THIS  CONVERTIBLE PROMISSORY NOTE IS ISSUED IN EXCHANGE FOR THE DEBENTURE
ORIGINALLY ISSUED ON MARCH 19, 2010_BY GLOBAL HEALTH VENTURES INC., WHICH LATER
MERGED WITH KEDEM PHARMACEUTICALS INC., BY THE BORROWER (AS DEFINED BELOW) TO
 THE LENDER (AS DEFINED BELOW) WITHOUT ANY ADDITIONAL CONSIDERATION. FOR
PURPOSES OF RULE 144, THIS NOTE SHALL BE DEEMED TO HAVE BEEN ISSUED ON MARCH 19,
2010.
 
NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION 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.

COMPANY NOTE

$2,507,042.62
October 27, 2011

KEDEM PHARMACEUTICALS INC.
 
Secured Convertible Promissory Note
 
FOR VALUE RECEIVED, Kedem Pharmaceuticals Inc. (formerly known as Global Health
Ventures Inc.), a Nevada corporation (the “Borrower”), hereby promises to pay to
the order of ●, an Illinois limited liability company, or its successors or
assigns (the “Lender,” and together with the Borrower, the “Parties”), the
principal sum of $2,507,042.62 (the “Principal Balance”) together with all
accrued and unpaid interest thereon, fees incurred, adjustments, or other
amounts owing hereunder, all as set forth below in this Secured Convertible
Promissory Note (this “Note”). This Note is issued pursuant to that certain
Exchange Agreement of even date herewith, entered into by and between the
Borrower and the Lender (the “Exchange Agreement”). Defined terms used herein
but not otherwise defined shall have the meanings ascribed thereto in the
Exchange Agreement.
 
1. Principal and Interest Payments. Interest on the Outstanding Balance (as
defined below) of this Note shall accrue interest at the rate of twelve percent
(12%) per annum. Interest shall accrue on the basis of a 360 day year for the
actual number of days elapsed. The Borrower shall pay to the Lender all
outstanding amounts due hereunder on or before September 18, 2014 (the “Maturity
Date”). All payments owing hereunder shall be in lawful money of the United
States of America delivered to the Lender at the address furnished to the
Borrower for that purpose. All payments shall be applied first to (a) costs of
collection, if any, then to (b) fees and penalties, if any, then to (c) accrued
and unpaid interest, and thereafter to (d) principal. For purposes hereof, the
term “Outstanding Balance” means the sum of the outstanding Principal Balance
and any accrued but unpaid interest, collection and enforcement costs,
adjustments, and any other fees or penalties incurred under this Note.
 
2. Conversion.
 
(a) Optional Conversion. At any time or from time to time after the date of this
Note and prior to payment in full of the entire Outstanding Balance, the Lender
shall have the right, at the Lender’s option, to convert the Outstanding
Balance, in whole or in part (the “Conversion Amount”), into shares of common
stock, par value $0.001 per share (the “Common Stock”) of the Borrower. The
number of shares of Common Stock to be issued upon a conversion hereunder shall
be determined by dividing (a) the Conversion Amount by (b) the Conversion Price
(as defined below).
 
(i) Conversion Price. For purposes of this Note, the “Conversion Price” is
defined as 70% (the “Conversion Factor”) of the average of the three lowest
closing bid prices for the Common Stock (the “Closing Bid Price”) during the
twenty (20) Trading Days (as defined below) immediately preceding the Conversion
Date (as defined below).
 
(ii) Trading Data. The trading data used to compute the Closing Bid Price shall
be as reported by Bloomberg, LP (“Bloomberg”), or if such information is not
then being reported by Bloomberg, then as reported by such other data
information source as may be selected by the Lender. “Trading Day” means any day
during which the primary market on which the Common Stock is principally traded
at the relevant time is open for business.
 
