**Exhibit4.4**

 

**FORACCREDITED INVESTORS ONLY**

 

**MEDICORLTD.**

**FORM OF CONVERTIBLE DEBENTUREAGREEMENT**

 

**THIS INVESTMENT AGREEMENT**(the“*Agreement”*)is by and between                                                 (the “*Holder”*)and **MEDICOR LTD., a Delaware Corporation** (the *“Company”*).

 

**RECITALS:**

 

**WHEREAS:**

 

**A.****                                   **TheHolder agrees to purchase one of the Company’s Convertible Debenture,convertible, at the Holder’s option on the first anniversary of the date oforiginal issuance thereof and thereafter at the 18-month, 24-month, 30-monthand 36-month anniversary of the issuance date, into the Company’s common stock,$.001 par value per share (the “*Common Stock”*) on the terms set forthbelow and in the Convertible Debenture; and

 

**B.****                                   **TheCompany and the Holder wish to enter into this Agreement to reflect the termsof the investment.

 

**AGREEMENT**

 

**NOW, THEREFORE,**intendingto be legally bound, the parties hereto agree as follows:

 

**1.****                                      INVESTMENT.****            **TheHolder hereby agrees to purchase                                                      **DOLLARS($                    USD)** in principal amount of Convertible Debentures, convertible intoshares of the Common Stock of the Company (the *“Debenture Shares”*), at theHolder’s option on the first anniversary date of original issuance thereof andthereafter at the 18-month, 24-month, 30-month and 36-month anniversary of theissuance date (each a *“Conversion Date”*), at a price per shareequal to the greater of: a) Five Dollars ($5.00) per share; or b) Seventy-FivePercent (75%) of the daily weighted average trading price per share of theCompany’s Common Stock over a period of Twenty (20) trading days prior to theConversion Date (the *“Conversion Price”)* as noticed to theCompany in writing by the Holder not less than ten (10) business days prior tothe Conversion Date.

 

**2.**                                      **HOLDER’SOPTIONS AT CONVERSION DATES.****         **In the solediscretion of the Holder, not more than twenty (20) business days nor less thanten (10) business days prior to the first anniversary of the date of originalissuance of the Convertible Debenture or thereafter at the 18-month, 24-month,30-month and 36-month anniversary of the issuance date, the Holder may electto: (a) have the entire outstanding principal amount of the ConvertibleDebenture repaid to the Holder, along with any accrued and unpaid interestthereon; (b) covert the entire outstanding principal amount of the ConvertibleDebenture into the Debenture Shares at the Conversion Price; or (c) continue tohold the Convertible Debenture until the third anniversary of the date oforiginal issuance thereof (the *“Maturity Date”*). If the Holder does notso notify the Company prior to the first anniversary of the issuance date orthereafter at the 18-month, 24-month, 30-month and 36-month anniversary of theissuance date, the

 

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Company will continue to record the Convertible Debenture asoutstanding. In the sole discretion of the Holder, not more than twenty (20)business days nor less than ten (10) business days prior to the Maturity Dateas defined above, the Holder may elect to: (a) have the entire outstandingprincipal amount of the Convertible Debenture repaid to the Holder, along withany accrued and unpaid interest thereon; or (b) convert the entire outstandingprincipal amount of the Convertible Debenture into the Debenture Shares at theConversion Price on the Maturity Date. If the Holder does not so notify theCompany prior to the Maturity Date, the Convertible Debenture willautomatically convert into the Debenture Shares at the Conversion Price and,upon such conversion, any and all obligations of the Company to the Holder inrespect of the Convertible Debenture shall be satisfied.

 

**3.****                                      INTEREST.**                                 TheCompany agrees to pay interest to the Holder on the outstanding principalamount of the Convertible Debenture at a rate of Eight Percent (8%) per annumfor as long as the Convertible Debenture is outstanding. Interest shall be paidto the Holder by the Company on a quarterly basis, payable within thirty (30)days from the end of each calendar quarter. If the Holder converts theConvertible Debenture into the Debenture Shares or elects to have theoutstanding principal amount of the Convertible Debenture repaid to the Holderas described in Section 2 above, the Company will pay any accrued andunpaid interest due the Holder and no further interest past the Conversion Datewill be due to the Holder by the Company.

