f8k121907a1ex10iv_celsius.htm


    
      Exhibit
        10.4

    

     

     

    THIS
      SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE, AND IS BEING
      OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
      OF
      THE SECURITIES ACT AND SUCH LAWS.  THIS SECURITY MAY NOT BE SOLD OR
      TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
      SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT OR SUCH OTHER LAWS.

     

    7
      3⁄4 % CONVERTIBLE DEBENTURE

     

    


    Company:
      Celsius Holdings,
      Inc.

    Company
      Address: 140 NE 4th
      Avenue,
      Suite C, Delray Beach, Florida 33483

    Closing
      Date: December 19,
      2007

    Maturity
      Date: December 19,
      2011

    Principal
      Amount:
      $1,500,000

     

    Celsius
      Holdings, Inc., a Nevada corporation, and any successor or resulting corporation
      by way of merger, consolidation, sale or exchange of all or substantially all
      of
      the assets or otherwise (the “Company”), for value
      received, hereby promises to pay to the Holder (as such term is hereinafter
      defined), or such other Person (as such term is hereinafter defined) upon order
      of the Holder, on the Maturity Date (as such term is hereinafter defined),
      the
      Principal Amount (as such term is hereinafter defined), as such sum may be
      adjusted pursuant to Article 3, and to pay interest thereon with such interest
      commencing to accrue as of the date hereof and payable monthly beginning on
      the
      date hereof and such interest shall be paid within three days of the beginning
      of each month that such interest is due, and on the Maturity Date (except that,
      if any such date is not a Business Day, then such payment shall be due on the
      next succeeding Business Day), at the rate of seven and three-quarters percent
      (7 3⁄4 %) per annum (the “Debenture Interest Rate”).
      All interest payable on the Principal Amount of this Debenture shall be
      calculated on the basis of a 360-day year for the actual number of days
      elapsed.  Payment of interest on this Debenture shall be in cash or,
      at the option of the Holder, in shares of Common Stock of the Company valued
      at
      the then applicable Conversion Price (as defined herein).  This
      Debenture may not be prepaid without the written consent of the
      Holder.

     

    ARTICLE
      1

     

    DEFINITIONS

     

    SECTION
      1.1 Definitions.  The
      terms defined in this Article whenever used in this Debenture have the following
      respective meanings:

     

    (i) “Affiliate”
      has the meaning
      ascribed to such term in Rule 12b-2 under the Securities Exchange Act of 1934,
      as amended.

     

    (ii) “Bankruptcy
      Code” means the
      United States Bankruptcy Code of 1986, as amended (11 U.S.C. §§ 101 et. seq.).

     

     

     

    
      
        
                  
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    (iii) “Business
      Day” means a day
      other than Saturday, Sunday or any day on which banks located in the State
      of
      California are authorized or obligated to close.

     

    (iv) “Capital
      Shares” means the
      Common Stock and any other shares of any other class or series of capital stock,
      whether now or hereafter authorized and however designated, which have the
      right
      to participate in the distribution of earnings and assets (upon dissolution,
      liquidation or winding-up) of the Company.

     

    (v) “Closing
      Date” means the
      closing date set forth in the first paragraph of this Debenture.

     

    (vi) “Common
      Shares” or “Common Stock” means shares
      of
      the Company’s Common Stock.

     

    (vii) “Common
      Stock Issued at
      Conversion”, when used with reference to the securities deliverable upon
      conversion of this Debenture, means all Common Shares now or hereafter
      Outstanding and securities of any other class or series into which this
      Debenture hereafter shall have been changed or substituted, whether now or
      hereafter created and however designated.

     

    (viii) “Conversion”
      or“conversion” means the
      repayment by the Company of the Principal Amount of this Debenture (and, to
      the
      extent the Holder elects as permitted by Section 3.1, accrued and unpaid
      interest thereon) by the delivery of Common Stock on the terms provided in
      Section 3.2, and “convert,”“converted,”“convertible”
      and like words
      shall have a corresponding meaning.

     

    (ix) “Conversion
      Date” means any
      day on which all or any portion of the Principal Amount of this Debenture is
      converted in accordance with the provisions hereof.

     

    (x) “Conversion
      Notice” means a
      written notice of conversion substantially in the form annexed hereto as Exhibit
      A.

     

    (xi) “Conversion
      Price” on any date
      of determination means the applicable price for the conversion of this Debenture
      into Common Shares on such day as set forth in Section 3.1(a).

     

    (xii) “Current
      Market Price” on any
      date of determination means the closing price of a Common Share on such day
      as
      reported in the “pink sheets” through the Interdealer Trading Quotation System;
      provided, if such security is not traded on the over the counter market via
      the
      pink sheets, then the closing price on the NASDAQ OTCBB Exchange; provided further,
      that, if such security is not listed or admitted to trading on the NASDAQ OTCBB,
      as reported on the principal national security exchange or quotation system
      on
      which such security is quoted or listed or admitted to trading, or, if not
      quoted or listed or admitted to trading on any national securities exchange
      or
      quotation system, the closing bid price of such security on the over-the-counter
      market on the day in question as reported by Bloomberg LP or a similar generally
      accepted reporting service, as the case may be.

     

     

    
      
                
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    (xiii) “Debenture”
or
“Debentures”
      means this
      Convertible Debenture of the Company or such other convertible debenture(s)
      exchanged therefor as provided in Section 2.1.

     

    (xiv) “Discount
      Multiplier” has the
      meaning set forth in Section 3.1(a).

     

    (xv) “Event
      of Default” has the
      meaning set forth in Section 6.1.

     

    (xvi) “Holder”
      means Golden Gate
      Investors, Inc., any successor thereto, or any Person to whom this Debenture
      is
      subsequently transferred in accordance with the provisions hereof.

     

    (xvii) “Interest
      Payment Due Date”
      has the meaning set forth in the opening paragraph of this
      Debenture.

     

    (xviii) “Market
      Disruption Event”
      means any event that results in a material suspension or limitation of trading
      of the Common Shares.

     

    (xix) “Maturity
      Date” means the
      maturity date set forth in the first paragraph of this Debenture.

     

    (xx) “Maximum
      Rate” has the meaning
      set forth in Section 6.4.

     

    (xxi) “Outstanding”
      when used with
      reference to Common Shares or Capital Shares (collectively, “Shares”) means, on any date
      of determination, all issued and outstanding Shares, and includes all such
      Shares issuable in respect of outstanding scrip or any certificates representing
      fractional interests in such Shares; provided, however,
      that any
      such Shares directly or indirectly owned or held by or for the account of the
      Company or any Subsidiary of the Company shall not be deemed “Outstanding” for purposes
      hereof.

