Document:

Amended and Restated Cornell Capital Secured Convertible Debenture

     

    Exhibit
      10.35

     

    
      

      

    

     

     

    THIS
      SECURED CONVERTIBLE DEBENTURE, AND THE SECURITIES INTO WHICH IT IS CONVERTIBLE
      (COLLECTIVELY, THE ‘SECURITIES”),
      HAVE
      NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
      THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE OFFERED OR SOLD
      UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT OR PURSUANT TO AVAILABLE
      EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND THE COMPANY IS
      PROVIDED WITH AN OPINION OF COUNSEL OR OTHER SUCH INFORMATION AS IT MAY
      REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTIONS ARE AVAILABLE.

     

     

    AMENDED
      AND RESTATED

     

    SECURED
      CONVERTIBLE DEBENTURE

     

    ULURU
      INC.

     

    10%
      Secured Convertible Debenture

     

    DUE
      DECEMBER 31, 2007

     

     

    THIS
      SECURITY IS BEING ISSUED IN EXCHANGE FOR THE 10% SECURED CONVERTIBLE DEBENTURE
      DUE OCTOBER 12, 2007, NO. HHF-001. THE MAKER OF THIS SECURED CONVERTIBLE
      DEBENTURE CHANGED ITS NAME FROM OXFORD VENTURES, INC. TO ULURU,
      INC.

     

    No.
      HHF-002                                                                                                    US$3,000,000
      

    

    This
      Amended and Restated Secured Convertible Debenture (the “Debenture”)
      is
      issued on August 30, 2006 (the “Closing
      Date”)
      by
      Uluru Inc., a Nevada corporation (the “Company”),
      to
      Cornell Capital Partners, LP (together with its permitted successors and
      assigns, the (“Holder”)
      pursuant to exemptions from registration under the Securities Act of 1933,
      as
      amended, in exchange for a Secured Convertible Debenture originally issued
      pursuant to a Securities Purchase Agreement, dated October 12, 2005 (as amended,
      the “Securities
      Purchase Agreement”)
      among
      the Company and Buyer(s) listed on Schedule I thereto.

    

    ARTICLE
      I.

    

    Section
      1.01 Principal
      and Interest.
      For
      value
      received, the Company hereby promises to pay to the order of the Holder on
      the
      date December 31, 2007 (“Maturity
      Date”),
      in
      lawful money of the United States of America and in immediately available funds
      the principal sum of Three Million Dollars ($3,000,000),
      together
      with interest on the unpaid principal of this Debenture at the rate of ten
      percent (10%) per year (compounded monthly) from September 1, 2006 until paid.
      The Company will begin making monthly interest only payments on this Debenture
      of accrued interest on the last business day of every calendar month of this
      Debenture commencing on September 29, 2006. At the Holder’s option, the entire
      principal amount and all accrued and unpaid interest and the Redemption Premium
      specified in Section 1.05 hereof shall be either (a) paid to the Holder on
      the
      Maturity Date or (b) converted in accordance with Section 1.02
      herein.

    

    Section
      1.02 Optional
      Conversion.
      The
      Holder is entitled, at its option, to convert, and, if the Holder so desires,
      sell on the same or any other day, at any time and from time to time, until
      payment in full of this Debenture, all or any part of the principal amount
      of
      the Debenture, plus accrued interest, into shares (the “Conversion
      Shares”)
      of the
      Company’s common stock, par value $0.001 per share (“Common
      Stock”),
      at
      the price per share equal to $1.50 (the “Conversion
      Price”).
      No
      fraction of shares or scrip representing fractions of shares will be issued
      on
      conversion, but the number of shares issuable shall be rounded to the nearest
      whole share. To convert this Debenture, the Holder hereof shall deliver written
      notice thereof, substantially in the form of Exhibit A to this Debenture, with
      appropriate insertions (the “Conversion
      Notice”),
      to
      the Escrow Agent (as defined in the Securities Purchase Agreement) and the
      Company at its address as set forth herein. The date upon which the conversion
      shall be effective (the “Conversion
      Date”)
      shall
      be deemed to be the date set forth in the Conversion Notice. The Holder has
      the
      right to convert this Debenture after the Maturity Date. Absent manifest error;
      the Escrow Agent shall release the shares of Common Stock from escrow and
      deliver such shares to the Holder by the third (3rd)
      business day following the Escrow Agent notifying the Company of the conversion.
      Any conversion of any portion of the Debenture to Common Stock shall be deemed
      to be a pre-payment of principal plus accrued and unpaid interest, without
      any
      penalty, and shall be credited against any future payments of principal and
      interest in the order that such payments become due and payable. 

    

    Section
      1.03 Monthly
      Payments.
      The
      interest so payable will be paid on the last business day of every calendar
      month of this Debenture commencing on September 29, 2006. This Debenture ranks
      pari passu with all other Debentures now or hereinafter issued pursuant to
      the
      Securities Purchase Agreement or issued in exchange for such Debentures. In
      the
      event of default, as described in Section 3.01 hereunder, the Holder may elect
      that the interest be paid in cash (via wire transfer or certified funds) or
      in
      the form of Common Stock. If paid in the form of Common Stock, the amount of
      stock to be issued will be calculated as follows: the value of the stock shall
      be the Closing Bid Price on: (i) the date the interest payment is due; or (ii)
      if the interest payment is not made when due, the date the interest payment
      is
      made if lower than the Closing Bid Price specified in clause (i). A number
      of
      shares of Common Stock with a value equal to the amount of interest due shall
      be
      issued. No fractional shares will be issued; therefore, in the event that the
      value of the Common Stock per share does not equal the total interest due,
      the
      Company will pay the balance in cash. 

    

    The
      Company shall make monthly scheduled payments (“Scheduled
      Payments”)
      consisting of principal and accrued interest. The first Scheduled Payment shall
      be due and payable on February 28, 2007. After the first Scheduled Payment,
      each
      subsequent Scheduled Payment shall be due and payable on the same day of each
      subsequent calendar month until the Maturity Date. The principal amount of
      each
      Scheduled Payment shall be determined by dividing the outstanding principal
      amount of this Debenture as of the date of such Scheduled Payment by the number
      of Scheduled Payments remaining until the Maturity Date plus a repayment premium
      equal to five percent (5%) (“Repayment
      Premium”)
      of the
      amount of the principal payment. All payments in respect of the indebtedness
      evidenced hereby shall be made in collected funds, and shall be applied to
      principal, accrued interest and charges and expenses owing under or in
      connection with this Debenture in such order as the 1-folder elects, except
      that
      payments shall be applied to accrued interest before principal.

    

    In
      the
      event that the Company redeems a portion of the amount outstanding under this
      Debenture, or the Holder converts a portion of the principal amount outstanding
      and accrued interest under this Debenture as contemplated herein, the Company
      shall be entitled to an off-set of the amount of principal and accrued interest
      due pursuant to the Schedule Payment equal to the amount of principal and
      accrued interest redeemed or converted (the “Off-Set
      Amount”).
      In
      such event the Company shall still be obligated to make a Scheduled Payment
      reduced by the Off-Set Amount as contemplated hereunder.

    

    During
      any time that this Debenture is held by an affiliate of Cornell Capital
      Partners, LP (as defined in Rule 144 promulgated under the Act, as amended),
      the
      Company may not redeem this Debenture with the proceeds of the SEDA (as defined
      in Section 5.0l(h)(iii) hereof).

     

    Section
      1.04 Reservation
      of Common Stock.
      As set
      forth in Section 6(c) of the Securities Purchase Agreement, the Company shall
      reserve and keep available out of its authorized but unissued shares of Common
      Stock, solely for the purpose of effecting the conversion of this Debenture,
      that number of shares of Common Stock equal to a multiple of five (5) times
      the
      number of shares of Common Stock into which the Debenture is convertible from
      time to time based upon the Conversion Price. If at any time the Company does
      not have a sufficient number of Conversion Shares authorized and available,
      then
      the Company shall call and hold a special meeting of its stockholders within
      thirty (30) days of that time for the sole purpose of increasing the number
      of
      authorized shares of Common Stock.

