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Exhibit 10.02
 

THE SECURITIES REPRESENTED HEREBY HAVE BEEN ISSUED WITHOUT REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS, AND
MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO ISSUER THAT THE TRANSFER IS EXEMPT
FROM REGISTRATION UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
 
ONE BIO, CORP.
CONVERTIBLE PROMISSORY NOTE
 
$150,000.00
New York, New York
January 8, 2010

 
         FOR VALUE RECEIVED, the undersigned, ONE Bio, Corp., a Florida
corporation with its principal office located at 8525 NW 53rd Terrace, Suite
C101, Doral, Florida 33166 (“Issuer”), hereby unconditionally promises to pay to
Udi Toledano, an individual (“Purchaser”), on the Maturity Date (as defined in
Section 4 hereof) to the order of Purchaser, at the office of Purchaser located
at 100 Executive Drive, Suite 330, West Orange, NJ 07052 or such other address
designated by Purchaser, in lawful money of the United States of America and in
immediately available funds, the principal amount of (i) One Hundred Fifty
Thousand Dollars ($150,000.00) Dollars or (ii) if less as a result of any
voluntary conversion(s) of this Note in part in accordance with Section 6
hereof, the aggregate unpaid principal amount of this Note.
 
1.   PURCHASE AGREEMENT.  This Note is one of a series of identical (except with
respect to principal amount) notes (collectively, the “Notes”) purchased under
that certain Securities Purchase and Registration Rights Agreement, dated as of
January 8, 2010, among Issuer, Purchaser and certain other purchasers of the
Notes (as may be amended from time to time, the “Purchase Agreement”).  The
Purchaser is entitled to the benefits and subject to certain obligations under
the Purchase Agreement and may enforce the agreements of the Issuer contained
therein and exercise the remedies provided thereby.  All words and phrases used
herein and not otherwise specifically defined herein shall have the respective
meanings assigned to such terms in the Purchase Agreement to the extent the same
are used or defined therein.
 
2.   HEADINGS, ETC.  The headings and captions of the numbered paragraphs of
this Note are for convenience of reference only and are not to be construed as
defining or limiting, in any way, the scope or intent of the provisions
hereof.  Whenever used, the singular number shall include the plural, the plural
the singular, and the words “Purchaser” and “Issuer” shall include,
respectively, their respective successors and assigns; provided, however, that
the Issuer shall in no event or under any circumstance have the right to assign
or transfer its obligations under this Note.
 
 
 

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3.   SECURITY.  The obligations of Issuer hereunder are initially secured by (a)
certain pledges of securities of the Issuer being provided by certain of the
issuer’s stockholders, and (b) certain guarantees being made by the Issuer’s two
British Virgin Islands subsidiaries, and, upon any Final Closing shall be
further secured by (c) certain  pledges of securities of certain of the Issuer’s
U.S. subsidiaries being provided by the Issuer, (d) certain guarantees being
made by certain of the Issuer’s U.S. subsidiaries, (e) certain  pledges of
securities of the Issuer’s two British Virgin Islands subsidiaries being
provided by certain of the Issuer’s U.S. subsidiaries, and (f) certain
agreement, covenants and account control rights being provided by the Issuer’s
indirect wholly-owned subsidiaries and their controlled operating companies in
the People’s Republic of China, each as set forth in the Purchase Agreement or
in ancillary agreements referred to in the Purchase Agreement, which Purchaser
is entitled to the benefits of.
 
4.   MATURITY.  Unless otherwise converted into the Conversion Shares (as
defined in Section 6 hereof) in accordance with the provisions hereof, each Note
shall mature on October 11, 2010, unless such date shall be otherwise extended
in writing by a Purchaser in its sole discretion (such date, the “Maturity
Date”).  On the Maturity Date, unless, and to the extent, converted into
Conversion Shares in accordance with the provisions hereof, all outstanding
principal and any accrued and unpaid interest due and owing under the Note (and
a premium payment of twenty percent (20%) of the original principal amount of
the Notes if Issuer does not complete a New Financing (as defined in Section 6
hereof) on or prior to the Maturity Date (the “Premium Payment”)), shall be
immediately paid by Issuer.
 
5.   INTEREST; INTEREST RATE; PAYMENT.  (a) The Note shall bear interest (other
than interest accruing as a result of a failure by Issuer to pay any amount when
due as set forth in subparagraph (b) below) at an annual interest rate equal to
eight percent (8%) per annum on the then outstanding principal balance (the
“Interest Rate”).  Interest (other than interest accruing as a result of a
failure by Issuer to pay any amount when due as set forth in subparagraph (b)
below) shall accrue until all amounts owed under the Note shall be fully repaid
or the date on which such Note shall be converted, in whole, into the Conversion
Shares (the “Conversion Date”), as the case may be, and shall be due and payable
quarterly in arrears on the last business day of each calendar quarter following
the issuance date.
 