     

    (xxii) “Person”
      means an individual,
      a corporation, a partnership, an association, a limited liability company,
      an
      unincorporated business organization, a trust or other entity or organization,
      and any government or political subdivision or any agency or instrumentality
      thereof.

     

    (xxiii) “Principal
      Amount” means, for
      any date of calculation, the principal sum set forth in the first paragraph
      of
      this Debenture (but only such principal amount as to which the Holder has (a)
      actually advanced, and (b) not theretofore furnished a Conversion Notice in
      compliance with Section 3.2).

     

    (xxiv) “Promissory
      Note” means that
      certain Secured Promissory Note in the principal amount of $1,250,000 of even
      date herewith issued by Golden Gate Investors, Inc. to Celsius Holdings, Inc.,
      as the same may be amended from time to time.

     

    (xxv) “SEC”
      means the United States
      Securities and Exchange Commission.

     

    (xxvi) “Securities
      Act” means the
      Securities Act of 1933, as amended, and the rules and regulations of the SEC
      thereunder, all as in effect at the time.

     

     

    
      
                 
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    (xxvii) “Securities
      Purchase
      Agreement” means that certain Securities Purchase Agreement of even date
      herewith by and among the Company and Holder, as the same may be amended from
      time to time.

     

    (xxviii) “Subsidiary”
      means any entity
      of which securities or other ownership interests having ordinary voting power
      to
      elect a majority of the board of directors or other persons performing similar
      functions are owned directly or indirectly by the Company.

     

    (xxix) “Trading
      Day” means any day on
      which (i) purchases and sales of securities on the principal national security
      exchange or quotation system on which the Common Shares are traded are reported
      thereon, or, if not quoted or listed or admitted to trading on any national
      securities exchange or quotation system, as reported by Bloomberg LP or a
      similar generally accepted reporting service, as the case may be, (ii) at least
      one bid for the trading of Common Shares is reported and (iii) no Market
      Disruption Event occurs.

     

    (xxx) “Volume
      Weighted Average
      Price”  per Common Share means the volume weighted average
      price of the Common Shares during any Trading Day as reported in the “pink
      sheets” through the Interdealer Trading Quotation System; provided, if such
      security is not traded on the over the counter market via the pink sheets,
      then
      the volume weighted average price on the NASDAQ OTCBB; provided further,
      that, if such security is not listed or admitted to trading on the NASDAQ OTCBB,
      as reported on the principal national security exchange or quotation system
      on
      which such security is quoted or listed or admitted to trading, or, if not
      quoted or listed or admitted to trading on any national securities exchange
      or
      quotation system, the volume weighted average price of the Common Shares during
      any Trading Day on the over-the-counter market as reported by Bloomberg LP
      or a
      similar generally accepted reporting service, as the case may be.

     

    All
      references to “cash” or “$” herein means currency of the United States of
      America.

     

    ARTICLE
      2

     

    EXCHANGES,
      TRANSFER AND REPAYMENT

     

    SECTION
      2.1 Registration
      of Transfer of
      Debentures. This Debenture, when presented for registration of transfer,
      shall (if so required by the Company) be duly endorsed, or be accompanied by
      a
      written instrument of transfer in form reasonably satisfactory to the Company
      duly executed, by the Holder duly authorized in writing.

     

    SECTION
      2.2 Loss,
      Theft, Destruction of
      Debenture.  Upon receipt of evidence satisfactory to the
      Company of the loss, theft, destruction or mutilation of this Debenture and,
      in
      the case of any such loss, theft or destruction, upon receipt of indemnity
      or
      security reasonably satisfactory to the Company, or, in the case of any such
      mutilation, upon surrender and cancellation of this Debenture, the Company
      shall
      make, issue and deliver, in lieu of such lost, stolen, destroyed or mutilated
      Debenture, a new Debenture of like tenor and unpaid Principal Amount dated
      as of
      the date hereof (which shall accrue interest from the most recent Interest
      Payment Due Date on which an interest payment was made in full).  This
      Debenture shall be held and owned upon the express condition that the provisions
      of this Section 2.2 are exclusive with respect to the replacement of a
      mutilated, destroyed, lost or stolen Debenture and shall preclude any and all
      other rights and remedies notwithstanding any law or statute existing or
      hereafter enacted to the contrary with respect to the replacement of negotiable
      instruments or other securities without the surrender thereof.

     

     

    
      
               
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    SECTION
      2.3 Who
      Deemed Absolute
      Owner.  The Company may deem the Person in whose name this
      Debenture shall be registered upon the registry books of the Company to be,
      and
      may treat it as, the absolute owner of this Debenture (whether or not this
      Debenture shall be overdue) for the purpose of receiving payment of or on
      account of the Principal Amount of this Debenture, for the conversion of this
      Debenture and for all other purposes, and the Company shall not be affected
      by
      any notice to the contrary.  All such payments and such conversions
      shall be valid and effectual to satisfy and discharge the liability upon this
      Debenture to the extent of the sum or sums so paid or the conversion or
      conversions so made.

     

    SECTION
      2.4 Repayment
      at
      Maturity.  At the Maturity Date, the Company shall repay the
      outstanding Principal Amount of this Debenture in whole in cash, together with
      all accrued and unpaid interest thereon, in cash, to the Maturity
      Date.  The Company shall first apply against such amount due on the
      Maturity Date an amount equal to the outstanding amount owed by the Holder
      to
      the Company under the Promissory Note, if any, and the amount otherwise owed
      by
      the Company to the Holder in connection with the maturity of this Debenture
      shall be reduced by the outstanding amount owed by the Holder to the Company
      under the Promissory Note, with the Promissory Note deemed paid by Holder to
      the
      extent of and with respect to such amount, and if the amount due from the
      Company to the Holder in connection with the maturity of this Debenture is
      equal
      to or greater than the outstanding amount owed under the Promissory Note, the
      Company shall cancel and deem the Promissory Note as paid in full in connection
      with the application of the amount owed by the Holder to the Company under
      Promissory Note against the amount otherwise owed by the Company to the Holder
      hereunder.  The Company shall immediately pay in cash to the Holder
      any remaining amount owed by the Company to the Holder in connection with the
      maturity of this Debenture as described herein, after the application of the
      outstanding amount owed under the Promissory Note, if any, to such
      obligation.

     

    ARTICLE
      3

     

    CONVERSION
      OF DEBENTURE

     

    SECTION
      3.1 Conversion;
      Conversion
      Price; Valuation Event.