 

**4.****                                      COMPANY’SREPRESENTATIONS AND WARRANTIES.**The Company hereby makes the followingrepresentations and warranties to the Holder:

 

**4.1****                               Organization,Good Standing and Qualification.** The Company is a corporation dulyorganized, validly existing and in good standing under the laws of the State ofDelaware and has all necessary corporate powers to own its properties, and tocarry on its business as now owned and operated by it, and is qualified to dointrastate business, and is in good standing in the State of Delaware and inall other jurisdictions in which the nature of the Company’s business, or ofits properties, makes such qualification necessary, except jurisdictions wherefailure to so qualify would not have a material adverse effect on the businessof the Company.

 

**4.2****                               CapitalStructure.**  The authorizednumber of shares of the Company is One Hundred Million (100,000,000) shares ofCommon Stock. In addition, the Company has authorized Twenty Million(20,000,000) shares of Preferred Stock. The Debenture Shares to be issued tothe Holder shall be validly issued, fully paid and non-assessable, and will beissued pursuant to applicable exemptions from the registration provisions ofall federal and state securities laws.

 

**4.3****                               Compliancewith Laws.**

 

**4.3.1****                    **Tothe best of the Company’s knowledge, the Company has complied in all materialrespects with, and the Company has not been cited for any violation of,federal, state or local environmental protection laws and/or regulations,including specifically, without limitation, all laws and regulations related tothe sale of its products by the Company to state or local or federal governmentpurchasers or contracts to those governmental agencies, and the Company has notreceived notice of any past, present or future events which would reasonably beexpected to give rise to any  liabilityfor failure to comply with any federal, state, or local laws or regulations nowin force relating to the protection of the environment.

 

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**4.3.2**                     To the best of the Company’sknowledge, the Company is not, and has not received notice from any governmentalagency that it is currently in violation of any other applicable federal, stateor local statute, law or regulation (including, without limitation, anyapplicable building, or other law, ordinance, or regulation) affecting itsassets or the operation of its business, except for possible instances ofnon-compliance which individually would not be expected to have a materialadverse effect on the business of the Company.

 

**4.3.3**                     To the best of the Company’sknowledge, the Company and all of the products which it manufactures, marshals,sells, licenses, imports or distributes have been at all times and continue tobe in substantial compliance with the Food, Drug and Cosmetic Act and allregulations promulgated thereunder by the U.S. Food and Drug Administration.

 

**4.3.4**                     Subject to the truth and accuracyof the representations of the Holder set forth in Section 6 hereof, theoffer, sale and issuance of the Convertible Debenture and the Debenture Sharesare or will be exempt from the registration requirements of the Securities Actof 1933, as amended (the *“Act”*). The Company has complied with allapplicable state “blue sky” or securities laws in connection with the offer,sale and issuance of this Convertible Debenture as contemplated by thisAgreement.

 

**4.4****                               Fulland Correct Disclosure.** No representation or warranty made by theCompany contained in this Agreement or other information provided, and to beprovided by the Company in any other writing furnished pursuant hereto containsor will contain an untrue statement of a material fact or fails or will fail tostate a material fact required to be stated herein or therein necessary to makethe statements and facts contained herein or therein, in light of thecircumstances which they were or are made, not false nor misleading.

 

**4.5****                               Non-Contravention.**The execution and delivery of the Agreement by the Company, and theconsummations of the transactions contemplated hereby, does not conflict withany material terms or provisions of any contract, agreement or indenture towhich the Company is a party, or by which the Company or any of its propertiesis subject, or the Company’s Certificate of Incorporation and By-Laws, each asamended to date.