 
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(b) Conversion Mechanics. In order to convert this Note into Common Stock, the
Lender shall give written notice to the Borrower at its principal corporate
office or the notice address provided in the Exchange Agreement (which notice,
notwithstanding anything herein to the contrary, may be given via facsimile,
email, or other means in the discretion of the Lender) pursuant to the forms
attached hereto as Exhibit A (the “Conversion Notice”) and Exhibit A-1 (the
“Conversion Worksheet”) of the election to convert the same pursuant to this
Section 2(b) (the date on which a Conversion Notice is given, a “Conversion
Date”). Such Conversion Notice shall state the Conversion Amount, the number of
shares of Common Stock to which the Lender is entitled pursuant to the
Conversion Notice (the “Conversion Shares”), and the account into which the
shares of Common Stock are to be deposited (the “Lender Account”). The Borrower
shall immediately, but in no event later than three (3) Trading Days after
receipt of a Conversion Notice (the “Required Delivery Date”), deliver the
Conversion Shares to the Lender Account. Notwithstanding anything to the
contrary herein, all such deliveries of Conversion Shares shall be electronic,
via DWAC, provided the Borrower is DWAC eligible. In the event the Borrower
fails to deliver the Conversion Shares on or before the Required Delivery Date,
in addition to all other remedies available to the Lender hereunder or under any
other Transaction Documents and at law or in equity, a penalty equal to 1.5% of
the Conversion Amount shall be added to the balance of this Note per day until
such Conversion Shares are received by the Lender (the “Actual Delivery Date”).
The conversion shall be deemed to have been made immediately prior to the close
of business on the date of the Conversion Notice, and the person or entity
entitled to receive the shares of Common Stock upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock as of such date.
 
(c) No Fractional Shares. Conversion calculations pursuant to Section 2(a) shall
be rounded up to the nearest whole share, and no fractional shares shall be
issuable by the Borrower upon conversion of this Note or any portion thereof.
All shares issuable upon conversion of this Note or any portion thereof shall be
aggregated for purposes of determining whether such conversion would result in
the issuance of a fractional share.
 
(d) No Impairment. The Borrower will not, by amendment of its Articles of
Incorporation or through any reorganization, recapitalization, 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 the Borrower, but will
at all times in good faith assist in the carrying out of all the provisions of
this Section 2 and in the taking of all such action as may be necessary or
appropriate in order to protect the conversion rights of the Lender against
impairment.
 
3. Prepayment by the Borrower. The Borrower may from time to time prepay the
Outstanding Balance or any portion thereof without premium or penalty. Any such
prepayments shall be applied to the Outstanding Balance in the manner set forth
in Section 1.
 
4. Certain Adjustments. The number and class of securities into which this Note
may be converted under Section 2 shall be subject to adjustment in accordance
with the following provisions:
 
(a) Capital Adjustments. If the Borrower shall at any time prior to the full
payment of this Note subdivide the Common Stock, by split-up or stock split, or
otherwise, or combine the Common Stock, or issue additional shares of Common
Stock as a dividend, the number of Conversion Shares issuable on the conversion
of this Note shall forthwith be automatically increased proportionately in the
case of a subdivision, split or stock dividend, or proportionately decreased in
the case of a combination. Any adjustment under this Section shall become
effective automatically at the close of business on the date the subdivision or
combination becomes effective, or as of the record date of such dividend, or in
the event that no record date is fixed, upon the making of such dividend.
 