     

    At
      the
      option of the Holder, this Debenture may be converted, either in whole or in
      part, up to the full Principal Amount hereof into Common Shares (calculated
      as
      to each such conversion to the nearest 1/100th of a share), at any time and
      from
      time to time on any Business Day, subject to compliance with Section 3.2. The
      number of Common Shares into which this Debenture may be converted is equal
      to
      the dollar amount of the Debenture being converted divided by the Conversion
      Price. The “Conversion
      Price” shall be equal to the lesser of (i) $1.00, or (ii) 80% of the
      average of the 3 lowest Volume Weighted Average Prices during the 20 Trading
      Days prior to Holder’s election to convert (the percentage figure being a “Discount Multiplier”). The
      Company reserves the right to increase the number of Trading Days in clause
      (ii)
      above, as it deems appropriate.

     

     

    
      
                
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    If
      the
      Holder elects to convert a portion of the Debenture and, on the day that the
      election is made, the Volume Weighted Average Price is below $0.20, the Company
      shall have the right to prepay that portion of the Debenture that Holder elected
      to convert, plus any accrued and unpaid interest, at 150% of such amount. In
      the
      event that the Company elects to prepay that portion of the Debenture, Holder
      shall have the right to withdraw its Conversion Notice.

     

    Notwithstanding
      the foregoing, prior to the conversion by Holder of any Principal Amount of
      this
      Debenture that is represented by all or a portion of the principal amount
      outstanding under the Promissory Note and has not otherwise been advanced in
      cash to the Company prior to such conversion, the Holder shall prepay such
      portion of the outstanding principal amount of the Promissory Note that is
      represented by such conversion under this Debenture, such that prior to the
      conversion of the principal amount of this Debenture, the Holder shall have
      paid
      an amount to the Company in cash equal to the portion of the principal amount
      of
      this Debenture that is to be so converted.

     

    SECTION
      3.2 Exercise
      of Conversion
      Privilege.  (a) Conversion of this Debenture may be exercised
      on any Business Day by the Holder by telecopying an executed and completed
      Conversion Notice to the Company.  Each date on which a Conversion
      Notice is telecopied to the Company in accordance with the provisions of this
      Section 3.2 shall constitute a Conversion Date.  The Company shall
      convert this Debenture and issue the Common Stock Issued at Conversion in the
      manner provided below in this Section 3.2, and all voting and other rights
      associated with the beneficial ownership of the Common Stock Issued at
      Conversion shall vest with the Holder, effective as of the Conversion Date
      at
      the time specified in the Conversion Notice.  The Conversion Notice
      also shall state the name or names (with addresses) of the persons who are
      to
      become the holders of the Common Stock Issued at Conversion in connection with
      such conversion. As promptly as practicable after the receipt of the Conversion
      Notice as aforesaid, but in any event not more than two (2) Business Days after
      the Company’s receipt of such Conversion Notice, the Company shall (i) issue the
      Common Stock Issued at Conversion in accordance with the provisions of this
      Article 3 and (ii) cause to be mailed for delivery by overnight courier (x)
      a
      certificate or certificate(s) representing the number of Common Shares to which
      the Holder is entitled by virtue of such conversion and (y) cash, as provided
      in
      Section 3.3, in respect of any fraction of a Common Share deliverable upon
      such
      conversion.  Such conversion shall be deemed to have been effected at
      the time at which the Conversion Notice indicates, and at such time the rights
      of the Holder of this Debenture, as such (except if and to the extent that
      any
      Principal Amount thereof remains unconverted), shall cease and the Person and
      Persons in whose name or names the Common Stock Issued at Conversion shall
      be
      issuable shall be deemed to have become the holder or holders of record of
      the
      Common Shares represented thereby, and all voting and other rights associated
      with the beneficial ownership of such Common Shares shall at such time vest
      with
      such Person or Persons.  The Conversion Notice shall constitute a
      contract between the Holder and the Company, whereby the Holder shall be deemed
      to subscribe for the number of Common Shares which it will be entitled to
      receive upon such conversion and, in payment and satisfaction of such
      subscription (and for any cash adjustment to which it is entitled pursuant
      to
      Section 3.4), to surrender this Debenture and to release the Company from all
      liability thereon (except if and to the extent that any Principal Amount thereof
      remains unconverted).  No cash payment aggregating less than $1.00
      shall be required to be given unless specifically requested by the
      Holder.

     

     

    
      
                
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    (b) If,
      at
      any time after the date of this Debenture, (i) the Company challenges, disputes
      or denies the right of the Holder hereof to effect the conversion of this
      Debenture into Common Shares or otherwise dishonors or rejects any Conversion
      Notice delivered in accordance with this Section 3.2 or (ii) any third party
      who
      is not and has never been an Affiliate of the Holder commences any lawsuit
      or
      legal proceeding or otherwise asserts any claim before any court or public
      or
      governmental authority which seeks to challenge, deny, enjoin, limit, modify,
      delay or dispute the right of the Holder hereof to effect the conversion of
      this
      Debenture into Common Shares, then the Holder shall have the right, but not
      the
      obligation, by written notice to the Company, to require the Company to promptly
      redeem this Debenture for cash at one hundred fifty percent (150%) of the
      Principal Amount thereof, together with all accrued and unpaid interest thereon
      to the date of redemption.  Under any of the circumstances set forth
      above, the Company shall be responsible for the payment of all costs and
      expenses of the Holder, including reasonable legal fees and expenses, as and
      when incurred in defending itself in any such action or pursuing its rights
      hereunder (in addition to any other rights of the Holder).

     

    (c) The
      Holder shall be entitled to exercise its conversion privilege notwithstanding
      the commencement of any case under the Bankruptcy Code.  In the event
      the Company is a debtor under the Bankruptcy Code, the Company hereby waives
      to
      the fullest extent permitted any rights to relief it may have under 11 U.S.C.
§
362 in respect of the Holder’s conversion privilege.  The Company
      hereby waives to the fullest extent permitted any rights to relief it may have
      under 11 U.S.C. § 362 in respect of the conversion of this
      Debenture.  The Company agrees, without cost or expense to the Holder,
      to take or consent to any and all action necessary to effectuate relief under
      11
      U.S.C. § 362.

     

    SECTION
      3.3 Fractional
      Shares.  No fractional Common Shares or scrip representing
      fractional Common Shares shall be delivered upon conversion of this
      Debenture.  Instead of any fractional Common Shares which otherwise
      would be delivered upon conversion of this Debenture, the Company shall pay
      a
      cash adjustment in respect of such fraction in an amount equal to the same
      fraction multiplied by the Current Market Price on the Conversion
      Date.  No cash payment of less than $1.00 shall be required to be
      given unless specifically requested by the Holder.