         (b)   If all or a portion of the principal amount of the Note or any
interest payable thereon shall not be repaid when due whether on the applicable
repayment date, by acceleration or otherwise, such overdue amounts shall bear
interest at a rate per annum that is three percent (3%) above the Interest Rate
from the date of such non-payment until such amount is paid in full (before as
well as after judgment).
 
         (c)   All payments to be made by Issuer hereunder shall be made,
without setoff or counterclaim, in lawful money of the United States by check or
wire transfer in immediately available funds.
 
6.   CONVERSION.  (a) At any time prior to the Maturity Date, Purchaser will
have the option to convert the entire principal and interest accrued and owing
on this Note, or any portion of the principal and/or interest thereof, into
shares (the “Conversion Shares”) of Issuer’s Common Stock at the Conversion
Price (as defined below).  For purposes hereof, “Conversion Price” shall mean
the lesser of (i) the market value of Issuer’s Common Stock as of the Initial
Closing Date, which shall be deemed equal to the volume weighted average sale
price of Issuer’s Common Stock for the ten (10) trading days ending immediately
preceding the Initial Closing Date, or (ii) 65% of the price per share offered
by Issuer in any publicly offered Common Stock or other equity or convertible
debt financing by Issuer that is closed within nine (9) months of the Initial
Closing Date (a “New Financing”).
 
 
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         (b)   Upon conversion, Purchaser shall be entitled to receive the
number of Conversion Shares calculated by dividing the amount being converted by
the Conversion Price.  No fractional shares of Conversion Shares shall be issued
upon conversion.  In lieu of any fractional shares to which Purchaser would
otherwise be entitled, Issuer shall pay cash in an amount equal to such fraction
multiplied by the Conversion Price.  All references herein to Common Stock are
deemed to apply to Conversion Shares.
 
7.   CONVERSION PROCEDURES.  In order to exercise the conversion rights set
forth in Section 6 hereof, Purchaser shall surrender the Note, appropriately
endorsed, to Issuer at Issuer’s principal office, accompanied by written notice
to Issuer setting forth the amount of principal and interest to be converted,
the name or names (with address(es)) in which the Conversion Shares issuable
upon such conversion shall be issued and registered on the books of Issuer.  For
purposes hereof, the “Conversion Date” shall be deemed to be the date the Note
and notice is received by Issuer for conversion.  Within three (3) business days
after the Conversion Date, Issuer shall deliver to Purchaser (i) a stock
certificate for the Conversion Shares or (ii) a notice certified by Issuer’s
Secretary that the Conversion Shares due on such conversion have been issued to
and registered on the books of Issuer in the name or names specified by
Purchaser. Issuer shall, upon request of Purchaser, and subsequent to the date
on which a registration statement covering the resale of the Conversion Shares
has been declared effective by the SEC, use its best efforts to deliver
Conversion Shares hereunder electronically through the Depository Trust
Corporation or another established clearing corporation performing similar
functions.  If by the third (3rd) Trading Day after conversion of this Note,
Issuer fails to deliver the required number of Conversion Shares, Purchaser will
have the right to rescind the exercise.  If by the third (3rd) Trading Day after
conversion, Issuer fails to deliver the required number of Conversion Shares,
and if after such third Trading Day (3rd) and prior to the receipt of such
Conversion Shares, Purchaser purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by
Purchaser of Conversion Shares (in a non-short sale transaction) which Purchaser
anticipated receiving upon such conversion (a “Buy In”), then Issuer shall (i)
pay in cash to Purchaser the amount by which (x) Purchaser’s total purchase
price (including brokerage commissions, if any) for the shares of Common Stock
so purchased exceeds (y) the amount obtained by multiplying (A) the number of
Conversion Shares that Issuer was required to deliver to Purchaser in connection
with the conversion at issue by (B) the closing bid price of the Common Stock on
the conversion date and (ii) at the option of Purchaser, either reinstate the
portion of the Note and equivalent number of Conversion Shares for which such
conversion was not honored or deliver to Purchaser the number of shares of
Conversion Shares that would have been issued had Issuer timely complied with
its exercise and delivery obligations hereunder.  Purchaser shall provide Issuer
written notice indicating the amounts payable to Purchaser in respect of the Buy
In. In the case of conversion of less than the entire principal of and interest
under the Note, Issuer shall cancel said Note and shall execute and deliver a
new Note of like tenor for the unconverted amount of the Note dated the date of
initial issuance of the Note.
 
