EX-4.1






THIS CONVERTIBLE DEBENTURE AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE

WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION

OF COUNSEL FOR THE HOLDER SATISFACTORY TO THE COMPANY (AS DEFINED BELOW) THAT SUCH REGISTRATION IS

NOT REQUIRED UNDER THE ACT.




LIFEVANTAGE CORPORATION




FORM OF CONVERTIBLE DEBENTURE




$     , 2007



Greenwood Village, Colorado




For value received, LifeVantage Corporation, a Colorado corporation (the
“Company”), unconditionally promises to pay to       or its assigns (the
“Holder”) the principal sum of $     with interest on the outstanding principal amount at the
rate of eight percent (8%) per annum (subject to adjustment as set forth below), or the maximum
rate permissible by law, whichever is less, simple interest, and calculated on the basis of a 360
day year for the actual number of days elapsed. Interest shall commence with the date hereof and
shall be due and payable on the dates and in the manner set forth below. The principal balance of
this Debenture, together with the accrued interest thereon shall be due and payable on the dates
and in the manner set forth below.



This Debenture is one of the convertible debentures (collectively, the “Debentures”) referred
to in, and is executed and delivered in connection with, those certain Unit Subscription
Agreements, dated on or about           , 2007 and executed by the Company and the Holder, among
others (as the same may from time to time be amended, modified or supplemented or restated, the
“Subscription Agreements”). Additional rights and obligations of the Holder and the Company are
set forth in the Subscription Agreement. Capitalized terms not otherwise defined herein shall have
the meanings set forth in the Subscription Agreement.



1. Interest; Maturity; Payments; Prepayment; Waiver of Presentment.



(a) Interest. Interest shall commence with the date hereof and shall be due and
payable on the last day of each calendar quarter. Interest due hereunder shall be payable in
shares of the Company’s Common Stock valued at the Market Price (as defined below) on the last day
of such quarter provided, however, that interest may be paid in Common Stock only if the Equity
Conditions have been met on such quarter-end date or, upon the election of the Company in its
discretion, in lawful money of the United States of America to the Holder at the address set forth
in the Subscription Agreement. “Market Price” shall mean the ten (10) day average of (i) the last
reported closing sale price for the Common Stock as officially reported by the OTC Bulletin Board,
if the Common Stock is then traded on the OTC Bulletin Board; or (ii) the last reported closing
sale price on the Nasdaq SmallCap or National Market or a national securities exchange, if the
Common Stock is then traded on the Nasdaq SmallCap or National Market or a national securities
exchange, in each case as officially reported by the Nasdaq SmallCap or National Market or such
national securities exchange; or (iii) if the Common Stock is not then traded on the OTC Bulletin
Board, the Nasdaq SmallCap Market, the Nasdaq National Market or a national securities exchange,
but is then traded in the over-the-counter market, then the average of the last reported bid and
asked prices of the Common Stock reported by the National Quotation Bureau, Inc. or similar bureau
if the National Quotation Bureau, Inc. is no longer reporting such information.




	 	 	 	"Equity Conditions” means the following:






	 	•	 	The Company shall have converted to Common Stock all Debentures from Holders
thereof who have properly requested such conversion;






	 	•	 	There will be an effective Registration Statement with respect to the Common
Stock underlying the Debentures and any warrants issued by the Company and any
Common Stock to be paid as interest hereunder;






	 	•	 	The Common Stock is listed for trading on the American Stock Exchange, the New
York Stock Exchange, the NASDAQ National Market, the NASDAQ Small Cap Market or the
OTC Bulletin Board (a “Principal Market”);






	 	•	 	The Company shall have a sufficient number of authorized but unissued and
otherwise unreserved Common Stock to satisfy all potential conversions of Debentures
to Common Stock; and






	 	•	 	The payment of interest in Common Stock has been approved by the Company’s
shareholders, if required by the applicable rules of the Principal Market.





(b) Maturity Date. At any time on or after      , 2010 (the “Maturity Date”)
and prior to delivery of an Automatic Conversion Notice (as defined in Section 2(b) below), if this
Debenture has not been paid in full or converted in accordance with the terms of Section 2 below,
the Holder may demand payment of the entire outstanding principal balance and all unpaid accrued
interest in cash (a “Payment Demand”).



