Exhibit 10.2

THE SECURITIES REPRESENTED BY THIS CONVERTIBLE SENIOR SECURED DEBENTURE,
INCLUDING THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF, HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A
REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR (2) THE COMPANY RECEIVES AN OPINION OF
COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED,
SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES
LAWS.

THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE
IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION
AGREEMENT DATED AS OF APRIL 17, 2007 BY AND AMONG MEDICAL SOLUTIONS MANAGEMENT
INC., VICIS CAPITAL MASTER FUND AND APOGEE FINANCIAL INVESTMENTS INC. AND THEIR
SUCCESSORS AND ASSIGNS, AND EACH HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE
HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS THEREOF.

FORM OF

MEDICAL SOLUTIONS MANAGEMENT INC.

6% CONVERTIBLE SENIOR SUBORDINATED SECURED DEBENTURE

DUE APRIL 17, 2009

 

$[                    ]

No. [        ]

 

Marlboro, Massachusetts

[  Date  ]

 

FOR VALUE RECEIVED, upon the terms and subject to the conditions set forth in
this convertible senior secured debenture (this “Debenture”), MEDICAL SOLUTIONS
MANAGEMENT INC., a Nevada corporation with its principal place of business at
237 Cedar Hill Street, Marlboro, MA (the “Company”), absolutely and
unconditionally promises to pay to the order of [                        ] (the
“Payee” or “Holder”), upon due presentation and surrender of this Debenture, on
April 17, 2009 (the “Maturity Date”), unless earlier converted pursuant to
Section 3.1 hereof, the principal amount of [                    ] Dollars
($[                ]) and accrued interest thereon as hereinafter provided. This
Debenture is issued in connection with a certain Securities Purchase and
Exchange Agreement,

 

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of even date herewith, between the Company and the Holder (the “Purchase
Agreement”), all terms of which are incorporated herein by this reference and
hereby made a part of this Debenture. Capitalized terms not defined herein shall
have the meanings ascribed to them in the Purchase Agreement. By its acceptance
of this Debenture, the Holder agrees to be bound by the terms of the Purchase
Agreement.

ARTICLE I

PAYMENT OF PRINCIPAL AND INTEREST; METHOD OF PAYMENT

1.1 Payment of Principal. Payment of the principal of this Debenture (and any
interest accrued thereon) shall be made in shall be made in U.S. dollars in
immediately available funds, without setoff or counterclaim and without any
withholding or deduction whatsoever. The Company may not at any time, without
the prior written consent of the Purchaser, prepay the Debenture, in whole or in
part.

1.2 Payment of Interest. Interest shall accrue on the unpaid portion of the
principal amount from time to time outstanding at the rate of six percent
(6%) per annum (the “Stated Interest Rate”), computed on the basis of a 360-day
year of twelve 30-day months, and become payable to the Payee on the Maturity
Date. Interest shall be paid as in U.S. dollars in immediately available funds,
without setoff or counterclaim and without any withholding or deduction
whatsoever; provided that, in connection with any conversion of this Debenture
pursuant to Section 3.1 hereof, the Company may, in its sole discretion, elect
to pay any interest due hereunder in shares of Common Stock in an amount equal
to the total amount of interest to be paid divided by the Conversion Price.

1.3 Payment on Non-Business Days. If the outstanding principal and accrued but
unpaid interest under this Debenture becomes due and payable on a Saturday,
Sunday or public holiday under the laws of the State of New York, the due date
hereof shall be extended to the next succeeding full business day and interest
shall be payable at the rate of six (6%) percent per annum during such
extension. All payments received by the Holder shall be applied first to the
payment of all accrued interest payable hereunder.

1.4 Late Fee. In the event any payment of principal or interest or both shall
remain unpaid for a period of ten (10) days or more after the due date thereof,
a one-time late charge equivalent to six percent (6%) of each unpaid amount
shall be charged.