     

    Section
      1.05 Right
      of Redemption.
      The
      Company at its option shall have the right to redeem, with three (3) business
      days advance written notice (the “Redemption
      Notice”),
      a
      portion or all of the outstanding Convertible Debenture. The redemption price
      shall be One Hundred Twenty percent (120%) (the “Redemption
      Price”)
      of the
      face amount redeemed plus accrued interest. The Company shall pay the Redemption
      Price on all payments made prior to a Scheduled Payment or any other payment
      due
      date. For all payments under this Debenture, the payment of the Redemption
      Price
      by the Company shall be in addition to any accrued interest due.

     

    Section
      1.06 Registration
      Rights.
      The
      Company is obligated to register the resale of the Conversion Shares under
      the
      Act, pursuant to the terms of an Amended and Restated Investor Registration
      Rights Agreement by and among the Company and the Buyers listed on Schedule
      I
      thereto of even date herewith (the “Investor
      Registration Rights Agreement”).

     

    Section
      1.07 Paying
      Agent and Registrar.
      Initially, the Company will act as paying agent and registrar. The Company
      may
      change any paying agent, registrar, or Company-registrar by giving the Holder
      not less than ten (10) business days’ written notice of its election to do so,
      specifying the name, address, telephone number and facsimile number of the
      paying agent or registrar. The Company may act in any such
      capacity.

     

    Section
      1.08 Secured
      Nature of Debenture.
      This
      Debenture and any other obligations due and owing to the Holder (including
      the
      accrued but unpaid Liquidated Damages (as defined in the Investor Registration
      Rights Agreement) specified in Section 2(e) of the Investor Registration Rights
      Agreement) are secured by, and the Company hereby reaffirms the previous grant
      of a security interest in, all of the assets and property of (i) the Company
      as
      set forth on Exhibit A to the Security Agreement dated as of October 12, 2005
      by
      and among the Company, the Holder and the other party thereto (the “Security
      Agreement”)
      and
      (ii) Uluru Delaware Inc. (f/k/a Uluru Inc.), a Delaware corporation and a
      wholly-owned subsidiary of the Company (the “Subsidiary”),
      as
      set forth on Exhibit A to the Guarantor Security Agreement dated as of October
      12, 2005, by and among the Subsidiary (the successor by merger to Uluru
      Acquisition Corp.), the Holder and the other party thereto.

     

    Section
      1.09 The
      Escrow Shares.
      The
      Company has deposited 50,000,000 shares of Common Stock with the Escrow Agent
      as
“Escrow Shares.” Upon receipt of the Conversion Notice from the Holder, the
      Escrow Agent shall distribute the Conversion Shares to Holder pursuant to this
      Debenture and the Securities Purchase Agreement including Exhibit F
      thereto.

     

     

    ARTICLE
      II. 

     

    Section
      2.01 Amendments
      and Waiver of Default.
      The
      Debenture may not be amended without the prior written consent of the Holder.
      

     

     

    ARTICLE
      III.

     

    Section
      3.01 Events
      of Default.
      An
      Event of Default is defined as follows: (a) failure by the Company to pay
      amounts due hereunder on the Maturity Date, a Scheduled Payment date or
      otherwise after the expiration of a seven (7) day period to cure such failure;
      (b) failure by the Company’s transfer agent (aside for reason of error) to issue
      freely tradeable Common Stock to the Holder within twelve (12) days of the
      Company’s receipt of the attached Conversion Notice from Holder; (c) failure by
      the Company for ten (10) days after notice to it to comply with any of its
      other
      agreements in the Debenture; (d) failure to comply with the terms of the
      Irrevocable Transfer Agent Instructions (as defined in the Securities Purchase
      Agreement); (e) if the Company files for relief under the United States
      Bankruptcy Code (the “Bankruptcy
      Code”)
      or
      under any other state or federal bankruptcy or insolvency law, or files an
      assignment for the benefit of creditors, or if an involuntary proceeding under
      the Bankruptcy Code or under any other federal or state bankruptcy or insolvency
      law is commenced against the Company; or (f) a breach by the Company of its
      obligations under any of the Transaction Documents (as defined in the Securities
      Purchase Agreement) which is not cured by the Company within any allocated
      cure
      period therein. Upon the occurrence of an Event of Default, the Holder may,
      in
      its sole discretion, (i) accelerate full repayment of all outstanding principal
      and accrued interest on this Debenture at the Redemption Price and/or (ii)
      convert all or any portion of the outstanding principal and accrued interest
      on
      this Debenture at twenty percent (20%) of the then Conversion Price (the
“Event
      of Default Conversion Price”).
      The
      failure of the Company to make payments due under Section 1.03 shall also be
      deemed as an Event of Default. Upon an Event of Default, the Escrow Agent is
      authorized and directed to release the Escrow Shares to the Holder if requested
      by the Holder, without approval of the Company.

     

    Section
      3.02 Failure
      to Issue Unrestricted Common Stock.
      As
      indicated in Section 3.01, a breach by the Company of its obligations under
      the
      Investor Registration Rights Agreement shall be deemed an Event of Default,
      which if not cured within ten (10) days, shall entitle the Holder to accelerate
      full repayment of the outstanding principal and accrued interest on this
      Debenture or to convert all or any portion of the outstanding principal and
      accrued interest on this Debenture into shares of Common Stock pursuant to
      Section 1.02 herein at the Event of Default Conversion Price. The Company
      acknowledges that failure to honor a Conversion Notice shall cause irreparable
      harm to the Holder.

     

    ARTICLE
      IV.

    

    Section
      4.01 Rights
      and Terms of Conversion.
      This
      Debenture, in whole or in part, may be converted at any time following the
      Closing Date (as defined in the Securities Purchase Agreement), into shares
      of
      Common Stock at a price equal to the Conversion Price as described in Section
      1.02 above or, following the occurrence and during the continuance of an Event
      of Default, at the Event of Default Conversion Price.

     

    Section
      4.02 Re-issuance
      of Debenture.
      When
      the Holder elects to convert a part of the Debenture, then the Company shall
      reissue a new Debenture in the same form as this Debenture to reflect the new
      principal amount.

     

    Section
      4.03 Beneficial
      Ownership.
      The
      Company shall not effect the conversion of this Debenture, and the Holder shall
      not have the right to exercise this Debenture, to the extent that after giving
      effect to such exercise, the Holder (together with such Holder’s affiliates)
      would beneficially own in excess of 4.99% (the “Maximum
      Percentage”)
      of the
      shares of Common Stock outstanding immediately after giving effect to such
      exercise. For purposes of the foregoing sentence, the aggregate number of shares
      of Common Stock beneficially owned by the Holder and its affiliates shall
      include the number of shares of Common Stock issuable upon conversion of this
      Debenture with respect to which the determination of such sentence is being
      made, but shall exclude shares of Common Stock which would be issuable upon
      (i)
      conversion of the remaining, unexercised portion of this Debenture beneficially
      owned by the Holder and its affiliates and (ii) exercise or conversion of the
      unexercised or unconverted portion of any other securities of the Company
      beneficially owned by the Holder and its affiliates (including, without
      limitation, any convertible notes or convertible preferred stock or warrants)
      subject to a limitation on conversion or exercise analogous to the limitation
      contained herein. Except as set forth in the preceding sentence, for purposes
      of
      this paragraph, beneficial ownership shall be calculated in accordance with
      Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes
      of this Debenture, in determining the number of outstanding shares of Common
      Stock, the Holder may rely on the number of outstanding shares of Common Stock
      as reflected in (1) the Company’s most recent Form 10-K or 10-KSB, Form 10-Q or
      10-QSB, Current Report on Form 8-K or other public filing with the Securities
      and Exchange Commission, as the case may be, (2) a more recent public
      announcement by the Company or (3) any other notice by the Company or its
      transfer agent setting forth the number of shares of Common Stock outstanding.
      For any reason at any time, upon the written or oral request of the Holder,
      the
      Company shall within one Business Day confirm orally and in writing to the
      Holder the number of shares of Common Stock then outstanding. By written notice
      to the Company, the Holder may increase or decrease the Maximum Percentage
      to
      any other percentage up to 9.99% specified in such notice; provided that any
      such increase will not be effective until the sixty-first (61st)
      day
      after such notice is delivered to the Company. This Section 4.03 shall control
      in the event of any conflict with Section 6(d) of the Securities Purchase
      Agreement.

