f8k013009ex4i_bioneut.htm


     

    Exhibit 4.1

    
 

    THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

    


    


    BIONEUTRAL
GROUP, INC.

    


    Debenture

    


    No.
_

     

    

      
        
          	
                  $100,000

                	
                  Issue
      Date:  December __,
2008

                


        

      

    

     

    This
Debenture (the “Debenture”) is duly
authorized and issued by BioNeutral Group, Inc. (the “Company”).

    


    FOR VALUE RECEIVED, the Company,
promises to pay to the order of _______________ located at ___________________,
and/or its registered assigns (the “Payee” or the “Holder”), the
principal sum of $100,000 (the “Principal Amount”)
within 90 days from the date hereof (the “Maturity Date”) in
such coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts, unless it is
converted into the Private Placement (as defined herein) after the Company
undertakes the Reverse Merger (as defined herein) and the subsequent Qualified
Offering (as defined herein), and to pay interest on the Principal Amount at a
rate of 10% per annum to be paid on the Maturity Date.

    


    This
Debenture is subject to the following additional provisions:

    


    A. “Reverse Merger” means
the share exchange transaction to be entered into between the Company and a
publicly traded company currently listed on the Over the Counter Bulletin Board
(“Pubco”),
pursuant to which the Company will become a wholly-owned subsidiary of
Pubco.

    


    B. “Qualified Offering”
means a private placement offering, subsequent to the Reverse Merger, of an
aggregate amount of five hundred thousand dollars ($500,000) (the “Private
Placement”).

    


    C. “Business Days” means
any day except Saturday, Sunday and any day which shall be a federal legal
holiday in the United States or a day on which banking institutions in the State
of New York are authorized or required by law or other government action to
close.

    


    1. Terms of
Repayment.

     

    Principal
of and interest on this Debenture shall be paid by the Company as
follows:

     


    
      
         


      

      
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    Interest
at the rate of ten percent (10%) per annum from the date hereof through the
Maturity Date shall be paid on the Maturity Date by the Company, in
cash.

     

    A. Principal
shall be due and payable on the date that is 90 days following the date hereof
(or if such date shall be a Saturday, Sunday or holiday, then on the immediately
preceding Business Day).  The principal amount shall be repaid in cash
and in full on the date it is due.

     

    B. The
Company further agrees that, if any payment made by the Company or any other
person is applied to this Debenture and is at any time annulled, set aside,
rescinded, invalidated, declared to be fraudulent or preferential or otherwise
required to be refunded or repaid, or the proceeds of any property hereafter
pledged as security for this Debenture is required to be returned by Holder to
the Company, its estate, trustee, receiver or any other party, including,
without limitation, under any bankruptcy law, state or federal law, common law
or equitable cause, then, to the extent of such payment or repayment, the
Company’s liability hereunder (and any lien, security interest or other
collateral securing such liability) shall be and remain in full force and
effect, as fully as if such payment had never been made, or, if prior thereto
any such lien, security interest or other collateral hereunder securing the
Company’s liability hereunder shall have been released or terminated by virtue
of such cancellation or surrender, this Debenture (and such lien, security
interest or other collateral) shall be reinstated in full force and effect, and
such prior cancellation or surrender shall not diminish, release, discharge,
impair or otherwise affect the obligations of the Company in respect to the
amount of such payment (or any lien, security interest or other collateral
securing such obligation).

     

    C. All
computations of interest shall be made by Holder on the basis of a year of 360
days for the actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest is
payable.  Whenever any payment to be made hereunder shall be stated to
be due on a day which is not a business day, such payment shall be made on the
next succeeding day and such extension of time shall in such case be included in
the computation of payment of interest.

     

    D. The
Company may prepay all or any part of the outstanding principal amount of this
Debenture, together with interest accrued, if any, plus a premium, upon not
fewer than ten (10) Business Days’ prior written notice to the
Holder.  In the event such prepayment occurs, the amount paid shall be
125% of the prepaid principal plus any accrued interest.

     

    
    

    
      2.           Mandatory Conversion upon
the Subsequent Qualified Offering.



    A. Mandatory Conversion
Mechanism.

    


    i. If the
Company undertakes a Qualified Offering prior to the Maturity Date, the Company
will deliver to the Holder a notice (the “Offering Notice”),
stating the price and other terms and conditions thereof not later than five (5)
business days prior to the closing date of the Qualified Offering.