1.5 Adjustment of Stated Interest Rate. After an Event of Default and
acceleration of the Maturity Date by the Holder the Stated Interest Rate shall
be adjusted to a rate of ten percent (10%) per annum, subject to the limitations
of applicable law.

ARTICLE II

SECURITY

The obligations of the Company under this Debenture are secured pursuant to
security interests on assets, tangible and intangible, of the Company granted by
the Company to the Holder pursuant to a security agreement of even date herewith
and a stock pledge agreement referred to in the Purchase Agreement. In addition,
OrthoSupply Management, Inc., a Delaware corporation and wholly-owned subsidiary
of the Company, has executed in favor of

 

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the Holder a certain guaranty agreement, dated of even date herewith,
guaranteeing the full and unconditional payment when due of the amounts payable
by the Company to the Holder pursuant to the terms of this Debenture. The
obligations of OrthoSupply Management, Inc. under its guaranty agreement are
secured pursuant to security interests on and collateral assignments of, assets,
tangible and intangible, of OrthoSupply Management, Inc. granted by OrthoSupply
Management, Inc. to the Holder pursuant to a security agreement of even date
herewith referred to in the Purchase Agreement.

ARTICLE III

CONVERSION

3.1 Conversion at Option of Holder. At any time and from time to time on and
after the date hereof (the “Initial Conversion Date”) until the Maturity Date,
the outstanding principal balance and accrued but unpaid interest under this
Debenture is convertible in whole or in part at the Holder’s option into shares
of Common Stock (“Conversion Shares”) upon surrender of this Debenture, at the
office of the Company, accompanied by a written Conversion Notice in the form
attached hereto as Annex II duly executed by the registered Holder or its duly
authorized attorney. “Common Stock” means common stock of the Company as it
exists on the date this Debenture is originally signed. This Debenture is
convertible on or after the Initial Conversion Date into shares of Common Stock
at a price per share of Common Stock equal to $.30 per share (subject to
proportionate adjustment in the event of any stock dividend, stock split,
combination of shares, reorganization, recapitalization, reclassification or
other similar event affecting the Common Stock occurring after the date hereof)
(the “Conversion Price”). No fractional shares or scrip representing fractional
shares will be issued upon any conversion, but an adjustment in cash will be
made, in respect of any fraction of a share which would otherwise be issuable
upon the surrender of this Debenture for conversion. The Conversion Price is
subject to adjustment as provided in Section 3.5 and Section 3.6 hereof. As soon
as practicable following conversion and upon the Holder’s compliance with the
conversion procedure described in Section 3.3 hereof, the Company shall deliver
a certificate for the number of full shares of Common Stock issuable upon
conversion and a check for any fractional share and, in the event the Debenture
is converted in part, a new Debenture in the principal amount equal to the
remaining principal balance of this Debenture after giving effect to such
partial conversion.

3.2 Registration of Transfer. The Company shall maintain books for the transfer
and registration of this Debenture. Upon the transfer or assignment of this
Debenture by the Holder pursuant to the terms hereof and its delivery of a
properly completed and executed Assignment attached hereto as Annex I, the
Company shall issue and register this Debenture in the names of the new holders.
The new Debentures shall be signed manually by the Chairman, Chief Executive
Officer, President or any Vice President and the Secretary or Assistant
Secretary of the Company.

3.3 Conversion Procedure. The Company shall convert, from time to time, any
outstanding portion of this Debentures upon the books to be maintained by the
Company for such purpose upon surrender thereof for conversion properly endorsed
and accompanied by a properly completed and executed Conversion Notice attached
hereto as Annex II. Subject to the terms of this Debenture, upon surrender of
this Debenture the Company shall issue and deliver

 

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a certificate or certificates in such name or names as the Holder may designate
for the number of full shares of Common Stock due to such Holder upon the
conversion of this Debenture. Such certificate or certificates shall be deemed
to have been issued and any person so designated to be named therein shall be
deemed to have become the Holder of record of such Shares as of the date of the
surrender of this Debenture; provided, however, that if, at the date of
surrender the transfer books of the Common Stock shall be closed, the
certificates for the Shares shall be issuable as of the date on which such books
shall be opened and until such date the Company shall be under no duty to
deliver any certificate for such Shares; provided, further, however, that such
transfer books, unless otherwise required by law or by applicable rule of any
national securities exchange, shall not be closed at any one time for a period
longer than twenty (20) days.