(c) Payments. All payments of principal and interest shall be in shares of Common
Stock as provided herein or in lawful money of the United States of America and shall be payable at
the address of the Holder set forth in the Subscription Agreement, unless another place of payment
shall be specified in writing by the Holder. All payments shall be applied first to any fees or
expenses due to the Holder, then to accrued interest, including any interest that accrues after the
commencement of a proceeding by or against the Company under Title 11 of the United States Code,
and thereafter to the outstanding principal balance hereof. If any payments on this Debenture
become due on a Saturday, Sunday, or a public holiday under the laws of the State of Colorado, such
payment shall be made on the next succeeding business day and such extension of time shall be
included in computing interest in connection with such payment.



(d) Prepayment. Subject to Section 2(c) below, at any time on or prior to the
Maturity Date, the Company may pay this Debenture, in whole or in part, by giving Holder and the
holders of all other Debentures then outstanding, at least fifteen (15) business days irrevocable
written notice prior to such prepayment (the “Prepayment Notice”), and the Company shall pay this
Debenture and all other Debentures, in whole or in part, (the “Prepayment Amount”) in accordance
with the Company’s notice.



(e) Waiver. The Company hereby waives demand, notice, presentment, protest and
notice of dishonor.



2. Conversion.



(a) At Maturity Date by Company. At any time on or after the Maturity Date, if all
principal and interest outstanding under this Debenture has not been paid in full, then the Company
may, in its discretion, cause the conversion of the entire principal balance of this Debenture and
all unpaid interest hereon into shares of the Company’s Common Stock at a rate equal to the
lower of the 10 day average closing price for the 10 previous business days or $0.20 per share
of Common Stock (the “Conversion Price”), subject to adjustment as set forth herein. The Company
shall notify the Holder of such automatic conversion in writing at least five (5) days prior to
such conversion (an “Automatic Conversion Notice”).



(b) Optional Conversion by Holder. At any time from the date hereof through the
date that this Debenture is paid in full, including at any time after receiving a Prepayment Notice
but before receiving the Prepayment Amount, Holder shall have the right, in its sole discretion, to
convert the principal balance of this Debenture then outstanding plus accrued but unpaid interest,
in whole or in part, into shares of Common Stock at the Conversion Price by delivering to the
Company written notice of such conversion as set forth on Appendix A hereto (an “Optional
Conversion Notice”).



(c) Conversion Procedures. Upon conversion of this Debenture pursuant to Section
2(a) or 2(b) above, the Holder shall surrender this Debenture, duly endorsed, at the principal
office of the Company, and the Company shall, at its expense, following receipt of this Debenture,
duly endorsed, promptly deliver or cause to be delivered to the Holder a certificate or
certificates (bearing such legends as may be required) representing that number of fully paid and
non-assessable shares of Common Stock into which this Debenture may be converted. The conversion
of this Debenture shall be deemed to have been made on the date of (i) the Maturity Date pursuant
to Section 2(a) above, or (ii) the date of the Optional Conversion Notice pursuant to Section 2(b)
above, as applicable, and the Holder shall be treated for all purposes as the record holder of such
shares of equity securities as of such applicable date.



(d) Reservation of Shares. The Company covenants and agrees that the shares of
Common Stock that may be issued upon the exercise of the rights represented by this Debenture will,
upon issuance, be validly issued and outstanding, fully paid and nonassessable, and free from all
taxes, liens and charges with respect to the issuance thereof. The Company further covenants and
agrees that the Company will at all times during the time that principal or interest is owed
pursuant to this Debenture, have authorized and reserved, free from preemptive rights, a sufficient
number of shares of its Common Stock to provide for the conversion rights set forth herein. If at
any time during the time that this Debenture is outstanding, the number of authorized but unissued
shares of Common Stock shall not be sufficient to permit conversion of amounts owed hereunder, the
Company will take such corporate action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to such number of shares as shall be
sufficient for such purposes.



(e) No Fractional Shares. Upon a conversion hereunder, the Company shall not be
required to issue stock certificates representing fractions of shares of Common Stock, and in lieu
of any fractional shares which would otherwise be issuable, the Company shall issue the next lowest
whole number of shares of Common Stock.