     

    ii. Upon the
closing of the Qualified Offering, the Principal Amount and interest of this
Debenture will automatically be converted into an amount of securities equal to
one hundred percent (100%) of the Principal Amount.  In the event of
an Merger and Qualified Offering, all accrued by unpaid interest shall be
forgiven and not required to be paid to the Holder.

     

              B. Registration Rights.
In the event that this Debenture is converted into the Private Placement, the
Holder shall have the same registration rights with respect to the Private
Placement as investors in the Qualified Offering.

     

    3.           Holder’s Representations and
Warranties.  The Holder represents and warrants
that:

     

    A.           Restrictions on Transfer or
Resale. The Holder understands that (i) this Debenture

     


    
      
         


      

      
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    and any
securities issued in connection with the Private Placement are not being
registered under the Securities Act of 1933 or any state securities laws, and
may not be offered for sale, sold, assigned or transferred unless (A) the
Debenture, any Common Shares or any shares issued in connection with the Private
Placement are subsequently registered thereunder, or (B) Holder shall have
delivered to the Company an opinion of counsel, in a generally acceptable form,
to the effect that such securities to be sold, assigned or transferred may be
sold, assigned or transferred pursuant to an exemption from such registration;
and (ii) neither the Company nor any other party is under any obligation to
register the Debenture or the Common Shares under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder, provided however that Holders
shall have the same registration rights with respect to any holders under the
private placement as investors in the Qualified Offering in the event that the
Debentures are converted into the Private Placement in the Qualified Offering;
(iii) Holder is acquiring the Debenture, the Common Share and any securities
issued in connection with the Private Placement for its own account and not with
a view towards, or for resale in connection with, the public sale or
distribution thereof, except pursuant to sales registered or exempted under the
1933 Act, and (iv) Holder does not presently have any agreement or
understanding, directly or indirectly, with any party to distribute any of the
securities.

     

    B.           Accredited Investor
Status.  Holder is an "accredited investor" as that term is
defined in Rule 501(a) of Regulation D.

     

     

    C.           Reliance on
Exemptions.  The Holder understands that the Debenture and any
securities issued in connection with the Private Placement acquired in the
Qualified Offering are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and state
securities laws and that the Company is relying in part upon the truth and
accuracy of, and Holder’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of Holder set forth herein in
order to determine the availability of such exemptions and the eligibility of
Holder to acquire the securities.

     

     

    D.           Information.  Holder
and its advisors, if any, have been furnished with all materials relating to the
business, finances and operations of the Company and materials relating to the
offer and sale of the securities that have been requested by
Holder.  Holder and its advisors, if any, have been afforded the
opportunity to ask questions of the Company.  Neither such inquiries
nor any other due diligence investigations conducted by Holder or its advisors,
if any, or its representatives shall modify, amend or affect Holder's right to
rely on the Company's representations and warranties contained herein. Holder
understands that its investment in the Debenture and any securities issued in
connection with the Private Placement acquired in the Qualified Offering involve
a high degree of risk and is able to afford a complete loss of such investment.
Holder has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to its
acquisition of the securities.

     

     

    E.           No Governmental
Review.  Holder understands that no United States federal or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the securities or the fairness or
suitability of the investment in the securities nor have such authorities passed
upon or endorsed the merits of the offering of the securities.

     

    F.           Legend. This
Debenture, all certificates representing Common Shares upon voluntary conversion
and the securities issued in connection with the Private Placement acquired in
the Qualified Offering shall be stamped or imprinted with a legend in
substantially the following form:

     

    NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE


    
      
         


      

      
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    SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A)
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD
PURSUANT TO RULE 144 OR RULE 144 A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

    


    4.           Events of
Default

    


    A.           The
term “Event of
Default” shall mean any of the events set forth in this Section 6A (the
term “Company” for this purpose shall include all subsidiaries of the
Company):

    


       i.           Non-Payment of
Obligations.  The Company shall default in the payment of the
Principal Amount of this Debenture as and when the same shall become due and
payable, whether by acceleration or otherwise.

    


       ii.           Non-Performance of
Affirmative Covenants.  The Company shall default in the due
observance or performance of any covenant set forth in Section 4A, which default
shall continue uncured for thirty (30) days after notice thereof.

    


       iii.           Non-Performance of Negative
Covenants.  The Company shall default in the due observance or
performance of any covenant set forth in Section 4B, which default shall
continue uncured for thirty (30) days after notice thereof.

