exv10w5






Exhibit 10.5




BMP SUNSTONE CORPORATION




Officer’s Certificate Pursuant to

Section 3.01 of the Indenture




     The undersigned, Fred Powell, Chief Financial Officer of BMP Sunstone Corporation, a Delaware
corporation (the “Company”), pursuant to Section 3.01 of the Indenture, dated as of March
16, 2009 (the “Indenture”), between the Company and The Bank of New York Mellon, as
Trustee, and pursuant to authority delegated by the Executive Committee of the Board of Directors
to the undersigned in resolutions duly adopted by such Executive
Committee at a meeting held on March 11, 2009 (the “Resolutions”),
hereby establishes a series of debt securities under the Indenture, the terms and forms of which
shall be as set forth below. Any term used herein which is not defined herein shall have the
meaning ascribed to it in the Indenture:




	 	1)	 	The title of the series of debt securities shall be “12.5% Subordinated
Convertible Notes due July 1, 2011” (the “Notes”).
	 
	 	2)	 	The aggregate initial principal amount of the Notes that may be
authenticated and delivered under the Indenture (except for Notes authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Notes pursuant to Section 3.04, 3.05, 3.06 or 9.06 of the Indenture and
except for any Notes that, pursuant to Section 3.03 of the Indenture, are deemed
never to have been authenticated and delivered under the Indenture)
is $7,000,000.
	 
	 	3)	 	Interest on each Note shall be payable to the Person in whose name such
Note is registered at the close of business on the Regular Record Date (as defined
below) for such interest.
	 
	 	4)	 	Each Note shall mature, and the principal amount thereof shall be
payable, on July 1, 2011.
	 
	 	5)	 	The rate at which each Note shall bear interest shall be 12.5% per
annum. Each Note shall bear interest from March 16, 2009 or from the most recent
interest payment date to which interest has been paid or provided for. Interest on
the Notes shall be payable quarterly in arrears on April 1, July 1, October 1 and
January 1 of each year (each, an “Interest Payment Date”), commencing on
April 1, 2009. Interest shall be payable to the Person in whose name a Note is
registered at the close of business on March 15, June 15, September 15 or December
15 (whether or not a business day), as the case may be, preceding the respective
Interest Payment Date (each, a “Regular Record Date”).










 









 












	 	6)	 	The principal of and any premium and interest on the Notes shall be
payable at such location or locations as are set forth in the form of the Note
attached hereto. The Trustee is hereby appointed Paying Agent for the notes.
	 
	 	7)	 	The Notes shall not be redeemable by the Company and Article XI of the
Indenture shall not be applicable to the Notes.
	 
	 	8)	 	The Company shall not be obligated to redeem or purchase Notes pursuant
to any sinking fund or analogous provisions, or at the option of the Holder
thereof.
	 
	 	9)	 	The Notes shall be issuable in denominations of $1,000 and any integral
multiple thereof.
	 
	 	10)	 	The principal of and any premium and interest on the Notes shall be
payable in the currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts.
	 
	 	11)	 	The amount of payments of principal of or any premium or interest on
the Notes shall not be determined with reference to an index.
	 
	 	12)	 	The principal of or any premium or interest on the Notes shall not be
payable in one or more currencies or currency units other than that which the Notes
are stated to be payable.
	 
	 	13)	 	The Notes shall not be issuable in the form of Global Securities.
	 
	 	14)	 	With respect to the Notes, the following Events of Default set forth in
Section 5.01 of the Indenture shall be amended as follows:






	 	a.	 	Section 5.01(1) of the Indenture shall be amended and
restated in its entirety as follows with respect to the Notes: “a default
in the payment of interest in respect of the Notes and such default
continues for three (3) Business Days (whether on a date specified for the
payment of interest or the prepayment or otherwise);”.
	 
	 	b.	 	Section 5.01(5) of the Indenture shall be amended and
restated in its entirety as follows with respect to the Notes: “the
Company or any Subsidiary defaults in any of its obligations under any
other note or any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be
issued, or by which there may be secured or evidenced, any indebtedness for
borrowed money or money due under any long term leasing or factoring
arrangement of the Company or any Subsidiary in an amount exceeding
$1,000,000, whether such indebtedness now exists or is hereafter created,
and such default results in such indebtedness becoming or being declared




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	 	 	 	due and payable prior to the date on which it would otherwise become due and
payable;”.






	 	15)	 	The principal amount of the Notes shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section 5.02 of the Indenture.
	 