     

    ARTICLE
      V.

     

    Section
      5.01 Anti-dilution.
      The
      Conversion Price shall be adjusted from time to time as follows:

     

    (a) Adjustment
      of Conversion Price and Number of Shares upon Issuance of Common
      Stock.
      If and
      whenever on or after the Closing Date of this Debenture, the Company issues
      or
      sells, or is deemed to have issued or sold, any shares of Common Stock (other
      than (i) Excluded Securities (as defined herein), (ii) shares of Common Stock
      which are issued or deemed to have been issued by the Company in connection
      with
      an Approved Stock Plan (as defined herein), and (iii) upon the issuance,
      exercise or conversion of Other Securities (as defined herein)) for a
      consideration per share less than a price (the “Applicable
      Price”)
      equal
      to $1.25 or if the Conversion Price has previously been adjusted pursuant to
      Section 5.01 hereof, then the Conversion Price in effect immediately prior
      to
      such issuance or sale, then immediately after such issue or sale the Conversion
      Price shall (until another such issuance or sale) be reduced to the price equal
      to the quotient derived by dividing (A) an amount equal to the sum of (X) the
      product of (a) the Conversion Price on the date immediately prior to the
      issuance or sale of such shares, multiplied by (b) the total number of shares
      of
      Common Stock outstanding immediately prior to such issuance or sale plus, (Y)
      the aggregate of the amount of all consideration, if any, received by the
      Company upon such issuance or sale, by (B) the total number of shares of Common
      Stock outstanding immediately after such issuance or sale; provided, however,
      that in no event shall the Conversion Price be reduced below $.001.

     

    (b) Effect
      on Conversion Price of Certain Events.
      For
      purposes of determining the adjusted Conversion Price under Section 5.01(a)
      above, the following shall be applicable:

     

    (i) Issuance
      of Options.
      If
      after the date hereof, the Company in any manner grants any rights, warrants
      or
      options to subscribe for or purchase Common Stock or convertible securities
      (“Options”)
      and
      the lowest price per share for which one share of Common Stock is issuable
      upon
      the exercise of any such Option or upon conversion or exchange of any
      convertible securities issuable upon exercise of any such Option is less than
      the Conversion Price then in effect, then such share of Common Stock shall
      be
      deemed to be outstanding and to have been issued and sold by the Company at
      the
      time of the granting or sale of such Option for such price per share. For
      purposes of this Section 5.01(b)(i), the lowest price per share for which one
      share of Common Stock is issuable upon exercise of such Options or upon
      conversion or exchange of such convertible securities shall be equal to the
      sum
      of the lowest amounts of consideration (if any) received or receivable by the
      Company with respect to any one share of Common Stock upon the granting or
      sale
      of the Option, upon exercise of the Option or upon conversion or exchange of
      any
      other convertible security other than this Debenture issuable upon exercise
      of
      such Option. No further adjustment of the Conversion Price shall be made upon
      the actual issuance of such Common Stock or of such convertible securities
      upon
      the exercise of such Options or upon the actual issuance of such Common Stock
      upon conversion or exchange of such convertible securities.

     

    (ii) Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any convertible securities after the
      Closing Date and the lowest price per share for which one share of Common Stock
      is issuable upon the conversion or exchange thereof is less than the Conversion
      Price then in effect, then such share of Common Stock shall be deemed to be
      outstanding and to have been issued and sold by the Company at the time of
      the
      issuance or sale of such convertible securities for such price per share. For
      the purposes of this Section 5.01(b)(ii), the lowest price per share for which
      one share of Common Stock is issuable upon such conversion or exchange shall
      be
      equal to the sum of the lowest amounts of consideration (if any) received or
      receivable by the Company with respect to one share of Common Stock upon the
      issuance or sale of the convertible security and upon conversion or exchange
      of
      such convertible security. No further adjustment of the Conversion Price shall
      be made upon the actual issuance of such Common Stock upon conversion or
      exchange of such convertible securities, and if any such issue or sale of such
      convertible securities is made upon exercise of any Options for which adjustment
      of the Conversion Price had been or are to be made pursuant to other provisions
      of this Section 5.01(b), no further adjustment of the Conversion Price shall
      be
      made by reason of such issue or sale.

     

    (iii) Change
      in Option Price or Rate of Conversion.
      If the
      purchase price provided for in any Options, the additional consideration, if
      any, payable upon the issue, conversion or exchange of any convertible
      securities, or the rate at which any convertible securities are convertible
      into
      or exchangeable for Common Stock changes at any time, the Conversion Price
      in
      effect at the time of such change shall be adjusted to the Conversion Price
      which would have been in effect at such time had such Options or convertible
      securities provided for such changed purchase price, additional consideration
      or
      changed conversion rate, as the case may be, at the time initially granted,
      issued or sold and the number of shares of Common Stock issuable upon conversion
      of this Debenture shall be correspondingly readjusted. For purposes of this
      Section 5.01(b)(iii), if the terms of any Option or convertible security that
      was outstanding as of the Closing Date of this Debenture are changed in the
      manner described in the immediately preceding sentence, then such Option or
      convertible security and the Common Stock deemed issuable upon exercise,
      conversion or exchange thereof shall be deemed to have been issued as of the
      date of such change. No adjustment pursuant to this Section 5.01(b) shall be
      made if such adjustment would result in an increase of the Conversion Price
      then
      in effect.

     

    (c) Effect
      on Conversion Price of Certain Events.
      For
      purposes of determining the adjusted Conversion Price under Sections 5.01(a)
      and
      5.01(b), the following shall be applicable: 

     

    (i) Calculation
      of Consideration Received.
      If any
      Common Stock, Options or convertible securities are issued or sold or deemed
      to
      have been issued or sold for cash, the consideration received therefore will
      be
      deemed to be the gross amount received by the Company therefore, If any Common
      Stock, Options or convertible securities are issued or sold for a consideration
      other than cash, the amount of such consideration received by the Company will
      be the fair value of such consideration, except where such consideration
      consists of marketable securities, in which case the amount of consideration
      received by the Company will be the market price of such securities on the
      date
      of receipt of such securities. If any Common Stock, Options or convertible
      securities are issued to the owners of the non-surviving entity in connection
      with any merger in which the Company is the surviving entity, the amount of
      consideration therefore will be deemed to be the fair value of such portion
      of
      the net assets and business of the non-surviving entity as is attributable
      to
      such Common Stock, Options or convertible securities, as the case may be. The
      fair value of any consideration other than cash or securities will be determined
      jointly by the Company and the holders of the Debenture representing at least
      two-thirds of the shares of Common Stock issuable upon conversion of the
      Debenture then outstanding. If such parties are unable to reach agreement within
      ten (10) days after the occurrence of an event requiring valuation (the
“Valuation
      Event”),
      the
      fair value of such consideration will be determined within five (5) Business
      Days after the tenth (10th)
      day
      following the Valuation Event by an independent, reputable appraiser jointly
      selected by the Company and the holders of the Debenture representing at least
      two-thirds of the shares of Common Stock issuable upon conversion of the
      Debenture then outstanding. The determination of such appraiser shall be final
      and binding upon all parties and the fees and expenses of such appraiser shall
      be borne by the non-prevailing party.