 

**4.6****                               Authority;Binding Effect.**  The Company hasobtained all necessary authorizations and approvals from its Board of Directorsand stockholders, if any, required for the execution and delivery of thisAgreement and the consummations of the transactions contemplated hereby.  This Agreement has been duly executed anddelivered by the Company and constitutes the legal, valid and bindingobligation of the Company, enforceable against the Company in accordance withits terms.

 

**5.****                                      COVENANTSOF THE COMPANY.**  The Companyhereby makes the following covenants, intending to be bound hereby.

 

**5.1**                               The Company agrees tomake and keep public information regarding the Company available as those termsare understood and defined in Rule 144 promulgated under the Act (“*Rule 144”*),at all times from and after ninety (90) days following the date of the Company’sinitial

 

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public offering or the Company’s Common Stock becoming publicly traded,and to file with the SEC in a timely manner all reports and other documentsrequired of the Company under the Act and the Securities Exchange Act of 1934(the “*1934Act”*), at any time after it has become subject to such reportingrequirements.

 

**5.2**                               The Company shall at alltimes reserve and keep available out of its authorized but unissued shares ofCommon Stock, for the purpose of complying with the terms of Section 1 ofthis Agreement, such number of its duly authorized shares of Common Stock asshall be sufficient to issue the Debenture Shares to the Holder pursuant to,and in accordance with, the terms of Section 1 hereof.  If at any time the number of authorized butunissued shares of Common Stock shall not be sufficient for the Company toissue additional shares of Common Stock to the Holder pursuant to, and inaccordance with, the terms of Section 1 hereof, the Company will forthwithtake such corporate action as may be necessary to increase its authorized butunissued shares of Common Stock to such number of shares as shall be sufficientfor such purposes.

 

**6.****                                      HOLDER’SREPRESENTATIONS, WARRANTS AND COVENANTS.**  The Holder hereby makes the following representations, warrantsand covenants to the Company:

 

**6.1****                              **TheHolder represents and warrants that the Holder is an “accredited investor”within the meaning of Regulation D promulgated under the Act, and as more specificallydescribed in Exhibit A hereto.

 

**6.2****                              **TheHolder is, by reason of the Holder’s business or financial experience, or byreason of the business or financial experience of the Holder’s professionaladviser, who is not affiliated with and is not compensated directly orindirectly by the Company, or any affiliate or selling agent of the Company, iscapable of evaluating the merits and risks of the purchase of the ConvertibleDebenture and the Debenture Shares and of protecting the Holder’s own interestsin connection with the investment contemplated herein.

 

**6.3****                              **TheHolder acknowledges that it has received and carefully reviewed this Agreementand the form of Convertible Debenture attached hereto as Exhibit “B.” ThisAgreement and the form of Convertible Debenture are hereinafter collectivelyreferred to as the “*Materials,”* and the Holder furtheracknowledges that it has read all of the disclosures set forth in theMaterials. The Holder has had the opportunity to ask questions and receiveanswers from the Company concerning the terms and conditions of this Agreement.The Holder recognizes that the Company has a limited operating history and is aspeculative venture, and that if the Holder invests therein, the Holder maylose the entire amount of its investment. The Holder acknowledges that itsrepresentatives and the Holder have been provided with the opportunity toobtain any additional information necessary to verify the accuracy of allinformation provided to the Holder in the Materials.

 

**6.4****                              **Indeciding whether to acquire the Convertible Debenture or the Debenture Shares,the Holder has relied or will rely exclusively upon consultations with itslegal, financial and tax advisers with respect to the nature of the investmentand the information provided by the Company in the Materials and thisAgreement. None of the Holder’s advisors are affiliated with, or compensateddirectly or indirectly by, the Company or any affiliate or selling agent of theCompany.

 

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**6.5****                              **TheHolder understands that neither the Securities and Exchange Commission (the *“SEC”*),nor any other governmental agency having jurisdiction over the sale andissuance of the Convertible Debenture or the Debenture Shares will make anyfinding or determination relating to the appropriateness for investment of theConvertible Debenture or the Debenture Shares and that none of them has or willrecommend or endorse the Convertible Debenture or the Debenture Shares.