	 	16)	 	In addition to the covenants set forth in Article X of the Indenture,
the following covenants shall apply to the Notes:






	 	a.	 	The Company will not, directly or indirectly, enter
into, create, incur, assume or suffer to exist any indebtedness 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 not subordinated in all respects to the Company’s
obligations under the Notes, other than the following indebtedness in
its respective current available or stated amounts (i) indebtedness secured by
purchase money security interests (which will be senior only as to the
underlying assets covered thereby), (ii) indebtedness under capital lease
obligations (which will be senior only as to the assets covered thereby),
(iii) indebtedness to any commercial bank or other institutional lender of
commercial loans, or (iv) the 12.5% Secured Convertible Notes due July 1, 2011
issued pursuant to Note Exchange Agreements dated January 20, 2009 (the
“January Notes”), the 12.5% March Exchange Secured Convertible
Notes due July 1, 2011 issued pursuant to the Note Exchange Agreement dated
March 13, 2009 (the “March Exchange Notes”), the 12.5% March Cash
Secured Convertible Notes due July 1, 2011 issued pursuant to the Purchase
Agreement dated March 16, 2009 (the “March Cash Notes”) or the
10.0% Senior Secured Promissory Notes due May 1, 2009 issued pursuant to
the Subscription Agreements dated October 31, 2007 (the “10.0%
Notes”); provided, however, that the Company may renew,
refinance or replace (A) any indebtedness contemplated by clauses (i)
through (iii) in each case in the Ordinary Course of Business or (B)
any indebtedness contemplated by clause (iv) in such a manner that
does not (x) result in an increase in the aggregate principal amount
of such indebtedness or (y) change any other term of such
indebtedness (other than with respect to any security
interest) that is not made available to the holders of the Notes on a
pro rata basis. For purposes of this paragraph “Ordinary Course of
Business” means an increase in availability or amount or change in
other terms that would not require approval of the board of directors
of the Company.
	 
	 	b.	 	The Company will not create, incur, assume or suffer to
exist any lien on the shares of capital stock of equity securities of
Sunstone China Limited (formerly named Hong Kong Fly International Health
Care Limited), a Hong Kong corporation and wholly-owned Subsidiary of the
Company, except to secure the January Notes, the March Exchange Notes, the
March Cash Notes and the 10.0% Notes, in each case, as provided in such
notes as of the date hereof.






	 	17)	 	Article XII of the Indenture shall not apply to the Notes.
	 
	 	18)	 	The provisions of Article XIII relating to Defeasance and Covenant
Defeasance shall not apply to the Notes.
	 
	 	19)	 	 










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	 	a.	 	Subject to and upon compliance with the provisions of
Article XIV of the Indenture and subject to paragraph 19(b) below, the
Holder of each Note is entitled, at his option, at any time after the close
of business on May 15, 2009, to convert such Note (or any portion of the
principal amount thereof which is $1,000 or an integral multiple thereof)
(the “Conversion Amount”), at the principal amount thereof, or of
such portion, into fully paid and non-assessable shares (calculated as to
each conversion to the nearest 1/100 of a share) of Common Stock of the
Company (the “Common Shares”) at a conversion price per share of
Common Stock (the “Conversion Price”) equal to $3.00 per each share
of Common Stock (or at the current adjusted conversion price if an
adjustment has been made as provided in the Indenture); provided that, if
the Company issues Common Shares in one or more offerings to investors
(other than any offerings following the closing of a Qualified Offering (as
defined below)) on or prior to December 31, 2009 (any such issuance, an
“Offering”), the Conversion Price shall equal the lesser of (i)
$3.00, (ii) 115% of the lowest price per Common Share (after deducting the
value, as determined by the Company, of any warrants or other securities
issued in such Offering) for which the Company sells Common Shares in any
Offering or (iii) 115% of the VWAP (as defined below) for the period from
and including October 15, 2009 through and including December 15, 2009,
provided that, notwithstanding anything to the contrary, the Conversion
Price shall not be less than $2.00. “VWAP” means the volume
weighted average price (the aggregate sales price of all trades of Common
Shares during each Trading Day divided by the total number of shares of
Common Shares traded during such Trading Day) of the Common Shares during
any Trading Day as reported by Bloomberg, L.P. using the AQR function.
“Trading Day” means any day other than a Saturday or a Sunday on
which the Principal Market is open for trading in equity securities.
“Principal Market” means the NASDAQ Capital Market, the NASDAQ
Global Select Market, the NASDAQ Global Market, the American Stock Exchange
or the New York Stock Exchange, whichever is at the time the principal
trading exchange or market for the Common Shares.
	 
