Exhibit 10.25
 
CONVERTIBLE PROMISSORY NOTE
 
Effective Date: October [      ], 2013 
U.S. $[__]

 
FOR VALUE RECEIVED, HEALTH REVENUE ASSURANCE HOLDINGS, INC., a Nevada
corporation ("Borrower"), promises to pay to TONAQUINT, INC., a Utah
corporation, or its successors or assigns ("Lender"), $[            ] and any
interest, fees, charges and penalties in accordance with the terms set forth
herein. This Convertible Promissory Note (this "Note") is issued and made
effective as of October [      ], 2013 (the "Effective Date"). For purposes
hereof, the "Outstanding Balance" of this Note means the Purchase Price (as
defined below), as reduced or increased, as the case may be, pursuant to the
terms hereof for redemption, conversion or otherwise, plus any original issue
discount ("OID"), accrued but unpaid interest, collection and enforcements
costs, and any other fees or charges (including without limitation late charges)
incurred under this Note. This Note is issued pursuant to that certain
Securities Purchase Agreement dated October [      ], 2013, as the same may be
amended from time to time (the "Purchase Agreement"), by and between Borrower
and Lender.
 
The purchase price for this Note and the Warrant (as defined in the Purchase
Agreement) is $[              ] (the "Purchase Price") payable by wire transfer.
The initial Outstanding Balance of this Note shall include the Purchase Price, a
$[             ] OID, and $[             ] to cover Lender's legal fees,
accounting costs, due diligence, monitoring and other transaction costs incurred
in connection with the purchase and sale of this Note. Borrower agrees that the
Master Promissory Note is fully paid for as of the Effective Date. The maturity
date for this Note (the "Maturity Date") shall be the date that is one year from
the Effective Date.
 
Subject to the adjustments described in this paragraph, the conversion price for
this Note shall be 70% (the "Conversion Factor") of the average of the two (2)
lowest intra-day trade prices in the fifteen (15) trading days immediately
preceding the Conversion (as defined below) (the "Conversion Price"). If at any
time after the Effective Date, Borrower is not DWAC Eligible (as defined below),
then the Conversion Factor will automatically be reduced by 5% for all future
Conversions under this Note. If at any time after the Effective Date, Borrower
is not DTC Eligible (as defined below), then the Conversion Factor will
automatically be reduced by an additional 5% for all future Conversions under
this Note; provided that the maximum reduction of the Conversion Factor may not
exceed 10%. For example, the first time Borrower is not DWAC Eligible, the
Conversion Factor for all future Conversions thereafter will be reduced from 60%
to 55%. If following such event, the first time the Company is not DTC Eligible,
the Conversion Factor for all future Conversions will be reduced from 55% to
50%. "DTC" means the Depository Trust Company. "DTC/FAST Program" means the
DTC's Fast Automated Securities Transfer Program. "DWAC" means Deposit
Withdrawal at Custodian as defined by the DTC. "DWAC Eligible" means that (i)
the Common Stock is eligible at the DTC for full services pursuant to DTC's
operational arrangements, including without limitation transfer through DTC's
DWAC system, (ii) the Borrower has been approved (without revocation) by the
DTC's underwriting department, and (iii) the Borrower's transfer agent is
approved as an agent in the DTC/FAST Program, (iv) the Conversion Shares are
otherwise eligible for delivery via DWAC; and (v) the Borrower's transfer agent
does not have a policy prohibiting or limiting delivery of the Conversion Shares
via DWAC. "DTC Eligible" means, with respect to the Common Stock, that such
Common Stock is eligible to be deposited in certificate form at the DTC, cleared
and converted into electronic shares by the DTC and held in the name of the
clearing firm servicing Lender's brokerage firm for the benefit of Lender.
 
