Anavex Life Sciences Corp.: Exhibit 10.5 - Filed by newsfilecorp.com






THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES INTO
WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION
TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION
S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”).


NONE OF THE SECURITIES REPRESENTED HEREBY NOR THE SECURITIES
INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE 1933
ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE
OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED
HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN
EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION,
HEDGING TRANSACTIONS INVOLVING THIS SECURITY AND THE SECURITIES INTO WHICH THIS
SECURITY IS CONVERTIBLE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933
ACT. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE
1933 ACT. 

Issue Date: February 22, 2010 

Conversion Price (subject to adjustment herein): USD
$2.35 share 

Principle Amount: USD $ 

ANAVEX LIFE SCIENCES CORP. 
20% CONVERTIBLE LOAN


FOR VALUE RECEIVED, ANAVEX LIFE SCIENCES CORP. (the
“Company”) promises to pay to ________________ or its registered
assigns (the “Holder”), the principal sum of _______________ ($) in
lawful currency of the United States (the “Principal Amount” ) on
February 22, 2012 or such earlier date as the Convertible Loan may be permitted
to be repaid as provided hereunder (the “Maturity Date”), and to pay
interest to the Holder on the aggregate unconverted and then outstanding
principal amount of this Convertible Loan at the rate of 20% per annum, payable
on the earlier of (i) the Conversion Date (as hereafter defined) (and subject in
any event to the terms of Section 3, below) and (ii) the Maturity Date. Interest
shall be calculated on the basis of a 365-day year and shall accrue daily
commencing on the Issue Date until payment in full of the Principal Amount,
together with all accrued and unpaid interest and other amounts which may become
due hereunder, has been made. Interest shall cease to accrue with respect to any
part of the Principal Amount converted, provided that the Company in fact
delivers the Shares, within the time period required by Section 3.3. Interest
hereunder will be paid to the Person in whose name this Convertible Loan is
registered on the records of the Company regarding registration and transfers of
Convertible Loans. The Company may prepay any portion of the principal and
interest amount of this Convertible Loan at any time after 12 months from issue
date by giving 30 days written notice to the Holder. 

This Convertible Loan is part of an offering in which all
Holders of such Convertible Loans are equal as to all rights and the amounts
owing to each will be treated pari passu.

This Convertible Loan is subject to the following additional
provisions: 

	1. 	
      Subscription Agreement








	 	(a) 	
      This Convertible Loan has been issued pursuant to a
      subscription agreement between the Company and the Holder dated February
      22. 2010 (the “Subscription Agreement”) pursuant to which the
      Holder purchased this Convertible Loan, and this Convertible Loan is
      subject in all respects to the terms of the Subscription Agreement and
      incorporates the terms of the Subscription Agreement to the extent that
      they do not conflict with the terms of this Convertible Loan. This
      Convertible Loan is not transferable and may be exchanged or converted
      only in compliance with the terms hereof, the terms of the Subscription
      Agreement and applicable securities laws and regulations.

	 	 	 
	 	(b) 	
      The Holder acknowledges that finder’s fees may be payable
      by the Company in connection with this Convertible Loan.

	 	 	 
	 	(c) 	
      The Company hereby grants to Holder piggyback
      registration rights with respect to the shares underlying the Convertible
      Loan. The piggyback registration rights shall be in effect from the date
      of issuance of the shares until such time that the underlying shares are
      eligible for sale pursuant to Rule 144 of the General Rules and
      Regulations under the Securities Act of 1933, as
amended.



THE OBLIGATIONS UNDER THIS CONVERTIBLE LOAN AGREEMENT ARE
UNSECURED AGAINST THE ASSETS OF THE COMPANY AND THEREFORE OTHER CHARGES MAY HAVE
PRIORITY AGAINST THE COMPANY’S ASSETS BEFORE THE HOLDER OF THIS CONVERTIBLE
LOAN. THERE IS NO GUARANTEE THAT THE COMPANY WILL HAVE SUFFICIENT ASSETS UPON AN
EVENT OF DEFAULT TO PAY THE HOLDER WHAT IS OWED.