     

    SECTION
      3.4 Adjustments.  The
      Conversion Price and the number of shares deliverable upon conversion of this
      Debenture are subject to adjustment from time to time as follows:

     

    (i) Reclassification,
      Etc.  In case the Company shall reorganize its capital,
      reclassify its capital stock, consolidate or merge with or into another Person
      (where the Company is not the survivor or where there is a change in or
      distribution with respect to the Common Stock of the Company), sell, convey,
      transfer or otherwise dispose of all or substantially all its property, assets
      or business to another Person, or effectuate a transaction or series of related
      transactions in which more than fifty percent (50%) of the voting power of
      the
      Company is disposed of (each, a “Fundamental Corporate
      Change”) and, pursuant to the terms of such Fundamental Corporate Change,
      shares of common stock of the successor or acquiring corporation, or any cash,
      shares of stock or other securities or property of any nature whatsoever
      (including warrants or other subscription or purchase rights) 

     

     

     

    
      
                
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    in
      addition to or in lieu of common stock of the successor or acquiring corporation
      (“Other Property”) are
      to be received by or distributed to the holders of Common Stock of the Company,
      then the Holder of this Debenture shall have the right thereafter, at its sole
      option, to (x) require the Company to prepay this Debenture for cash at one
      hundred fifty percent (150%) of the Principal Amount thereof, together with
      all
      accrued and unpaid interest thereon to the date of prepayment, (y) receive
      the number of shares of common stock of the successor or acquiring corporation
      or of the Company, if it is the surviving corporation, and Other Property as
      is
      receivable upon or as a result of such Fundamental
      Corporate Change by a holder of the number of shares of Common Stock into which
      the outstanding portion of this Debenture may be converted at the Conversion
      Price applicable immediately prior to such Fundamental Corporate Change or
      (z) require the Company, or such successor, resulting or purchasing
      corporation, as the case may be, to, without benefit of any additional
      consideration therefor, execute and deliver to the Holder a debenture with
      substantial identical rights, privileges, powers, restrictions and other terms
      as this Debenture in an amount equal to the amount outstanding under this
      Debenture immediately prior to such Fundamental Corporate Change.  For
      purposes hereof, “common stock
      of the successor or acquiring corporation” shall include stock of such
      corporation of any class which is not preferred as to dividends or assets over
      any other class of stock of such corporation and which is not subject to
      prepayment and shall also include any evidences of indebtedness, shares of
      stock
      or other securities which are convertible into or exchangeable for any such
      stock, either immediately or upon the arrival of a specified date or the
      happening of a specified event and any warrants or other rights to subscribe
      for
      or purchase any such stock.  The foregoing provisions shall similarly
      apply to successive Fundamental Corporate Changes.

     

    SECTION
      3.5 Certain
      Conversion
      Limits.

     

    The
      Company shall not effect any conversion of this Debenture, and a Holder shall
      not have the right to convert any portion of this Debenture, to the extent
      that
      after giving effect to the conversion, as set forth on the applicable Conversion
      Notice, such Holder (together with such Holder’s Affiliates, and any other
      person or entity acting as a group together with such Holder or any of such
      Holder’s Affiliates) would beneficially own in excess of the Beneficial
      Ownership Limitation (as defined below).  For purposes of the
      foregoing sentence, the number of shares of Common Stock beneficially owned
      by
      such Holder and its Affiliates shall include the number of shares of Common
      Stock issuable upon conversion of this Debenture with respect to which such
      determination is being made, but shall exclude the number of shares of Common
      Stock which are issuable upon (A) conversion of the remaining, unconverted
      principal amount of this Debenture beneficially owned by such Holder or any
      of
      its Affiliates and (B) exercise or conversion of the unexercised or unconverted
      portion of any other securities of the Company subject to a limitation on
      conversion or exercise analogous to the limitation contained herein (including,
      without limitation, any other Debentures or warrants to purchase shares of
      the
      Company’s Common Stock) beneficially owned by such Holder or any of its
      Affiliates.  Except as set forth in the preceding sentence, for
      purposes of this Section 3.5, beneficial ownership shall be calculated in
      accordance with Section 13(d) of the Exchange Act and the rules and regulations
      promulgated thereunder.  To the extent that the limitation contained
      in this Section 3.5 applies, the determination of whether this Debenture is
      convertible (in relation to other securities owned by such Holder together
      with
      any Affiliates) and of which principal amount of this Debenture is convertible
      shall be in the sole discretion of such Holder, and the submission of a
      Conversion Notice shall be deemed to be such Holder’s determination of whether
      this Debenture may be converted (in relation to other securities owned by such
      Holder together with any Affiliates) and which principal amount of this
      Debenture is convertible, in each case subject to such aggregate percentage
      limitations. 

     

     

    
      
                
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     To
      ensure compliance with this restriction, each Holder will be deemed to represent
      to the Company each time it delivers a Conversion Notice that such Conversion
      Notice has not violated the restrictions set forth in this paragraph and the
      Company shall have no obligation to verify or confirm the accuracy of such
      determination.  In addition, a determination as to any group status as
      contemplated above shall be determined in accordance with Section 13(d) of
      the
      Exchange Act and the rules and regulations promulgated
      thereunder.  For purposes of this Section 3.5, in determining the
      number of outstanding shares of Common Stock, a Holder may rely on the number
      of
      outstanding shares of Common Stock provided to the Holder in writing by the
      Company after Holder makes such request or in the event that the Company files,
      any of the following with the Securities and Exchange Commission, the most
      recent of the following: (A) the Company's most recent Form 10-QSB or Form
      10-KSB, as the case may be, (B) a more recent public announcement by the
      Company; or (C) a more recent notice by the Company or the Company’s transfer
      agent setting forth the number of shares of Common Stock
      outstanding.  Upon the written or oral request of a Holder, the
      Company shall within two Trading Days confirm orally and in writing to such
      Holder the number of shares of Common Stock then outstanding on the records
      of
      the Company as of the date of the request.  In any case, the number of
      outstanding shares of Common Stock shall be determined after giving effect
      to
      the conversion or exercise of securities of the Company, including this
      Debenture, by such Holder or its Affiliates since the date as of which such
      number of outstanding shares of Common Stock was reported.  The “Beneficial Ownership
      Limitation” shall be 4.99% of the number of shares of the Common Stock
      outstanding immediately after giving effect to the issuance of shares of Common
      Stock issuable upon conversion of this Debenture held by the
      Holder.  The Beneficial Ownership Limitation provisions of this
      Section 3.5 may be waived by such Holder, at the election of such Holder, upon
      not less than 61 days’ prior notice to the Company, to, at the sole discretion
      of the Holder, either change the Beneficial Ownership Limitation to (i) 9.99%
      of
      the number of shares of the Common Stock outstanding immediately after giving
      effect to the issuance of shares of Common Stock upon conversion of the
      Debenture held by the Holder and the provisions of this Section 3.5 shall
      continue to apply, or (ii) remove any Beneficial Ownership Limitation under
      this
      Debenture.  The provisions of this paragraph shall be construed and
      implemented in a manner otherwise than in strict conformity with the terms
      of
      this Section 3.5 to correct this paragraph (or any portion hereof) which may
      be
      defective or inconsistent with the intended Beneficial Ownership Limitation
      herein contained or to make changes or supplements necessary or desirable to
      properly give effect to such limitation.  If any court of competent
      jurisdiction shall determine that the foregoing limitation is ineffective to
      prevent a Holder from being deemed the beneficial owner of more than 9.99%
      of
      the then outstanding shares of Common Stock, then the Company shall prepay
      such
      portion of this Debenture as shall cause such Holder not to be deemed the
      beneficial owner of more than 9.99% of the then outstanding shares of Common
      Stock.  Upon such determination by a court of competent jurisdiction,
      the Holder shall have no interest in or rights under such portion of the
      Debenture.  Any and all interest paid on or prior to the date of such
      determination shall be deemed interest paid on the remaining portion of this
      Debenture held by the Holder.  Such prepayment shall be for cash at a
      prepayment price of one hundred fifty percent (150%) of the Principal Amount
      thereof, together with all accrued and unpaid interest thereon to the date
      of
      prepayment.  The limitations contained in this paragraph shall apply
      to a successor holder of this Debenture.