3.4 Issuance of Common Stock. As of the date hereof, the Company has duly
authorized and reserved for issuance all shares of Common Stock to permit the
full conversion of this Debenture. The Conversion Shares which may be issued
upon the conversion of this Debentures shall be fully paid and non-assessable
and free of preemptive rights. The Company will endeavor to comply with all
securities laws regulating the offer and delivery of the Conversion Shares upon
conversion of this Debenture.

3.5 Dividends; Reclassifications, etc. In the event that the Company shall, at
any time prior to the earlier to occur of (i) exercise of conversion rights
hereunder and (ii) the Maturity Date: (i) declare or pay to the holders of the
Common Stock a dividend payable in any kind of shares of capital stock of the
Company; or (ii) change or divide or otherwise reclassify the Common Stock into
the same or a different number of shares with or without par value, or in shares
of any class or classes; or (iii) transfer its property as an entirety or
substantially as an entirety to any other company or entity; or (iv) make any
distribution of its assets to holders of the Common Stock as a liquidation or
partial liquidation dividend or by way of return of capital; then, upon the
subsequent exercise of conversion rights under this Debenture, the Holder of the
Conversion Shares shall receive, in addition to or in substitution for the
Conversion Shares to which it would otherwise be entitled upon such exercise,
such additional shares of stock or scrip of the Company, or such reclassified
shares of stock of the Company, or such shares of the securities or property of
the Company resulting from transfer, or such assets of the Company, which it
would have been entitled to receive had it exercised these conversion rights
prior to the happening of any of the foregoing events.

3.6 Most Favored Nations Exchange. Except for any Qualified Issuance, (as
hereinafter defined), if at any time until one year after the Effective Date of
the Registration Statement, the Company shall offer, issue or agree to issue any
Common Stock or securities convertible into or exercisable for shares of Common
Stock (or modify any of the foregoing which may be outstanding at any time prior
to the Closing Date) to any person or entity at a price per share or conversion
or exercise price per share which shall be less than the Conversion Price then
in effect, then, for each such occasion, as to this Debenture (if remaining
outstanding), without the consent of the Holder, the Conversion Price shall be
adjusted to equal such other lower price per share, and, as to shares of Common
Stock, if any, that were previously issued upon the partial conversion of this
Debenture and are then still owned by the Purchaser, the Company shall issue
additional shares of Common Stock to the Holder so that the average per share
purchase price of the shares of Common Stock issued to the Holder upon

 

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the conversion of this Debenture is equal to such other lower price per share.
For purposes of this Section 3.6 “Qualified Issuance” shall mean (x) the grant,
issuance or exercise of any convertible securities pursuant to a qualified or
non-qualified stock option plan of the Company or any other bona fide employee
benefit plan or incentive arrangement, adopted or approved by the Board and
approved by the Company’s shareholders, as may be amended from time to time,
(y) the grant, issuance or exercise of any convertible securities in connection
with the hire or retention of any officer, director or key employee of the
Company, provided such grant is approved by the Board, or (z) the issuance of
any shares of Common Stock pursuant to the grant or exercise of convertible
securities outstanding as of the date hereof (exclusive of any subsequent
amendments thereto).