	2. 	
      Conversion

	 	 	 
		(a) 	
      At any time after six months from the Issue Date until
      this Convertible Loan is no longer outstanding, this Convertible Loan may
      be converted into Shares at the option of the Holder, in whole or in part
      at any time and from time to time. The Holder shall effect conversions by
      delivering to the Company the form of Notice of Conversion attached hereto
      as Annex A (a “Notice of Conversion”), specifying therein the
      principal amount to be converted. The date on which such conversion is to
      be effected (a “Conversion Date”) shall be the date that is five
      business days following delivery of the Notice of Conversion to the
      Company. To effect conversions hereunder, the Holder shall not be required
      to physically surrender the Convertible Loan to the Company unless the
      entire principal amount of this Convertible Loan plus all accrued and
      unpaid interest thereon has been so converted. Conversions hereunder shall
      have the effect of lowering the outstanding principal amount of this
      Convertible Loan in an amount equal to the applicable conversion. The
      Holder and the Company shall maintain records showing the principal amount
      converted and the date of such conversions. The Company shall deliver any
      objection to any Notice of Conversion within ten business days of receipt
      of such notice. The Holder, by acceptance of this Convertible Loan,
      acknowledges and agrees that, by reason of the provisions of this
      paragraph, following conversion of a portion of this Convertible Loan, the
      unpaid and unconverted principal amount of this Convertible Loan may be
      less than the amount stated on the face hereof. From and after the date of
      a Notice of Conversion until the Conversion Date, the Company shall have
      the right to prepay any or all of the principal amount and interest to be
      converted pursuant to such Notice of Conversion.

	 	 	 
		(b) 	
      The number of Shares issuable upon a conversion shall be
      determined by the quotient obtained by dividing (x) by (y)
      where (x) shall be equal to the outstanding principal amount of
      this Convertible Loan to be converted plus the amount of interest that has
      accrued thereon, and (y) is equal to the Conversion Price, as
      adjusted pursuant to this Convertible Loan.








	 	(c) 	
      Not later than ten Trading Days after any Conversion
      Date, the Company will deliver to the Holder a certificate or
      certificates, which shall bear such restrictive legends required by the
      Subscription Agreement, representing the number of Shares being acquired
      upon the conversion, including the conversion of accrued and unpaid
      interest through the Conversion Date.

	 	 	 
	 	(d) 	
      The conversion price in effect on any Conversion Date
      shall be equal to USD $2.35 (subject to adjustment herein).

	 	 	 
	 	(e) 	
      If the Company, at any time while this Convertible Loan
      is outstanding: (A) shall pay a stock dividend or otherwise make a
      distribution or distributions in shares of its Common Stock or any other
      equity or equity equivalent securities payable in shares of Common Stock,
      (B) subdivide outstanding shares of Common Stock into a larger number of
      shares, (C) combine (including by way of reverse stock split) outstanding
      shares of Common Stock into a smaller number of shares, or (D) issue by
      reclassification of shares of the Common Stock any shares of capital stock
      of the Company, then the Conversion Price shall be multiplied by a
      fraction of which the numerator shall be the number of shares of Common
      Stock (excluding treasury shares, if any) outstanding before such event
      and of which the denominator shall be the number of shares of Common Stock
      outstanding after such event. Any adjustment made pursuant to this Section
      shall become effective immediately after the record date for the
      determination of stockholders entitled to receive such dividend or
      distribution and shall become effective immediately after the effective
      date in the case of a subdivision, combination or
  reclassification.

	 	 	 
	 	(f) 	
      The Company covenants that it will at all times reserve
      and keep available out of its authorized and unissued shares of Common
      Stock solely for the purpose of issuance upon conversion of the
      Convertible Loans, each as herein provided, free from preemptive rights or
      any other actual contingent purchase rights of Persons other than the
      Holder, not less than such number of shares of the Common Stock as shall
      (subject to any additional requirements of the Company as to reservation
      of such shares set forth in the Subscription Agreement) be issuable upon
      the conversion of the outstanding principal amount of the Convertible
      Loan. The Company covenants that all shares of Common Stock that shall be
      so issuable shall, upon issue, be duly and validly authorized, issued and
      fully paid and nonassessable.

