Obligor or any subsidiary of the Obligor of more than one-half of the assets of
the Obligor in one or a series of related transactions, a Holder shall have the
right to (A) exercise any rights under Section 2(b), (B) convert the aggregate
amount of this Debenture then outstanding into the shares of stock and other
securities, cash and property receivable upon or deemed to be held by holders of
Common Stock following such merger, consolidation or sale, and such Holder shall
be entitled upon such event or series of related events to receive such amount
of securities, cash and property as the shares of Common Stock into which such
aggregate principal amount of this Debenture could have been converted
immediately prior to such merger, consolidation or sales would have been
entitled, or (C) in the case of a merger or consolidation, require the surviving
entity to issue to the Holder a convertible Debenture with a principal amount
equal to the aggregate principal amount of this Debenture then held by such
Holder, plus all accrued and unpaid interest and other amounts owing thereon,
which such newly issued convertible Debenture shall have terms identical
(including with respect to conversion) to the terms of this Debenture, and shall
be entitled to all of the rights and privileges of the Holder of this Debenture
set forth herein and the agreements pursuant to which this Debentures were
issued. In the case of clause (C), the conversion price applicable for the newly
issued shares of convertible preferred stock or convertible Debentures shall be
based upon the amount of securities, cash and property that each share of Common
Stock would receive in such transaction and the Conversion Price in effect
immediately prior to the effectiveness or closing date for such transaction. The
terms of any such merger, sale or consolidation shall include such terms so as
to continue to give the Holder the right to receive the securities, cash and
property set forth in this Section upon any conversion or redemption following
such event. This provision shall similarly apply to successive such events.
 
 
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(d)           Other Provisions.
 
(i)           The Obligor 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 this Debenture and payment of
interest on this Debenture, each as herein provided, free from preemptive rights
or any other actual contingent purchase rights of persons other than the Holder,
not less than such number of shares of the Common Stock as shall (subject to any
additional requirements of the Obligor as to reservation of such shares set
forth in this Debenture) be issuable (taking into account the adjustments and
restrictions of Sections 2(b) and 3(c)) upon the conversion of the outstanding
principal amount of this Debenture and payment of interest hereunder. The
Obligor covenants that all shares of Common Stock that shall be so issuable
shall, upon issue, be duly and validly authorized, issued and fully paid,
nonassessable.
 
(ii)           Upon a conversion hereunder the Obligor shall not be required to
issue stock certificates representing fractions of shares of the Common Stock,
but may if otherwise permitted, make a cash payment in respect of any final
fraction of a share based on the Closing Bid Price at such time. If the Obligor
elects not, or is unable, to make such a cash payment, the Holder shall be
entitled to receive, in lieu of the final fraction of a share, one whole share
of Common Stock.
 
(iii)           The issuance of certificates for shares of the Common Stock on
conversion of this Debenture shall be made without charge to the Holder 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 Obligor 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 Debenture so converted and the Obligor
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 Obligor
the amount of such tax or shall have established to the satisfaction of the
Obligor that such tax has been paid.
 
(iv)           Nothing herein shall limit a Holder's right to pursue actual
damages or declare an Event of Default pursuant to Section 2 herein for the
Obligor 's failure to deliver certificates representing shares of Common Stock
upon conversion within the period specified herein and such Holder shall have
the right to pursue all remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief,
in each case without the need to post a bond or provide other security. The
exercise of any such rights shall not prohibit the Holder from seeking to
enforce damages pursuant to any other Section hereof or under applicable law.
 
(v)           In addition to any other rights available to the Holder, if the
Obligor fails to deliver to the Holder such certificate or certificates pursuant
to Section 3(a)(i) by the third (3rd) Trading Day after the Conversion Date, and
if after such third (3rd) Trading Day the Holder purchases (in an open market
transaction or otherwise) Common Stock to deliver in satisfaction of a sale by
such Holder of the Underlying Shares which the Holder anticipated receiving upon
such conversion (a “Buy-In”), then the Obligor shall (A) pay in cash to the
Holder (in addition to any remedies available to or elected by the Holder) the
amount by which (x) the Holder's total purchase price (including brokerage
commissions, if any) for the Common Stock so purchased exceeds (y) the product
of (1) the aggregate number of shares of Common Stock that such Holder
anticipated receiving from the conversion at issue multiplied by (2) the market
price of the Common Stock at the time of the sale giving rise to such purchase
obligation and (B) at the option of the Holder, either reissue a Debenture in
the principal amount equal to the principal amount of the attempted conversion
or deliver to the Holder the number of shares of Common Stock that would have
been issued had the Obligor timely complied with its delivery requirements under
Section 3(a)(i). For example, if the Holder purchases Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an attempted
conversion of Debentures with respect to which the market price of the
Underlying Shares on the date of conversion was a total of $10,000 under clause
(A) of the immediately preceding sentence, the Obligor shall be required to pay
the Holder $1,000.  The Holder shall provide the Obligor written notice
indicating the amounts payable to the Holder in respect of the Buy-In.
 
