exhibit10-3.htm


    SARS
CORPORATION

    10%
CONVERTIBLE DEBENTURE

    


    No.
100 December 20, 2007

    USD$722,000 Bothell,
Washington, USA

    


    


    


    SARS
CORPORATION (“Maker” or the “Company”) hereby promises to pay to the order of
Andronics, Ltd. or his, her, its assigns (“Holder”), the sum of Seven Hundred
Twenty-Two United States Dollars (USD$722,000), with interest at the rate of ten
percent (10%) per annum until paid.  All outstanding principal and
accrued and unpaid interest shall become due twelve months from the date upon
which this 10% Convertible Debenture (“Debenture”) is executed (the “Maturity
Date”).  All payments due and owning under this Debenture shall be
subject to the terms and conditions set forth herein.

    


    
      	
              1.  

            	
              Agreement.

            


    

    


    The
Debenture is issued pursuant to that certain Asset Purchase Agreement (the
“Agreement”), dated the same date as first set forth herein, by and between
Andronics, Ltd. and Jinkhold, Ltd., a wholly owned subsidiary of the Maker,
which is hereby incorporated by reference.

    


    
      	
              2.  

            	
              Register.

            


    

    


    The
Company shall keep at its principal office a register in which the Company shall
provide for the registration of the Holder of the Debenture or for the
registration of a transfer of the Debenture to a different Holder.

    


    
      	
              3.  

            	
              Loss Theft,
      Destruction or Mutilation of the
  Debenture.

            


    

    


    Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of the Debenture and, in the case of any such loss,
theft or destruction, upon receipt of an indemnity bond in such reasonable
amount as the Company may determine (or if such Debenture is held by the
original Holder, of an unsecured indemnity agreement reasonably satisfactory to
the Company) or, in the case of any such mutilation, upon surrender and
cancellation of such Debenture, the Company will make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Debenture, a new Debenture of like
tender and unpaid principal amount and dated as of the date to which interest
has been paid on the Debenture so lost, stolen, destroyed or
mutilated.

    


    
      	
              4.  

            	
              Registered
      Holder.

            


    

    


    The
Company may deem and treat the person in whose name any Debenture is registered
as the absolute owner and Holder of such Debenture for the purpose of receiving
payment of the principal of and interest on such Debenture and for the purpose
of any notices, waivers or consents thereunder, whether or not such Debenture
shall be overdue, and the Company shall not be affected by notice to the
contrary.  Payments with respect to any Debenture shall be made only
to the registered Holder thereof.

    


    
      	
              5.  

            	
              Surrender of the
      Debenture.

            


    

    


    The
Company may, as a condition of payment of all or any of the principal of, and
interest on, the Debenture, or its conversion, require Holder to present the
Debenture for notation of such payment and, if the Debenture be paid in full or
converted at the election of Holder as herein provided, require the surrender
hereof.

    


    
      	
              6.  

            	
              Subordination.

            


    

    


    The
Company, in its sole discretion, may subordinate the Debenture to any Senior
Debt of the Company.  For purposes of the Debenture, “Senior Debt”
shall mean all indebtedness for all principal, fees, expenses, interest,
penalties, post-bankruptcy petition interest, and all other amounts payable for
money borrowed.

    


    


    
      	
              7.  

            	
              Conversion.

            


    

    


    At any
time prior to or at the Maturity Date, at the option of the Holder, all
principal and accrued interest due on this Debenture (the “Convertible Amount”)
may be converted at $1.00 USD per share.  Upon the Maturity Date, all
outstanding principal and accrued interest shall automatically convert into
common stock of the Company.

    


    The
Conversion Amount shall be adjusted downward in the event the Company issues
common stock (or securities exercisable for convertible into or exchangeable for
common stock) at a price below the Conversion Amount, to a price equal to such
issue price.

    
      


      
        	
                8.  

              	
                Mechanics of
      Conversion.

              


      

    

    
Upon the
Company’s receipt of written notice of Holder’s election to convert the
Debenture or upon the Maturity Date, the principal amount of this Debenture plus
any accrued interest shall be deemed converted into such number of shares of the
Company’s Common Stock as determined pursuant to Section 7, and no further
payments shall thereafter accrue or be owing under the Debenture.  The
entire balance due and owing under the Debenture must be converted to Common
Stock; no partial conversions will be allowed.  Holder shall return
this Debenture to the Company at the address set forth below, or such other
place as the Company may require in writing.   Within ten (10)
days after receipt of this Debenture, the Company shall cause to be issued in
the name of and delivered to Holder at the address set forth above, or to such
other address as to which Holder shall have notified the Company in writing, a
certificate evidencing the securities to which Holder is entitled.  No
fractional securities will be issued upon conversion of the
Debenture.  If on conversion of the Debenture a fraction of a security
results, the Company shall round up the total number of securities to be issued
to Holder to the nearest whole number.

     

    


    
      	
              9.  

            	
              Notice.

            


    

    


    Any
notice required or desired to be given under this Agreement shall be in writing
and shall be deemed given when personally delivered, sent by an overnight
courier service, or sent by certified or registered mail to the addresses set
forth below, or such other address as to which one party may have notified the
other in such manner.