     

     

    
      
                
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    SECTION
      3.6 Surrender
      of
      Debentures.  Upon any redemption of this Debenture pursuant to
      Sections 3.2, 3.5 or 6.2, or upon maturity pursuant to Section 2.4, the Holder
      shall either deliver this Debenture by hand to the Company at its principal
      executive offices or surrender the same to the Company at such address by
      nationally recognized overnight courier.  Payment of the redemption
      price or the amount due on maturity specified in Section 2.4, shall be made
      by
      the Company to the Holder against receipt of this Debenture (as provided in
      this
      Section 3.5) by wire transfer of immediately available funds to such account(s)
      as the Holder shall specify by written notice to the Company.  If
      payment of such redemption price is not made in full by the redemption date,
      or
      the amount due on maturity is not paid in full by the Maturity Date, the Holder
      shall again have the right to convert this Debenture as provided in Article
      3
      hereof or to declare an Event of Default.

     

    ARTICLE
      4

     

    STATUS;
      RESTRICTIONS ON TRANSFER

     

    SECTION
      4.1 Status
      of
      Debenture.  This Debenture constitutes a legal, valid and
      binding obligation of the Company, enforceable in accordance with its terms
      subject, as to enforceability, to general principles of equity and to principles
      of bankruptcy, insolvency, reorganization and other similar laws of general
      applicability relating to or affecting creditors’ rights and remedies
      generally.

     

    SECTION
      4.2 Restrictions
      on
      Transfer.  This Debenture, and any Common Shares deliverable
      upon the conversion hereof, have not been registered under the Securities
      Act.  The Holder by accepting this Debenture agrees that this
      Debenture and the shares of Common Stock to be acquired as interest on and
      upon
      conversion of this Debenture may not be assigned or otherwise transferred unless
      and until (i) the Company has received the opinion of counsel for the Holder
      that this Debenture or such shares may be sold pursuant to an exemption from
      registration under the Securities Act, provided that the Company will not
      require opinions of counsel for transactions involving transfers to Affiliates
      of the Holder or pursuant to Rule 144 promulgated by the SEC under the
      Securities Act, except in unusual circumstances, or (ii) a registration
      statement relating to this Debenture or such shares has been filed by the
      Company and declared effective by the SEC.

     

    Each
      certificate for shares of Common Stock deliverable hereunder shall bear a legend
      as follows unless and until such securities have been sold pursuant to an
      effective registration statement under the Securities Act:

     

    “The
      securities represented by this certificate have not been registered under the
      Securities Act of 1933, as amended (the “Securities Act”).  The
      securities may not be offered for sale, sold or otherwise transferred except
      (i)
      pursuant to an effective registration statement under the Securities Act or
      (ii)
      pursuant to an exemption from registration under the Securities Act in respect
      of which the issuer of this certificate has received an opinion of counsel
      satisfactory to the issuer of this certificate to such effect.  Copies
      of the agreement covering both the purchase of the securities and restrictions
      on their transfer may be obtained at no cost by written request made by the
      holder of record of this certificate to the Secretary of the issuer of this
      certificate at the principal executive offices of the issuer of this
      certificate.”

     

     

     

    
      
                
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    ARTICLE
      5

     

    COVENANTS

     

    SECTION
      5.1 Conversion.  The
      Company shall cause the transfer agent, not later than two (2) Business Days
      after the Company’s receipt of a Conversion Notice, to issue and deliver to the
      Holder the requisite shares of Common Stock Issued at Conversion.

     

    SECTION
      5.2 Notice
      of
      Default.  If any one or more events occur which constitute or
      which, with notice, lapse of time, or both, would constitute an Event of
      Default, the Company shall forthwith give notice to the Holder, specifying
      the
      nature and status of the Event of Default or such other event(s), as the case
      may be.

     

    SECTION
      5.3 Payment
      of
      Obligations.  So long as this Debenture shall be outstanding,
      the Company shall pay, extend, or discharge at or before maturity, all its
      respective material obligations and liabilities, including, without limitation,
      tax liabilities, except where the same may be contested in good faith by
      appropriate proceedings.

     

    SECTION
      5.4 Compliance
      with
      Laws.  So long as this Debenture shall be outstanding, the
      Company shall comply with all applicable laws, ordinances, rules, regulations
      and requirements of governmental authorities, except for such noncompliance
      which would not have a material adverse effect on the business, properties,
      prospects, condition (financial or otherwise) or results of operations of the
      Company and the Subsidiaries.

     

    SECTION
      5.5 Inspection
      of Property,
      Books and Records.  So long as this Debenture shall be
      outstanding, the Company shall keep proper books of record and account in which
      full, true and correct entries shall be made of all material dealings and
      transactions in relation to its business and activities and shall permit
      representatives of the Holder at the Holder’s expense to visit and inspect any
      of its respective properties, to examine and make abstracts from any of its
      respective books and records, not reasonably deemed confidential by the Company,
      and to discuss its respective affairs, finances and accounts with its respective
      officers and independent public accountants, all at such reasonable times and
      as
      often as may reasonably be desired.

     

    SECTION
      5.6 Reservation
      of Stock
      Issuable Upon Conversion.  The Company shall at all times
      reserve and keep available out of its authorized but unissued shares of Common
      Stock, solely for the purpose of effecting the conversion of this Debenture,
      such number of its shares of Common Stock as shall from time to time be
      sufficient to effect the conversion of this Debenture; and if at any time the
      number of authorized but unissued shares of Common Stock shall not be sufficient
      to effect the conversion of this Debenture, in addition to such other remedies
      as shall be available to the holder of this Debenture, the Company will take
      such corporate action as may, in the opinion of its counsel, be necessary to
      increase its authorized but unissued shares of Common Stock to such number
      of
      shares as shall be sufficient for such purposes, including, without limitation,
      engaging in best efforts to obtain the requisite shareholder approval to file
      an
      amendment to the charter of the Company.