 

**6.6****                              **TheHolder represents that the Convertible Debenture is purchased and the DebentureShares will be purchased for its own account for investment and is not beingpurchased and will not be purchased with a view to the resale or distributionthereof, and that the Holder does not have and will not have a presentintention of distributing or reselling any portion of the Convertible Debentureor the Debenture Shares. The Holder acknowledges that it has been informed bythe Company that the Convertible Debenture, and the Debenture Shares to be issuedand delivered, have not been registered under the Act and that the ConvertibleDebenture and Debenture Shares must be held indefinitely unless subsequentlyregistered under the Act or an exemption for such registration is available.The Holder acknowledges that, other than as may be set forth in the Materials,the Company has no obligation to register the Convertible Debenture or theDebenture Shares under the Act. The Holder also acknowledges that it is fullyaware of the restrictions on disposing of the Convertible Debenture and theDebenture Shares resulting from the provisions of the Act and the rules andregulations of the SEC thereunder.

 

**6.7****                              **TheHolder understands that the Convertible Debenture is not and the DebentureShares upon issuance will not be freely transferable.

 

**6.8****                              **TheHolder recognizes that there is not a public market for the ConvertibleDebenture and that there is no assurance that there will be such a market forthese securities.  The Holderunderstands that it may have to hold the Debenture Shares indefinitely due tothe lack of such a market.

 

**6.9****                              **TheHolder recognizes that no escrow or minimum amount has been established for thesale of the Convertible Debenture and that the proceeds will be immediatelyreceived by the Company.  The Holderrecognizes that the Company’s inability to raise such funds, or additionalfunds, promptly may significantly and adversely affect the Company’s ability toachieve its financial objectives, although the Company believes it couldmaintain its current operations.

 

**6.10****                       **TheHolder represents that it possesses such knowledge and experience in businessand financial matters that it is capable of evaluating the merits and risks ofits investment in the Convertible Debenture and the Debenture Shares. The Holderalso has the degree of sophistication in these matters necessary to understand(1) the financial and operational information provided to it relating to theCompany, and (2) the potential risk of losing all or a portion of itsinvestment in the Convertible Debenture and the Debenture Shares.  The Holder represents that it is able tobear the economic risk of a loss of its investment in the securities that ithas funds adequate to meet personal needs and contingencies and that it has noneed for liquidity of the investment in the Convertible Debenture or theDebenture Shares.

 

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**6.11****                       **TheHolder recognizes that “stop transfer” instructions will be issued against theConvertible Debenture and the Debenture Shares and that the following legendwill be placed on the Convertible Debenture and the Debenture Shares issued:

 

THE SECURITIESREPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT ANDHAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.  THE SECURITIES MAY NOT BE SOLD ORTRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDERSAID ACT.

 

**6.12**                        The Holder hereby agrees thatcommencing thirty (30) trading days prior to any Conversion Date as definedabove and ending on the Conversion Date, Holder and any representative underHolder’s direction, will refrain from any direct or indirect trading in theCompany’s Common Stock, including trading of any options or derivativesecurities and lending of any Common Stock or related derivative securities, inorder that the Conversion Price not be influenced in any way by the Holder.

 

**7.****                                      TRANSFER. **With respect to any offer, sale or otherdisposition of the Convertible Debenture or the Debenture Shares, the Holderwill give written notice to the Company prior thereto, describing briefly themanner thereof, together with a written opinion of such Holder’s counsel, tothe effect that such offer, sale or other distribution may be effected withoutregistration or qualification (under any federal or state law then in effect).Promptly upon receiving such written notice, the Company shall notify suchHolder whether such Holder may sell or otherwise dispose of the ConvertibleDebenture or the Debenture Shares, all in accordance with the terms of thenotice delivered to the Company.