 
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8.   PAYMENT RIGHTS UPON MERGER, CONSOLIDATION, ETC.; VOLUNTARY PREPAYMENT.  If,
at any time, prior to the Maturity Date, Issuer proposes to consolidate or
effect any other corporate reorganization with, or merge into, another
corporation or entity that previously did not hold, directly or indirectly, more
than twenty percent (20%) of the Company’s Common Stock, whereby  such
corporation or entity immediately subsequent to such consolidation, merger or
reorganization will own capital stock of Issuer or entity surviving such merger,
consolidation or reorganization representing more than fifty (50%) percent of
the combined voting power of the outstanding securities of Issuer or such entity
immediately after such consolidation, merger or reorganization, or has the right
to elect nominees to a represent a majority of Issuer’s Board of Directors (a
“Change of Control Event”), then Issuer shall provide Purchaser with at least
ten (10) days’ prior written notice of any such proposed action, and Purchaser
will, at its option, have the right to demand immediate payment of all amounts
due and owing under the Note (including all accrued and unpaid interest and the
payment of the Premium Payment) in cash or in Company Common Stock valued at the
lesser of (i) the closing price of the Company Common Stock on the date of the
mailing of such written notice or (ii) the then-effective Conversion
Price.  Purchaser will give Issuer written notice of such demand within five (5)
days after receiving notice of the Change of Control Event.  All amounts due and
owing hereunder shall be paid by Issuer to Purchaser within five (5) days from
the date of such written notice via federal funds wire transfer(s) of
immediately available funds, or in the case of the issuance of Company Common
Stock in lieu of cash, the issuance shall take place prior to the consummation
of the Change of Control Event, in accordance with written instructions provided
to Issuer by Purchaser.
 
9.   ASSURANCES WITH RESPECT OF CONVERSION RIGHTS.  Issuer shall not, by
amendment of its Certificate of Incorporation or By-laws or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by Issuer but shall at all times in good faith assist in the carrying
out of all the provisions of this Agreement and in taking of all such actions as
may be necessary or appropriate in order to protect the conversion rights of
Purchaser against impairment.
 
10.         EVENTS OF DEFAULT.  If any of the following events (each, an “Event
of Default”) shall occur and be continuing:
 
         (a)   Issuer shall fail to pay any amount payable under this Note
within three (3) business days after such payment becomes due in accordance with
the terms hereof;
 
         (b)   Issuer or any Subsidiary shall fail to pay when due, and it shall
continue unremedied for a period of ten (10) calendar days, whether upon
acceleration, prepayment obligation or otherwise, any indebtedness and/or other
sums payable by Issuer or any Subsidiary;
 
         (c)   dissolution, termination of existence, suspension or
discontinuance of business (other than as a result of a consolidation of one or
more of the Issuer’s subsidiaries with the Issuer or another subsidiary) or
ceasing to operate as going concern of Issuer or any Subsidiary;
 
 
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         (d)   any representation or warranty made or deemed made by Issuer
herein, in the Purchase Agreement or in any other agreement, certificate or
instrument contemplated by this Note or the Purchase Agreement or that is
contained in any certificate, document or financial or other statement furnished
at any time under or in connection with this Note or the Purchase Agreement
shall have been incorrect in any material respect on or as of the date made or
deemed made;
 
         (e)   Issuer shall default, in any material respect, in the observance
or performance of any other agreement contained in this Note, Sections 6,
11.3(c), 12, 14 or 15 of the Purchase Agreement, the Company Pledge and Security
Agreement, the US Subsidiary Guarantee and Pledge and Security Agreements, the
BVI Subsidiary Guarantee and Security Agreements, the WFOE Collateral Security
Agreements, the Acknowledgement Agreements, or any other agreement or instrument
contemplated by this Note or the Purchase Agreement, and such default shall
continue unremedied for a period of ten (10) days after written notice to Issuer
of such default;
 
         (f)   (i) Issuer or any Subsidiary shall commence any case, proceeding
or other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization,
conservatorship or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent,
or seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or
Issuer shall make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against Issuer or any Subsidiary any case, proceeding
or other action of a nature referred to in clause (i) above that (A) results in
the entry of an order for relief of any such adjudication of appointment or (B)
remains undismissed, undischarged or unbonded for a period of thirty (30) days;
or (iii) there shall be commenced against Issuer or any Subsidiary any case,
proceeding other action seeking issuance of a warrant of attachment, execution,
distrait or similar process against all or any substantial part of its assets
that results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within thirty (30)
days from the entry thereof; or (iv) Issuer or any Subsidiary shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in any of the acts set forth in clauses (i), (ii) or (iii) above;
or (v) Issuer or any Subsidiary shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due,
 