(b) Subsequent Equity Sales. If the Borrower or any subsidiary thereof, as
applicable, at any time while this Note remains outstanding and unconverted,
shall sell or grant any option to purchase, or sell or grant any right to
reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or
any option to purchase or other disposition of) any Common Stock, preferred
shares convertible into Common Stock, or debt, warrants, options or other
instruments or securities convertible into or exercisable for shares of Common
Stock (together herein referred to as “Equity Securities”), at an effective
price per share less than the then-applicable Conversion Price (such lower
price, the “Base Share Price” and such issuance collectively, a “Dilutive
Issuance”) (if the holder of the Common Stock or Equity Securities so issued
shall at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options, or rights per share which are issued in connection
with such issuance, be entitled to receive shares of Common Stock at an
effective price per share that is less than the Conversion Price, such issuance
shall be deemed to have occurred for less than the Conversion Price on such date
of the Dilutive Issuance), then the Conversion Price shall be reduced and only
reduced to equal the Base Share Price. Such adjustment shall be made whenever
such Common Stock or Equity Securities are issued. The Borrower shall notify the
Lender, in writing, no later than the first trading day following the issuance
of any Common Stock or Equity Securities subject to this Section 4(b),
indicating therein the applicable issuance price, or applicable reset price,
exchange price, conversion price, or other pricing terms (such notice, the
“Dilutive Issuance Notice”). For purposes of clarification, whether or not the
Borrower provides a Dilutive Issuance Notice pursuant to this Section, upon the
occurrence of any Dilutive Issuance, after the date of such Dilutive Issuance
the Lender is entitled to receive the Conversion Shares at a Conversion Price
equal to the Base Share Price regardless of whether the Lender accurately refers
to the Base Share Price in the Conversion Notice.
 
 
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(c) Notice of Adjustment. When any adjustment is required to be made in the
number or kind of shares issuable upon conversion of this Note, or in the
Conversion Price, pursuant to the terms hereof, the Borrower shall promptly
notify the Lender of such event and of the number of Conversion Shares.
 
(d) Exceptions to Adjustment. Notwithstanding the provisions of this Section 4,
no adjustment to the Conversion Price shall be effected as a result of an
Excepted Issuance. “Excepted Issuances” shall mean, collectively, (i) the
Borrower’s issuance of securities in connection with strategic license
agreements and other partnering arrangements so long as such issuances are not
for the purpose of raising capital and in which holders of such securities or
debt are not at any time granted registration rights, (ii) the Borrower’s
issuance of Common Stock or the issuances or grants of options to purchase
Common Stock to employees, directors, and consultants, pursuant to plans or
agreements which are constituted or in effect on the date of the initial
issuance of this Note.
 
(e) No Change Necessary. The form of this Note need not be changed because of
any adjustment in the number and class of securities issuable upon its
conversion.
 
5. Further Adjustments. In case at any time or, from time to time, the Borrower
shall take any action that affects the class of securities into which this Note
may be converted under Section 2, other than an action described herein, then,
unless such action will not have a material adverse effect upon the rights of
the Lender, the number and class of securities into which this Note is
convertible shall be adjusted in such a manner and at such time as shall be
equitable under the circumstances.
 
6. Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment pursuant to Section 4 or Section 5, the Borrower at its sole
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to the Lender, within five (5) days, a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The Borrower
shall, upon the written request at any time of the Lender, furnish or cause to
be furnished to the Lender a like certificate setting forth (a) such adjustments
and readjustments, and (b) the number and class of securities and the amount, if
any, of other property which at the time would be received upon the conversion
of this Note under Section 2.
 
7. Security. This Note is secured by a Security Agreement of even date herewith
(the “Security Agreement”) executed by the Borrower in favor of the Lender
encumbering all of the assets of the Borrower, as more specifically set forth in
the Security Agreement, all the terms and conditions of which are hereby
incorporated into and made a part of this Note.
 
8. Change of Control. In the event of (a) any transaction or series of related
transactions (including any reorganization, merger or consolidation) that
results in the transfer of 50% or more of the outstanding voting power of the
Borrower, or (b) a sale of all or substantially all of the assets of the
Borrower to another person or entity, this Note shall be automatically due and
payable in cash. The Borrower will give the Lender not less than ten (10)
business days prior written notice of the occurrence of any events referred to
in this Section 8.
 
