Exhibit


 





THE SECURITIES REPRESENTED BY THIS INSTRUMENT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT").


 


RESTATED CONVERTIBLE DEBENTURE


 





	$15,000.00	 	As of November 30, 2012



 


For value received, Viral Genetics, Inc.,
a Delaware corporation (the "Company"), promises to pay to the order of DMBM Inc. (the "Holder"), the principal
sum of FIFTEEN THOUSAND DOLLARS AND NO CENTS or the aggregate outstanding principal amount hereof, whichever is less (the “Principal”),
represents various loans (each a “Loan”) made by the Holder to the Company between October 1, 2012 and October 31,
2012, on the dates and in the amounts specified on Schedule A attached hereto and to pay interest on the outstanding principal
amount of this Convertible Debenture (this "Debenture") as provided herein.


 


1.Definitions.
The following terms shall have the definitions set forth in this Section 1:


 


		(a)	"Business Day" means any day on which banks are open for business in both the State of
California and the State of New York.



 


		(b)	"Common Stock" means the Company's common stock, par value $0.0001 per Share.



 


		(c)	"Conversion Price" shall be $0.0005 per Share.



 


		(d)	"Shares" means shares of Common Stock.



 


		(e)	"Trading Day" means a calendar day on which the Shares are quoted for trading on the
Trading Market.



 


		(f)	"Trading Market" means the following markets or exchanges on which the Shares are listed
or quoted for trading on the date in question: The Over The Counter Bulletin Board, the PinkSheets, the Nasdaq SmallCap Market,
the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market, the Toronto Stock Exchange, the TSX Venture
Exchange, or any other securities exchange registered with the United States Securities and Exchange Commission.



 


2.Loans.
Each Loan made by the Holder to the Company evidenced by this Debenture, shall be set forth on Schedule A attached hereto. The
Holder is authorized by the Company to modify Schedule A from time to time to reflect the amount of any partial conversion of
this Debenture.


 






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3.Interest.
Interest on the outstanding Principal amount of this Debenture will accrue at a rate equal to one percent (1%) per annum from
the date of the making of each Loan as set forth on Schedule A. Interest will be computed on the basis of a year of 12 months,
each having 30 days, and will be paid on the Maturity Date and upon any permitted prepayment of this Debenture.


 


4.Repayment.
The Company shall pay the Principal amount of this Debenture, together with all accrued and unpaid interest, to the Holder on
October 30, 2013 (the "Maturity Date").


 


5.Payment.
All payments due under this Debenture shall be made in either the lawful money of the United States of America or in Shares,
as determined by the Company in its discretion in accordance with Section 5 hereof, without set-off, deduction, demand or
notice.


 


		(a)	Form of Payment. Five (5) business days prior to the Maturity Date, the Company, at its
sole discretion, shall notify the Holder whether the payment due on the Maturity Date shall be made in cash or in Shares.



 


		(b)	Payment in Cash. All payments in cash shall be made to the Holder by check or by wire transfer
to such bank as the Holder may advise the Company in writing.



 


		(c)	Payment in Shares. The number of Shares issuable upon a payment being made in Shares shall
be calculated by dividing the aggregate amount due on the Maturity Date by the Conversion Price. No fractional Shares will be issued
upon conversion of this Debenture or a payment by the Company in Shares. In lieu of any fractional Share to which the Holder would
otherwise be entitled upon a payment in Shares, the Company will pay to the Holder in cash the amount of the unpaid or unconverted
Principal and interest balance of this Debenture that would otherwise be paid or converted into such fractional Share. Shares issued
hereunder shall be transmitted by the transfer agent of the Company to the Holder either by crediting the account of the Holder's
designated broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission ("DWAC"), or, if
so elected by Holder, by physical delivery of certificates to Holder's address within five (5) Trading Days from the Due Date.
If the Company fails for any reason to deliver to the Holder the Shares by the requisite delivery date, the Company shall pay to
the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Shares not timely delivered, $5 per Trading
Day (increasing to $10 per Trading Day on the fifteenth (15) Trading Day after such liquidated damages begin to accrue) for each
Trading Day after such requisite delivery date until such Shares are delivered. In addition to any other rights available to the
Holder, if the Company fails to cause its transfer agent to deliver to the Holder the Shares on or before the requisite delivery
date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise), or
the Holder's brokerage firm otherwise purchases, Shares to deliver in satisfaction of a sale by the Holder of the Shares which
the Holder anticipated receiving pursuant to this Debenture (a "Buy-In"), then the Company shall (1) pay in cash to the
Holder the amount by which (x) the Holder's total



 






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purchase price (including brokerage
commissions, if any) for the Shares so purchased exceeds (y) the amount obtained by multiplying (A) the number of Shares that
the Company was required to deliver to the Holder multiplied by (B) the price at which the sell order giving rise to such purchase
obligation was executed, and (2) deliver to the Holder the number of Shares that would have been issued had the Company timely
complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Shares having a total purchase
price of $11,000 to cover a Buy-In with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause
(1) of the immediately preceding sentence the Company shall be required to pay the Holder $ 1,000. The Holder shall provide the
Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company,
commercially reasonable evidence of the amount of such loss.