3. Mandatory Redemption. If prior to conversion or payment of this Debenture, (i)
the Company fails to remain subject to the reporting requirement under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) for a period of at least 45 consecutive days, (ii) the
Company fails to materially comply with the reporting requirements under the Exchange Act for a
period of 45 consecutive days, (iii) the Company’s Common Stock is no longer quoted on the OTC
Bulletin Board or listed or quoted on a securities exchange, or (iv) a Change of Control is
consummated (each a “Mandatory Redemption Event”), the Company will be required to redeem this
Debenture in an amount equal to 150% of principal amount hereof plus any accrued but unpaid
interest hereon within fifteen (15) days of such Mandatory Redemption Event. “Change of Control”
means the existence or occurrence of any of the following: (a) the sale, conveyance or disposition
of all or substantially all of the assets of the Company; (b) the effectuation of a transaction or
series of related transactions by the Company in which more than 50% of the voting power of the
Company is disposed of (other than as a direct result of the issuance of securities by the Company
in a capital raising transaction); (c) the consolidation, merger or other business combination of
the Company with or into any other entity, immediately following which the prior stockholders of
the Company fail to own, directly or indirectly, at least 50% of the voting equity of the surviving
entity; (d) a transaction or series of transactions in which any person or “group” (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act) acquires more than 50% of the voting equity
of the Company (other than the issuance of securities by the Company in a capital raising
transaction); or (e) a transaction or series of transactions that constitutes or results in a
“going private transaction” (as defined in Section 13(e) of the Exchange Act and the regulations
thereunder).



4. Adjustments of Conversion Price.



(a) In the event of changes in the outstanding Common Stock of the Company by reason
of stock dividends, splits, recapitalizations, reclassifications, combinations or exchanges of
shares, separations, reorganizations, liquidations, or the like, the Conversion Price shall be
correspondingly adjusted to give the Holder of the Debenture, on exercise for the same aggregate
Conversion Price, the total number, class, and kind of shares as the Holder would have owned had
the Debenture been exercised prior to the event and had the Holder continued to hold such shares
until after the event requiring adjustment. The form of this Debenture need not be changed because
of any adjustment in the Conversion Price.



(b) If during the time that principal or interest is owed pursuant to this
Debenture, the Company issues or sells Additional Shares of Common Stock (as defined below) other
than pursuant to 4(a) above for a price (the “Effective Price”) less than the then effective
Conversion Price, then and in each such case, the then existing Conversion Price shall be reduced,
as of the opening of business on the date of such issue or sale, to a price equal to such Effective
Price. “Additional Shares of Common Stock” shall mean all shares of Common Stock, or options,
warrants or other rights to acquire Common Stock, issued by the Company, other than (i) options,
warrants or shares of Common Stock issued to employees, directors and consultants as a part of an
equity incentive plan or agreement approved by the Company’s Board of Directors, (ii) shares of
Common Stock issued as a consideration for a merger, acquisition or other business combination
approved by the Company’s Board of Directors, (iii) options, warrants or shares issued pursuant to
any equipment loan or leasing arrangement, real property leasing arrangement or debt financing from
a bank or similar financial institution approved by the Company’s Board of Directors; (iv) shares
issued upon the exercise of an option, warrant or other right to acquire Common Stock pursuant to
which an adjustment of the Conversion Price under this Section 4(b) has already been made; and (v)
options, warrants or shares issued with respect to which the holders of a majority of the
outstanding Debentures waive their antidilution rights under this Section 4(b).



5. Default.



(a) Each of the following events shall be an “Event of Default” hereunder:



(i) the Company engages in any liquidation, dissolution or winding up of the
Company;



(ii) the Company files any petition or action for relief under any bankruptcy,
reorganization, insolvency or moratorium law or any other law for the relief of, or relating to,
debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes
any corporate action in furtherance of any of the foregoing;



(iii) an involuntary petition is filed against the Company under any bankruptcy
statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of
creditors (or other similar official) is appointed to take possession, custody or control of any
property of the Company;



(iv) the Company executes an assignment with respect to a majority of its assets;



(v) the Company fails to pay, within ten (10) business days of the Maturity Date,
any and all unpaid principal, accrued interest and other amounts owing hereunder if not otherwise
converted into Common Stock pursuant to Section 2 hereof;



(vi) the Company fails to pay, within ten (10) business days of an interest payment
due date, accrued interest due on such date if not otherwise converted into Common Stock pursuant
to Section 1 hereof, and such failure is not cured within ten (10) business days of receipt of
notice thereof; or



(vii) the Company fails to redeem the Debenture pursuant to Section 3 hereof within
ten (10) business days of a Mandatory Redemption Event.