9. Representations and Warranties of the Borrower. In addition to the
representations and warranties set forth in that certain Forbearance Agreement
of even date herewith (the “Forbearance Agreement”), the Exchange Agreement, and
the Security Agreement, which are incorporated herein, the Borrower hereby
represents and warrants to the Lender that:
 
(a) The Borrower understands and acknowledges that the number of Conversion
Shares issuable upon conversion of this Note will increase in certain
circumstances. The Borrower further acknowledges that its obligation to issue
Conversion Shares upon conversion of this Note in accordance with its terms is
absolute and unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other stockholders of the Borrower;
 
(b) The Borrower’s Common Stock is registered under Section 12(g) of the
Securities Exchange Act of 1934 (the “Exchange Act”);
 
(c) The Borrower is not and for at least the last 12 months prior to the date
hereof has not been a “shell company,” as defined in paragraph (i)(1)(i) of Rule
144 or Rule 12(b)(­2) of the Exchange Act;
 
(d) The Borrower is subject to the reporting requirements of Section 13 or
Section 15(d) of the Exchange Act and has filed all required reports under
Section 13 or Section 15(d) of the Exchange Act during the 12 months prior to
the date hereof (or for such shorter period that the Borrower was required to
file such reports); and
 
(e) The issuance of this Note has been duly authorized by the Borrower. Upon
conversion in accordance with the terms of this Note, the Conversion Shares,
when issued, will be validly issued, fully paid and non-assessable, free from
all taxes, liens, claims, pledges, mortgages, restrictions, obligations,
security interests and encumbrances of any kind, nature and description. The
Borrower has reserved from its duly authorized capital stock the appropriate
number of shares of Common Stock for issuance upon conversion of this Note as
required by the terms of this Note.
 
 
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10. Affirmative and Negative Covenants. In addition to the covenants set forth
in the Forbearance Agreement, Exchange Agreement, and the Security Agreement,
the Borrower covenants and agrees, while any portion of this Note remains
outstanding and unconverted, as follows:
 
(a) The Borrower shall do all things necessary to preserve and keep in full
force and effect its corporate existence including, without limitation, maintain
all licenses or similar qualifications required by it to engage in its business
in all jurisdictions in which it is at the time so engaged; and continue to
engage in business of the same general type as conducted as of the date hereof;
and continue to conduct its business substantially as now conducted or as
otherwise permitted hereunder;
 
(b) The Borrower shall pay and discharge promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property before the same shall become
delinquent or in default, which, if unpaid, might reasonably be expected to give
rise to liens or charges upon such properties or any part thereof, unless, in
each case, the validity or amount thereof is being contested in good faith by
appropriate proceedings and the Borrower has maintained adequate reserves with
respect thereto in accordance with United States GAAP;
 
(c) The Borrower shall comply in all material respects with all federal, state
and local laws and regulations, orders, judgments, decrees, injunctions, rules,
regulations, permits, licenses, authorizations and requirements (collectively,
“Requirements”) of all governmental bodies, departments, commissions, boards,
insurers, courts, authorities, officials or officers which are applicable to the
Borrower or any of its properties, except where the failure to so comply would
not have a material adverse effect on the Borrower or any of its properties;
provided, however, that nothing provided herein shall prevent the Borrower from
contesting the validity or the application of any Requirements;
 
(d) The Borrower shall keep proper records and books of account with respect to
its business activities, in which proper entries, reflecting all of their
financial transactions, are made in accordance with United States GAAP;
 
(e) From the date hereof until the date that is six (6) months after the date
that all the Conversion Shares either have been sold by the Lender, or may
permanently be sold by the Lender without any restrictions pursuant to Rule 144
(the “Registration Period”), the Borrower shall file with the Securities and
Exchange Commission (the “SEC”) in a timely manner all required reports under
Sections 13 or 15(d) of the Exchange Act and such reports shall conform to the
requirement of the Exchange Act and the SEC for filing thereunder;
 
(f) The Borrower shall furnish to the Lender, so long as the Lender owns any
Common Stock, promptly upon request, (i) a written statement by the Borrower
that it has complied with the reporting requirements of Rule 144, (ii) a copy of
the most recent annual or quarterly report of the Borrower and such other
reports and documents so filed by the Borrower, and (iii) such other information
as may be reasonably requested to permit the Lender to sell such securities
pursuant to Rule 144 without registration;
 
(g) During the Registration Period, the Borrower shall not terminate its status
as an issuer required to file reports under the Exchange Act even if the
Exchange Act or the rules and regulations thereunder would otherwise permit such
termination;
 