 

**8.**                                      **CERTAIN CORPORATE TRANSACTIONS.**  Nothing in this Agreement shall in any wayprohibit the Company from merging with or consolidating into anothercorporation, or from selling or transferring all or substantially all of itsassets, or from distributing all or substantially all of its assets to itsstockholders in liquidation, or from dissolving and terminating its corporateexistence, and, in any such event (other than a merger in which the Company isthe surviving corporation and under the terms of which the shares of CommonStock outstanding immediately prior to the merger remain outstanding andunchanged), Holder shall have the right exercisable not less than ten (10)business days prior to the completion of such merger, consolidation, sale ortransfer of assets, liquidation or dissolution, to elect to: (a) have theoutstanding principal amount of the Convertible Debenture repaid to Holder; or(b) have the entire outstanding principal amount of the Convertible Debentureconverted into the Debenture Shares at a price equal to Seventy Five Percent(75%) of the daily weighted average trading price per share of the Company’sCommon Stock for a period of twenty (20) trading days prior to the announcementby the Company of such transaction as noticed to the Company in writing by theHolder. To the extent that Holder’s right to convert the Convertible Debentureinto the Debenture Shares is accelerated under this Section 8, theconversion or payment of the entire outstanding principal amount of theConvertible Debenture shall be contingent upon the consummation of such merger,consolidation, sale or transfer of assets, liquidation or dissolution.

 

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**9.****                                      GENERALPROVISIONS.**

 

**9.1****                               Survivalof Representations and Warranties.** All representations and warranties of the parties hereto contained inthis Agreement will survive the Closing, are material and have been or will berelied upon by the other parties.

 

**9.2****                               NoThird Parties Benefited.**  ThisAgreement is made for the purpose of defining and setting forth certainobligations, rights and duties of the Company and the Holder in connection withthe obligations under this Agreement. This Agreement is made for the sole protection of the Company and theHolder.  No other person shall have anyrights of any nature hereunder or by reason hereof.

 

**9.3****                               BindingEffect.**  This Agreement shallbind, and shall inure to the benefit of, the Company and the Holder, and theirrespective heirs, successors, personal representatives and assigns.

 

**9.4****                               Executionin Counterparts.**  This Agreementmay be executed in any number of counterparts and any party hereto or theretomay execute any counterpart, each of which when executed and delivered will bedeemed to be an original and all of which counterparts of this Agreement takentogether will be deemed to be but one and the same instrument.  The execution of this Agreement by any partyhereto will not become effective until counterparts hereof or thereof, as thecase may be, have been executed by all the parties hereto or thereto, andtransmitted by facsimile copy with overnight delivery of manually executedcopies.

 

**9.5****                               PriorAgreements; Amendments; Consents.** This Agreement contains the entire agreement between the Holder and theCompany in regards to the Convertible Debenture and the Debenture Shares andall prior negotiations, understandings and agreements with regards to theoffering thereof are superseded by this Agreement.  No amendment, modification, supplement, termination or waiver ofany provision of this Agreement, and no consent to any departure by the Companytherefrom, shall be effective unless in writing and signed by the Holder, andthen only in the specific instance and for the specific purpose given.  “Including” as used herein means “including,but not limited to.”

 

**9.6****                               GoverningLaw.****           THIS AGREEMENT AND ALLAMENDMENTS, SUPPLEMENTS, WAIVERS AND CONSENTS RELATING HERETO OR THERETO SHALLBE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OFDELAWARE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.  EACH PARTY HEREBY IRREVOCABLY SUBMITS ITSELFTO THE JURISDICTION OF THE COURTS SITTING IN THE STATE OF DELAWARE AND AGREESAND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGALPROCEEDINGS RELATING HERETO BY ANY MEANS ALLOWED UNDER DELAWARE LAW.**

 

**9.7****                               MandatoryArbitration.****                 **Any disputearising in connection with the interpretation or enforcement of the provisionsof this Agreement, or its application or validity, will be submitted toarbitration. Such arbitration proceedings will be held in the State ofDelaware. This

 

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agreement to arbitrate is specifically enforceable. Any award renderedin any such arbitration proceeding will be final and binding on each of theparties, and judgment may be entered thereon in any court of competentjurisdiction. The costs and fees of any such arbitration proceeding will beborne by the respective parties. The arbitrators may in their discretion awardcosts and reasonable attorneys’ fees to the prevailing party.