 


(d) Adjustments. If the Company, at any time while this Debenture
is outstanding subdivides outstanding Shares into a larger number of shares or combines (including by way of reverse stock split)
outstanding Shares into a smaller number of shares, then the Conversion Price shall be multiplied by a fraction of which the numerator
shall be the number of Shares outstanding immediately before such event and of which the denominator shall be the number of Shares
outstanding immediately after such event.


 


6.Prepayment.
This Debenture may not be prepaid by the Company without the prior written consent of the Holder, except as provided in Section
7 of this Debenture .


 


7.Conversion.
At any time prior to five (5) business days prior to the Maturity Date, all or any portion of the Principal amount of this Debenture,
together will accrued interest thereon, may be converted at the option of the Holder, at any time and from time to time, in the
minimum principal amount of $5,000 and integral multiples of $1,000 thereafter, upon not less than two (2) three (3) Business
Days after the Company's receipt of the Conversion Notice (as hereinafter defined) from the Holder and payment in full of the
Conversion Price as then in effect. Each "Conversion Notice" shall mean a written notice from the Holder informing the
Company of the date of the conversion, the principal amount of this Debenture being converted, the number of shares of Common
Stock to be received upon conversion and confirming that the Conversion Price will be paid in cash. The Conversion Price shall
be paid by certified check or by wire transfer of immediately available funds to a bank account designated by the Company in writing.
Within three (3) Business Days after payment of the Conversion Price, the Company will deliver a certificate for the shares of
Common Stock issued upon conversion to the Holder, or at the Holder’s request, to a brokerage account for the benefit of
Holder. The Company shall at all times reserve for issuance a number of shares of Common Stock sufficient to satisfy the conversion
feature of this Debenture. The number of shares of Common Stock issuable upon the conversion of all or a portion of this Debenture
shall be equal to the Principal amount of this Debenture being converted divided by the Conversion Price. For purposes hereof,
any partial conversion of this Debenture, each Loan shall be considered separate and distinct indebtedness of the Company to the
Holder for purposes of determining the holding period of each item of indebtedness represented by the Loan. Notwithstanding anything
set forth herein, in no event shall the Holder be entitled to convert this Debenture for a number of shares of Common Stock in
excess of that number of shares of Common Stock which, upon giving effect to such conversion, would cause the aggregate number
of shares of Common Stock beneficially owned by the Holder and its affiliates to exceed 9.99% of the outstanding shares of the
Common Stock following such conversion. Notwithstanding receipt of a Conversion Notice, the Company shall have the right to prepay
this Debenture in the amount being converted if the principal amount to be converted together with accrued interest thereon is
paid in immediately available funds within one (1) business day after the date of the


 






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8.Seniority.
The indebtedness represented by this Debenture is and shall be an obligation of the Company ranking senior in right of payment,
liquidation and otherwise to any future indebtedness and other obligations of the Company. The Company will not create any indebtedness
that is senior in priority to the indebtedness represented by this Debenture.


 


9.Default. Any one of the following occurrences
shall constitute an "Event of Default" under this Debenture:


 


(a)failure
of Company to pay any amount that it payable under this Debenture on the Due Date, provided that such failure is not cured
within a grace period of ten (10) calendar days; or


 


(b)failure
to comply with or perform any other agreement or covenant of the Company contained herein, which failure does not otherwise
constitute an Event of Default, provided that such failure has not been cured within thirty (30) calendar days written notice
by Holder to the Company; or


 


(c)there
shall occur any default or event of default, any similar event, any event that requires the prepayment of borrowed money or
permits the acceleration of the maturity thereof, or any event or condition that might become any of the foregoing with
notice or the passage of time or both, under the terms of any evidence of indebtedness or other agreement issued or assumed
or entered into by the Company, or under the terms of any document or instrument under which any such evidence of
indebtedness or other agreement is issued, assumed, secured, or guaranteed, and such event shall continue beyond any
applicable notice, grace or cure period, provided that such condition shall not have been cured within thirty (30)
calendar days of notice by Holder; or


 


(d)the
Company shall fail to maintain its existence in good standing in its state of incorporation; provided that such
condition shall not have been cured within thirty (30) calendar days of notice by Holder; or


 


(e)a
judgment or settlement shall be entered or agreed to in any proceeding which would reasonably be expected to have a material
and adverse effect on the ability of the Company to repay this Debenture; or any garnishment, summons, writ of attachment,
citation, levy or the like is issued against or served upon Holder for the attachment of any property of the Company in
Holder’s possession or control, provided that such condition shall not have been cured within thirty (30) calendar days
of notice by Holder of such condition; or






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(f)any
Share issued pursuant to this Debenture shall not be duly authorized, validly issued, fully paid or nonassessable, provided
that such condition shall not have been cured within ninety (90) calendar days of notice by Holder of such condition; or


 


(g)the
Company shake make a voluntary filing for bankruptcy under Title 11, Chapter 7 of the United States Code; or


 


(h)there
shall be appointed a receiver or trustee to take possession of the property or assets of the Company under Title 11, Chapter
7 of the United States Code.