     

     

    
      
                 
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    ARTICLE
      6

     

    EVENTS
      OF DEFAULT; REMEDIES

     

    SECTION
      6.1 Events
      of
      Default.  “Event of Default” wherever
      used herein means any one of the following events:

     

    (i) the
      Company shall default in the payment of principal of or interest on this
      Debenture as and when the same shall be due and payable and, in the case of
      an
      interest payment default, such default shall continue for five (5) Business
      Days
      after the date such interest payment was due, or the Company shall fail to
      perform or observe any other covenant, agreement, term, provision, undertaking
      or commitment under this Debenture or the Securities Purchase Agreement and
      such
      default shall continue for a period of ten (10) Business Days after the delivery
      to the Company of written notice that the Company is in default hereunder or
      thereunder;

     

    (ii) any
      of
      the representations, warranties, or covenants made by the Company herein, in
      the
      Securities Purchase Agreement or in any certificate or financial or other
      written statements heretofore or hereafter furnished by or on behalf of the
      Company in connection with the execution and delivery of this Debenture or
      the
      Securities Purchase Agreement shall be false or misleading in a material respect
      on the Closing Date;

     

    (iii) under
      the
      laws of any jurisdiction not otherwise covered by clauses (iv) and (v) below,
      the Company or any Subsidiary (A) becomes insolvent or generally not able to
      pay
      its debts as they become due, (B) admits in writing its inability to pay its
      debts generally or makes a general assignment for the benefit of creditors,
      (C)
      institutes or has instituted against it any proceeding seeking (x) to adjudicate
      it a bankrupt or insolvent, (y) liquidation, winding-up, reorganization,
      arrangement, adjustment, protection, relief or composition of it or its debts
      under any law relating to bankruptcy, insolvency, reorganization or relief
      of
      debtors including any plan of compromise or arrangement or other corporate
      proceeding involving or affecting its creditors or (z) the entry of an order
      for
      relief or the appointment of a receiver, trustee or other similar person for
      it
      or for any substantial part of its properties and assets, and in the case of
      any
      such official proceeding instituted against it (but not instituted by it),
      either the proceeding remains undismissed or unstayed for a period of sixty
      (60)
      calendar days, or any of the actions sought in such proceeding (including the
      entry of an order for relief against it or the appointment of a receiver,
      trustee, custodian or other similar official for it or for any substantial
      part
      of its properties and assets) occurs or (D) takes any corporate action to
      authorize any of the above actions;

     

    (iv) the
      entry
      of a decree or order by a court having jurisdiction in the premises adjudging
      the Company or any Subsidiary a bankrupt or insolvent, or approving as properly
      filed a petition seeking reorganization, arrangement, adjustment or composition
      of or in respect of the Company under the Bankruptcy Code or any other
      applicable Federal or state law, or appointing a receiver, liquidator, assignee,
      trustee or sequestrator (or other similar official) of the Company or of any
      substantial part of its property, or ordering the winding-up or liquidation
      of
      its affairs, and any such decree or order continues and is unstayed and in
      effect for a period of sixty (60) calendar days;

     

     

    
      
        
        

      

      
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    (v) the
      institution by the Company or any Subsidiary of proceedings to be adjudicated
      a
      bankrupt or insolvent, 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 the Bankruptcy Code or any
      other applicable federal or state law, or the consent by it to the filing of
      any
      such petition or to the appointment of a receiver, liquidator, assignee, trustee
      or sequestrator (or other similar official) of the Company 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 and when they become due, or the taking of corporate action by
      the
      Company in furtherance of any such action;

     

    (vi) a
      final
      judgment or final judgments for the payment of money shall have been entered
      by
      any court or courts of competent jurisdiction against the Company and remains
      undischarged for a period (during which execution shall be effectively stayed)
      of thirty (30) days, provided that the
      aggregate amount of all such judgments at any time outstanding (to the extent
      not paid or to be paid, as evidenced by a written communication to that effect
      from the applicable insurer, by insurance) exceeds One Hundred Thousand Dollars
      ($100,000);

     

    (vii) it
      becomes unlawful for the Company to perform or comply with its obligations
      under
      this Debenture or the Securities Purchase Agreement in any respect;

     

    (viii) the
      Common Shares shall no longer be traded in the over the counter market via
      the
“pink sheets” or not otherwise be listed for trading on  the NASDAQ
      OTCBB (the “Trading
      Market” or, to the extent the Company becomes eligible to list its Common
      Stock on any other national security exchange or quotation system, upon official
      notice of listing on any such exchange or system, as the case may be, it shall
      be the “Trading Market”) or suspended from trading on the Trading Market, and
      shall not be reinstated, relisted or such suspension lifted, as the case may
      be,
      within five (5) days;

     

    (ix) the
      Company shall fail to timely file all reports required to be filed by it with
      the Commission (as defined in the Securities Purchase Agreement) pursuant to
      Section 13 or 15(d) of the Exchange Act (as defined in the Securities Purchase
      Agreement), or otherwise required by the Exchange Act;

     

    (x) the
      Company shall default (giving effect to any applicable grace period) in the
      payment of principal or interest as and when the same shall become due and
      payable, under any indebtedness, individually or in the aggregate, of more
      than
      One Hundred Thousand Dollars ($100,000); or

     

    (xi) the
      Common Stock shall trade on the Trading Market at a price per share that is
      $0.02 per share or lower at any time during the term of this Debenture (as adjusted for any stock splits,
      stock
      dividends, combinations, subdivisions, recapitalizations or the
      like).