(b) Upon the occurrence of any Event of Default hereunder, all unpaid principal,
accrued interest and other amounts owing hereunder shall, at the option of the Holder, and, in the
case of an Event of Default pursuant to Section 5(a)(ii) or (iii) above, automatically, be
immediately due, payable and collectible by the Holder pursuant to applicable law.



(c) In the event of any Event of Default hereunder, the Company shall pay all
reasonable attorneys’ fees and court costs incurred by the Holder in enforcing and collecting this
Debenture.



6. Miscellaneous.



(a) Registration Rights. The Holder is entitled to certain registration rights with
respect to the Common Stock issuable upon conversion of this Debenture as set forth in the
Subscription Agreement.



(b) Restrictions on Dividends. The Company further covenants and agrees that during
the time that principal or interest is owed pursuant to this Debenture the Company will not declare
or pay any dividends on its outstanding capital stock, provided that the Company may repurchase
shares of capital stock in connection with the termination of employment or consulting
relationships pursuant to such agreements as are approved by the Board of Directors.



(c) Restrictions on Transfer. This Debenture and the rights granted hereunder are
subject to restrictions on transfer under Federal and state securities laws as further described in
the Subscription Agreement.



(d) Successors and Assigns. Subject to applicable law, 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.



(e) Acceptance. Receipt of this Debenture by the Holder shall constitute acceptance
of and agreement to all of the terms and conditions contained herein.



(f) Governing Law. This Debenture shall be governed by and construed under the laws
of the State of Colorado as applied to agreements among Colorado residents, made and to be
performed entirely within the State of Colorado.



(g) Titles and Subtitles. The titles and subtitles used in this Debenture are used
for convenience only and are not to be considered in construing or interpreting this Debenture.



(h) Amendment and Waiver. This Debenture may be amended, together with all similar
Debentures purchased pursuant to the Subscription Agreements, as provided in Section O(4) of the
Subscription Agreements.



1



	 
	LifeVantage Corporation

By:     

Name:      

Title:      







[Signature Page to Convertible Debenture]




Appendix A




Optional Conversion Notice




TO: LifeVantage Corporation



(1) The undersigned hereby elects to convert $     in principal amount of that certain
Convertible Debenture dated on or about      , 2007 and any accrued but unpaid interest
thereon into shares of Common Stock of LifeVantage Corporation (the “Company”) at the Conversion
Price pursuant to the terms of the attached Convertible Debenture, and tenders herewith payment of
in full by delivery of Convertible Debenture.



(2) Please issue a certificate or certificates representing said shares of Common Stock in the
name of the undersigned or in such other name as is specified below:












(Name)























(Address)




(3) The undersigned represents that (i) the aforesaid shares of Common Stock are being
acquired for the account of the undersigned for investment and not with a view to, or for resale in
connection with, the distribution thereof and that the undersigned has no present intention of
distributing or reselling such shares; (ii) the undersigned is aware of the Company’s business
affairs and financial condition and has acquired sufficient information about the Company to reach
an informed and knowledgeable decision regarding its investment in the Company; (iii) the
undersigned is experienced in making investments of this type and has such knowledge and background
in financial and business matters that the undersigned is capable of evaluating the merits and
risks of this investment and protecting the undersigned’s own interests; (iv) the undersigned
understands that the shares of Common Stock have not been registered under the Securities Act of
1933, as amended (the “Securities Act”), by reason of a specific exemption from the registration
provisions of the Securities Act, which exemption depends upon, among other things, the bona fide
nature of the investment intent as expressed herein, and, because such securities have not been
registered under the Securities Act, they must be held indefinitely unless subsequently registered
under the Securities Act or an exemption from such registration is available; (v) the undersigned
is aware that the aforesaid shares of Common Stock may not be sold pursuant to Rule 144 adopted
under the Securities Act unless certain conditions are met and until the undersigned has held the
shares for the number of years prescribed by Rule 144, that among the conditions for use of the
Rule is the availability of current information to the public about the Company and the Company has
not made such information available and has no present plans to do so; and (vi) the undersigned
agrees not to make any disposition of all or any part of the aforesaid shares of Common Stock
unless and until there is then in effect a registration statement under the Securities Act covering
such proposed disposition and such disposition is made in accordance with said registration
statement, or the undersigned has provided the Company with an opinion of counsel satisfactory to
the Company, stating that such registration is not required.



	 	 	 
	     

(Date)

	 	     

(Signature)






     



(Print name)




2