(h) On the date hereof and at all times prior to the repayment in full of this
Note, the Borrower shall reserve the number of shares required by the Share
Reserve for the purpose of, among other things, the conversion of this Note. The
Borrower represents that it has sufficient authorized and unissued shares of
Common Stock available to create the Share Reserve after considering all other
commitments that may require the issuance of Common Stock. The Borrower shall
take all action reasonably necessary to at all times have authorized, and
reserved for the purpose of issuance, such number of shares of Common Stock as
shall be necessary to effect the full conversion of the Note. If at any time the
Share Reserve is insufficient to effect the full conversion of the Note, the
Borrower shall increase the Share Reserve accordingly. If the Borrower does not
have sufficient authorized and unissued shares of Common Stock available to
increase the Share Reserve, the Borrower shall call and hold a special meeting
of the stockholders within thirty (30) days of such occurrence, for the sole
purpose of increasing such number of authorized shares. The Borrower’s
management shall recommend to the stockholders to vote in favor of increasing
the number of authorized shares of Common Stock. Management shall also vote all
of its shares in favor of increasing the number of authorized shares of Common
Stock. The Borrower shall use its best efforts to cause such additional shares
of Common Stock to be authorized so as to comply with the requirements of this
Section 10(h);
 
(i) The Common Stock shall be listed or quoted for trading on any of (i) NYSE
Amex, (ii) the New York Stock Exchange, (iii) the Nasdaq Global Market, (iv) the
Nasdaq Capital Market, (v) the OTC Bulletin Board, or (vi) the OTCQX or OTCQB
(each, a “Primary Market”). The Borrower shall promptly secure the listing of
all of its securities issuable under the terms of the Transaction Documents upon
each national securities exchange and automated quotation system, if any, upon
which the Common Stock is then listed (subject to official notice of issuance)
and shall maintain such listing of all securities from time to time issuable
under the terms of the Transaction Documents;
 
(j) The Borrower shall notify the Lender in writing, promptly upon learning
thereof, of any litigation or administrative proceeding commenced or threatened
against the Borrower involving a claim in excess of $100,000.00;
 
(k) The Borrower shall use the proceeds from this Note for working capital and
general corporate purposes only; and
 
(l) The Borrower shall notify the Lender in writing, promptly upon the
occurrence of any Event of Default.
 
 
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11. Event of Default. Upon each occurrence of any of the following events, each
an “Event of Default”, the Lender may, in its sole and exclusive discretion,
accelerate the maturity of this Note and demand immediate payment in full,
whereupon the Outstanding Balance of the Note and all obligations of Borrower to
Lender hereunder, together with accrued interest thereon and accrued charges and
costs, if any, shall become immediately due and payable without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived; provided, however, that this remedy shall not preclude the Lender from
exchanging this Note for shares of Common Stock pursuant to Section 2 hereof and
exercising all legally available rights and privileges. Notwithstanding the
forgoing, upon the occurrence or existence of any Event of Default described in
Section 11(g), immediately and without notice, all outstanding obligations
payable by the Borrower hereunder shall automatically become immediately due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived, anything contained herein or in the
other Transaction Documents to the contrary notwithstanding.
 
If an Event of Default occurs, then such Event of Default shall constitute a
continuing default which will permit the Lender to exercise its rights under
this Section at any time.
 
           An “Event of Default” shall be when any of the following occur:
 
(a) The Borrower defaults in the payment of principal or interest on this Note
or any other amount due or otherwise owed to Lender; or
 
(b) Any material default, material misrepresentation, or material breach of a
covenant, representation or warranty or other agreement under the Transaction
Documents; or
 
(c) Any transfer, conveyance, or assignment of substantial Borrower assets or
substantial assets of any of its subsidiaries, in each case not in the ordinary
course of business, except for a merger in which the Borrower is the surviving
corporation or in which the surviving corporation assumes the Borrower’s
obligations under the Transaction Documents; or
 
(d) Any money judgment, writ or warrant of attachment, or similar process
against the Borrower or any of its properties or other assets, or defaults on
obligations, in amount in excess of $100,000 unless such are being contested by
the Borrower; or
 