     

     

    
      
                 
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    SECTION
      6.2 Acceleration
      of Maturity;
      Rescission and Annulment.  If an Event of Default occurs and is
      continuing, provided however, that once an Event of Default occurs as described
      in clause (xi) of Section 6.1, such Event of Default will not be cured by the
      subsequent trading of the Common Stock at a price greater than that specified
      in
      such clause, then and in every such case the Holder may, in Holder’s sole and
      absolute discretion, by a notice in writing to the Company, rescind any
      outstanding Conversion Notice and declare that any or all amounts owing or
      otherwise outstanding under this Debenture are immediately due and payable
      and
      upon any such declaration this Debenture or such portion thereof, as applicable,
      shall become immediately due and payable in cash at a price of one hundred
      fifty
      percent (150%) of the Principal Amount thereof, together with all accrued and
      unpaid interest thereon to the date of payment; provided, however,
      in the case
      of any Event of Default described in clause (xi) of Section 6.1 such amount
      shall become immediately due and payable in cash at a price of one hundred
      ten
      percent (110%) of the Principal Amount thereof, together with all accrued and
      unpaid interest thereon to the date of payment; provided further, in
      the case of any Event of Default described in clauses (iii), (iv), (v) or (vii)
      of Section 6.1, all amounts owing or otherwise outstanding under this Debenture
      automatically shall become immediately due and payable without the necessity
      of
      any notice or declaration as aforesaid.  In the event that the Company
      is obligated to pay any amount to the Holder in connection with an acceleration
      of the maturity of this Debenture as set forth herein, the Company shall first
      apply against such amount an amount equal to the outstanding amount owed by
      the
      Holder to the Company under the Promissory Note, if any, and the amount
      otherwise owed by the Company to the Holder in connection with an acceleration
      of the maturity of this Debenture shall be reduced by the outstanding amount
      owed by the Holder to the Company under the Promissory Note, with the Promissory
      Note deemed paid by Holder to the extent of and with respect to such amount,
      and
      if the amount due from the Company to the Holder in connection with an
      acceleration of the maturity of this Debenture is equal to or greater than
      the
      outstanding amount owed under the Promissory Note, the Company shall cancel
      and
      deem the Promissory Note as paid in full in connection with the application
      of
      the amount owed by the Holder to the Company under Promissory Note against
      the
      amount otherwise owed by the Company to the Holder hereunder.  The
      Company shall immediately pay in cash to the Holder any remaining amount owed
      by
      the Company to the Holder in connection with the acceleration of the maturity
      of
      this Debenture as described herein, after the application of the outstanding
      amount owed under the Promissory Note, if any, to such obligation.

     

    SECTION
      6.3 Late
      Payment
      Penalty.  If any portion of the principal of or interest on
      this Debenture shall not be paid within ten (10) days of when it is due, the
      Discount Multiplier under this Debenture shall decrease by one percentage point
      (1%) for all conversions of this Debenture thereafter.

     

    SECTION
      6.4 Maximum
      Interest
      Rate.  Notwithstanding anything herein to the contrary, if at any
      time the applicable interest rate as provided for herein shall exceed the
      maximum lawful rate which may be contracted for, charged, taken or received
      by
      the Holder in accordance with any applicable law (the “Maximum Rate”), the rate of
      interest applicable to this Debenture shall be limited to the Maximum
      Rate.  To the greatest extent permitted under applicable law, the
      Company hereby waives and agrees not to allege or claim that any provisions
      of
      this Debenture could give rise to or result in any actual or potential violation
      of any applicable usury laws.

     

    SECTION
      6.5 Remedies
      Not
      Waived.  No course of dealing between the Company and the
      Holder or any delay in exercising any rights hereunder shall operate as a waiver
      by the Holder.

     

     

    
      
                
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    SECTION
      6.6 Remedies.  The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to the Holder, by vitiating the intent and purpose of the
      transaction contemplated hereby. Accordingly, the Company acknowledges that
      the
      remedy at law for a breach of its obligations under this Debenture will be
      inadequate and agrees, in the event of a breach or threatened breach by the
      Company of the provisions of this Debenture, that the Holder shall be entitled
      to all other available remedies at law or in equity, and in addition to the
      penalties assessable herein, to an injunction or injunctions restraining,
      preventing or curing any breach of this Debenture and to enforce specifically
      the terms and provisions thereof, without the necessity of showing economic
      loss
      and without any bond or other security being required.

     

    SECTION
      6.7  Payment
      of Certain Amounts. Whenever pursuant to this Debenture the Company
      is required to pay an amount in excess of the Principal Amount plus accrued
      and
      unpaid interest, the Company and the Holder agree that the actual damages to
      the
      Holder from the receipt of cash payment on this Debenture may be difficult
      to
      determine and the amount to be so paid by the Company represents stipulated
      damages and not a penalty and is intended to compensate the Holder in part
      for
      loss of the opportunity to convert this Debenture and to earn a return from
      the
      sale of shares of Common Stock acquired upon conversion of this Debenture at
      a
      price in excess of that price paid for such shares pursuant to this Debenture.
      The Company and the Holder hereby agree that such amount of stipulated damages
      is not disproportionate to the possible loss to the Holder from the receipt
      of a
      cash payment without the opportunity to convert this Debenture into shares
      of
      Common Stock.

     

    ARTICLE
      7

     

    MISCELLANEOUS

     

    SECTION
      7.1 Notice
      of Certain
      Events.  In the case of the occurrence of any event described
      in Section 3.4 of this Debenture, the Company shall cause to be mailed to the
      Holder of this Debenture at its last address as it appears in the Company’s
      security registry, at least twenty (20) days prior to the applicable record,
      effective or expiration date hereinafter specified (or, if such twenty (20)
      days’ notice is not possible, at the earliest possible date prior to any such
      record, effective or expiration date), a notice thereof, including, if
      applicable, a statement of (y) the date on which a record is to be taken for
      the
      purpose of such dividend, distribution, issuance or granting of rights, options
      or warrants, or if a record is not to be taken, the date as of which the holders
      of record of Common Stock to be entitled to such dividend, distribution,
      issuance or granting of rights, options or warrants are to be determined or
      (z)
      the date on which such reclassification, consolidation, merger, sale, transfer,
      dissolution, liquidation or winding-up is expected to become effective, and
      the
      date as of which it is expected that holders of record of Common Stock will
      be
      entitled to exchange their shares for securities, cash or other property
      deliverable upon such reclassification, consolidation, merger, sale transfer,
      dissolution, liquidation or winding-up.

     

    SECTION
      7.2 Register.  The
      Company shall keep at its principal office a register in which the Company
      shall
      provide for the registration of this Debenture.  Upon any transfer of
      this Debenture in accordance with Articles 2 and 4 hereof, the Company shall
      register such transfer on the Debenture register.

     

     

     

    
      
                 
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    SECTION
      7.3 Withholding.  To
      the extent required by applicable law, the Company may withhold amounts for
      or
      on account of any taxes imposed or levied by or on behalf of any taxing
      authority in the United States having jurisdiction over the Company from any
      payments made pursuant to this Debenture.

     

    SECTION
      7.4 Transmittal
      of
      Notices.  Except as may be otherwise provided herein, any
      notice or other communication or delivery required or permitted hereunder shall
      be in writing and shall be delivered personally, or sent by telecopier machine
      or by a nationally recognized overnight courier service, and shall be deemed
      given when so delivered personally, or by telecopier machine or overnight
      courier service as follows:

     

    (1)           
      If to the Company, to:

    


    Celsius
      Holdings, Inc.

