Unassociated Document


    THIS
NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY BE TRANSFERRED ONLY
IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED. THIS LEGEND SHALL BE
ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE.

     

     

    FORTICELL
BIOSCIENCE, INC.

    PROMISSORY DEMAND
NOTES

     

    
      
        	
                U.S.
      $750,000

              	
                Issuance
      Date:________, 2009

              
	
                No.:
      PN-04-17-1

              	
                Maturity
      Date , ________2009

              


      

    

     

    FOR VALUE RECEIVED, the
undersigned, Forticell Bioscience, Inc., a Delaware corporation (the "Borrower"), hereby
promises to pay to the order of Holy Land Art . Inc.(“HLA” or the "Lender") or to its
order, at the principal office of the Lender set forth herein, or at such other
place as the Lender may designate in writing to the Borrower, the principal sum
of up to Seven hundred and fifty thousand Dollars ($750,000), or such other
amount as may be outstanding hereunder, together with all accrued but unpaid
interest (the “Principal Balance”),
in such coin or currency of the United States of America as at the time shall be
legal tender for the payment of public and private debts and in immediately
available funds, as provided in this note (the "Note").  Capitalized
terms not set forth herein shall have the meaning set forth in a certain DIP
Loan Agreement and Security Agreement, between the Borrower and Lender dated
May   , 2009.

    


    1.              
Principal
and Interest Payments.

     

    (a)           The Borrower shall repay in full the
entire Principal Balance on the Maturity Date as defined in the Security
Agreement and DIP loan Agreement which is the earliest of (a) the date which is
ninety (90) days or the
agreed to 180 days ), to
the extent extended by Borrower,  after (i)entry of an Interim Order or
(ii) when loan is made unless such date is otherwise extended by Lender in
writing in its sole discretion, (b) the date of acceleration of the Obligations
of Borrower hereunder pursuant to Section 6, (c) the date of the closing of a
sale of all or substantially all of Borrower’s assets pursuant to Section 363 of
the Bankruptcy Code or a confirmed plan of reorganization, and (d) the effective
date of a plan of reorganization or arrangement in the Chapter 11
Case.

     

    (b)           Interest shall be payable on the unpaid principal balance hereof Loan from time to time outstanding
hereunder at the annual rate of fifteen percent (15%) per annum from the date hereof until
paid. The unpaid principal balance shall be paid in full on the due date
specified above.
Interest on the unpaid outstanding principal sum of the Note shall be computed
on the basis of the actual number of days elapsed and a year of three hundred
and sixty (360) days.  Borrower shall pay the accrued and unpaid
interest on any portion of the Loans so paid or prepaid together with the
repayment of principal.  The Borrower may prepay the
Note, including all accrued and unpaid interest at any time in cash without
penalty. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.   Defaults - Upon the occurrence and during the
continuance of an Event of Default, referred to in Section 11 of the DIP Loan
Agreement, (x) the outstanding principal amount of the Loans (and any overdue
and unpaid interest) shall bear interest at the rate of the lesser of the
maximum permitted by law or seventeen percent (17%) per annum, computed and
payable as provided above and (y) Lender may require the payment in cash of
accrued interest on demand..

     

    3.              
Amendments.  This Note may not be
modified or amended in any manner except in writing executed by the Borrower and
the Lender.

     

    4.          
Headings.  Article and section
headings in this Note are included herein for purposes of convenience of
reference only and shall not constitute a part of this Note for any other
purpose.

     

    5.          
Failure or
Indulgence Not Waiver.  No failure or delay on the
part of the Lender in the exercise of any power, right or privilege hereunder
(including without limitation to perfect any security interest granted to Lender
by this Note) shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.

     

    6.          
Enforcement
Expenses.  The
Borrower agrees to pay all costs and expenses of enforcement of this Note,
including, without limitation, reasonable attorneys' fees and
expenses.

     

    7.          
Severability.  The provisions of this
Note are severable, and if any provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall not in any manner affect such provision in any other
jurisdiction or any other provision of this Note in any
jurisdiction.