     

    (ii) Integrated
      Transactions.
      In case
      any Option is issued in connection with the issue or sale of other securities
      of
      the Company, together comprising one integrated transaction in which no specific
      consideration is allocated to such Options by the parties thereto, the Options
      will be deemed to have been issued for a consideration of $.001. 

     

    (iii) Treasury
      Shares.
      The
      number of shares of Common Stock outstanding at any given time does not include
      shares owned or held by or for the account of the Company, and the disposition
      of any shares so owned or held will be considered an issue or sale of Common
      Stock. 

     

    (iv) Record
      Date.
      If the
      Company takes a record of the holders of Common Stock for the purpose of
      entitling them (1) to receive a dividend or other distribution payable in Common
      Stock, Options or in convertible securities or (2) to subscribe for or purchase
      Common Stock, Options or convertible securities, then such record date will
      be
      deemed to be the date of the issue or sale of the shares of Common Stock deemed
      to have been issued or sold upon the declaration of such dividend or the making
      of such other distribution or the date of the granting of such right of
      subscription or purchase, as the case may be.

     

    (d) Adjustment
      of Conversion Price upon Subdivision or Combination of Common
      Stock.
      If the
      Company at any time after the date of issuance of this Debenture subdivides
      (by
      any stock split, stock dividend, recapitalization or otherwise) one or more
      classes of its outstanding shares of Common Stock into a greater number of
      shares, any Conversion Price in effect immediately prior to such subdivision
      will be proportionately reduced. If the Company at any time after the date
      of
      issuance of this Debenture combines (by combination, reverse stock split or
      otherwise) one or more classes of its outstanding shares of Common Stock into
      a
      smaller number of shares, any Conversion Price in effect immediately prior
      to
      such combination will be proportionately increased. Any adjustment under this
      Section 5.01(d) shall become effective at the close of business on the date
      the
      subdivision or combination becomes effective.

     

    (e) Distribution
      of Assets.
      If the
      Company shall declare or make any dividend or other distribution of its assets
      (or rights to acquire its assets) to holders of Common Stock, by way of return
      of capital or otherwise (including, without limitation, any distribution of
      cash, stock or other securities, property or options by way of a dividend,
      spin
      off, reclassification, corporate rearrangement or other similar transaction)
      (a
“Distribution”),
      at
      any time after the issuance of this Debenture, then, in each such case any
      Conversion Price in effect immediately prior to the close of business on the
      record date fixed for the determination of holders of Common Stock entitled
      to
      receive the Distribution shall be reduced, effective as of the close of business
      on such record date, to a price determined by multiplying such Conversion Price
      by a fraction of which (A) the numerator shall be the closing bid price of
      the
      Common Stock on the trading day immediately preceding such record date minus
      the
      value of the Distribution (as determined in good faith by the Company’s Board of
      Directors) applicable to one share of Common Stock, and (B) the denominator
      shall be the closing bid price of the Common Stock on the trading day
      immediately preceding such record date; and

     

    (f) Certain
      Events.
      If any
      event occurs of the type contemplated by the provisions of this Section 5.01
      but
      not expressly provided for by such provisions (including, without limitation,
      the granting of stock appreciation rights, phantom stock rights or other rights
      with equity features), then the Company’s Board of Directors will make an
      appropriate adjustment in the Conversion Price so as to protect the rights
      of
      the holders of the Debenture; provided, except as set forth in Section 5.01(d),
      that no such adjustment pursuant to this Section 5.01(f) will increase the
      Conversion Price as otherwise determined pursuant to this Section
      5.01.

     

    (g) Notices.

     

    (i) Immediately
      upon any adjustment of the Conversion Price, the Company will give written
      notice thereof to the holder of this Debenture, setting forth in reasonable
      detail, and certifying, the calculation of such adjustment.

     

    (ii) The
      Company will give written notice to the holder of this Debenture at least ten
      (10) days prior to the date on which the Company closes its books or takes
      a
      record (A) with respect to any dividend or distribution upon the Common Stock,
      (B) with respect to any pro rata subscription offer to holders of Common Stock
      or (C) for determining rights to vote with respect to any dissolution or
      liquidation, provided that such information shall be made known to the public
      prior to or in conjunction with such notice being provided to such
      holder.

     

    (h) Definitions.

     

    (i) “Approved
      Stock Plan”
means
      any employee benefit plan which has been approved by the Board of Directors
      of
      the Company, pursuant to which the Company’s securities may be issued to any
      employee, officer or director for services provided to the Company.

     

    (ii) “Excluded
      Securities”
means,
      provided such security is issued at a price which is greater than or equal
      to
      the arithmetic average of the Closing Bid Prices of the Common Stock for the
      ten
      (10) consecutive trading days immediately preceding the date of issuance, any
      of
      the following: (a) any issuance by the Company of securities in connection
      with
      a strategic partnership or a joint venture (the primary purpose of which is
      not
      to raise equity capital), and (b) any issuance by the Company of securities
      as
      consideration for a merger or consolidation or the acquisition of a business,
      product, license, or other assets of another person or entity (which merger,
      consolidation or acquisition is approved by a majority of the independent
      members of the Board of Directors of the Company)

     

    (iii) “Other
      Securities”
means
      (i) those options and warrants of the Company issued prior to, and outstanding
      on, the date hereof ii) the shares of Common Stock issuable on exercise of
      such
      options and warrants, provided such options and warrants are not amended after
      the date hereof and (iii) the shares of Common Stock issuable upon conversion
      of
      this Debenture, or otherwise in connection with this Debenture or in connection
      with the Standby Equity Distribution Agreement dated on or around October 12,
      2005 by and between the Company and Cornell Capital Partners, L.P. (the
“SEDA”).

     

    (i) Nothing
      in this Section 5.01 shall be deemed to authorize the issuance of any securities
      by the Company in violation of Section 5.02.

     

    Section
      5.02 Consent
      of Holder to Sell Capital Stock or Grant Security
      Interests.
      Except
      for securities issued under the SEDA, so long as any of the principal of or
      interest on this Debenture remains unpaid and unconverted, the Company shall
      not, without the prior consent of the Holder (i) issue or sell any Common Stock
      or Preferred Stock without consideration or for a consideration per share less
      than its fair market value determined immediately prior to its issuance, (ii)
      issue or sell any Preferred Stock, warrant, option, right, contract, call,
      or
      other security or instrument granting the holder thereof the right to acquire
      Common Stock without consideration or for a consideration per share less than
      such Common Stock’s fair market value determined immediately prior to its
      issuance, (iii) enter into any security instrument granting the holder a
      security interest in any of the assets of the Company, or (iv) file any
      registration statement on Form S-8, except that such Form S-8 relates solely
      to
      an Approved Plan and provided that such Form S-8 is not filed prior to 90 days
      following the effectiveness of the Registration Statement referenced in the
      Investor Registration Rights Agreement.

     

    Section
      5.03 Notwithstanding
      Section 5.02 above, the Company may, without obtaining the prior written consent
      of the Holder, issue or sell shares of Common Stock or Preferred Stock for
      a
      consideration of up to 20% below the closing bid price of the Common Stock
      determined immediately prior to its issuance, provided
      that 50%
      of the net proceeds of any such issuance are used to redeem amounts outstanding
      under this Debenture.

     

     

    ARTICLE
      VI.

     

    Section
      6.01 Notice.
      Notices
      regarding this Debenture shall be sent to the parties at the following
      addresses, unless a party notifies the other parties, in writing, of a change
      of
      address;

     

    
      	
               If
                to the Company, to:

               

            	
              Uluru,
                Inc. 

              4452
                Beltway Drive

              Addison,
                TX 75287

              Attention: Kerry
                P. Gray

              Telephone: (214)
                905-5145

              Facsimile: (214)
                905-5130

            
	 	 
	
               With
                a copy to: 

               

            	
              Bingham
                McCutchen LLP

              150
                Federal Street

              Boston,
                MA 02110

              Attention: John
                J. Concannon, Esq.