 
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Section 4.                      Notices.                      Any notices,
consents, waivers or other communications required or permitted to be given
under the terms hereof must be in writing and will be deemed to have been
delivered:  (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or (iii) one
(1) trading day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same.  The
addresses and facsimile numbers for such communications shall be:

If to the Obligor, to:
Intellicell Biosciences, Inc.
460 Park Avenue, 17th Floor
New York, NY 10022
     
Attention:                      Steven Victor, MD
 
Telephone:                      (212) 249-3050
 
Facsimile:
   
With a copy to:
K&L Gates LLP
Southeast Financial Center, Suite 3900
200 South Biscayne Boulevard
Miami, FL 33131-2399
 
Attention:   Clayton E. Parker, Esq.
Telephone: (305) 539-3300
Facsimile:    (305) 358-7095
   
If to the Holder:
YA Global Master SPV, Ltd.
 
1012 Springfield Ave
 
Mountainside, NJ  07092
 
 
Attention:                      Mark Angelo
 
Telephone:                      (201) 536-5115
Facsimile:       (908) 232-3647
   
With a copy to:
David Gonzalez, Esq.
 
1012 Springfield Ave
 
Mountainside, NJ 07092
 
 
Telephone:                      (201) 536-5109
 
Facsimile:                      (908) 232-3647
   

or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three (3) Business Days prior to the effectiveness of such
change.  Written confirmation of receipt (i) given by the recipient of such
notice, consent, waiver or other communication, (ii) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (iii) provided by a nationally recognized overnight delivery
service, shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
 
Section 5.                      Definitions.  For the purposes hereof, the
following terms shall have the following meanings:
 
“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 are authorized or required by law or other government action to
close.
 
“Change of Control Transaction” means the occurrence of (a) 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 Obligor,
by contract or otherwise) of in excess of fifty percent (50%) of the voting
securities of the Obligor (except that the acquisition of voting securities by
the Holder shall not constitute a Change of Control Transaction for purposes
hereof), (b) a replacement at one time or over time of more than one-half of the
members of the board of directors of the Obligor which is not approved by a
majority of those individuals who are members of the board of directors on the
date hereof (or by those individuals who are serving as members of the board of
directors on any date whose nomination to the board of directors was approved by
a majority of the members of the board of directors who are members on the date
hereof), (c) the merger, consolidation or sale of fifty percent (50%) or more of
the assets of the Obligor or any subsidiary of the Obligor in one or a series of
related transactions with or into another entity, or (d) the execution by the
Obligor of an agreement to which the Obligor is a party or by which it is bound,
providing for any of the events set forth above in (a), (b) or (c).
 
 
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“Common Stock” means the common stock, par value $0.0001, of the Obligor and
stock of any other class into which such shares may hereafter be changed or
reclassified.
 
“Conversion Date” shall mean the date upon which the Holder gives the Obligor
notice of their intention to effectuate a conversion of this Debenture into
shares of the Obligor’s Common Stock as outlined herein.
 
“Closing Bid Price” means the price per share in the last reported trade of the
Common Stock on the OTC or on the exchange  which the Common Stock is then
listed as quoted by Bloomberg, LP.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Guaranty Agreement” means that certain Guaranty Agreement dated as of the date
hereof by the Obligor’s direct and indirect subsidiaries in favor of the Holder.
 
“Intellectual Property Security Agreement” means that certain Intellectual
Property Security Agreement dated as of the date hereof by the Obligor and its
direct and indirect subsidiaries in favor of the Holder.
 