     

    If any part of this Note cannot be
enforced, then such fact shall not affect the balance of the terms and
provisions of this Note. Borrower does not agree or intend to pay, and Lender
does not agree or intend to contract for, charge or collect, take, reserve or
receive (collectively referred to herein as “charge or collect”), any amount in
the nature of interest or as fees for the loan evidenced by this Note which
would in any way or event (including demand, prepayment or acceleration) cause
Lender to charge or collect more for such loan than the maximum Lender would be
permitted to charge of collect by federal law or the laws of the State of
Delaware (as applicable). Any such excess interest or unauthorized fee (but only
to the extent of such excess interest or unauthorized fee) shall,
notwithstanding anything stated to the contrary, first be applied to reduce the
outstanding principal, interest and other sums due under this Note, and after
all such sums shall have been paid in full, refunded to Borrower.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              8.

            	
              Governing
      Law Consent to
      Jurisdiction.

            


    

     

    THIS NOTE SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WITHIN SUCH STATE. BORROWER
HERETO HEREBY CONSENTS AND AGREES THAT THE BANKRUPTCY COURT SHALL HAVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWER AND
LENDER PERTAINING TO THIS NOTE OR TO ANY MATTER ARISING OUT OF OR RELATING TO
THIS AGREEMENT; PROVIDED, THAT BORROWER ACKNOWLEDGE THAT ANY APPEALS FROM THE
BANKRUPTCY COURT MAY HAVE TO BE HEARD BY A COURT OTHER THAN THE BANKRUPTCY
COURT; PROVIDED FURTHER, THAT NOTHING IN THIS NOTE SHALL BE DEEMED OR OPERATE TO
PRECLUDE LENDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
LENDER.

    


     

    BORROWER AGREES THAT ALL ACTIONS AND
PROCEEDINGS RELATING DIRECTLY OR INDIRECTLY TO THIS NOTE SHALL BE LITIGATED IN
THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
BORROWER WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS THAT SERVICE OF PROCESS
UPON BORROWER MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED,   DIRECTED TO BORROWER AT BORROWER’S ADDRESS APPEARING
ON LENDER’S RECORDS, AND SERVICE SO MADE SHALL BE DEEMED COMPLETED THREE (3)
DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.

     

    


    9.          Waiver of Jury Trial
Lender and Borrower hereby waive the right to a trial by jury in any action or
proceeding between such parties. Each of the Borrower hereby waives and agrees
not to assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit action or
proceeding is brought in an unconventional forum or that the venue of the suit
action or proceeding is improper.

     

    10.          
Borrower
Waivers.  Except
as otherwise specifically provided herein, the Borrower and all others that may
become liable for all or any part of the obligations evidenced by this Note,
hereby waive presentment, demand, notice of nonpayment, protest and all other
demands and notices in connection with the delivery, acceptance, performance and
enforcement of this Note, and do hereby consent to any number of renewals of
extensions of the time or payment hereof and agree that any such renewals or
extensions may be made without notice to any such persons and without affecting
their liability herein and do further consent to the release of any person
liable hereon, all without affecting the liability of the other persons, firms
or Borrower liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY
JURY.

     

      (a)
Borrower hereby waives presentment for payment, demand, notice of demand, notice
of non-payment or dishonor, protest and notice of protest of this Note, and all
other notices in connection with the delivery, acceptance, performance, default,
or enforcement of the payment of this Note. Borrower further agrees that its
liability under this Note shall be unconditional and shall not be affected in
any manner by any indulgence, extension of time, renewal, waiver or modification
granted or consented by the Lender.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) No
failure to accelerate the debt evidenced by this Note due to default hereunder,
acceptance of a past due installment, or indulgences granted from time to time
shall be construed (i) as a novation of this Note or as a reinstatement of the
indebtedness evidenced hereby or as a waiver of such right of acceleration or of
the right of Lender thereafter to insist upon strict compliance with the terms
of this Note or (ii) to prevent the exercise of such right of acceleration by
Lender or any other right granted hereunder or under applicable
law.

     

    THE
BORROWER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A
COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY
WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY
WHICH THE LENDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

     

    IN
WITNESS WHEREOF, the Borrower has executed and delivered this Note as of the
date first written above.

     

     

    
      
        	 	FORTICELL BIOSCIENCE,
      INC.	 
	 	 	 	 
	 	
                By:
      

              	 	 
	 	 	Name:
      Alan W. Schoenbart, CEO and CFO