              Telephone: (617)
                951-8874

              Facsimile: (617)
                951-8736

            
	 	 
	
               If
                to the Holder: 

               

            	
              Cornell
                Capital Partners, LP

              101
                Hudson Street, Suite 3700

              Jersey
                City, NJ 07302

              Facsimile: (201)
                985-8266

            

    

     

    Section
      6.02 Governing
      Law.
      The
      parties hereto acknowledge that the transactions contemplated by this Agreement
      and the exhibits hereto bear a reasonable relation to the State of New York.
      The
      parties hereto agree that the internal laws of the State of New York shall
      govern this Agreement and the exhibits hereto, including, but not limited to,
      all issues related to usury. Any action to enforce the terms of this Agreement
      or any of its exhibits shall be brought exclusively in the state and/or federal
      courts situated in the County and State of New York. Service of process in
      any
      action by the Buyers to enforce the terms of this Agreement may be made by
      serving a copy of the summons and complaint, in addition to any other relevant
      documents, by commercial overnight courier to the Company at its principal
      address set forth in this Agreement.

     

    Section
      6.03 Severability.
      The
      invalidity of any of the provisions of this Debenture shall not invalidate
      or
      otherwise affect any of the other provisions of this Debenture, which shall
      remain in full force and effect.

     

    Section
      6.04 Entire
      Agreement and Amendments.
      This
      Debenture, together with the Securities Purchase Agreement, Investor
      Registration Rights Agreement, the Security Agreement and any other transaction
      documents entered into between the Company and the Holder in connection with
      the
      Holder’s investment, represents the entire agreement between the parties hereto
      with respect to the subject matter hereof and there are no representations,
      warranties or commitments, except as set forth herein. This Debenture may be
      amended only by an instrument in writing executed by the parties
      hereto.

     

    Section
      6.05 Counterparts.
      This
      Debenture may be executed in multiple counterparts, each of which shall be
      an
      original, but all of which shall be deemed to constitute on
      instrument.

     

     

    [Remainder
      of Page Intentionally Left Blank]

     

    
      
         

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      with
      the intent to be legally bound hereby, the Company as executed this Debenture
      as
      of the date first written above.

     

     

    ULURU
      INC.

     

    By:
      /s/
      Kerry P. Gray

    Name: Kerry
      P.
      Gray

    Title: President
      & CEO

    

    
      
         

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    EXHIBIT
      A

     

     

    NOTICE
      OF CONVERSION

     

    (To
      be executed by the Holder in order to Convert the
      Debenture)

    

    TO:
      

    

    The
      undersigned hereby irrevocably elects to convert $_____________________ of
      the
      principal amount of the above Debenture into Shares of Common Stock of Uluru,
      Inc., according to the conditions stated therein, as of the Conversion Date
      written below.

    

    
      	
              Conversion
                Date: 

            	 
	
              Applicable
                Conversion Price: 

            	 
	
              Signature:
                

            	 
	
              Name:

            	 
	
              Address:
                

            	 
	
              Amount
                to be converted: 

            	
              $

            
	
              Amount
                of Debenture unconverted:

            	
              $

            
	
              Conversion
                Price per share: 

            	
              $

            
	
              Number
                of shares of Common Stock to be issued:

            	 
	
              Please
                issue the shares of Common Stock in the following name and to the
                following address:

            	 
	
              Issue
                to: 

            	 
	
              Authorized
                Signature: 

            	 
	
              Name:
                

            	 
	
              Title:
                

            	 
	
              Phone
                Number: 

            	 
	
              Broker
                DTC Participant Code: 

            	 
	
              Account
                Number:

            	 

    

    
      A-1Prenox Warrant to Purchase Common Stock

    Exhibit 
      10.36

     

    
      

      

    

     

     

    Void
      after 5:00 p.m., New York Time on August 30, 2011 

     

     

    Warrant
      to Purchase 1,125,000 Shares of Common Stock

     

     

    WARRANT
      TO PURCHASE COMMON STOCK 

     

    OF

     

    ULURU
      INC. 

     

     

    THIS
      WARRANT AND THE SECURITIES INTO WHICH IT IS EXERCISABLE (COLLECTIVELY, THE
      “SECURITIES”)
      HAVE
      NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
      THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE OFFERED OR SOLD
      UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT OR PURSUANT TO AVAILABLE
      EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND THE COMPANY WILL
      BE
      PROVIDED WITH AN OPINION OF COUNSEL OR OTHER SUCH INFORMATION AS IT MAY
      REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTIONS ARE AVAILABLE.

     

     

    FOR
      VALUE RECEIVED,
      Uluru,
      Inc., a corporation organized under the laws of Nevada (the “Company”), grants
      the following rights to Prenox, LLC and/or its assigns (the
“Holder”):

     

     

    ARTICLE
      1. DEFINITIONS

     

    Capitalized
      terms used and not otherwise defined herein shall have the meanings given such
      terms in the Securities Purchase Agreement by and among the Company, the Holder
      and the other party thereto entered into on October 12, 2005 (as amended, the
      “Purchase Agreement”). As used in this Warrant, the following terms shall have
      the following meanings:

     

     

    “Corporate
      Office” shall mean the office of the Company (or its successor) at which at any
      particular time its principal business shall be administered. 

     

    “Exercise
      Date” shall mean any date on which the Holder gives the Company a Notice of
      Exercise in compliance with the terms of Exhibit E to the Purchase Agreement.
      

     

    “Exercise
      Price” shall mean the Fixed Price per share of Common Stock, subject to
      adjustment as provided herein.

     

    “Expiration
      Date” shall mean 5:00 p.m. (New York time) on August 30, 2011. 

     

    “Fair
      Market Value” shall have the meaning set forth in Section 2.2(b). 

     

    “Fixed
      Price” shall mean US$1.25.

     

    “Market
      Value” shall have the meaning set forth in Section 2.2(b).

     

    “SEC”
      shall mean the United States Securities and Exchange Commission.

     

    “Warrant
      Shares” shall mean the shares of the Common Stock issuable upon exercise of this
      Warrant.

     

     

    ARTICLE
      2. EXERCISE AND AGREEMENTS

     

    2.1 Exercise
      of Warrant; Sale of Warrant and Warrant Shares.
      This
      Warrant shall entitle the Holder to purchase, at the Exercise Price, One Million
      One Hundred Twenty Five Thousand (1,125,000) shares of Common Stock; the number
      of Warrant Shares shall be subject to adjustment in accordance with Section
      2.7.
      This Warrant shall be exercisable at any time and from time to time from the
      date hereof and prior to the Expiration Date (the “Exercise Period”). This
      Warrant and the right to purchase Warrant Shares hereunder shall expire and
      become void on the Expiration Date.

     

    2.2 Manner
      of Exercise.

     

    (a) The
      Holder may exercise this Warrant at any time and from time to time during the
      Exercise Period, in whole or in part (but not in denominations of fewer than
      10,000 Warrant Shares, except upon an exercise of this Warrant with respect
      to
      the remaining balance of Warrant Shares purchasable hereunder at the time of
      exercise), by delivering to the Escrow Agent pursuant to the Escrow Agreement
      incorporated herein by reference (i) a duly executed Notice of Exercise in
      substantially the form attached as Appendix I hereto, (ii) the certificate
      representing this Warrant and (iii) a bank cashier’s or certified check for the
      aggregate Exercise Price of the Warrant Shares being purchased (unless this
      Warrant is exercised through a Warrant Exchange as set forth in Section 2.2(b)
      below).

     

    (b) The
      Holder may, at its option, in lieu of paying cash for the Warrant Shares,
      exercise this Warrant by an exchange, in whole or in part (a “Warrant
      Exchange”), by delivery to the Escrow Agent of (i) a duly executed Notice of
      Exercise electing a Warrant Exchange and (ii) the certificate representing
      this
      Warrant. In connection with any Warrant Exchange, the Holder shall be deemed
      to
      have paid for the Warrant Shares an amount equal to the Fair Market Value of
      each Warrant delivered, and the Warrant shall be deemed exercised for the amount
      so paid. For this purpose, the Fair Market Value of each Warrant is the
      difference between the Market Value of a share of Common Stock and the Exercise
      Price on the Exercise Date. Market Value shall mean the average Closing Bid
      Price of a share of Common Stock during the ten (10) Trading Days ending on
      the
      Exercise Date.