 

**9.8****                               Severabilityof Provisions; Conflict.**  Anyprovision in this Agreement that is held to be inoperative, unenforceable orinvalid shall be inoperative, unenforceable or invalid without affecting theremaining provisions, and to this end the provisions of this Agreement aredeclared to be severable.  In the eventof a conflict between this Agreement and the Materials as defined herein, theterms of this Agreement shall prevail.

 

**9.9****                               Attorney’sFees.**  In the event that anyaction, proceeding, or arbitration is instituted by or against any of theparties in order to enforce any of the terms or provisions hereof, to construethe rights of the parties hereunder, then the prevailing party shall beentitled to recover all costs thereof and reasonable attorneys’ fees as part ofthe judgment, whether or not such action is prosecuted to judgment.

 

**9.10****                        Confidentiality.**  The Holder acknowledges and agrees that thenon-public information it has received and will receive about the Company andthe Company’s financial performance is confidential, and agrees to use allreasonable efforts to maintain the confidentiality thereof. Any confidentialityagreement between the Holder and the Company, including the foregoing, ishereby modified, only to the extent necessary, to permit the Holder to exerciseand protect its rights under this Agreement, or as a stockholder of theCompany.

 

**10.****                               NOTICES. **Any notice to the Company provided forin the Convertible Debenture shall be given by personal delivery or by mailingsuch notice by first class or certified mail, return receipt requested,addressed to the Company at the property address stated below, or to such otheraddress as the Company may designate by written notice to the Holder. Anynotice to the Holder shall be given by personal delivery or by mailing suchnotice by first class or certified mail, return receipt requested, to theHolder at the address stated on the signature page of the Agreement, or at suchother address as may have been designated the Holder by written notice to theCompany. Mailed notices shall be deemed delivered and received on the deliverydate as shown on the postal return receipt or the receipt furnished by anindependent courier service, and any notices transmitted by confirmed facsimiletransmission will be deemed delivered and received as of the date of thetransmission.

 

 

**SIGNATURES ON NEXT PAGE**

 

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**IN WITNESS WHEREOF**, the parties have signedthis Agreement as of                    ,**2003**at Las Vegas, Nevada.

 
|   |                                | **“HOLDER”** |
|--------|-------------------------------------|------------------------|
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|   | Phone:                              |                   |   |
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|   | FAX:                                |                   |   |
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|   | Tax I.D. or Social Security Number: |
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**THISAGREEMENT IS NOT EFFECTIVE UNTIL AFTER THE RECEIPT AND VERIFICATION OF GOODFUNDS FROM THE HOLDER TO THE BANK ACCOUNT LISTED BELOW AND ACCEPTANCE BY THECOMPANY AS WITNESSED BY THE SIGNATURE ON THE NEXT PAGE**

 

**Wires should be sent via the Fed Wiresystem to:**

U.S. Bank ofNevada

Nevada FinancialCenter

2300 West SaharaAvenue

Las Vegas,NV.  89102

ABA #121201694

Credit to theAccount of:

MediCor Ltd.

Account#153790902537

 

(continued on nextpage)

 

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**Checks should be made payable toMediCor Ltd.and sent, via Federal Express, to:**

MediCor Ltd.