“Irrevocable Transfer Agent Instructions” means that certain Irrevocable
Transfer Agent Instructions letter agreement by and among the Obligor, the
Holder and the transfer agent.
 
“Lowest Trade” means the lowest price per share of a reported trade of the
Common Stock on the OTC or on the exchange which the Common Stock is then listed
as quoted by Bloomberg, LP.
 
“Original Issue Date” shall mean the date of the first issuance of this
Debenture regardless of the number of transfers and regardless of the number of
instruments, which may be issued to evidence such Debenture.
 
“Person” means a corporation, an association, a partnership, organization, a
business, an individual, a government or political subdivision thereof or a
governmental agency.
 
“Pledge Agreement” means that certain Pledge Agreement dated as of the date
hereof by the Obligor and its direct and indirect subsidiaries in favor of the
Holder.
 
 “Securities Act” means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
 
“Securities Purchase Agreement” shall have the meaning ascribed thereto in the
recitals to this Debenture.
 
“Security Agreement” means that certain Security Agreement dated as of the date
hereof by the Obligor and its direct and indirect subsidiaries in favor of the
Holder.
 
“Subsequent Market” means the Nasdaq Stock Market, New York Stock Exchange or
the NYSE-Amex.
 
“Trading Day” means a day on which the shares of Common Stock are quoted on the
OTC or quoted or traded on such Subsequent Market on which the shares of Common
Stock are then quoted or listed; provided, that in the event that the shares of
Common Stock are not listed or quoted, then Trading Day shall mean a Business
Day.
 
“Transaction Documents” means, collectively, the Securities Purchase Agreement,
this Debenture, the Warrant, the Security Agreement, the Intellectual Property
Security Agreement, the Pledge Agreement, the Guaranty Agreement, the
Irrevocable Transfer Agent Instructions and all documents, instruments and
agreements executed in connection therewith or related thereto.
 
“Underlying Shares” means the shares of Common Stock issuable upon conversion of
this Debenture or as payment of interest in accordance with the terms hereof.
 
“Warrant” means that certain Warrant to Purchase Common Stock, issued by the
Obligor to the Holder, Warrant No. SVFC-1-1, issued on the date hereof.
 
 
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Section 6.                      Except as expressly provided herein, no
provision of this Debenture shall alter or impair the obligations of the
Obligor, which are absolute and unconditional, to pay the principal of, interest
and other charges (if any) on, this Debenture at the time, place, and rate, and
in the coin or currency, herein prescribed.  This Debenture is a direct
obligation of the Obligor. This Debenture ranks pari passu with all other
Debentures now or hereafter issued under the terms set forth herein. As long as
this Debenture is outstanding, the Obligor shall not and shall cause their
subsidiaries not to, without the consent of the Holder, (i) amend its
certificate of incorporation, bylaws or other charter documents so as to
adversely affect any rights of the Holder; (ii) repay, repurchase or offer to
repay, repurchase or otherwise acquire shares of its Common Stock or other
equity securities other than as to the Underlying Shares to the extent permitted
or required under the Transaction Documents; or (iii) enter into any agreement
with respect to any of the foregoing.
 
Section 7.                      This Debenture shall not entitle the Holder to
any of the rights of a stockholder of the Obligor, including without limitation,
the right to vote, to receive dividends and other distributions, or to receive
any notice of, or to attend, meetings of stockholders or any other proceedings
of the Obligor, unless and to the extent converted into shares of Common Stock
in accordance with the terms hereof.
 
Section 8.                      If this Debenture is mutilated, lost, stolen or
destroyed, the Obligor shall execute and deliver, in exchange and substitution
for and upon cancellation of the mutilated Debenture, or in lieu of or in
substitution for a lost, stolen or destroyed Debenture, a new Debenture for the
principal amount of this Debenture so mutilated, lost, stolen or destroyed but
only upon receipt of evidence of such loss, theft or destruction of such
Debenture, and of the ownership hereof, and indemnity, if requested, all
reasonably satisfactory to the Obligor.
 