	 	b.	 	So long as the Common Shares are listed for trading on
The Nasdaq Stock Market, Inc. (“Nasdaq”) or an exchange or
quotation system with a rule substantially similar to Rule 4350(i) then,
notwithstanding anything to the contrary contained herein if, at any time
(the “Triggering Event”), the aggregate number of Common Shares
then issued upon conversion of the Notes (including any shares of capital
stock or rights to acquire shares of capital stock issued by the Company
which are aggregated or integrated with the Common Shares issued or
issuable upon conversion of the Notes for purposes of such rule) equals
19.99% of the Outstanding Common Amount (as hereinafter defined), the Notes
(1) shall, from that time forward, cease to be convertible into Common
Shares in accordance with the terms of Paragraph 19(a) above, unless the
Company (A) has obtained approval (“Shareholder Approval”) of the
issuance of the Common Shares




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	 	 	 	upon conversion of the Notes by a majority of the total votes cast on such
proposal, in person or by proxy, by the holders of the then outstanding
Common Shares (not including (x) any Common Shares held by present or former
holders of Notes that were issued upon conversion of Notes or (y) any shares
of capital stock or rights to acquire shares of capital stock issued by the
Company that are held by present or former holders of such shares of capital
stock or rights to acquire shares of capital stock which are aggregated or
integrated with the Common Shares issued or issuable upon conversion of the
Notes for purposes of Rule 4350(i)), or (B) shall have otherwise obtained
permission to allow such issuances from Nasdaq in accordance with Rule
4350(i) and (2) shall, from that time forward, be convertible into such
Holder’s pro rata share of the Maximum Share Amount (as hereinafter
defined). If the Common Shares are not then listed on Nasdaq or an exchange
or quotation system that has a rule substantially similar to Rule 4350(i),
the limitations set forth herein shall be inapplicable and of no force and
effect. If the Triggering Event occurs, the Company shall promptly seek
Shareholder Approval. If the Triggering Event occurs and the Company does
not obtain Shareholder Approval at a special meeting of shareholders, the
Company shall pay interest to the Holder on the aggregate then outstanding
principal amount of this Note at the rate of 15% per annum (but in no event
in excess of the maximum rate permitted under applicable law). For purposes
of this paragraph, “Outstanding Common Amount” means (i) the number
of Common Shares outstanding on the earliest date of issuance of the Notes
or any shares of capital stock or rights to acquire shares of capital stock
issued by the Company which are aggregated or integrated with the Common
Shares issued or issuable upon conversion of the Notes for purposes of such
rule plus (ii) any additional shares of Common Shares issued thereafter in
respect of such shares pursuant to a stock dividend, stock split or similar
event. The maximum number of Common Shares issuable as a result of the
19.99% limitation set forth herein is hereinafter referred to as the
“Maximum Share Amount.” With respect to each Holder of Notes, the
Maximum Share Amount shall refer to such Holder’s pro rata share thereof
based on the principal amount of Notes then held by such Holder relative to
the total aggregate principal amount of Notes then outstanding plus the
value of any shares of capital stock or rights to acquire shares of capital
stock issued by the Company which are aggregated or integrated with the
Common Shares issued or issuable upon conversion of the Notes for purposes
of Rule 4350(i). In the event that the Company obtains Shareholder Approval
or the approval of Nasdaq, by reason of the inapplicability of the rules of
Nasdaq or otherwise that the restrictions set forth in this paragraph 19(b)
shall no longer apply and the number of shares that the Notes convert into
will be as set forth in paragraph 19(a) above (such increased number being
the “New Maximum Share Amount”) and the references to Maximum Share
Amount, above, shall be deemed to be, instead, references to the greater New
Maximum Share Amount. In






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	 	 	 	the event that Shareholder Approval is not obtained, the Maximum Share
Amount shall remain unchanged.






	 	c.	 	The number of Common Shares issuable upon conversion of
any portion of the Conversion Amount shall be determined by dividing (x)
such portion of the Conversion Amount by (y) the Conversion Price in effect
on the date of receipt of the Conversion Notice by the Company from the
Holder pursuant to the Indenture. The Holder shall surrender its Note,
duly endorsed or assigned to the Company or in blank, to the Company at its
office or agency at 600 W. Germantown Pike, Suite 400, Plymouth Meeting, PA
19482, accompanied by written notice to the Company that the Holder thereof
elects to convert the Note, or if less than the entire principal amount
thereof is to be converted, the portion thereof to be converted, and, in
case such surrender shall be made during the period from the close of
business on any Regular Record Date next preceding any Interest Payment
Date to the opening of business on such Interest Payment Date, also
accompanied by payment in funds acceptable to the Company of an amount
equal to the interest payable on such Interest Payment Date on the
principal amount of the Note then being converted. Subject to the
aforesaid requirement for payment and, in the case of a conversion after
the Regular Record Date next preceding any Interest Payment Date and on or
before such Interest Payment Date, to the right of the Holder of the Note
(or any Predecessor Security) of record at such Regular Record Date to
receive an installment of interest (with certain exceptions provided in the
Indenture), no payment or adjustment is to be made on conversion for
interest accrued thereon or for dividends on the Common Stock issued on
conversion. No fractions of shares or scrip representing fractions of
shares will be issued on conversion, but instead of any fractional interest
the Company shall pay a cash adjustment as provided in the Indenture. The
conversion price is subject to adjustment as provided in the Indenture.
	 
	 	d.	 	“Qualified Offering” shall mean the issuance
after the date hereof of equity securities of the Company or securities
convertible into equity securities in one or more offerings to investors
resulting in the receipt of proceeds, net of all commissions, by the
Company in an aggregate amount of at least twelve million six hundred
seventy two thousand four hundred sixty three dollars ($12,672,463).