(e) The Borrower (a) fails to cause its transfer agent to issue shares of Common
Stock upon written notice of the Lender’s request to receive repayment of this
Note in shares of Common Stock pursuant to the terms herein within five (5)
business days of receipt of a Conversion Notice; or (b) upon written request of
the Lender, fails to remove any restrictive legend on any certificate or fails
to cause its transfer agent to remove such legend where such removal is lawful
within five (5) business days of receipt of a written demand therefore; or
 
(f) Any governmental agency or any court of competent jurisdiction at the
instance of any governmental agency shall assume custody or control of the whole
or any substantial portion of the properties or assets of the Borrower; or
 
(g) The entry of a decree or order by a court having jurisdiction adjudging the
Borrower a bankrupt or insolvent, or approving a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of the
Borrower, under federal bankruptcy law, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other similar law;
or the commencement against the Borrower of a proceeding under federal
bankruptcy law or any applicable federal or state bankruptcy, insolvency or
similar law and the continuance of any such proceedings unstayed and in effect
for a period of ninety (90) days or more; or the commencement by the Borrower of
a voluntary case under federal bankruptcy law, as now or hereafter constituted,
or any other applicable federal or state bankruptcy, insolvency, or other
similar law, or the consent by it to the institution of bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under federal bankruptcy law or any other
applicable federal or state law, or the consent by it to the filing of such
petition or to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Borrower or of any substantial part of
its property, or the making by it of an assignment for the benefit of creditors,
or the admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Borrower in
furtherance of any such action; or
 
(h) The Borrower fails to continuously maintain its status as a reporting
company under the federal securities laws; or
 
(i) Provided the Borrower qualifies as such, the Borrower fails to become a DWAC
eligible issuer prior to or on February 1, 2012 and to maintain its status as a
DWAC eligible issuer at all times thereafter; or
 
(j) The Borrower fails to timely file all reports required to be filed by the
Borrower with the SEC pursuant to Section 12, 13 or 15(d) of the Exchange Act,
or otherwise required by the Exchange Act, except for current reports on Form
8-K the late filing of which will not have a material adverse effect on the
Borrower (the Borrower can cure any late filing by filing a timely notice of
late filing and filing such report, provided, however, that any such late filing
shall not prevent the Lender from listing or selling its shares under Rule 144).
 
(k) Notwithstanding anything to the contrary contained in this Note or the other
Transaction Documents, a breach or default by the Borrower of any covenant or
other term or condition contained in (i) the Note, (ii) any of the other
Transaction Documents, or (iii) any Other Agreements (defined below); shall, at
the option of the Lender, be considered a default under the Note, in which event
the Lender shall be entitled (but in no event required) to apply all rights and
remedies of the Lender under the terms of this Agreement and the Note. “Other
Agreements” means, collectively, all existing and future agreements and
instruments between, among or by: (1) the Borrower (or a subsidiary), and, or
for the benefit of, (2) the Lender and any affiliate of the Lender, including,
without limitation, promissory notes, purchase agreements, contracts or other
agreements or undertakings; provided, however, the term “Other Agreements” shall
not include the Loan Documents. The intent of this provision is that all
existing and future loan transactions will be cross-defaulted with each other
loan transaction and with all other existing and future debt of Borrower to the
Lender.
 
 
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12. Lender’s Rights Upon Default. Upon the occurrence of any Event of Default
pursuant to this Note, the Lender may, at its sole and exclusive option, do any
or all of the following, either concurrently or separately: (a) accelerate the
maturity of this Note and demand immediate payment in full, whereupon the
outstanding principal amount of the Note and all obligations of Borrower to
Lender hereunder, together with adjustments, accrued interest thereon, and
accrued charges and costs, including costs incurred by the Lender with respect
to the collection of this Note (including reasonable legal fees), if any, shall
become immediately due and payable without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived; (b)
offset, recoup or exercise any other legal remedy to offset any liabilities due
by the Lender, including but not limited to any offset of this Note against the
investor notes previously delivered by the Lender to the Borrower (the “Investor
Notes”), as provided under Section 3 of the Investor Notes issued by the Lender
to the Company on March 19, 2010; and (c) exercise all legally available rights
and privileges. If an Event of Default occurs hereunder, the Borrower will be
responsible for all costs incurred by the Lender in collection of this Note,
including reasonable legal fees, which costs will constitute part of the
obligations of the Borrower hereunder.
 