     

    (c) Beneficial
      Ownership.
      The
      Company shall not effect the exercise of this Warrant, and the Holder shall
      not
      have the right to exercise this Warrant, to the extent that after giving effect
      to such exercise, such Holder (together with such Holder’s affiliates) would
      beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares of
      Common Stock outstanding immediately after giving effect to such exercise.
      For
      purposes of the foregoing sentence, the aggregate number of shares of Common
      Stock beneficially owned by such Holder and its affiliates shall include the
      number of shares of Common Stock issuable upon exercise of this Warrant with
      respect to which the determining of such sentence is being made, but shall
      exclude shares of Common Stock which would be issuable upon (i) exercise of
      the
      remaining, unexercised portion of this Warrant beneficially owned by such Holder
      and its affiliates and (ii) exercise or conversion of the unexercised or
      unconverted portion of any other securities of the Company beneficially owned
      by
      such Holder and its affiliates (including, without limitation, any convertible
      notes or convertible preferred stock or warrants) subject to a limitation on
      conversion or exercise analogous to the limitation contained herein. Except
      as
      set forth in the preceding sentence, for purposes of this paragraph, beneficial
      ownership shall be calculated in accordance with Section 13(d) of the Securities
      Exchange Act of 1934, as amended. For purposes of this Warrant, in determining
      the number of outstanding shares of Common Stock, the Holder may rely on the
      number of outstanding shares of Common Stock as reflected in (1) the Company’s
      most recent Form 10-K or 10-KSB, Form 10-Q or 10-QSB, Current Report on Form
      8-K
      or other public filing with the Securities and Exchange Commission, as the
      case
      may be, (2) a more recent public announcement by the Company or (3) any other
      notice by the Company or its transfer agent setting forth the number of shares
      of Common Stock outstanding. For any reason at any time, upon the written or
      oral request of the Holder, the Company shall within one Business Day confirm
      orally and in writing to the Holder the number of shares of Common Stock then
      outstanding. By written notice to the Company, the Holder may increase or
      decrease the Maximum Percentage to any other percentage up to 9.99% specified
      in
      such notice; provided that any such increase will not be effective until the
      sixty-first (61st)
      day
      after such notice is delivered to the Company.

     

    2.3 Termination.
      All
      rights of the Holder in this Warrant, to the extent they have not been
      exercised, shall terminate on the Expiration Date.

     

    2.4 No
      Rights Prior to Exercise.
      This
      Warrant shall not entitle the Holder to any voting or other rights as a
      stockholder of the Company.

     

    2.5 Fractional
      Shares.
      No
      fractional shares shall be issuable upon exercise of this Warrant, and the
      number of Warrant Shares to be issued shall be rounded up to the nearest whole
      number. If, upon exercise of this Warrant, the Holder hereof would be entitled
      to receive any fractional share, the Company shall issue to the Holder one
      additional share of Common Stock in lieu of such fractional share.

     

    2.6 Escrow.
      The
      Company previously entered into the Escrow Agreement and acknowledges and agrees
      (i) that the delivery of Warrant Shares shall be subject to the terms of the
      Escrow Agreement and (ii) to deposit with the Escrow Agent thereunder stock
      certificates registered in the name of the Holder, each representing a number
      of
      shares of Common Stock (in denominations specified by the Purchaser) equal,
      in
      the aggregate, to the total number of Warrant Shares for which this Warrant
      is
      exercisable, assuming exercise of this Warrant in full on the date hereof
      without regard to any limitations on exercise. The Company shall deposit
      additional certificates for Warrant Shares upon request by the Escrow Agent
      pursuant to the Escrow Agreement.

     

    2.7 Adjustments
      to Exercise Price and Number of Securities.

     

    (a) Subdivision
      and Combination.
      In case
      the Company shall at any time subdivide or combine the outstanding shares of
      Common Stock or pay a dividend or make a distribution on its Common Stock in
      shares of Common Stock, the Exercise Price shall forthwith be proportionately
      decreased in the case of subdivision, dividend or distribution or increased
      in
      the case of a combination.

     

    (b) Adjustment
      in Number of Securities.
      Upon
      each adjustment of the Exercise Price pursuant to the provisions of this Section
      2.7 (including subsection (f) of this Section 2.7), the number of Warrant Shares
      issuable upon the exercise of each Warrant shall be adjusted to the nearest
      whole number by multiplying a number equal to the Exercise Price in effect
      immediately prior to such adjustment by the number of Warrant Shares issuable
      upon exercise of the Warrants immediately prior to such adjustment and dividing
      the product so obtained by the adjusted Exercise Price.

     

    (c) Merger
      or Consolidation.
      In case
      of any consolidation of the Company with, or merger of the Company with, or
      merger of the Company into, another corporation (other than a consolidation
      or
      merger which does not result in any reclassification or change of the
      outstanding Common Stock), the corporation formed by such consolidation or
      merger shall execute and deliver to the Holder a supplemental warrant agreement
      providing that the Holder of each Warrant then outstanding or to be outstanding
      shall have the right thereafter (until the expiration of such Warrant) to
      receive, upon exercise of such Warrant, the kind and amount of shares of stock
      and other securities and property (except in the event the property is cash,
      then the Holder shall have the right to exercise the Warrant and receive cash
      in
      the same manner as other stockholders) receivable upon such consolidation or
      merger, by a holder of the number of shares of Common Stock of the Company
      for
      which such warrant might have been exercised immediately prior to such
      consolidation, merger, sale or transfer. Such supplemental warrant agreement
      shall provide for adjustments which shall be identical to the adjustments
      provided in Section 2.7. The foregoing provisions of this paragraph (c) shall
      similarly apply to successive consolidations or mergers.

     

    (d) No
      Adjustment of Exercise Price in Certain Cases.
      No
      adjustment of the Exercise Price shall be made upon the issuance of the Warrant
      Shares or upon the exercise of any options, rights, or warrants outstanding
      as
      of the date hereof and disclosed in Schedule 2.7(d) of this
      Warrant.

     

    (e) Dividends
      and Other Distributions.
      In the
      event that the Company shall at any time while this Warrant is outstanding
      declare a dividend (other than a dividend consisting solely of shares of Common
      Stock) or otherwise distribute to its stockholders any assets, property, rights,
      evidences of indebtedness, securities (other than shares of Common Stock),
      whether issued by the Company or by another, or any other thing of value, the
      Holder of this unexercised Warrant shall thereafter be entitled, in addition
      to
      the shares of Common Stock or other securities and property receivable upon
      the
      exercise assuming exercise thereof, to receive, upon the exercise of this
      Warrant, the same property, assets, rights, evidences of indebtedness,
      securities or any other thing of value that they would have been entitled to
      receive at the time of such dividend or distribution as if the Warrant had
      been
      exercised immediately prior to such dividend or distribution. At the time of
      any
      such dividend or distribution, the Company shall make appropriate reserves
      to
      ensure the timely performance of the provisions of this subsection 2.7 (e).
      Nothing contained herein shall provide for the receipt or accrual by a Holder
      of
      cash dividends prior to the exercise by such Holder of this
      Warrant.