    140
      NE
      4th
      Avenue, Suite C

    Delray
      Beach, Florida 33483

    Telephone:        561-276-2239

    Facsimile:           561-276-2268

    


    (2)           
      If to the Holder, to:

    Golden
      Gate Investors, Inc.

    7817
      Herschel Avenue, Suite 200

    La
      Jolla,
      California 92037

    Telephone:  
      858-551-8789

    Facsimile:     
      858-551-8779

     

    Each
      of
      the Holder or the Company may change the foregoing address by notice given
      pursuant to this Section 7.4.

     

    SECTION
      7.5 Attorneys’
      Fees.  Should any party hereto employ an attorney for the
      purpose of enforcing or construing this Debenture, or any judgment based on
      this
      Debenture, in any legal proceeding whatsoever, including insolvency, bankruptcy,
      arbitration, declaratory relief or other litigation, the prevailing party shall
      be entitled to receive from the other party or parties thereto reimbursement
      for
      all reasonable attorneys' fees and all reasonable costs, including but not
      limited to service of process, filing fees, court and court reporter costs,
      investigative costs, expert witness fees, and the cost of any bonds, whether
      taxable or not, and that such reimbursement shall be included in any judgment
      or
      final order issued in that proceeding.  The "prevailing party" means
      the party determined by the court to most nearly prevail and not necessarily
      the
      one in whose favor a judgment is rendered.

     

    SECTION
      7.6 Governing
      Law.  This Debenture shall be governed by, and construed in
      accordance with, the laws of the State of California (without giving effect
      to
      conflicts of laws principles).  With respect to any suit, action or
      proceedings relating to this Debenture, the Company irrevocably submits to
      the
      exclusive jurisdiction of the courts of the State of California sitting in
      San
      Diego and the United States District Court located in the City of San Diego
      and
      hereby waives, to the fullest extent permitted by applicable law, any claim
      that
      any such suit, action or proceeding has been brought in an inconvenient
      forum.  Subject to applicable law, the Company agrees that final
      judgment against it in any legal action or proceeding arising out of or relating
      to this Debenture shall be conclusive and may be enforced in any other
      jurisdiction within or outside the United States by suit on the judgment, a
      certified copy of which judgment shall be conclusive evidence thereof and the
      amount of its indebtedness, or by such other means provided by law.

     

     

     

    
      
                
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    SECTION
      7.7  Waiver
      of Jury Trial. To the fullest extent permitted by law, each of the
      parties hereto hereby knowingly, voluntarily and intentionally waives its
      respective rights to a jury trial of any claim or cause of action based upon
      or
      arising out of this Debenture or any other document or any dealings between
      them
      relating to the subject matter of this Debenture and other
      documents.  Each party hereto (i) certifies that neither of their
      respective representatives, agents or attorneys has represented, expressly
      or
      otherwise, that such party would not, in the event of litigation, seek to
      enforce the foregoing waivers and (ii) acknowledges that it has been induced
      to
      enter into this Debenture by, among other things, the mutual waivers and
      certifications herein.

     

    SECTION
      7.8   Headings.  The
      headings of the Articles and Sections of this Debenture are inserted for
      convenience only and do not constitute a part of this Debenture.

     

    SECTION
      7.9  Payment
      Dates.  Whenever any payment hereunder shall be due on a day
      other than a Business Day, such payment shall be made on the next succeeding
      Business Day.

     

    SECTION
      7.10 Binding
      Effect.  Each Holder by accepting this Debenture agrees to be
      bound by and comply with the terms and provisions of this
      Debenture.

     

    SECTION
      7.11 No Stockholder
      Rights.  Except as otherwise provided herein, this Debenture
      shall not entitle the Holder to any of the rights of a stockholder of the
      Company, including, without limitation, the right to vote, to receive dividends
      and other distributions, or to receive any notice of, or to attend, meetings
      of
      stockholders or any other proceedings of the Company, unless and to the extent
      converted into shares of Common Stock in accordance with the terms
      hereof.

     

    [REMAINDER
      OF PAGE INTENTIONALLY BLANK]

     

     

     

    
      
                
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    SECTION
      7.12  Facsimile
      Execution.  Facsimile execution of this Debenture shall be
      deemed original.

     

    IN
      WITNESS WHEREOF, the Company has caused this Debenture to be signed by its
      duly
      authorized officer on the date of this Debenture.

    


    Celsius
      Holdings, Inc.

     

    By:   /s/
      Jan
      Norelid                                                             


    Name:  Jan
      Norelid                                                             


    Title:   
      CFO                                                            


     

    


    


    
      
                 
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    EXHIBIT A

     

    DEBENTURE
      CONVERSION
      NOTICE

    


    
      	
              TO:

            	
              Celsius
                Holdings, Inc. 

            


    

    140
      NE
      4th
      Avenue, Suite C

    Delray
      Beach, Florida 33483

    Facsimile:    
      561-276-2268

    


     

    The
      undersigned owner of the Convertible Debenture due December ___, 2011 (the
“Debenture”) issued by
      Celsius Holdings, Inc. (the “Company”) hereby irrevocably
      exercises its option to convert $__________ Principal Amount of the Debenture
      into shares of Common Stock in accordance with the terms of the
      Debenture.  The undersigned hereby instructs the Company to convert
      the portion of the Debenture specified above into shares of Common Stock Issued
      at Conversion in accordance with the provisions of Article 3 of the
      Debenture.  The undersigned directs that the Common Stock and
      certificates therefor deliverable upon conversion, the Debenture reissued in
      the
      Principal Amount not being surrendered for conversion hereby, [the check or
      shares of Common Stock in payment of the accrued and unpaid interest thereon
      to
      the date of this Notice,] together with any check in payment for fractional
      Common Stock, be registered in the name of and/or delivered to the undersigned
      unless a different name has been indicated below.  All capitalized
      terms used and not defined herein have the respective meanings assigned to
      them
      in the Debenture.  The conversion pursuant hereto shall be deemed to
      have been effected at the date and time specified below, and at such time the
      rights of the undersigned as a Holder of the Principal Amount of the Debenture
      set forth above shall cease and the Person or Persons in whose name or names
      the
      Common Stock Issued at Conversion shall be registered shall be deemed to have
      become the holder or holders of record of the Common Shares represented thereby
      and all voting and other rights associated with the beneficial ownership of
      such
      Common Shares shall at such time vest with such Person or Persons.

    
       

    

    Date
      and
      time:  __________________

     

    ______________________________

     

    By:
      ___________________________

     

    Title:
      _________________________

     

    Fill
      in
      for registration of Debenture:

    Please
      print name and address

    (including
      ZIP code number):

     

    


     

    
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