	 	 	 
	 	(g) 	
      Upon a conversion hereunder the Company shall not be
      required to issue stock certificates representing fractions of shares of
      the Common Stock, and the Holder shall be entitled to receive, in lieu of
      any final fraction of a share in excess of 0.50, one whole share of Common
      Stock.




	3. 	
      Notices

	 	 	 
		(a) 	
      Any and all notices or other communications or deliveries
      to be provided by the Holders hereunder, including, without limitation,
      any Notice of Conversion, shall be in writing and delivered personally, by
      facsimile, sent by a nationally recognized overnight courier service,
      addressed to the Company, at the address set forth above, facsimile number
      (250) 764-9701, Attn: President or such other address or facsimile
      number as the Company may specify for such purposes by notice to the
      Holder delivered in accordance with this Section. Any and all notices or
      other communications or deliveries to be provided by the Company hereunder
      shall be in writing and delivered personally, by facsimile, sent by a
      nationally recognized overnight courier service addressed to the Holder at
      the facsimile telephone number or address of such Holder appearing on the
      books of the Company, or if no such facsimile telephone number or address
      appears, at the principal place of business of the Holder. Any notice or
      other communication or deliveries hereunder shall be deemed given and
      effective on the earliest of (i) the date of transmission, if such notice
      or communication is delivered via facsimile at the facsimile telephone
      number specified in this Section prior to
5:30 p.m. (Pacific Standard Time), (ii) the date after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section later than 5:30 p.m. (Pacific
Standard Time) on any date and earlier than 11:59 p.m. (Pacific Standard Time)
on such date, (iii) the second business day following the date of mailing, if
sent by nationally recognized overnight courier service, or (iv) upon actual
receipt by the party to whom such notice is required to be given. 









	4. 	
      Definitions

	 	 	 	 
		(a) 	
      For the purposes hereof, in addition to the terms defined
      elsewhere in this Convertible Loan: (i) capitalized terms not otherwise
      defined herein have the meanings given to such terms in the Subscription
      Agreement, and (ii) the following terms shall have the following
      meanings:

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

	 	 	 	 
			(ii) 	
      “Commission” means the Securities and Exchange
      Commission.

	 	 	 	 
			(iii) 	
      “Common Stock” means the common stock, par value
      $0.001 per share, of the Company and stock of any other class into which
      such shares may hereafter have been reclassified or changed.

	 	 	 	 
			(iv) 	
      “Conversion Date” shall have the meaning set forth
      in Section 3.1 hereof.

	 	 	 	 
			(v) 	
      “Exchange Act” means the Securities Exchange Act
      of 1934, as amended.

	 	 	 	 
			(vi) 	
      “Issue Date” shall have the meaning shown on the
      first page of this Convertible Loan.

	 	 	 	 
			(vii) 	
      “Maturity Date” shall be 24 months from Issue
      Date.

	 	 	 	 
			(viii) 	
      “Person” means a corporation, an association, a
      partnership, organization, a business, an individual, a government or
      political subdivision thereof or a governmental agency.

	 	 	 	 
			(ix) 	
      “Subscription Agreement” means the Securities
      Subscription Agreement, dated as of February 22, 2010, to which the
      Company and the Holder are parties, as amended, modified or supplemented
      from time to time in accordance with its terms.

	 	 	 	 
			(x) 	
      “Securities Act” means the Securities Act of 1933,
      as amended, and the rules and regulations promulgated
thereunder.

	 	 	 	 
			(xi) 	
      “Trading Day” means a day on which the shares of
      Common Stock are traded on a trading market on which the shares of Common
      Stock are then listed or quoted, provided , that in the event that the
      shares of Common Stock are not listed or quoted, then Trading Day shall
      mean a Business Day.