13. Ownership Limitation. Notwithstanding the provisions of this Note, if at any
time after the date hereof, the Lender shall or would receive shares of Common
Stock in payment of interest or principal under this Note or upon conversion of
this Note, so that the Lender would, together with other shares of Common Stock
held by it or its affiliates, own or beneficially own by virtue of such action
or receipt of additional shares of Common Stock a number of shares exceeding
9.99% of the number of shares of Common Stock outstanding on such date (the
“9.99% Cap”), the Borrower shall not be obligated and shall not issue to the
Lender shares of Common Stock which would exceed the 9.99% Cap, but only until
such time as the 9.99% Cap would no longer be exceeded by any such receipt of
shares of Common Stock by the Borrower. The foregoing limitations are
enforceable, unconditional and non-waivable and shall apply to all affiliates
and assigns of the Lender.
 
14. No Rights or Liabilities as Stockholder. This Note does not by itself
entitle the Lender to any voting rights or other rights as a stockholder of the
Borrower. In the absence of conversion of this Note, no provisions of this Note,
and no enumeration herein of the rights or privileges of the Lender, shall cause
the Lender to be a stockholder of the Borrower for any purpose.
 
15. Unconditional Obligation. No provision of this Note shall alter or impair
the obligation of the Borrower, which is absolute and unconditional, to pay the
principal of, and interest on, this Note at the time, place, and rate, and in
the currency or where contemplated herein in shares of Common Stock, as
applicable, as herein prescribed. This Note, together with interest accrued and
accruing thereon, and fees, costs, expenses, and other charges now or hereafter
payable by Borrower to Lender under the Transaction Documents, are
unconditionally owing by Borrower to Lender, without offset, defense, or
counterclaim of any kind, nature, or description whatsoever. This Note is a
direct obligation of the Borrower.
 
16. Confession of Judgment. Upon the occurrence of an Event of Default, in
addition to any other rights or remedies the Lender may have under the
Transaction Documents or applicable law, the Lender shall have the right, but
not the obligation, to cause the Judgment by Confession attached to the
Forbearance Agreement to be entered into a court of competent jurisdiction.
 
17. Binding Effect. This Note shall be binding on the Parties and their
respective heirs, successors, and assigns; provided, however, that the Borrower
shall not assign its rights hereunder in whole or in part without the express
written consent of the Lender.
 
18. Governing Law; Venue. The terms of this Note shall be construed in
accordance with the laws of the State of Illinois as applied to contracts
entered into by Illinois residents within the State of Illinois which contracts
are to be performed entirely within the State of Illinois. With respect to any
disputes arising out of or related to this Note, the Parties consent to the
exclusive personal jurisdiction of, and venue in, the state courts located in
Cook County, State of Illinois (or in the event of federal jurisdiction, any
United States District Court for the District of Illinois), and hereby waive, 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
jurisdiction or to any claim that such venue of the suit, action or proceeding
is improper.
 
19. Severability. If any part of this Note is construed to be in violation of
any law, such part shall be modified to achieve the objective of the Parties to
the fullest extent permitted by law and the balance of this Note shall remain in
full force and effect.
 
20. Attorneys’ Fees. If any action at law or in equity is necessary to enforce
this Note or to collect payment under this Note, the Lender shall be entitled to
recover reasonable attorneys’ fees directly related to such enforcement or
collection actions.
 
 
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21.  Amendments and Waivers; Remedies. No failure or delay on the part of a
Party hereto in exercising any right, power or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to a
Party hereto at law, in equity or otherwise. Any amendment, supplement or
modification of or to any provision of this Note, any waiver of any provision of
this Note, and any consent to any departure by either Party from the terms of
any provision of this Note, shall be effective (i) only if it is made or given
in writing and signed by the Borrower and the Lender and (ii) only in the
specific instance and for the specific purpose for which made or given.
 