 


10.Remedies.
Upon the occurrence and during the continuance of an Event of Default, this Debenture and shall become immediately due in full,
and unpaid amounts hereunder will accrue interest at the rate equal to the stated rate plus 5.00% per annum, and Holder may exercise
any rights and remedies under this Debenture, any Transaction Document or other document or instrument and at law or in equity.
The time of payment of this Debenture is also subject to acceleration if an Event of Default occurs. Notwithstanding the foregoing,
the entire unpaid Principal sum of this Debenture, together with accrued and unpaid interest thereon, shall become immediately
due and payable upon any of the Events of Default set forth in this Debenture.


 


11.Transfer;
Successors and Assigns. The terms and conditions of this Debenture shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. At the election of the Holder, but subject-to compliance with applicable securities laws,
this Debenture may be assigned or transferred by the Holder, in whole or in part, upon surrender of this Debenture, duly endorsed,
and accompanied by a duly executed written instrument of transfer in customary form, following which a new Debenture for the same
principal amount and interest will be issued to, and registered in the name of, the transferee. If less than the entire amount
of this Debenture is transferred or assigned, the Company will issue new Debentures to the transferee, in the amount transferred
or assigned, and to the Holder, in the remaining Principal amount hereof after the transfer or assignment. This Debenture shall
be binding upon and inure to the benefit of the Company and the Holder, their successors and permitted assigns and the transferees
of the Holder.


 


12.Governing
Law. This Debenture and all acts and transactions pursuant hereto and the rights and obligations of the Company and the Holder
shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to any
of its principles of conflicts of law or choice of law principles which would result in the application of the laws of another
jurisdiction.


 


13.Notices.
Any notice required or permitted by this Debenture shall be in writing and shall be deemed sufficient upon receipt, when
delivered personally or by courier, overnight delivery service or confirmed facsimile, or 96 hours after being deposited in
the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified
at such party's address or facsimile number as set forth herein or as subsequently modified by written notice.


 






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14.Amendments
and Waivers. This Debenture may only be amended, modified or waived by a written instrument executed by the Company and the
Holder. Any amendment or waiver effected in accordance with this Section 14 shall be binding upon the Company, the Holder and
each transferee or permitted assigns of any Debenture.


 


15.Loss of Debenture.
Upon receipt by the Company of a customary representation by the Holder of the loss, theft, destruction or mutilation of this
Debenture or any Debenture exchanged for it, and a customary indemnity undertaking by the Holder (in case of loss, theft or destruction)
or surrender and cancellation of such Debenture {in the case of mutilation), the Company will make and deliver in lieu of such
Debenture a new Debenture of like tenor.


 


16.Waiver of
Presentment, etc. The Company hereby expressly waives presentment, demand for payment, dishonor, notice of dishonor, protest,
notice of protest and any other formality upon the occurrence of an Event of Default.


 


17.Entire Understanding.
This Debenture sets forth the entire understanding agreement of the Company and the Holder with respect to the subject matter
hereof and it supersedes all prior and/or contemporaneous understandings and agreements with respect to such subject matter, all
of which are merged herein, and it specifically amends and restates a Debenture dated this date in the same principal amount hereof,
which did not accurately reflect the understanding and agreement of the Company and the Holder.


 


18.Costs and Fees. The
Company agrees to pay all costs, expenses, including, without limitation, reasonable attorneys' fees and disbursements, incurred
by the Holder in endeavoring to collect any amounts payable hereunder (including, without limitation, amounts payable in Shares)
which are not paid when due or otherwise in enforcing any provision of this Debenture and any of the rights and remedies of the
Holder under this Debenture, at law or in equity.


 


 


[signature page follows]


 


 






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IN
WITNESS WHEREOF, this Note has been executed by a duly authorized officer of the Company as of the date of this Note.


 


VIRAL GENETICS, INC.


 


By: /s/ Haig Keledjian                                 


Name: Haig Keledjian


Title: President


 


 






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	Date of Loan	Amount of Loan	Schedule A
	11/9/12	WIRE TRANSFER OUTGOING Viral Genetics Inc	$2,000.00
	11/14/12	WIRE TRANSFER OUTGOING Viral Genetics Inc	$5,000.00
	11/19/12	WIRE TRANSFER OUTGOING Viral Genetics Inc	$2,000.00
	11/20/12	WIRE TRANSFER OUTGOING Viral Genetics Inc	$4,000.00
	11/21/12	WIRE TRANSFER OUTGOING Viral Genetics Inc	$2,000.00




 


 






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