         then, and in any such event, (1) if such event is an Event of Default
specified in subsection (e) above of this Section 10 with respect to Issuer,
automatically this Note (with all accrued and unpaid interest thereon) and all
other amounts owing under this Note, including the Premium Payment, as
applicable, shall immediately become due and payable, and (2) if such event is
any other Event of Default, Purchasers holding a majority in original principal
amount of the Notes may, by written notice to Issuer, declare the Notes (with
all accrued and unpaid interest thereon) and all other amounts owing under this
Note, including the Premium Payment, as applicable, to be due and payable
forthwith, whereupon the same shall immediately become due and payable.  Except
as expressly provided above in this Section 10, presentation, demand, protest
and all other notices of any kind are hereby expressly waived by Issuer.
 
 
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11.         CERTAIN ADJUSTMENTS.  The Conversion Price and number of Conversion
Shares issuable upon exercise of this Note are subject to adjustment from time
to time as set forth in this Section 11.
 
         (a)   Stock Dividends and Splits.  If after the date hereof, the number
of outstanding shares of Common Stock is increased by a stock dividend payable
in shares of Common Stock or by a split-up of shares of Common Stock or other
similar event, then, on the effective date thereof, the number of shares
issuable on exercise of this Note shall be increased in proportion to such
increase in outstanding shares and the then applicable Conversion Price shall be
correspondingly decreased.
 
         (b)   Aggregation of Shares.  If after the date hereof, the number of
outstanding shares of Common Stock is decreased by a consolidation, combination
or reclassification of shares of Common Stock or other similar event, then, upon
the effective date of such consolidation, combination or reclassification, the
number of shares issuable on exercise of this Note shall be decreased in
proportion to such decrease in outstanding shares and the then applicable
Conversion Price shall be correspondingly increased.
 
         (c)   Replacement of Securities Upon Reorganization, etc.  If after the
date hereof any capital reorganization or reclassification of the Common Stock
of Issuer, or consolidation or merger of Issuer with another corporation, or the
sale of all or substantially all of its assets to another corporation or other
similar event (each, a “Fundamental Transaction”) shall be effected, then, as a
condition of such Fundamental Transaction, lawful and fair provision shall be
made whereby the Purchaser of this Note shall thereafter have the right to
convert and receive, upon the basis and upon the terms and conditions specified
in this Note and in lieu of the shares of Common Stock of Issuer immediately
theretofore convertible and receivable upon the exercise of the rights
represented thereby, such shares of stock, securities, or assets as may be
issued or payable with respect to or in exchange for the number of outstanding
shares of such Common Stock equal to the number of shares of such stock
immediately theretofore convertible and receivable upon the exercise of the
rights represented by this Note, had such Fundamental Transaction not taken
place and in such event appropriate provision shall be made with respect to the
rights and interests of the Purchaser of this Note to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Conversion Price and of the number of shares convertible upon the exercise
of this Note) shall thereafter be applicable, as nearly as may be in relation to
any share of stock, securities, or assets thereafter deliverable upon the
exercise hereof.  Issuer shall not effect any such Fundamental Transaction
unless prior to the consummation thereof the successor corporation (if other
than Issuer) resulting from such Fundamental Transaction, or the corporation
purchasing such assets in a Fundamental Transaction, shall assume by written
instrument executed and delivered to the Purchaser of this Note the obligation
to deliver to the Purchaser of this Note such shares of stock, securities, or
assets as, in accordance with the foregoing provisions, such Purchaser may be
entitled to.
 
 
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         (d)   Adjustment of Conversion Price Upon Issuance of Additional Shares
of Common Stock.  In the event Issuer shall at any time after the Closing Date
issue shares of Common Stock (the “Additional Shares of Common Stock”), other
than Exempt Issuances (as defined below), while any portion of this Note remains
outstanding, without consideration or for a consideration per share less than
then-effective Conversion Price, then the Conversion Price shall be reduced,
concurrently with such issuance, to a price (calculated to the nearest
one-hundredth of a cent), equal to the consideration per share paid by the
purchasers for the Additional Shares of Common Stock. For purposes hereof,
“Exempt Issuances” shall mean the issuance of (i) up to 1,000,000 shares of
Common Stock to employees, officers and/or independent directors pursuant to an
equity incentive plan approved by Issuer’s stockholders, provided such issuances
are approved by Issuer’s Board of Directors, including approval of least 50% of
Issuer’s independent directors, and (ii) up to 5,000,000 shares of Common Stock
as part of mergers or acquisitions of businesses or assets, provided that the
aggregate consideration for each such acquisition or merger does not exceed a
multiple of 4 times the after-tax net income of the acquired business.
 