4560 South DecaturBlvd. Suite 300

Las Vegas,NV.  89103

Phone:702/731-2519

FAX: 702/791-5365

 

**THE COMPANY:**

 
| ***MediCor Ltd.***                                  | ***The Effective Date:*** |
|-----------------------------------------------------|---------------------------|
|                                                |                      |
| By:                                                 |                      |   |                                   ,  2003 |
|                                                |                      |
|                                                |                      |
| Its:                                                |                      |   |   |
|                                                |                      |
| Management Office  Address and Address for Notices: |                      |
| MediCor Ltd.                                        |                      |
| 4560 South Decatur  Blvd.                           |                      |
| Suite 300                                           |                      |
| Las Vegas, NV.  89103                          |                      |
| Phone: 702/731-2519                                 |                      |
| FAX: 702/791-5365                                   |                      |

 

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**LIST OF EXHIBITSTOINVESTMENT AGREEMENT**

 

 
| **EXHIBIT A** |   | **-**  |   | **DEFINITION OF AN “ACCREDITED  INVESTOR”** |
|---------------|--------|--------|--------|-------------------------------------------------------|
|          |   |   |   |                                                  |
| **EXHIBIT B** |   | **-**  |   | **FORM OF CONVERTIBLE  DEBENTURE**                    |

 

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**EXHIBIT A TO AGREEMENT**

 

**DEFINITION OF ACCREDITED HOLDERREGULATION D**

 

To be eligible topurchase the Convertible Debenture, prospective investors must meet theAccredited Investor requirements described below.

 

Under Regulation D an“Accredited Investor” shall mean any person who comes within any of thefollowing categories, or who the issuer reasonably believes comes within any ofthe following categories at the time of the sale of the securities to thatperson:

 

(1)               any bank as definedin section 3(a)(2) of the Act, or any savings and loan association orother institution as defined in section 3(a)(5)(A) of the Act whetheracting in its individual or fiduciary capacity; any broker or dealer registeredpursuant to section 15 of the Exchange Act; any insurance company asdefined in section 2(13) of the Act; any investment company registeredunder the Investment Company Act of 1940 or a business development company asdefined in section 2(a)(48) of that Act; Small Business Investment Companylicensed by the U.S. Small Business Administration under section 301(c) or(d) of the Small Business Investment Act of 1958; any plan established andmaintained by a state, its political subdivisions, or any agency orinstrumentality of a state or its political subdivisions for the benefit of itsemployees, if such plan has total assets in excess of $5,000,000; employeebenefit plan within the meaning of the Employee Retirement Income Security Actof 1974 if the investment decision is made by a plan fiduciary, as defined inSection 3(21) of such Act, which is either a bank, savings and loanassociation, insurance company, or registered investment adviser, or if theemployee benefit plan has total assets in excess of $5,000,000 or, if aself-directed plan, with investment decisions made solely by persons that areaccredited Holders;

 

(2)               any privatebusiness development company as defined in section 202(a)(22) of theInvestment Advisors Act of 1940;

 

(3)               any organizationdescribed in Section 501(c)(3) of the Internal Revenue Code, corporation,Massachusetts or similar business trust, or partnership not formed for thespecific purpose of acquiring the securities offered, with total assets inexcess of $5,000,000;

 

(4)               any director,executive officer or general partner of the issuer of the securities beingoffered or sold, or any director, executive officer, or general partner of thatissuer;

 

(5)               any natural personwhose individual net worth, or joint net worth with that person’s spouse, atthe time of his purchase exceeds $1,000,000;

 

(6)               any natural personwho had an individual income in excess of $200,000 in each of the two mostrecent years or joint income with that person’s spouse in excess of $300,000 ineach of those years and has a reasonable expectation of reaching the sameincome level in the current year;

 

(7)               any trust withtotal assets in excess of $5,000,000 not formed for the specific purpose ofacquiring the securities offered, whose purchase is directed by a sophisticatedperson as described in Section 230.506(b)(2)(ii); or

 

(8)               any entity in whichall of the equity owners are Accredited Investors.

 

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**EXHIBIT BTO INVESTMENT AGREEMENT**

 

 

**FORM OF CONVERTIBLE DEBENTURE**

 

 

**CONFIDENTIAL**

 

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