     

    (f) Adjustment
      of Exercise Price upon Issuance of Common Stock or Common Stock
      Equivalents.
      If and
      whenever on or after the date of issuance of this Warrant, the Company issues
      or
      sells, or is deemed to have issued or sold, any shares of Common Stock (other
      than (i) Excluded Securities (as defined herein), or (ii) shares of Common
      Stock
      which are issued or deemed to have been issued by the Company in connection
      with
      an Approved Stock Plan (as defined herein)) for a consideration per share less
      than the Exercise Price in effect immediately prior to such issuance or sale,
      then immediately after such issue or sale the Exercise Price shall be reduced
      to
      the price equal to the quotient derived by dividing (A) an amount equal to
      the
      sum of (X) the product of (a) the Exercise Price on the date immediately prior
      to the issuance or sale of such shares, multiplied by (b) the total number
      of
      shares of Common Stock outstanding immediately prior to such issuance or sale
      plus, (Y) the aggregate of the amount of all consideration, if any, received
      by
      the Company upon such issuance or sale, by (B) the total number of shares of
      Common Stock outstanding immediately after such issuance or sale. For purposes
      of determining the reduced Exercise Price under clause (f) of this Section
      2.7,
      the following shall be applicable:

     

    (i) Issuance
      of Options.
      If
      after the date hereof, the Company in any manner grants any rights, warrants
      or
      options to subscribe for or purchase Common Stock or convertible securities
      (“Options”)
      and
      the lowest price per share for which one share of Common Stock is issuable
      upon
      the exercise of any such Option or upon conversion or exchange of any
      convertible securities issuable upon exercise of any such Option is less than
      the Exercise Price then in effect, then such shares of Common Stock underlying
      such Options shall be deemed to be outstanding and to have been issued and
      sold
      by the Company at the time of the granting or sale of such Option for such
      price
      per share. For purposes of this Section 2.7(f), the lowest price per share
      for
      which one share of Common Stock is issuable upon exercise of such Options or
      upon conversion or exchange of such convertible securities shall be equal to
      the
      sum of the lowest amounts of consideration (if any) received or receivable
      by
      the Company with respect to any one share of Common Stock upon the granting
      or
      sale of the Option, upon exercise of the Option or upon conversion or exchange
      of any other convertible security issuable upon exercise of such Option. No
      further adjustment of the Exercise Price shall be made upon the actual issuance
      of such Common Stock or of such convertible securities upon the exercise of
      such
      Options or upon the actual issuance of such Common Stock upon conversion or
      exchange of such convertible securities.

     

    (ii) Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any convertible securities after the
      date
      hereof and the lowest price per share for which one share of Common Stock is
      issuable upon the conversion or exchange thereof is less than the Exercise
      Price
      then in effect, then such shares of Common Stock underlying the convertible
      securities shall be deemed to be outstanding and to have been issued and sold
      by
      the Company at the time of the issuance or sale of such convertible securities
      for such price per share. For the purposes of this Section 2.7(f)(ii), the
      lowest price per share for which one share of Common Stock is issuable upon
      such
      conversion or exchange shall be equal to the sum of the lowest amounts of
      consideration (if any) received or receivable by the Company with respect to
      one
      share of Common Stock upon the issuance or sale of the convertible security
      and
      upon conversion or exchange of such convertible security. No further adjustment
      of the Exercise Price shall be made upon the actual issuance of such Common
      Stock upon conversion or exchange of such convertible securities, and if any
      such issue or sale of such convertible securities is made upon exercise of
      any
      Options for which adjustment of the Exercise Price had been or are to be made
      pursuant to Section 2.7(0(i), no further adjustment of the Exercise Price shall
      be made by reason of such issue or sale.

    

    (iii) Change
      in Option Price or Rate of Conversion.
      If the
      purchase price provided for in any Options, the additional consideration, if
      any, payable upon the issue, conversion or exchange of any convertible
      securities, or the rate at which any convertible securities are convertible
      into
      or exchangeable for Common Stock changes at any time, the Exercise Price in
      effect at the time of such change shall be adjusted to the Exercise Price which
      would have been in effect at such time had such Options or convertible
      securities provided for such changed purchase price, additional consideration
      or
      changed conversion rate, as the case may be, at the time initially granted,
      issued or sold. For purposes of this Section 2.7(f)(iii), if the terms of any
      Option or convertible security that was outstanding as of the date hereof are
      changed in the manner described in the immediately preceding sentence, then
      such
      Option or convertible security and the Common Stock deemed issuable upon
      exercise, conversion or exchange thereof shall be deemed to have been issued
      as
      of the date of such change. No adjustment pursuant to this Section 2.7(f) shall
      be made if such adjustment would result in an increase of the Conversion Price
      then in effect.

    

    (iv) Effect
      on Conversion Price of Certain Events.
      For
      purposes of determining the adjusted Exercise Price under Section 2.7(f), the
      following shall be applicable:

    

    
      	1)  	
              Calculation
                of Consideration Received.
                If any Common Stock, Options or convertible securities are issued
                or sold
                or deemed to have been issued or sold for cash, the consideration
                received
                therefore will be deemed to be the gross amount received by the Company
                therefore. If any Common Stock, Options or convertible securities
                are
                issued or sold for a consideration other than cash, the amount of
                such
                consideration received by the Company will be the fair value of such
                consideration, except where such consideration consists of marketable
                securities, in which case the amount of consideration received by
                the
                Company will be the market price of such securities on the date of
                receipt
                of such securities. If any Common Stock, Options or convertible securities
                are issued to the owners of the non- surviving entity in connection
                with
                any merger in which the Company is the surviving entity, the amount
                of
                consideration therefore will be deemed to be the fair value of such
                portion of the net assets and business of the non-surviving entity
                as is
                attributable to such Common Stock, Options or convertible securities,
                as
                the case may be. The fair value of any consideration other than cash
                or
                securities will be determined jointly by the Company and the Holder.
                If
                such parties are unable to reach agreement within ten (10) days after
                the
                occurrence of an event requiring valuation (the “Valuation
                Event”),
                the fair value of such consideration will be determined within five
                (5)
                Business Days after the tenth (10th)
                day following the Valuation Event by an independent, reputable appraiser
                jointly selected by the Company and the Holder. The determination
                of such
                appraiser shall be final and binding upon all parties and the fees
                and
                expenses of such appraiser shall be borne by the non-prevailing
                party.

            

    

    

    
      	2)  	
              Integrated
                Transactions.
                In case any Option is issued in connection with the issue or sale
                of other
                securities of the Company, together comprising one integrated transaction
                in which no specific consideration is allocated to such Options by
                the
                parties thereto, the Options will be deemed to have been issued for
                a
                consideration of $.001.

            

    

    

    (v) Treasury
      Shares.
      The
      number of shares of Common Stock outstanding at any given time does not include
      shares owned or held by or for the account of the Company, and the disposition
      of any shares so owned or held will be considered an issue or sale of Common
      Stock.

    

    (vi) Record
      Date.
      If the
      Company takes a record of the holders of Common Stock for the purpose of
      entitling them (I) to receive a dividend or other distribution payable in Common
      Stock, Options or in convertible securities or (2) to subscribe for or purchase
      Common Stock, Options or convertible securities, then such record date will
      be
      deemed to be the date of the issue or sale of the shares of Common Stock deemed
      to have been issued or sold upon the declaration of such dividend or the making
      of such other distribution or the date of the granting of such right of
      subscription or purchase, as the case may be.

    

    (g) Distribution
      of Assets.
      If the
      Company shall declare or make any dividend or other distribution of its assets
      (or rights to acquire its assets) to holders of Common Stock (other than
      distributions or dividends referred to in Section 2.7(a)), by way of return
      of
      capital or otherwise (including, without limitation, any distribution of cash,
      stock or other securities, property or options by way of a dividend, spin off,
      reclassification, corporate rearrangement or other similar transaction) (a
      “Distribution”), then, in each such case the Exercise Price in effect
      immediately prior to the close of business on the record date fixed for the
      determination of holders of Common Stock entitled to receive the Distribution
      shall be reduced, effective as of the close of business on such record date,
      to
      a price determined by multiplying such Exercise Price by a fraction of which
      (A)
      the numerator shall be the closing bid price of the Common Stock on the trading
      day immediately preceding such record date minus the value of the Distribution
      (as determined in good faith by the Company’s Board of Directors) applicable to
      one share of Common Stock, and (B) the denominator shall be the closing bid
      price of the Common Stock on the trading day immediately preceding such record
      date.