         (e)   Adjustment of Conversion Price Upon Issuance of Common Stock
Equivalents.  In the event Issuer shall at any time after the Closing Date issue
any Convertible Security (defined as evidences of indebtedness, shares of stock
or other securities which are or may be at any time convertible into or
exchangeable for shares of Common Stock) or warrant, option or other right to
subscribe for or purchase any shares of Common Stock or any Convertible Security
(a “Common Stock Equivalent”), while any portion of this Note remains
outstanding, other than Exempt Issuances, and the price per share for which
Additional Shares of Common Stock may be issuable thereafter pursuant to such
Common Stock Equivalent shall be less than the Conversion Price, or if, after
any such issuance of Common Stock Equivalents, the price per share for which
Additional Shares of Common Stock may be issuable thereafter is amended, and
such price as so amended shall be less than the Conversion Price, then the
Conversion  Price upon each such issuance or amendment shall be adjusted as
provided in Section 11(d) above, on the basis that Additional Shares of Common
Stock issuable pursuant to such Common Stock Equivalents shall be deemed to have
been issued (whether or not such Common Stock Equivalents are actually then
exercisable, convertible or exchangeable in whole or in part) as of the earlier
of (i) the date on which Issuer shall enter into a firm contract for the
issuance of such Common Stock Equivalent, or (ii) the date of actual issuance of
such Common Stock Equivalent.  No adjustment of the Conversion Price shall be
made under this Section 11(e) upon the issuance of any Convertible Security
which is issued pursuant to the exercise of any warrants or other subscription
or purchase rights therefore, if any adjustment shall previously have been made
in the Conversion Price then in effect upon the issuance of such warrants or
other rights pursuant to this Section 11(e).
 
 
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         (f)   Computation of Consideration.  The consideration received by
Issuer shall be deemed to be the following: to the extent that any Additional
Shares of Common Stock or any Common Stock Equivalents shall be issued for a
cash consideration, the consideration received by Issuer therefore; or, if such
Additional Shares of Common Stock or Common Stock Equivalents are offered by
Issuer for subscription, the subscription price; or, if such Additional Shares
of Common Stock or Common Stock Equivalents are sold to underwriters or dealers
for public offering without a subscription offering, the initial public offering
price, in any such case excluding any amounts paid or receivable for accrued
interest or accrued dividends and without deduction of any compensation,
discounts, commissions, or expenses paid or incurred by Issuer for or in
connection with the underwriting thereof or otherwise in connection with the
issue thereof.  The consideration for any Additional Shares of Common Stock
issuable pursuant to any Common Stock Equivalents shall be the consideration
received by Issuer for issuing such Common Stock Equivalents, plus the
additional consideration payable to Issuer upon the exercise, conversion or
exchange of such Common Stock Equivalents.  In case of the issuance at any time
of any Additional Shares of Common Stock or Common Stock Equivalents in payment
or satisfaction of any dividend upon any class of stock other than Common Stock,
Issuer shall be deemed to have received for such Additional Shares of Common
Stock or Common Stock Equivalents a consideration equal to the amount of such
dividend so paid or satisfied.  In any case in which the consideration to be
received or paid shall be other than cash, the Board of Directors of Issuer
shall determine in good faith the fair market value of such consideration and
promptly notify the Purchaser of its determination of the fair market value of
such consideration prior to payment or accepting receipt thereof.  If, within
thirty (30) days after receipt of said notice, the Purchaser shall notify the
Board of Directors of Issuer in writing of its objection to such determination,
a determination of fair market value of such consideration shall be made by an
appraiser selected by Issuer and approved by the Purchaser.  If Issuer and the
Purchaser are unable to agree on the selection of an appraiser, the issue of
selection of an appraiser shall be submitted to the American Arbitration
Association.
 
         (g)   Readjustment of Conversion Price.  Upon the expiration of the
right to convert, exchange or exercise any Common Stock Equivalent the issuance
of which effected an adjustment in the Conversion Price, if such Common Stock
Equivalent shall not have been converted, exercised or exchanged, the number of
shares of Common Stock deemed to be issued and outstanding by reason of the fact
that they were issuable upon conversion, exchange or exercise of any such Common
Stock Equivalent shall no longer be computed as set forth above, and the
Conversion Price shall forthwith be readjusted and thereafter be the price which
it would have been (but reflecting any other adjustments in the Conversion Price
made pursuant to the provisions of this Section 11 after the issuance of such
Common Stock Equivalent) had the adjustment of the Conversion Price been made in
accordance with the issuance or sale of the number of Additional Shares of
Common Stock actually issued upon conversion, exchange or issuance of such
Common Stock Equivalent and thereupon only the number of Additional Shares of
Common Stock actually so issued shall be deemed to have been issued and only the
consideration actually received by Issuer shall be deemed to have been received
by Issuer.
 