1.   Interest. Borrower may repay this Note at any time on or before the date
that is 60 days from the Effective Date (the "Prepayment Opportunity Date"). If
Borrower repays this Note on or before the Prepayment Opportunity Date. (i) the
interest rate shall be ZERO PERCENT (0%), and (ii) the Note will be deemed paid
in full and retired. If Borrower does not repay the entire Outstanding Balance
on or before the Prepayment Opportunity Date, a one-time interest charge of 12%
(the "Interest Charge") shall be applied to the Outstanding Balance. Any
interest payable is in addition to the OID. The OID remains payable regardless
of the time and manner of payment by Borrower. Following the Prepayment
Opportunity Date, so long as no Event of Default (as defined below) shall have
occurred, Borrower may, in its sole and absolute discretion and upon giving
Lender not less than five (5) Trading Days written notice (a "Prepayment
Notice"), pay in cash all or any portion of the Outstanding Balance at any time
prior to the Maturity Date; provided that in the event the Company elects to
prepay all or any portion of the Outstanding Balance, it shall pay to the Holder
112% of the portion of the Outstanding Balance the Company elects to prepay.
 
 
 

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2.   Conversion. Lender has the right at any time after the date that is six (6)
months from the Effective Date, at its election, to convert (each instance of
conversion is referred to herein as a "Conversion") all or any part of the
Outstanding Balance of this Note into shares ("Conversion Shares") of fully paid
and non-assessable common stock of Borrower ("Common Stock") as per the
following conversion formula: the number of Conversion Shares equals the
Conversion amount divided by the Conversion Price. Conversion notices (each, a
"Conversion Notice") under this Note may be effectively delivered to Borrower by
any method of Lender's choice (including but not limited to facsimile, email,
mail, overnight courier, or personal delivery), and all Conversions shall be
cashless and not require further payment from Lender. If no objection is
delivered from Borrower to Lender regarding any variable or calculation of the
Conversion Notice within 24 hours of delivery of the Conversion Notice, Borrower
shall have been thereafter deemed to have irrevocably confirmed and irrevocably
ratified such Conversion Notice and waived any objection thereto. Borrower shall
deliver the Conversion Shares from any Conversion to Lender within three (3)
business days of Lender's delivery of the Conversion Notice to Borrower.
 
3.   Conversion Delays. If Borrower fails to deliver Conversion Shares in
accordance with the timeframes stated in Section 2, Lender, at any time prior to
selling all of those Conversion Shares, may rescind in whole or in part that
particular Conversion attributable to the unsold Conversion Shares, with a
corresponding increase to the Outstanding Balance (any returned Conversion
amount will tack back to the Effective Date). In addition, for each Conversion,
in the event that Conversion Shares are not delivered by the fourth business day
(inclusive of the day of the Conversion), a penalty of $2,000 per day will be
assessed for each day after the third business day (inclusive of the day of the
Conversion) until Conversion Share delivery is made; and such penalty will be
added to the Outstanding Balance (under Lender's and Borrower's expectations
that any penalty amounts will tack back to the Effective Date).
 
4.   Default. The following are events of default under this Note (each an
"Event of Default"): (i) Borrower shall fail to pay any principal under this
Note when due and payable hereunder; or (ii) Borrower shall fail to deliver any
Conversion Shares in accordance with the terms hereof; or (iii) Borrower shall
fail to pay any interest or any other amount under this Note when due and
payable (or payable by Conversion) hereunder; or (iv) a receiver, trustee or
other similar official shall be appointed over Borrower or a material part of
its assets and such appointment shall remain uncontested for twenty (20) days or
shall not be dismissed or discharged within sixty (60) days; or (v) Borrower
shall become insolvent or generally fails to pay, or admits in writing its
inability to pay, its debts as they become due, subject to applicable grace
periods, if any; or (vi) Borrower shall make a general assignment for the
benefit of creditors; or (vii) Borrower shall file a petition for relief under
any bankruptcy, insolvency or similar law (domestic or foreign); or (viii) an
involuntary proceeding shall be commenced or filed against Borrower; or (ix)
Borrower, at any time after the Effective Date, is not DWAC Eligible; or (x)
Borrower shall become delinquent in its filing requirements as a fully-reporting
issuer registered with the SEC; or (xi) Borrower shall fail to observe or
perform any covenant, obligation, condition or agreement of Borrower contained
herein, including without limitation all covenants to timely file all required
quarterly and annual reports and any other filings related to Rule 144; or (xii)
any representation, warranty or other statement made or furnished by or on
behalf of Borrower to Lender herein or in connection with the issuance of this
Note shall be false, incorrect, incomplete or misleading in any material respect
when made or furnished or becomes false thereafter.
 