22. Notices. All notices, requests, demands, claims and other communications
hereunder shall be in writing. Any notice, request, demand, claim or other
communication hereunder shall be deemed duly given if it is sent by registered
or certified mail, return receipt requested, postage prepaid, and addressed to
the intended recipient, as set forth in the Exchange Agreement. Any Party may
send any notice, request, demand, claim or other communication hereunder to the
intended recipient at the address set forth in the Exchange Agreement using any
other means (including personal delivery, expedited courier, messenger service,
facsimile, ordinary mail, or electronic mail), but no such notice, request,
demand, claim or other communication shall be deemed to have been duly given
unless and until it actually is received by the intended recipient or receipt is
confirmed electronically or by return mail. Any Party may change the address to
which notices, requests, demands, claims and other communications hereunder are
to be delivered by giving the other Party notice in any manner herein set forth.
 
23.  Entire Agreement. This Note, together with the Forbearance Agreement, the
Exchange Agreement, the Security Agreement and the other Transaction Documents,
contains the complete understanding and agreement of the Borrower and the Lender
and supersedes all prior representations, warranties, agreements, arrangements,
understandings, and negotiations with respect to the subject matter thereof.
THIS NOTE, TOGETHER WITH THE FORBEARANCE AGREEMENT, THE EXCHANGE AGREEMENT, THE
SECURITY AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY
ALLEGED PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
 
 
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IN WITNESS WHEREOF, the Borrower has executed this Note as of the date set forth
above.

Exhibits

Exhibit A – Conversion Notice
Exhibit A-1 – Conversion Worksheet

THE BORROWER:

KEDEM PHARMACEUTICALS INC.

 
By: __________________________________
       Hassan Salari, Chief Executive Officer

 
 
ACKNOWLEDGED, ACCEPTED AND AGREED:
 
●

By: ●, Manager

By: __________________________                                                               
       ●, President
 
[Signature page to Secured Convertible Promissory Note]
 
 
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EXHIBIT A

●

Date: _______________________                                           

Kedem Pharmaceuticals Inc.
885 West Georgia Street, Suite 1500
Vancouver, British Columbia, Canada V6C 3E8

Sent via email to ________________ or facsimile to ________________

CONVERSION NOTICE

The above-captioned Lender hereby gives notice to Kedem Pharmaceuticals Inc., a
Nevada corporation (the “Company”), pursuant to that certain Secured Convertible
Promissory Note made by the Company in favor of the Lender on October 24, 2011,
as the same may be amended from time to time, (the “Note”), that the Lender
elects to convert the portion of the Note balance set forth below 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 of Three Lowest Closing Bid Prices:  ___________ (of the last 20 Trading
Days per Exhibit A-1)

E.  
Conversion Factor:  ___________ (70%)

F.  
Conversion Price:  _______________ (D multiplied by E)

G.  
Conversion Shares:  _______________ (C divided by F)

H.  
Remaining Note Balance:  ____________

I.  
Required Delivery Date:  __________ (three days after delivery of the Conversion
Notice)

Please transfer the Conversion Shares electronically (via DWAC) to the following
account:
 
Broker: ________________________________
Address:
_______________________________
DTC#: _________________________________
  _______________________________ 
Account #: _____________________________
  _______________________________ 
Account Name: _________________________
   

 
Sincerely,

●
 
By: ●, Manager

 
By:
____________________________                                                                 
       ●, President
 
 
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EXHIBIT A-1

CONVERSION WORKSHEET
 

 
Trading Day
Closing Bid Price
Lowest (Yes or No)
1.
     
2.
     
3.
     
4.
     
5.
     
6.
     
7.
     
8.
     
9.
     
10.
     
11.
     
12.
     
13.
     
14.
     
15.
     
16.
     
17.
     
18.
     
19.
     
20.
     

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