3.7 Notice to Holder. If, at any time while this Debenture is outstanding, the
Company shall pay any dividend payable in cash or in Common Stock, shall offer
to the holders of Common Stock for subscription or purchase by them any shares
of stock of any class or any other rights, shall enter into an agreement to
merge or consolidate with another corporation, shall propose any capital
reorganization or reclassification of the capital stock of the Company,
including any subdivision or combination of its outstanding shares of Common
Stock or there shall be contemplated a voluntary or involuntary dissolution,
liquidation or winding up of the Company, the Company shall cause notice thereof
to be mailed to the registered Holder of this Debenture at its address below, at
least thirty (30) days prior to the record date as of which holders of Common
Stock shall participate in such dividend, distribution or subscription or other
rights or at least thirty (30) days prior to the effective date of the merger,
consolidation, reorganization, reclassification or dissolution.

ARTICLE IV

MISCELLANEOUS

4.1 Default. Upon the occurrence of any one or more of the Events of Default
specified or referred to in the Purchase Agreement or in the other documents or
instruments executed in connection therewith, all amounts then remaining unpaid
on this Debenture may be declared to be immediately due and payable as provided
in the Purchase Agreement.

4.2 Collection Costs. Should all or any part of the indebtedness represented by
this Debenture be collected by action at law, or in bankruptcy, insolvency,
receivership or other court proceedings, or should this Debenture be placed in
the hands of attorneys for collection after default, the Company hereby promises
to pay to the Holder, upon demand by the Holder at any time, in addition to the
outstanding principal and all (if any) other amounts payable on or in respect of
this Debenture, all court costs and reasonable attorneys’ fees and other
collection charges and expenses incurred or sustained by the Holder.

4.3 Rights Cumulative. The rights, powers and remedies given to the Payee under
this Debenture shall be in addition to all rights, powers and remedies given to
it by virtue of the Purchase Agreement, any document or instrument executed in
connection therewith, or any statute or rule of law.

4.4 No Waivers. Any forbearance, failure or delay by the Payee in exercising any
right, power or remedy under this Debenture, the Purchase Agreement, any
documents or instruments executed in connection therewith or otherwise available
to the Payee shall not be

 

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deemed to be a waiver of such right, power or remedy, nor shall any single or
partial exercise of any right, power or remedy preclude the further exercise
thereof.

4.5 Amendments in Writing. No modification or waiver of any provision of this
Debenture, the Purchase Agreement or any documents or instruments executed in
connection therewith shall be effective unless it shall be in writing and signed
by the Payee, and any such modification or waiver shall apply only in the
specific instance for which given.

4.6 Governing Law. This Debenture and the rights and obligations of the parties
hereto, shall be governed, construed and interpreted according to the laws of
the State of New York, wherein it was negotiated and executed, and the
undersigned consents and agrees that the State and Federal Courts which sit in
the State of New York, County of New York shall have exclusive jurisdiction of
all controversies and disputes arising hereunder.

4.7 No Counterclaims. The Company waives the right to interpose counterclaims or
set-offs of any kind and description in any litigation arising hereunder and
waives the right in any litigation with the Payee (whether or not arising out of
or relating to this Debenture) to trial by jury.

4.8 Successors. The term “Payee” and “Holder” as used herein shall be deemed to
include the Payee and its successors, endorsees and assigns.

4.9 Notices. All notices, demands or other communications given hereunder shall
be in writing and shall be sufficiently given if delivered either personally or
by a nationally recognized courier service marked for next business day delivery
or sent in a sealed envelope by first class mail, postage prepaid and either
registered or certified, addressed as follows:

 

  (a) if to the Company:

Medical Solutions Management Inc.

237 Cedar Hill Street

Marlboro MA 01752

Attn: Chief Executive Officer

 

  (b) if to the Holder:

[                    ]

(or at such other address as the Holder may have furnished in writing to the
Company)

 

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4.10 Certain Waivers. The Company hereby irrevocably waives notice of
acceptance, presentment, notice of nonpayment, protest, notice of protest, suit
and all other conditions precedent in connection with the delivery, acceptance,
collection and/or enforcement of this Debenture or any collateral or security
therefor.