 
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5.   Remedies. In the event of any default under this Note, Lender may at any
time thereafter accelerate this Note by written notice to Borrower, with the
Outstanding Balance becoming immediately due and payable in cash at the
Mandatory Default Amount (as defined hereafter). Notwithstanding the foregoing,
upon the occurrence of any event of default described in clauses (iv), (v),
(vi), (vii) or (viii) of Section 4, the Outstanding Balance as of the date of
acceleration shall become immediately and automatically due and payable in cash
at the Mandatory Default Amount, without any written notice required by Lender.
The "Mandatory Default Amount" means the greater of (i) the Outstanding Balance
divided by the Conversion Price on the date the Mandatory Default Amount is
either demanded or paid in full, whichever has a lower Conversion Price,
multiplied by the VWAP on the date the Mandatory Default Amount is either
demanded or paid in full, whichever has a higher VWAP, or (ii) 125% multiplied
by the Outstanding Balance. Commencing five (5) days after the occurrence of any
event of default that results in the eventual acceleration of this Note,
interest shall accrue on the Outstanding Balance at an interest rate equal to
the lesser of 22% per annum or the maximum rate permitted under applicable law.
In connection with such acceleration described herein, Lender need not provide,
and Borrower hereby waives, any presentment, demand, protest or other notice of
any kind, and Lender 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 acceleration may be rescinded and
annulled by Lender at any time prior to payment hereunder and Lender shall have
all rights as a holder of this Note until such time, if any, as Lender receives
full payment pursuant to this Section 5. No such rescission or annulment shall
affect any subsequent event of default or impair any right consequent thereon.
Nothing herein shall limit Lender's right to pursue any other remedies available
to it at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to Borrower's failure to
timely deliver certificates representing Conversion Shares upon Conversion of
this Note as required pursuant to the terms hereof.
 
6.   No Offset. Borrower acknowledges that this Note is an unconditional, valid,
binding and enforceable obligation of Borrower not subject to offset, deduction
or counterclaim of any kind. Borrower hereby waives any rights of offset it now
has or may have hereafter against Lender, its successors and assigns, and agrees
to make the payments or conversions called for herein in accordance with the
terms of this Note.
 
7.   Ownership Limited to 9.99% of Common Stock Outstanding. Notwithstanding
anything to the •contrary contained herein (except as set forth below in this
Section), this Note shall not be convertible by Lender, and Borrower shall not
effect any conversion of this Note or otherwise issue any shares of Common Stock
pursuant to Section 2 hereof, to the extent (but only to the extent) that Lender
together with any of its affiliates would beneficially own in excess of 9.99%
(the "Maximum Percentage") of the Common Stock outstanding. To the extent the
foregoing limitation applies, the determination of whether this Note shall be
convertible (vis-a-vis other convertible, exercisable or exchangeable securities
owned by Lender or any of its affiliates) and of which such securities shall be
convertible, exercisable or exchangeable (as among all such securities owned by
Lender and its affiliates) shall, subject to such Maximum Percentage limitation,
be determined on the basis of the first submission to Borrower for conversion,
exercise or exchange (as the case may be). No prior inability to convert this
Note, or to issue shares of Common Stock, pursuant to this Section shall have
any effect on the applicability of the provisions of this Section with respect
to any subsequent determination of convertibility. For purposes of this Section,
beneficial ownership and all determinations and calculations (including, without
limitation, with respect to calculations of percentage ownership) shall be
determined in accordance with Section 13(e) of the 1934 Act (as defined below)
and the rules and regulations promulgated thereunder. The provisions of this
Section shall be implemented in a manner otherwise than in strict conformity
with the terms of this Section to correct this Section (or any portion hereof)
which may be defective or inconsistent with the intended Maximum Percentage
beneficial ownership limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such Maximum
Percentage limitation. The limitations contained in this Section shall apply to
a successor holder of this Note and shall be unconditional, irrevocable and
non-waivable. For any reason at any time, upon the written or oral request of
Lender, Borrower shall within one (1) business day confirm orally and in writing
to Lender the number of shares of Common Stock then outstanding, including by
virtue of any prior conversion or exercise of convertible or exercisable
securities into Common Stock, including, without limitation, pursuant to this
Note.
 