Section 9.                      No indebtedness of the Obligor is senior to this
Debenture in right of payment, whether with respect to interest, damages or upon
liquidation or dissolution or otherwise.  Without the Holder’s consent, the
Obligor will not and will not permit any of their subsidiaries to, directly or
indirectly, enter into, create, incur, assume or suffer to exist any
indebtedness of any kind, on or with respect to any of its property or assets
now owned or hereafter acquired or any interest therein or any income or profits
there from that is senior in any respect to the obligations of the Obligor under
this Debenture.
 
Section 10.                      This Debenture shall be governed by and
construed in accordance with the laws of the State of New Jersey, without giving
effect to conflicts of laws thereof.  Each of the parties consents to the
jurisdiction of the Superior Courts of the State of New Jersey sitting in Union
County, New Jersey and the U.S. District Court for the District of New
Jersey  sitting in Newark, New Jersey in connection with any dispute arising
under this Debenture and hereby waives, to the maximum extent permitted by law,
any objection, including any objection based on forum non conveniens to the
bringing of any such proceeding in such jurisdictions.
 
Section 11.                      If the Obligor fails to strictly comply with
the terms of this Debenture, then the Obligor shall reimburse the Holder
promptly for all fees, costs and expenses, including, without limitation,
attorneys’ fees and expenses incurred by the Holder in any action in connection
with this Debenture, including, without limitation, those incurred: (i) during
any workout, attempted workout, and/or in connection with the rendering of legal
advice as to the Holder’s rights, remedies and obligations, (ii) collecting any
sums which become due to the Holder, (iii) defending or prosecuting any
proceeding or any counterclaim to any proceeding or appeal; or (iv) the
protection, preservation or enforcement of any rights or remedies of the Holder.
 
Section 12.                      Any waiver by the Holder of a breach of any
provision of this Debenture shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Debenture. The failure of the Holder to insist upon strict adherence to any
term of this Debenture on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Debenture. Any waiver must be in writing.
 
Section 13.                      If any provision of this Debenture is invalid,
illegal or unenforceable, the balance of this Debenture shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances. If it
shall be found that any interest or other amount deemed interest due hereunder
shall violate applicable laws governing usury, the applicable rate of interest
due hereunder shall automatically be lowered to equal the maximum permitted rate
of interest. The Obligor covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law or
other law which would prohibit or forgive the Obligor from paying all or any
portion of the principal of or interest on this Debenture as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this indenture, and the Obligor (to
the extent it may lawfully do so) hereby expressly waives all benefits or
advantage of any such law, and covenants that it will not, by resort to any such
law, hinder, delay or impeded the execution of any power herein granted to the
Holder, but will suffer and permit the execution of every such as though no such
law has been enacted.
 
Section 14.                      Whenever any payment or other obligation
hereunder shall be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day.
 
Section 15.                      OBLIGOR HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
DEBENTURE OR ANY OTHER TRANSACTION DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY.  THE
OBLIGOR ACKNOWLEDGES AND AGREES THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
HOLDER TO ENTER INTO THE TRANSACTIONS CONTEMPLATED BY THE SECURITIES PURCHASE
AGREEMENT, THIS DEBENTURE AND THE OTHER TRANSACTION DOCUMENTS.
 
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IN WITNESS WHEREOF, the Obligor has caused this Secured Convertible Debenture to
be duly executed by a duly authorized officer as of the date set forth above.
 

 
INTELLICELL BIOSCIENCES, INC.
         
 
By:
/s/ Steve Victor, MD       Name: Steve Victor, MD       Title: Chairman/CEO    
     

 
 

 
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EXHIBIT “A”
 
 
NOTICE OF CONVERSION
 
 
(To be executed by the Holder in order to convert the Debenture)
 

TO:
 

The undersigned hereby irrevocably elects to convert $ of the principal amount
of the above Debenture into shares of Common Stock of Intellicell Biosciences,
Inc., according to the conditions stated therein, as of the Conversion Date
written below.
 
Conversion Date:
 
Applicable Conversion Price:
 
Signature:
 
Name:
 
Address:
 
Amount to be converted:
$                                                                                      
Amount of Debenture unconverted:
$                                                                                      
Conversion Price per share:
$                                                                                      
Number of shares of Common Stock to be issued:
 
Please issue the shares of Common Stock in the following name and to the
following address:
 
Issue to:
 
Authorized Signature:
 
Name:
 
Title:
 
Phone Number:
 
Broker DTC Participant Code:
 
Account Number:
 

 
 
 
 
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