4.11 Mutilated, Lost, Stolen or Destroyed Debentures. In case this Debenture
shall be mutilated, lost, stolen or destroyed, the Company shall issue and
deliver in exchange and substitution for and upon cancellation of the mutilated
Debenture, or in lieu of and substitution for the Debenture, mutilated, lost,
stolen or destroyed, a new Debenture of like tenor and representing an
equivalent right or interest, but only upon receipt of evidence satisfactory to
the Company of such loss, theft or destruction and an indemnity, if requested,
also satisfactory to it.

4.12 Transfer and Assignment. The Holder may transfer or assign this Debenture
without the consent of the Company; provided that, it may not so transfer or
assign this Debenture or any rights hereunder to any competitor of the Company.
The Company may not transfer or assign this Debenture or its obligations
hereunder without the consent of the Holder.

4.13 Ownership Cap and Certain Exercise Restrictions. Notwithstanding the
Holder’s ownership of shares of the Common Stock, at no time may the Holder
convert this Debenture if the number of shares of Common Stock to be issued
pursuant to such exercise would exceed, when aggregated with all other shares of
Common Stock owned by the Holder at such time, the number of shares of Common
Stock which would result in the Holder beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and the rules thereunder) in
excess of 4.99% of the then issued and outstanding shares of Common Stock;
provided, however, that upon the Holder providing the Company with sixty-one
(61) days notice (the “Waiver Notice”) that the Holder would like to waive this
Section 4.13 with regard to any or all shares of Common Stock issuable upon
conversion of this Debenture, this Section 4.13 will be of no force or effect
with regard to all or a portion of this Debenture referenced in the Waiver
Notice; provided, further, that this provision shall be of no further force or
effect during the sixty-one (61) days immediately preceding the Maturity Date.

[signature page follows]

 

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IN WITNESS WHEREOF, Medical Solutions Management Inc. has caused this Debenture
to be signed by its Chief Executive Officer and to be dated the day and year
first above written.

 

ATTEST [SEAL]

 

____________________________________________

 

 

 

MEDICAL SOLUTIONS MANAGEMENT INC.

 

____________________________________________

Brian Lesperance

Chief Executive Officer

 

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ANNEX I

ASSIGNMENT

For value received, the undersigned hereby assigns subject to the provisions of
Section 12.4 of that certain Securities Purchase Agreement, dated as of
April 17, 2007, of Medical Solutions Management Inc., a Nevada corporation (the
“Company”), as may be amended or modified from time to time, to ________
$_________________ principal amount of and $_________________ in accrued but
unpaid interest under the 6% Convertible Senior Subordinated Secured Debenture
due April 17, 2009 evidenced hereby and hereby irrevocably appoints
_______________ attorney to transfer the Debenture (or such portion thereof) on
the books of the within named corporation with full power of substitution in the
premises.

Dated:

In the presence of:

 

 

 

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ANNEX II

CONVERSION NOTICE

TO: MEDICAL SOLUTIONS MANAGEMENT INC.

The undersigned holder of this Debenture hereby irrevocably exercises the option
to convert $________ principal amount of and $_________________ in accrued but
unpaid interest under such Debenture (which may be less than the stated
principal amount thereof) into shares of Common Stock of Medical Solutions
Management Inc., in accordance with the terms of such Debenture, and directs
that the shares of Common Stock issuable and deliverable upon such conversion,
together with a check (if applicable) in payment for any fractional shares as
provided in such Debenture, be issued and delivered to the undersigned unless a
different name has been indicated below. If shares of Common Stock are to be
issued in the name of a person other than the undersigned holder of such
Debenture, the undersigned will pay all transfer taxes payable with respect
thereto.

____________________________________

Name and address of Holder

____________________________________

Signature of Holder

 

Principal amount of Debenture

to be converted $                                                     

If shares are to be issued otherwise then to the holder:

______________________________________

Name of Transferee

Address of Transferee

____________________________________

____________________________________

____________________________________

Social Security or Tax ID Number of Transferee

____________________________________