     

    (h) Certain
      Events.
      If any
      event occurs of the type contemplated by the provisions of this Section 2.7
      but
      not expressly provided for by such provisions (including, without limitation,
      the granting of stock appreciation rights, phantom stock rights or other rights
      with equity features), then the Company’s Board of Directors will make an
      appropriate adjustment in the Exercise Price so as to protect the rights of
      the
      Holder; provided, except in connection with a stock combination pursuant to
      Section 2.7(a), that no such adjustment pursuant to this Section 2.7 will
      increase the Exercise Price.

    

    (i) Notices.
      Immediately upon any adjustment of the Exercise Price, the Company will give
      written notice thereof to the Holder, setting forth in reasonable detail, and
      certifying, the calculation of such adjustment. The Company will give written
      notice to the Holder at least ten (10) days prior to the date on which the
      Company closes its books or takes a record (A) with respect to any dividend
      or
      distribution upon the Common Stock, (B) with respect to any pro rata
      subscription offer to holders of Common Stock or (C) for determining rights
      to
      vote with respect to any dissolution or liquidation, provided that such
      information shall be made known to the public prior to or in conjunction with
      such notice being provided to the Holder.

     

    (j) Definitions.
      For
      purposes of this Warrant, the following terms shall have the meanings as set
      forth below:

    

    (1) “Approved
      Stock Plan”
means
      the employee benefit plan presently in effect which has been approved by the
      Board of Directors of the Company, pursuant to which the Company’s securities
      may be issued to any employee, officer or director for services provided to
      the
      Company, including any

    amendment
      to such option plan approved by the shareholders of the company.

    

    (2) “Excluded
      Securities”
means
      any of the following: (a) any issuance by the Company of securities in
      connection with a strategic partnership or a joint venture (the primary purpose
      of which is not to raise equity capital), (b) any issuance by the Company of
      securities as consideration for a merger or consolidation or the acquisition
      of
      a business, product, license, or other assets of another person or entity which
      merger, consolidation or acquisition is approved by a majority of the
      independent members of the Board of Directors of the Company), (c) options
      to
      purchase shares of Common Stock pursuant to the Approved Stock Plan, (d) the
      issuance, or conversion or exercise, of any Other Securities and (e) any
      securities issued in connection with an equity or equity- linked financing
      pursuant to which all of the debentures issued pursuant to the Purchase
      Agreement, as amended, are redeemed in full.

    

    (3) “Other
      Securities”
means
      (i) those options and warrants of the Company issued prior to, and outstanding
      on, the date hereof as set forth on Schedule 2.7(d) attached hereto, (ii) the
      shares of Common Stock issuable on exercise of such options and warrants,
      provided such options and warrants are not amended after the date hereof, and
      (iii) the shares of Common Stock issuable upon conversion or exercise of the
      Debentures or Warrants issued pursuant to the Purchase Agreement ,as amended,
      or
      issued in connection with the Standby Equity Distribution Agreement, dated
      as of
      October 12, 2006, by and between the Company and Cornell Capital Partners,
      L.P.

    

    2.8 Registration
      Rights.
      The
      Holder shall have the registration rights in the Investor Registration Rights
      Agreement as amended and restated.

    

    ARTICLE
      3. MISCELLANEOUS

    

    3.1 Transfer.
      This
      Warrant may not be offered, sold, transferred, pledged, assigned, hypothecated
      or otherwise disposed of, in whole or in part, at any time, except in compliance
      with applicable federal and state securities laws by the transferor and the
      transferee (including, without limitation, the delivery of an investment
      representation letter and, if requested by the Company, a legal opinion
      reasonably satisfactory to the Company).

    

    3.2
       Transfer
      Procedure.
      Subject
      to the provisions of Section 3.1, the Holder may transfer or assign this Warrant
      by giving the Company notice setting forth the name, address and taxpayer
      identification number of the transferee or assignee, if applicable (the
“Transferee”), and surrendering this Warrant to the Company for reissuance to
      the Transferee and, in the event of a transfer or assignment of this Warrant
      in
      part, the Holder. (Each of the persons or entities in whose name any such new
      Warrant issued are herein referred to as a ‘Holder”).

     

    3.2  Loss,
      Theft, Destruction or Mutilation.
      If this
      Warrant shall mutilated or defaced or be destroyed, lost or stolen, the Company
      shall execute deliver a new Warrant in exchange for and upon surrender and
      cancellation mutilated or defaced Warrant or, in lieu of and in substitution
      for
      such Warrant destroyed, lost or stolen, upon the Holder filing with the Company
      an affidavit that Warrant has been so mutilated, defaced, destroyed, lost or
      stolen. However, Company shall be entitled, as a condition to the execution
      and
      delivery of such Warrant, to demand reasonably acceptable indemnity to it and
      payment of the expenses and charges incurred in connection with the delivery
      of
      such new Warrant. Any so surrendered to the Company shall be
      canceled.

     

    3.3  Notices.
      All
      notices and other communications from the Company Holder or vice versa shall
      be
      deemed delivered and effective when given personally, facsimile transmission
      with confirmation sheet at such address and/or facsimile as may have been
      furnished to the Company or the Holder, as the case may be, in by the Company
      or
      the Holder from time to time.

     

    3.4  Waiver.
      This
      Warrant and any term hereof may be changed, waived, terminated only by an
      instrument in writing signed by the party against enforcement of such change,
      waiver, discharge or termination is sought.

     

    3.5  Governing
      Law.
      This
      Warrant shall be governed by and construed accordance with the laws of the
      State
      of New York, without giving effect to its principles regarding conflicts of
      law.
      Any action to enforce the terms of this Warrant exclusively heard in the county,
      state and federal Courts of New York and Country United States of
      America.

     

    3.6  Signature.
      In the
      event that any signature on this Warrant is delivered facsimile transmission,
      such signature shall create a valid and binding obligation party executing
      (or
      on whose behalf such signature is executed) the same, with the force and effect
      as if such facsimile signature page were an original thereof.

     

    3.7  Legal
      Fees.
      In the
      event any Person commences a legal action proceeding to enforce its rights
      under
      this Warrant, the non-prevailing party action or proceeding shall pay all
      reasonable and necessary costs and expenses (including reasonable and necessary
      attorney’s fees) incurred in enforcing such rights. 

     

     

    Dated:
      August 30, 2006

     

    ULURU
      INC.

     

    By: 
      /s/
      Kerry P. Gray 

    Name: Kerry
      P.
      Gray

    Title: President
      & CEO

    

    Attest: 
      /s/
      Daniel G. Moro 

    Name: Daniel
      G.
      Moro

    Title: Vice
      President, Development

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    APPENDIX
      I

     

     

    NOTICE
      OF EXERCISE

     

     

    
      	
              1.

            	
              The
                undersigned hereby elects (please check the appropriate box and fill
                in
                the blank spaces):

            

    

     

    £ to
      purchase ______ shares of Common Stock, $.001 par value per share, of Uluru
      Inc.
      at $.01 per share for a total of $______ and pursuant to the terms of the
      attached Warrant, and tenders herewith payment of the aggregate Exercise Price
      of such Warrant Shares in full; or

    

    £ to
      purchase _______ shares of Common Stock, $.001 par value per share, of Uluru
      Inc. pursuant to the cashless exercise provision under Section 2.2 (b) of the
      attached Warrant, and tenders herewith the number of Warrant Shares to purchase
      such Warrant Shares based upon the formula set forth in Section 2.2
      (b).

     

    
      	
              2.

            	
              Please
                issue a certificate or certificates representing said Warrant Shares
                in
                the name of the undersigned or in such other name as is specified
                below:

            

    

     

    
      	
               

              Dated:
                

               

            	
               

              By:

               

            
	 	 
	 	
               

              Name:

               

            
	 	 
	
               

              Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}]]