    


       iv.           Bankruptcy, Insolvency,
etc.  The Company shall:

    


    (a)           admit
in writing its inability to pay its debts as they become due;

    


    (b)           apply
for, consent to, or acquiesce in, the appointment of a trustee, receiver,
sequestrator or other custodian for the Company or any of its property, or make
a general assignment for the benefit of creditors;

    


    (c)           in
the absence of such application, consent or acquiesce in, permit or suffer to
exist the appointment of a trustee, receiver, sequestrator or other custodian
for the Company or for any part of its property and that is not dismissed within
sixty days;

    


    (d)           permit
or suffer to exist the commencement of any bankruptcy, reorganization, debt
arrangement or other case or proceeding under any bankruptcy or insolvency law,
or any dissolution, winding up or liquidation proceeding, in respect of the
Company, and, if such case or proceeding is not commenced by the Company or
converted to a voluntary case, such case or proceeding is consented to or
acquiesced in by the Company or results in the entry of an order for relief;
or

    


    (e)           take
any corporate or other action authorizing any of the foregoing.

    


       v.           Cross-Default.  The
Company shall default in the payment when due of any amount payable under any
other obligation of the Company for money borrowed in excess of
$50,000.


    
      
         


      

      
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              B.           Action if
Bankruptcy.  If any Event of Default described in clauses
(iv)(a) through (d) of Section 6A shall occur, the Principal Amount of this
Debenture and all other obligations hereunder shall automatically be and become
immediately due and payable, without notice or demand.

     

    C.           Action if Other Event of
Default.  If any Event of Default (other than any Event of
Default described in clauses (iv)(a) through (d) of Section 6A shall occur for
any reason, whether voluntary or involuntary, and be continuing, for 30 days
after notice, the Holder may, upon notice to the Company, declare all or any
portion of the outstanding principal amount of the Debenture, to be due and
payable and any or all other obligations hereunder to be due and payable,
whereupon the full unpaid principal amount hereof, and any and all other such
obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand, or
presentment.

    


    5.           Miscellaneous.

    


    A.           Parties in
Interest.  All covenants, agreements and undertakings in this
Debenture binding upon the Company or the Holder shall bind and inure to the
benefit of the successors and permitted assigns of the Company and the Holder,
respectively, whether so expressed or not.

    


    B.           Governing
Law.   This Debenture shall be governed by the laws of the
State of Delaware as applied to contracts entered into and to be performed
entirely within the State of Delaware.

    


    C.           Waiver of Jury
Trial.  THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS NOTE OR ANY OTHER DOCUMENT OR INSTRUMENT EXECUTED AND DELIVERED IN
CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE PAYEE OR THE
COMPANY.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PAYEE'S
PURCHASING THIS NOTE.

     

    D.           Notices.

    


       (i)           Any
notice pursuant to this Debenture to be given or made by the Holder to or upon
the Company shall be sufficiently given or made if sent by certified or
registered mail, postage prepaid, addressed (until another address is sent by
the Company to the Holder) as follows:

    


    To the
Company:                                          BioNeutral
Group, Inc.

                                                    
Attn: Raj Pamani

                    
211 Warren Street

                    
Newark, New Jersey 07103

    


    To the Holder:

     

       (ii)           Any
notice pursuant to this Debenture to be given or made by the Company to or upon
the Holder shall be sufficiently given or made if sent by certified or
registered mail, postage prepaid, addressed (until another address is sent by
the Holder to the Company) to the address of the Holder set forth
above.


    
      
         


      

      
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    E.           No
Waiver.  No delay in exercising any right hereunder shall be
deemed a waiver thereof, and no waiver shall be deemed to have any application
to any future default or exercise of rights hereunder.

    


    F.           Modification and
Severability.  If, in any action before any court or agency
legally empowered to enforce any provision contained herein, any provision
hereof is found to be unenforceable, then such provision shall be deemed
modified to the extent necessary to make it enforceable by such court or
agency.  If any such provision is not enforceable as set forth in the
preceding sentence, the unenforceability of such provision shall not affect the
other provisions of this agreement, but this agreement shall be construed as if
such unenforceable provision had never been contained herein.

    


    


    


    


    


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    IN
WITNESS WHEREOF, this Debenture has been executed and delivered on the date
specified above by the duly authorized representative of the
Company.

    


                                                                           BioNeutral
Group, Inc.

     

                   By:  __________________________

                                                                           Name:
Raj Pamani

                   Title:
Director

    


                            [BUYER]

     

     

                            By:  __________________________

    


    


    


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