    


    
      	
              10.  

            	
              Default.

            


    

    


    The
following will be “Events of Default” under the Debenture:  (a) the
Company shall default on the payment of principal or interest on the Debenture
or on any other indebtedness of the Company when due; (b) the Company shall
default on the observance or performance of any other covenant set forth in the
Debenture; (c) the Company shall issue any indebtedness senior to the Debenture
or grant any security for any other indebtedness (other than in connection with
operating leases such as stand-alone office equipment leases); (d) the Company
shall become insolvent or file a voluntary petition in bankruptcy (or have such
a petition filed against it) or have an assignment for the benefit of creditors
or other creditor arrangement or similar event occur with respect to it or its
assets; or (e) failure to comply with any other term or condition of the
Debenture, which shall not have been cured within ten (10) business days receipt
of written notice to the Company.

    


    Upon
Default, and at the option of Holder, or Holder’s successors or assigns, with
fifteen (15) days written notice to the Company, demand or presentment, Holder
may (i) accelerate all amounts due and owing under this Debenture and demand
payment immediately and/or (ii) declare the right to exercise any and all
remedies available to Holder under applicable law.

    

      


      
        	
                11. 

              	
                

                  Miscellaneous.

                

              


      

    

     

    (a)           10%
per annum calculated using a 360-day year composed of 12 30-day months, payable
in full, unless otherwise converted to common stock in the Company, at maturity
or conversion.

    


    (b)           The
Company agrees that all Conversion Shares shall be fully paid and
non-assessable.  Maker shall pay upon demand any and all expenses,
including reasonable attorney fees, incurred or paid by Holder of this Debenture
without suit or action in attempting to collect funds due under this Debenture
or in connection with the issuance of the Conversion Shares.  In the
event an action is instituted to enforce or interpret any of the terms of this
Debenture including but not limited to any action or participation by Maker in,
or in connection with, a case or proceeding under the Bankruptcy Code or any
successor statute, the prevailing party shall be entitled to recover all
expenses reasonably incurred at, before and after trial and on appeal or review,
whether or not taxable as costs, including, without limitation, attorney fees,
witness fees (expert and otherwise), deposition costs, copying charges and other
expenses.

    


    (c)           All
parties to this Debenture hereby waive presentment, dishonor, notice of dishonor
and protest.  All parties hereto consent to, and Holder is hereby
expressly authorized to make, without notice, any and all renewals, extensions,
modifications or waivers of the time for or the terms of payment of any sum or
sums due hereunder, or under any documents or instruments relating to or
securing this Debenture, or of the performance of any covenants, conditions or
agreements hereof or thereof or the taking or release of collateral securing
this Debenture.  Any such action taken by Holder shall not discharge
the liability of any party to this Debenture.

    


    (d)           This
Debenture shall be governed by and construed in accordance with the laws of the
state of California without regard to conflict of law principles.

    


    (e)           All
payments due and owing under this Debenture shall be delivered to the
following:

    


    Andronics, Ltd.

    Unit 20
Balliniska Road

    Springtown
Industrial Estate

    Londonderry

    Northern
Ireland

    BT48
ONA

    


    


    IN
WITNESS WHEREOF, the parties hereto execute this Convertible Debenture as of
this 20th day of
December, 2007.

    


    


    Maker:                                SARS
Corporation

    


    
 

    ____________________________

                                                   
By: Clayton S. Shelver

    Its:  Chief Executive
Officer

    


    


    
      	 
      	 
      
	
              Maker’s
      address:                               SARS
      Corporation

                                           Attn:
      Clayton S. Shelver

                           19119
      Northcreek Parkway, Suite 201

                                                                          
      Bothell, WA 98011 USA

               

            	
              With
      a copy to:    The Otto Law Group, PLLC

              Attn: David M. Otto

              601 Union Street, Suite
      4500

              Seattle, WA 98101
    USA

            


    

    


    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    _________,
200_

    


    


    


    SARS
Corporation

    19119
Northcreek Parkway, Suite 201

    Bothell,
WA 98011 USA

    Attention:
Clayton S. Shelver

    


    RE:           SARS,
Corporation (the “Company”) Convertible Debenture

    


    Dear Mr.
Shelver:

    


    I, ________________________, am the
holder of convertible debenture #___ of the Company, issued on ______________,
200__ for $____________ (the “Debenture”).  The original Debenture is
enclosed and attached hereto.  Subject to Section 8 of the Debenture,
I wish to convert the entire principal and any accrued interest into such number
of shares of the Company’s common stock as determined pursuant to Section 7 of
the Debenture. I understand that by converting the Debenture into common stock,
no further payments shall thereafter accrue or owe under the
Debenture.

    


    Once the Debenture is converted into
common stock of the Company, please direct the Company’s transfer agent to
submit the stock certificates to the following street address:

    


    _____________________

    _____________________

    _____________________

    _____________________

    Phone: _______________

    


    Please do not hesitate to contact me at
the above referenced phone number if you need further
assistance.  Thank you for your time.

    


    


    Sincerely,

    


    


    


    _____________________

    


    


    Enclosure