	 	20)	 	The provisions of Article XV of the Indenture shall be applicable with
respect to the Notes.
	 
	 	21)	 	Except as otherwise provided for herein, the Notes are not convertible
into or exchangeable for any other securities.
	 
	 	22)	 	The following other terms shall apply to the Notes:




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	 	a.	 	For purposes of the Notes, the definition of “Senior
Indebtedness” in the Indenture shall be amended and restated in its
entirety as follows: “‘Senior Indebtedness’ means the principal of (and
premium, if any), accrued interest (including interest accruing on or after
the filing in bankruptcy or reorganization relating to the Company whether
or not a claim for post-filing interest is allowed in such proceedings),
fees, charges, expenses, reimbursement obligations, guarantees and other
amounts owing with respect to all Indebtedness of the Company under the
10.0% Notes.”
	 
	 	b.	 	At any time on or following a Change of Control (as
such term is defined below) and delivery of a written notice to the Company
with a copy to the Trustee (the date such notice is delivered to the
Company, the “Notice Date”), a Holder of a Note shall be entitled
to demand prepayment of all or any portion of the outstanding principal
amount of such Note plus any accrued and unpaid interest thereon for an
amount in cash equal to the Prepayment Price (as such term is defined
below).
	 
	 	 	 	The Prepayment Price shall be due on the fifteenth Business Day
immediately following the Notice Date. If any portion of the Prepayment
Price shall not be timely paid by the Company, interest shall accrue thereon
at the rate of 18% per annum (or the maximum rate permitted by applicable
law, whichever is less) until the Prepayment Price plus all such interest is
paid in full, which payment shall constitute liquidated damages and not a
penalty.
	 
	 	 	 	For the purposes of this Paragraph 22b.,
	 
	 	 	 	(i) “Change of Control” means the occurrence of (i) an acquisition after
the date hereof by an individual or legal entity or “group” (as described in
Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control
(whether through legal or beneficial ownership of capital stock of the
Company, by contract or otherwise) of in excess of fifty percent (50%) of
the voting securities of the Company (except that the acquisition of voting
securities by the Holder or any current holder of convertible securities of
the Company shall not constitute a Change of Control for purposes hereof);
(ii) a replacement at one time or over time of more than one-half of the
members of the board of directors of the Company which is not approved by a
majority of those individuals who are members of the board of directors on
the date hereof (or by those individuals who are serving as members of the
board of directors on any date whose nomination to the board of directors
was approved by a majority of the members of the board of directors who are
members on the date hereof); (iii) the merger or consolidation of the
Company with or into another entity as a result of which the holders of the
voting securities of the Company immediately before such merger or
consolidation do not hold




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	 	 	 	fifty percent (50%) or more of the voting securities of the surviving or
resulting entity; (iv) the sale of fifty percent (50%) or more of the assets
of the Company and its Subsidiaries on a consolidated basis; or (v) the
execution by the Company of an agreement to which the Company is a party or
by which it is bound, providing for any of the events set forth above in
(i), (ii), (iii) or (iv).






	 	 	 	(ii) “Prepayment Price” for any Notes which shall be subject to prepayment
pursuant to this Paragraph 22b., means the amount equal to the sum of the
then outstanding principal amount of the Note being prepaid pursuant to
Paragraph 22b., plus all accrued but unpaid interest on such outstanding
principal amount of such Note.
	 
	 	c.	 	The Notes shall be substantially in the form of
Annex A attached hereto, with such modifications thereto as may be
approved by an authorized officer.





[Signature Page Follows.]





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          IN
WITNESS WHEREOF, I have hereunto signed my name this 16th day of March, 2009.




	 	 	 	 	 	 	 
	 

	 	By:	 	/s/
Fred M. Powell 
	 	 
	 

	 	Name:
	 	Fred M. Powell
	 	 
	 

	 	Title	 	Chief Financial Officer	 	 






[Signature Page to Officer’s Certificate Pursuant to Section 3.01 of the Indenture]





 









 








Annex A




Form of Note




[See Attached.]