         (h)   Treasury Shares.  In making any adjustment in the Conversion
Price hereinbefore provided in this Section 11, the number of shares of Common
Stock at any time outstanding shall not include any shares thereof then directly
or indirectly owned or held by or for the account of Issuer.
         
         (i)   Calculations.  All calculations under this Section 11 shall be
made to the nearest cent or the nearest 1/100th of a share, as applicable.  The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of Issuer, and the disposition of any
such shares shall be considered an issue or sale of Common Stock.
 
         (j)   Notice of Adjustments.  Upon the occurrence of each adjustment
pursuant to this Section 11, Issuer at its expense will promptly compute such
adjustment in accordance with the terms of this Note and prepare a certificate
setting forth such adjustment, including a statement of the adjusted Conversion
Price and adjusted number or type of Conversion Shares or other securities, cash
or property issuable upon exercise of this Note (as applicable), describing the
transactions giving rise to such adjustments and showing in detail the facts
upon which such adjustment is based.  Upon written request, Issuer will promptly
deliver a copy of each such certificate to the Purchaser and to Issuer’s
transfer agent.
 
 
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         (k)   Notice of Corporate Events.  If Issuer (i) declares a dividend or
any other distribution of cash, securities or other property in respect of its
Common Stock, including without limitation any granting of rights or warrants to
subscribe for or purchase any capital stock of Issuer or any Subsidiary, (ii)
authorizes or approves, enters into any agreement contemplating or solicits
stockholder approval for  (x) any sale of all or substantially all of its assets
in one or a series of related transactions, (y) any tender offer or exchange
offer (whether by Issuer or another person) pursuant to which holders of Common
Stock are permitted to tender or exchange their shares for other securities,
cash or property, or (z) any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property or (iii)
authorizes the voluntary dissolution, liquidation or winding up of the affairs
of Issuer, then Issuer shall deliver to the Purchaser a notice describing the
material terms and conditions of such transaction, at least ten (10) business
days prior to the applicable record or effective date on which a Person would
need to hold Common Stock in order to participate in or vote with respect to
such transaction, and Issuer will take all steps reasonably necessary in order
to insure that the Purchaser is given the practical opportunity to convert this
Note prior to such time so as to participate in or vote with respect to such
transaction; provided, however, that the failure to deliver such notice or any
defect therein shall not affect the validity of the corporate action required to
be described in such notice.
 
         (l)   Rights Upon Distribution Of Assets.  If Issuer shall declare or
make any dividend or other distribution of its assets (or rights to acquire its
assets) to holders of shares of Common Stock, by way of return of capital or
otherwise (including, without limitation, any distribution of cash, stock or
other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (a “Distribution”), at any time after the issuance of this
Note, then, in each such case:
 
            (i)          any Conversion Price in effect immediately prior to the
close of business on the record date fixed for the determination of holders of
shares of Common Stock entitled to receive the Distribution shall be reduced,
effective as of the close of business on such record date, to a price determined
by multiplying such Conversion Price by a fraction of which (i) the numerator
shall be the closing bid price of the shares of Common Stock on the Trading Day
immediately preceding such record date minus the fair market value of the
Distribution (as determined in good faith by Issuer’s Board of Directors)
applicable to one share of Common Stock, and (ii) the denominator shall be the
closing bid price of the shares of Common Stock on the Trading Day immediately
preceding such record date; and
        
            (ii)         the number of Conversion Shares shall be increased to a
number of shares equal to the number of shares of Common Stock obtainable
immediately prior to the close of business on the record date fixed for the
determination of holders of shares of Common Stock entitled to receive the
Distribution multiplied by the reciprocal of the fraction set forth in the
immediately preceding paragraph (a); provided that in the event that the
Distribution is of shares of Common Stock (or common stock) (“Other Shares of
Common Stock”) of a company whose common shares are traded on a national
securities exchange or a national automated quotation system, then the Purchaser
may elect to receive a warrant to purchase Other Shares of Common Stock in lieu
of an increase in the number of Conversion Shares, the terms of which shall be
identical to those of the Warrant issued pursuant to the Purchase Agreement,
except that such warrant shall be exercisable into the number of shares of Other
Shares of Common Stock that would have been payable to the Purchaser pursuant to
the Distribution had the Purchaser converted this Note immediately prior to such
record date and with an aggregate exercise price equal to the product of the
amount by which the conversion price of this Note was decreased with respect to
the Distribution pursuant to the terms of the immediately preceding paragraph
(i) and the number of Conversion Shares calculated in accordance with the first
part of this paragraph (ii).
 
 
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12.   PURCHASER REDEMPTION OPTION.  Upon written notice (the “Purchaser
Redemption Notice”) by Purchaser no earlier than one day prior to the closing
date of any New Financing and no later than forty-five (45) calendar days
following the closing date of any New Financing (the “Purchaser Redemption
Right”), Issuer shall make a cash payment in full of the entire principal amount
of, and any accrued interest on, this Note, plus the Premium Payment (the
“Purchaser Redemption Purchase Price”). Within three (3) business following
receipt of Purchaser Redemption Notice, the Company shall deliver to Purchaser
the Purchaser Redemption Purchase Price via federal funds wire transfer(s) of
immediately available funds, in accordance with written instructions provided by
Purchaser to the Company prior to the date thereof, and Purchaser and the
Company agree to enter into such documents and make such representations,
warranties and covenants as are reasonably customary in order to complete the
redemption of this Note.
 
13.   ISSUER REDEMPTION OPTION.  In the event that (a) the closing bid price of
Issuer’s Common Stock has exceeded 200% of the initial Conversion Price, as
adjusted, for at least 20 consecutive trading days, (b) the average daily
trading volume of Issuer Common Stock exceeds a value of US$250,000 per day
during the same period, (c) Issuer’s Common Stock has not been suspended and is
listed or quoted for trading on the NASDAQ or NYSE, and (d) an effective
registration statement is in effect covering the Conversion Shares as provided
in the Purchase Agreement or all of the Conversion Shares may then be freely
sold without any limitations under SEC Rule 144, Issuer shall have the right
(the “Issuer Redemption Right”), upon twenty (20) trading days prior written
notice (“Issuer Redemption Notice”) to Purchaser and all other Purchasers, to
redeem this Note and all (but not less than all) other Notes at their remaining
principal amount, plus all accrued interest thereon plus the Premium Payment, as
applicable (the “Issuer Redemption Purchase Price”). On the closing date set
forth in the Redemption Notice, the Company shall deliver to Purchaser the
Issuer Redemption Purchase Price via federal funds wire transfer(s) of
immediately available funds, in accordance with written instructions provided by
Purchaser to the Company prior to the date thereof, and Purchaser and the
Company agree to enter into such documents and make such representations,
warranties and covenants as are reasonably customary in order to complete the
redemption of this Note and the other Notes. This Note (to the extent not
converted) and any other Notes (to the extent not converted) shall no longer be
convertible on the date that is twenty (20) trading days following the date that
Purchaser and all other Purchasers have been notified of the exercise of the
Issuer Redemption Right by Issuer, provided that payment of the Issuer
Redemption Purchase Price is paid to the Purchaser and all other Purchasers
within five (5) business days thereafter.
 
 
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14.   ENFORCEABILITY.  The Issuer acknowledges that this Note and the Issuer’s
obligations under this Note are and shall at all times continue to be absolute
and unconditional in all respects, and shall at all times be valid and
enforceable irrespective of any other agreements or circumstances of any nature
whatsoever which might otherwise constitute a defense to this Note and the
obligations of the Issuer under this Note or the obligations of any other person
or entity relating to this Note.  The Transaction Documents set forth the entire
agreement and understanding of the Purchaser and the Issuer, and the Issuer
absolutely, unconditionally and irrevocably waives any and all right to assert
any set-off, counterclaim or crossclaim of any nature whatsoever with respect to
this Note or the obligations of the Issuer hereunder, or the obligations of any
other person or entity relating hereto or thereto or to the obligations of the
Issuer hereunder or otherwise in any action or proceeding brought by the
Purchaser to collect on the Note, or any portion thereof (provided, however,
that the foregoing shall not be deemed a waiver of the Issuer’s right to assert
any compulsory counterclaim maintained in a court of the United States, or of
the State of New York if such counterclaim is compelled under local law or rule
of procedure, nor shall the foregoing be deemed a waiver of the Issuer’s right
to assert any claim which would constitute a defense, setoff, counterclaim or
crossclaim of any nature whatsoever against the Purchaser in any separate action
or proceeding).  The Issuer acknowledges that no oral or other agreements,
conditions, promises, understandings, representations or warranties exist with
respect to the Transaction Documents or with respect to the obligations of the
Issuer thereunder, except those specifically set forth in the Transaction
Documents.  Issuer agrees to pay all costs and expenses of Purchaser related to
Purchaser’s enforcement of the obligations of the Issuer hereunder and the
collection of all sums payable hereunder, including but not limited to
reasonable attorneys’ fees and expenses, irrespective of whether litigation is
commenced.  Any such amounts shall be payable on demand, with interest at the
rate provided above for overdue principal and interest.
 
15.   WAIVER.  Issuer waives presentment, demand for payment, notice of dishonor
and any or all notices or demands in connection with the delivery, acceptance,
performance, default or enforcement of any Transaction Document now or hereafter
required by applicable law, and consents to any or all delays, extensions of
time, renewals or releases with respect to any Transaction Document, and of any
available security therefor, and agrees that no failure or delay on the part of
the Purchaser, in the exercise of any power, right or remedy under this Note
shall impair such power, right or remedy or shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or remedy
preclude other or further exercise of such or any other power, right or
remedy.  No notice to or demand on the Issuer shall be deemed to be a waiver of
the obligation of the Issuer or of the right of the Purchaser, to take further
action without further notice or demand as provided in any of the Transaction
Documents.
 
16.   AMENDMENTS.  This Note may not be modified, amended, changed or terminated
orally, except by an agreement in writing signed by the Issuer and the Required
Purchasers.  Any amendment or waiver effected in accordance with this Section 16
shall be binding upon the Issuer, all holders of the Notes and each transferee
of the Notes.  By acceptance hereof, Purchaser acknowledges that in the event
the required consent is obtained, any term of this Note may be amended or waived
without the consent of the Purchaser.
 
 
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17.   USURIOUS INTEREST RATE.  Notwithstanding anything to the contrary
contained in this Note, the interest paid or agreed to be paid hereunder shall
not exceed the maximum rate of non-usurious interest permitted by applicable law
(the “Maximum Rate”). If the Purchaser shall receive interest in an amount that
exceeds the Maximum Rate, the excess interest shall be applied to the principal
of the Note or, if it exceeds such unpaid principal, shall be refunded to the
Issuer. In determining whether the interest contracted for, charged, or received
by the Purchaser exceeds the Maximum Rate, the Issuer may, to the extent
permitted by applicable law, (a) characterize any payment that is not principal
as an expense, fee or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Note.
 
18.   COUNTERPARTS.  This Note may be executed in any number of counterparts,
each of which will be deemed to be an original and all of which together will
constitute a single agreement.
 
19.   NOTICES.  Any notice required or permitted by this Note shall be in
writing and shall be deemed sufficient upon delivery, when delivered personally
or by a nationally-recognized delivery service (such as Federal Express or UPS),
or seventy-two (72) hours after being deposited in the U.S. mail, as certified
or registered mail, with postage prepaid, and in all cases addressed to the
party to be notified at such party’s address as set forth above or as
subsequently modified by written notice.
 
20.   GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL.  This Note and all acts
and transactions pursuant hereto shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws.  The Issuer hereby irrevocably consents to the exclusive
jurisdiction of any federal or state court located in the State of New York and
consents that all service of process be sent by nationally recognized overnight
courier service directed to the Issuer at the Issuer’s address set forth herein
and service so made will be deemed to be completed on the business day after
deposit with such courier.  The Issuer acknowledges and agrees that the venue
provided above is the most convenient forum for both the Purchaser and the
Issuer.  The Issuer waives any objection to venue and any objection based on a
more convenient forum in any action instituted under this Note.  THE ISSUER AND
THE PURCHASER (BY ACCEPTANCE OF THIS NOTE) MUTUALLY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY AND ALL RIGHTS THAT THEY MAY NOW OR
HEREAFTER HAVE UNDER THE LAWS OF THE UNITED STATES OF AMERICA OR ANY STATE
THEREOF TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR ANY COURSE OF CONDUCT, COURSE OF
DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY,
INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF THE PURCHASER RELATING TO ENFORCEMENT OF THIS
NOTE.  EXCEPT AS PROHIBITED BY APPLICABLE LAW, THE ISSUER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER
IN ANY LITIGATION RELATING TO ENFORCEMENT OF THIS NOTE ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES.  THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE PURCHASER
TO MAKE FUNDS AVAILABLE TO THE ISSUER AND TO ACCEPT THIS NOTE.
 
 
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21.   PARI PASSU NOTES.  Purchaser acknowledges and agrees that the payment of
all or any portion of the outstanding principal amount of this Note and all
interest hereon shall be pari passu in right of payment and in all other
respects with the other Notes.  In the event Purchaser receives payments in
excess of its pro rata share of the Issuer’s payments to the holders of all of
the Notes, then Purchaser shall hold in trust all such excess payments for the
benefit of the holders of the other Notes and shall pay such amounts held in
trust to such other holders upon demand by such holders.
 
[Signature page follows]
 
 
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IN WITNESS WHEREOF, the Issuer has duly executed this Convertible Promissory
Note as of the date first written above.
 

 
ISSUER:
     
ONE BIO, CORP.
     
By:
   
Name:
 
Title:

 
PURCHASER:
 

 
Udi Toledano, individually

 
 
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