8.           Opinion of Counsel. In the event that an opinion of counsel is
needed for any matter related to this Note, Lender has the right to have any
such opinion provided by its counsel. Lender also has the right to have any such
opinion provided by Borrower's counsel.
 
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IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of the
Effective Date set out above.
 

 
BORROWER:
         
HEALTH REVENUE ASSURANCE HOLDINGS, INC.
           
By:
      Name: Robert Rubinowitz     Title: President  

 
ACKNOWLEDGED, ACCEPTED AND AGREED:
 
LENDER:
 
TONAQUINT, INC.
 
By:
      John M. Fife, President  

 
 
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TONAQUINT, INC.
303 EAST WACKER DRIVE, SUITE 1200
CHICAGO, ILLINOIS 60601
 
Date:                                               
Health Revenue Assurance Holdings, Inc.
8551 W. Sunrise Boulevard, Suite 304
Plantation, Florida 33322 Attn: Andrea Clark, CEO
 
CONVERSION NOTICE
 
The above-captioned Lender hereby gives notice to Health Revenue Assurance
Holdings, Inc., a Nevada corporation (the "Company"), pursuant to that certain
Convertible Promissory Note made by the Company in favor of the Lender on
October 7, 2013, as applicable (the "Note"), that the Lender elects to convert
the portion of the Outstanding Balance of the Note into fully paid and
non-assessable shares of Common Stock of the Company as of the date of
conversion specified below. Such conversion shall be based on the Conversion
Price set forth below. In the event of a conflict between this Conversion Notice
and the Note, the Note shall govern, or, in the alternative, at the election of
the Lender in its sole discretion, the Lender may provide a new form of
Conversion Notice to conform to the Note.
 

 
A.          Date of conversion:                                   
B.           Conversion #:                                    
C.           Conversion Amount:                                            
D.          Average trade price:                                (average of the
two (2) lowest intra-day trade prices in the fifteen (15) trading days as per
Exhibit A)
E.           Conversion
Factor:                                             (70%, as may be adjusted per
the Note)
F.           Conversion Price:                                             (D
multiplied by E)
G.           Conversion Shares:                                             (C
divided by F)
H.           Remaining Outstanding Balance of
Note:                                             *

 
*      Subject to adjustments for corrections, defaults, and other adjustments
permitted by the Transaction Documents.
 
Please transfer the Conversion Shares electronically (via DWAC) to the following
account:
 

Broker:      Address:     DTC#:           Account #:           Account Name:   
       

 
To the extent the Conversion Shares are not able to be delivered to the Lender
electronically via the DWAC system, please reduce the Conversion Factor by five
percent (5%), and deliver all such certificated shares to Lender via reputable
overnight courier after receipt of this Conversion Notice (by facsimile
transmission or otherwise) to:
 

                       

 

 
Sincerely,
   
TONAQU1NT, INC.
           
By:
        John M. Fife, President  

 
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