	5. 	
      Miscellaneous







Except as expressly provided herein, no provision of this
Convertible Loan shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the Principal Amount and interest on, this
Convertible Loan at the time, place, and rate, in United States currency, as
herein prescribed. This Convertible Loan is a direct debt obligation of the
Company. As long as this Convertible Loan is outstanding, the Company shall not
and shall cause it Subsidiaries not to, without the consent of the Holder, amend
its certificate of incorporation, bylaws or other charter documents so as to
materially and adversely affect any rights of the Holder. 

6.        
 Replacement of Convertible Loan if lost or destroyed 

If this Convertible Loan shall be mutilated, lost, stolen or
destroyed, the Company shall execute and deliver, in exchange and substitution
for and upon cancellation of a mutilated Convertible Loan, or in lieu of or in
substitution for a lost, stolen or destroyed Convertible Loan, a new Convertible
Loan for the principal amount of this Convertible Loan so mutilated, lost,
stolen or destroyed but only upon receipt of evidence of such loss, theft or
destruction of such Convertible Loan, and of the ownership hereof, and
indemnity, if requested, all reasonably satisfactory to the Company. 

7.          Other
Indebtedness 

So long as any portion of this Convertible Loan is outstanding,
the Company will not and will not permit any Subsidiary or other affiliate to,
directly or indirectly, enter into, create, incur, assume or suffer to exist any
indebtedness or liens of any kind, on or with respect to any of its property or
assets now owned or hereafter acquired or any interest therein or any income or
profits therefrom that is senior to, or pari passu with, in any respect,
the Company’s obligations under this Convertible Loan without the prior consent
of the Holder, provided however that all Convertible Loans that are part of the
same offering will be pari passu with each other and equal in all
respects. . 

8.          Governing
Law 

All questions concerning the construction, validity,
enforcement and interpretation of this Convertible Loan shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Nevada, without regard to the principles of conflicts of law thereof. 

9.          Waivers


Any waiver by the Company or the Holder of a breach of any
provision of this Convertible Loan shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other
provision of this Convertible Loan. The failure of the Company or the Holder to
insist upon strict adherence to any term of this Convertible Loan on one or more
occasions shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Convertible Loan. Any waiver must be in writing. 

10.        Usury 

If any provision of this Convertible Loan is invalid, illegal
or unenforceable, the balance of this Convertible Loan shall remain in effect,
and if any provision is inapplicable to any Person or circumstance, it shall
nevertheless remain applicable to all other Persons and circumstances. If it
shall be found that any interest or other amount deemed interest due hereunder
violates applicable laws governing usury, the applicable rate of interest due
hereunder shall automatically be lowered to equal the maximum permitted rate of
interest. The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law or other
law which would prohibit or forgive the Company from paying all or any portion
of the principal of or interest on this Convertible Loan as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this indenture, and the Company (to the extent
it may lawfully do so) hereby expressly waives all benefits or advantage of any
such law, and covenants that it will not, by resort to any such
law, hinder, delay or impeded the execution of any power herein granted to the
Holder, but will suffer and permit the execution of every such as though no such
law has been enacted. 




11.        Next
business day 

Whenever any payment or other obligation hereunder shall be due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day. 

 

IN WITNESS WHEREOF, the Company has caused this Convertible
Loan to be duly executed by a duly authorized officer as of the date first above
indicated. 

 

ANAVEX LIFE SCIENCES CORP




By: ________________________

Name: 
Title: 




ANNEX A 

NOTICE OF CONVERSION 

The undersigned hereby elects to convert principal and all
accrued and outstanding interest under the 20% Convertible Loan of Anavex Life
Sciences Corp., a Nevada corporation (the “ Company “), due on
__________, 20__, into shares ( “Shares” ) of common stock of the
Company, par value $0.001 per share (the “ Common Stock “) as of the date
written below. 

Conversion calculations: 

Date to Effect Conversion: 

Principal Amount of Convertible Loans to be Converted: 

Amount of issued and outstanding interest: 

Number of Shares of Common Stock to be issued: 

Signature: 

Name: 

 

Address: