Document:

timothyconnorsempagreement.htm

    Exhibit 10.16

     

    Executive Employment
Agreement

     

    
    

    1.    
Employment. 
Prestige
Brands Holdings, Inc. (“Employer”) agrees to employ Timothy Connors
(“Executive”) and Executive accepts such employment for the period beginning as
of April 19, 2010 and ending upon his separation pursuant to Section 1(c) hereof
(the “Employment
Period”) subject only to the approval of the Prestige Brands Holdings,
Inc. Board of Directors.

     

    (a) Position and
Duties.

     

    (i)    
During
the Employment Period, Executive shall serve as Chief Marketing Officer of
Employer and shall have the normal duties, responsibilities and authority
implied by such position, subject to the power of the Chief Executive Officer of
Employer and the Board to expand or limit such duties, responsibilities and
authority and to override such actions.

     

    (ii)    
Executive
shall report to the Chief Executive Officer of Employer, and Executive shall
devote his best efforts and his full business time and attention to the business
and affairs of Employer and its Subsidiaries (as defined below).

     

    (b) Salary, Bonus and
Benefits.  During the Employment Period, Employer will pay
Executive a base salary of $300,000 per annum (the “Annual Base Salary”),
paid twice monthly, in accordance with Employer’s normal payroll cycle and
procedures. In addition, in fiscal years 2012 and beyond, the Executive shall be
eligible for and participate in the Annual Incentive Compensation Plan (the
“Annual Bonus”) under which the Executive shall be eligible for an annual Target
Bonus payment of 50% of Annual Base Salary. During FY 2011 only, Executive shall
receive as a “Guaranteed Bonus” a one time payment of $142,500 ($150,000
adjusted as 95% pro rata) upon the earlier of (i) the purchase or sale of
Executive’s permanent residence, or (ii) May 10, 2011. Also, during FY2011, if
corporate performance exceeds 100% of Target, and if employed by Employer on
March 31, 2011, Executive shall receive an additional pro rata payment
representing Executive’s participation in that upside (only), such payment to be
made when and to the extent authorized by the Board of Directors of Employer
(the “Board”). Executive shall be eligible to participate in the Long-Term
Equity Incentive Plan of Employer (the “Plan”) and all equity grants thereunder
shall automatically vest upon a Change in Control (as defined in the Plan). On
the first day of your employment Executive will receive options to purchase
100,000 shares of Common Stock of Employer at the closing price of such Common
Stock on the New York Stock Exchange on that date. This option, which shall have
a term of ten (10) years from the date of grant, shall vest in three equal
installments over a three year period. During the Employment Period, Executive
will be entitled to such other benefits approved by the Board and made available
to the senior management of Employer and its Subsidiaries, which shall include
vacation time (four weeks per year), flexible spending account, 401(k) Plan
(currently 65% match of up to 6% of salary, subject to IRS cap and periodic

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    potential
adjustment by the Board) as well as medical, dental, vision, life, long term
care and disability insurance.  The Board, on a basis consistent with
past practice, shall review the Annual Base Salary of Executive and may increase
the Annual Base Salary by such amount as the Board, in its sole discretion,
shall deem appropriate.  The term “Annual Base Salary” as used in this
Agreement shall refer to the Annual Base Salary as it may be so
increased.

     

    (c) Separation.  The
Employment Period will continue until (i) Executive’s death, disability or
resignation from employment with Employer and its Subsidiaries or (ii) Employer
and its Subsidiaries decide to terminate Executive’s employment with or without
Cause (as defined below).  If (A) Executive’s employment is terminated
without Cause pursuant to clause (ii) above or (B) Executive resigns from
employment with Employer and its Subsidiaries for Good Reason, then, subject to
Executive’s execution and delivery of a Release, starting on the sixtieth
(60th) day
following Executive’s termination of employment, Employer shall pay to
Executive, in equal installments ratably over twelve (12) months in accordance
with the Company’s normal payroll cycle and procedures, an aggregate amount
equal to (I) his Annual Base Salary, plus (II) an amount equal to the average
Annual Bonus paid or payable to Executive by Employer for the last three
completed fiscal years prior to the date of termination. In the event that
Executive shall have been employed less than three years, the average shall be
calculated for the number of years actually employed. In addition, if Executive
is entitled on the date of termination to coverage under the medical and
prescription portions of the Welfare Plans, such coverage shall continue for
Executive and Executive’s covered dependents for a period ending on the first
anniversary of the date of termination at the active employee cost payable by
Executive with respect to those costs paid by Executive prior to the date of
termination; provided, that this
coverage will count towards the depletion of any continued health care coverage
rights that Executive and Executive’s dependents may have pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”); provided further,
that Executive’s or Executive’s covered dependents’ rights to continued health
care coverage pursuant to this Section 1(c) shall terminate at the time Executive or Executive’s
covered dependents become covered, as described in COBRA, under another group
health plan, and shall also terminate as of the date Employer ceases to provide
coverage to its senior executives generally under any such Welfare
Plan.  Notwithstanding the foregoing, (I) Executive shall not be
entitled to receive any payments or benefits pursuant to this Section 1(c) unless Executive has executed and delivered to
Employer a general release in form and substance satisfactory to Employer and
(II) Executive shall be entitled to receive such payments and benefits only so
long as Executive has not breached the provisions of Section 2 or Section 3
hereof.  The release described in the foregoing sentence shall not
require Executive to release any claims for any vested employee benefits,
workers compensation benefits covered by insurance or self-insurance, claims to
indemnification to which Executive may be entitled under Employer’s or its
Subsidiaries’ certificate(s) of incorporation, by-laws, any indemnification
agreement or under any of Employer’s or its Subsidiaries’ directors or officers

     

    
      
        
        

      

      
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insurance
policy(ies) or applicable law, or equity claims to contribution from Employer or
its Subsidiaries or any other Person to which Executive is entitled as a matter
of law in respect of any claim made against Executive for an alleged act or
omission in Executive’s official capacity and within the scope of Executive’s
duties as an officer, director or employee of Employer or its Subsidiaries. Not
later than eighteen (18) months following the termination of Executive’s
employment, Employer and its Subsidiaries for which the Executive has acted in
the capacity of a senior manager, shall sign and deliver to Executive a release
of claims that Employer  and its Subsidiaries have against Executive;
provided that,
such release shall not release any claims that Employer and/or its Subsidiaries
commenced prior to the date of the release(s), any claims relating to matters
actively concealed by Executive, any claims to contribution from Executive to
which Employer or its Subsidiaries are entitled as a matter of law or any claims
arising out of mistaken indemnification by Employer and/or any of its
Subsidiaries.  Except as otherwise provided in this Section 1(c) or in
the Employer’s employee benefit plans or as otherwise required by applicable
law, Executive shall not be entitled to any other salary, compensation or
benefits after termination of Executive’s employment with
Employer.

    

     

    (d) Relocation Expense.
You will be paid $125,000 in a lump sum as a moving allowance and in lieu of any
and all other moving expense reimbursement. In addition, you will be reimbursed
for up to three months of reasonable temporary or interim housing. Relocation
expense shall be subject to 100% recoupment by the Employer in the event of a
voluntary separation by Executive during the first 12 months of employment.
Relocation expense shall be subject to 50% recoupment by the Employer in the
event of a voluntary separation by Executive after the first 12 months but
during the first 24 months of employment.

     

    (e) Recoupment of FY2011
Guaranteed Bonus. In the event of a voluntary separation by Executive
during the first 12 months of employment, the Guaranteed Bonus shall be subject
to recoupment by the Employer where the recoupment shall be 1/12 of the
Guaranteed Bonus for each month less than 12 full months of employment from
April 19, 2010.

     

    2.         
Confidential
Information.

     

    (a) Obligation to Maintain
Confidentiality.  Executive acknowledges that the information,
observations and data (including trade secrets) obtained by him during the
course of his performance under this Agreement concerning the business or
affairs of Employer, its Subsidiaries and Affiliates (“Confidential
Information”) are the property of Employer, its Subsidiaries and
Affiliates, as applicable, including information concerning acquisition
opportunities in or reasonably related to Employer’s, its Subsidiaries’ and/or
Affiliates’ business or industry of which Executive becomes aware during the
Employment Period. Therefore, Executive agrees that he will not disclose to any
unauthorized Person or use for his own account (for his commercial advantage or
otherwise) any 

     

    
      
        
        

      

      
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    Confidential
Information without the Board’s written consent, unless and to the extent that
the Confidential Information, (i) becomes generally known to and available for
use by the public other than as a result of Executive’s acts or omissions to
act, (ii) was known to Executive prior to Executive’s employment with Employer
or any of its Subsidiaries or Affiliates or (iii) is required to be disclosed
pursuant to any applicable law, court order or other governmental
decree.  Executive shall deliver to Employer on the date of
termination, or at any other time Employer may request, all memoranda, notes,
plans, records, reports, computer tapes, printouts and software and other
documents and data (and copies thereof) relating to the Confidential
Information, Work Product (as defined below) or the business of the Employer,
its Subsidiaries and Affiliates (including, without limitation, all acquisition
prospects, lists and contact information) which he may then possess or have
under his control.

     

    (b) Ownership of
Property.  Executive acknowledges that all discoveries,
concepts, ideas, inventions, innovations, improvements, developments, methods,
processes, programs, designs, analyses, drawings, reports, patent applications,
copyrightable work and mask work (whether or not including any Confidential
Information) and all registrations or applications related thereto, all other
proprietary information and all similar or related information (whether or not
patentable) that relate to Employer’s, its Subsidiaries’ and/or Affiliates’
actual or anticipated business, research and development, or existing or future
products or services and that are conceived, developed, contributed to, made, or
reduced to practice by Executive (either solely or jointly with others) while
employed by the Employer, its Subsidiaries and/or Affiliates (including any of
the foregoing that constitutes any proprietary information or records) (“Work Product”) belong
to the Employer or such Subsidiary or Affiliate and Executive hereby assigns,
and agrees to assign, all of the above Work Product to Employer or to such
Subsidiary or Affiliate.  Any copyrightable work prepared in whole or
in part by Executive in the course of his work for any of the foregoing entities
shall be deemed a “work made for hire” under the copyright laws, and Employer or
such Subsidiary or Affiliate shall own all rights therein.  To the
extent that any such copyrightable work is not a “work made for hire,” Executive
hereby assigns and agrees to assign to Employer or such Subsidiary or Affiliate
all right, title, and interest, including without limitation, copyright in and
to such copyrightable work.  Executive shall promptly disclose such
Work Product and copyrightable work to the Board and perform all actions
reasonably requested by the Board (whether during or after the Employment
Period) to establish and confirm the Employer’s or such Subsidiary’s or
Affiliate’s ownership (including, without limitation, assignments, consents,
powers of attorney, and other instruments).

     

    (c) Third Party Information.
Executive understands that Employer, its Subsidiaries and Affiliates will
receive from third parties confidential or proprietary information (“Third Party
Information”), subject to a duty on Employer’s, its Subsidiaries’ and
Affiliates’ part to maintain the confidentiality of such information and to use
it only for certain limited purposes.  During the Employment Period
and thereafter, and without in any way limiting the provisions 

     

    
      
        
        

      

      
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    of Section 2(a) above, Executive will hold Third Party Information
in the strictest confidence and will not disclose to anyone (other than
personnel and consultants of Employer, its Subsidiaries and Affiliates who need
to know such information in connection with their work for Employer or any of
its Subsidiaries and Affiliates) or use, except in connection with his work for
Employer or any of its Subsidiaries and Affiliates, Third Party Information
unless expressly authorized by a member of the Board (other than himself if
Executive is on the Board) in writing.

     

    (d) Use of
Information of Prior Employers.  During the Employment
Period and thereafter, Executive will not improperly use or disclose any
confidential information or trade secrets, if any, of any former employers or
any other Person to whom Executive has an obligation of confidentiality, and
will not bring onto the premises of Employer or any of its Subsidiaries or
Affiliates any unpublished documents or any property belonging to any former
employer or any other Person to whom Executive has an obligation of
confidentiality unless consented to in writing by the former employer or
Person.  Executive will use in the performance of his duties only
information which is (i) generally known and used by persons with training and
experience comparable to Executive’s and which is (x) common knowledge in the
industry or (y) otherwise legally in the public domain, (ii) otherwise provided
or developed by Employer or any of its Subsidiaries or Affiliates or (iii) in
the case of materials, property or information belonging to any former employer
or other Person to whom Executive has an obligation of confidentiality, approved
for such use in writing by such former employer or Person.

     

    3.           Non-competition and No
Solicitation.  Executive
acknowledges that (i) the course of his employment with Employer he will become
familiar with Employer’s, its Subsidiaries’ and Affiliates’ trade secrets and
with other confidential information concerning the Employer, its Subsidiaries
and Affiliates; and (ii) his services will be of special, unique and
extraordinary value to Employer and such Subsidiaries.  Therefore,
Executive agrees that:

     

    (a) Non-competition.  During
the Employment Period and also during the period commencing on the date of
termination of the Employment Period and ending on the first anniversary of the
date of termination (the “Severance Period”), he shall not without the express
written consent of Employer, anywhere in the United States, directly or
indirectly, own, manage, control, participate in, consult with, render services
for, or in any manner engage in any business (i) which competes with (a) OTC
wart or skin tag treatment products (including, without limitation, salicylic
acid or cryogen-based products), (b) dental devices for treatment or management
of bruxism, (c) OTC sore throat treatment products (including, without
limitation, liquids, lozenges and strips), (d) inter-proximal devices, (e)
powdered and liquid cleansers, (f) pediatric OTC medicinal and non-medicinal
products, (g) OTC eye care products, or (h) any other business acquired by
Employer and its Subsidiaries after the date hereof which represents 5% or more
of the consolidated revenues or EBITDA of Employer and its Subsidiaries

     

    
      
        
        

      

      
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    for the
trailing 12 months ending on the last day of the last completed calendar month
immediately preceding the date of termination of the Employment Period, or (ii)
in which Employer and/or its Subsidiaries have conducted discussions or have
requested and received information relating to the acquisition of such business
by such Person (x) within one year prior to the date of termination and (y)
during the Severance Period, if any.  Nothing herein shall prohibit
Executive from being a passive owner of not more than 2% of the outstanding
stock of any class of a corporation that is publicly traded, so long as
Executive has no active participation in the business of such
corporation

     

    (b) No
solicitation.  During the Employment Period and also
during the Severance Period, Executive shall not directly or indirectly through
another entity (i) induce or attempt to induce any employee of Employer or its
Subsidiaries to leave the employ of Employer or its Subsidiaries, or in any way
interfere with the relationship between Employer or its Subsidiaries and any
employee thereof, (ii) hire any person who was an employee of Employer or its
Subsidiaries within 180 days after such person ceased to be an employee of
Employer or its Subsidiaries; provided, however, that such
restriction shall not apply for a particular employee if Employer or its
Subsidiaries have provided written consent to such hire, which consent, in the
case of any person who was not a key employee of Employer or its Subsidiaries
shall not be unreasonably withheld, (iii) induce or attempt to induce any
customer, supplier, licensee or other business relation of Employer or its
Subsidiaries to cease doing business with Employer or its Subsidiaries or in any
way interfere with the relationship between any such customer, supplier,
licensee or business relation and Employer or its Subsidiaries or (iv) directly
or indirectly acquire or attempt to acquire an interest in any business relating
to the business of Employer or its Subsidiaries and with which Employer or its
Subsidiaries have conducted discussions or have requested and received
information relating to the acquisition of such business by Employer or its
Subsidiaries in the two year period immediately preceding the date of
termination.

     

    (c) Enforcement.  If,
at the time of enforcement of Section 2 or this
Section 3, a
court holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum duration,
scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum
duration, scope and area permitted by law.  Because Executive’s
services are unique and because Executive has access to Confidential
Information, the parties hereto agree that money damages would be an inadequate
remedy for any breach of this Agreement.  Therefore, in the event of a
breach or threatened breach of this Agreement, Employer, its Subsidiaries or
their successors or assigns may, in addition to other rights and remedies
existing in their favor, apply to any court of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce, or
prevent any violations of, the provisions hereof (without posting a bond or
other security).

     

    
      
        
        

      

      
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    (d) Additional
Acknowledgments.  Executive acknowledges that the provisions of
this Section 3
are in consideration of:  (i) employment with the Employer, (ii) the
prospective issuance of securities by Employer pursuant to the Plan and (iii)
additional good and valuable consideration as set forth in this
Agreement.  In addition, Executive agrees and acknowledges that the
restrictions contained in Section 2 and this
Section 3 do
not preclude Executive from earning a livelihood, nor do they unreasonably
impose limitations on Executive’s ability to earn a living.  In
addition, Executive acknowledges (i) that the business of Employer and its
Subsidiaries will be conducted throughout the United States, (ii)
notwithstanding the state of incorporation or principal office of Employer or
any of its Subsidiaries, or any of their respective executives or employees
(including the Executive), it is expected that Employer and its Subsidiaries
will have business activities and have valuable business relationships within
its industry throughout the United States and (iii) as part of his
responsibilities, Executive will be traveling throughout the United States in
furtherance of Employer’s and/or its Subsidiaries’ business and their
relationships.  Executive agrees and acknowledges that the potential
harm to Employer and its Subsidiaries of the non-enforcement of Section 2 and this
Section 3
outweighs any potential harm to Executive of their enforcement by injunction or
otherwise.  Executive acknowledges that he has carefully read this
Agreement and has given careful consideration to the restraints imposed upon
Executive by this Agreement, and is in full accord as to their necessity for the
reasonable and proper protection of confidential and proprietary information of
Employer and its Subsidiaries now existing or to be developed in the
future.  Executive expressly acknowledges and agrees that each and
every restraint imposed by this Agreement is reasonable with respect to subject
matter, time period and geographical area.

     

    4.          
Miscellaneous.  

    

    (a)           Survival.  The
provisions of Sections 1(c), 2, 3 and 4 shall survive the termination of this
Agreement.

    

    (b)           Entire Agreement and
Merger.  This Agreement sets forth the entire understanding of
the parties and merges and supersedes any prior or contemporaneous agreements,
whether written or oral, between the parties pertaining to the subject matter
hereof.

    

    (c)           Modification.  This
Agreement may not be modified or terminated orally, and no modification or
waiver of any of the provisions hereof shall be binding unless in writing and
signed by the party against whom the same is sought to be enforced.

    

    (d)           Waiver.  Failure
of a party to enforce one or more of the provisions of this Agreement or to
require at any time performance of any of the obligations hereof shall not be
construed to be a waiver of such provisions by such party nor to in any way
affect the validity of this Agreement or such party's right thereafter

     

    
      
        
        

      

      
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    to
enforce any provision of this Agreement, nor to preclude such party from taking
any other action at any time which it would legally be entitled to
take.

    

    (e)           Successors and
Assigns.  Neither party shall have the right to assign this
Agreement, or any rights or obligations hereunder, without the consent of the
other party; provided, however, that upon the sale of all or substantially all
of the assets, business and goodwill of Employer to another company, or upon the
merger or consolidation of Employer with another company, this Agreement shall
inure to the benefit of, and be binding upon, both Executive and the company
purchasing such assets, business and goodwill, or surviving such merger or
consolidation, as the case may be, in the same manner and to the same extent as
though such other company were Employer; and provided, further, that Employer
shall have the right to assign this Agreement to any Affiliate or Subsidiary of
Employer.  Subject to the foregoing, this Agreement shall inure to the
benefit of, and be binding upon, the parties hereto and their legal
representatives, heirs, successors and permitted assigns.

    

    (f)           Communications.  All
notices or other communications required or permitted hereunder will be in
writing and will be deemed given or delivered when delivered personally, by
registered or certified mail or by overnight courier (fare prepaid) addressed as
follows:

     

     

    
      	 (i)	 	To
    Employer:	Prestige Brands
      Holdings, Inc.	 
	 	 	 	90
      North Broadway	 
	 	 	 	Irvington,
      New York  10533	 
	 	 	 	Attention:
      Chief Executive Officer	 
	 	 	 	 	 
	 (ii)	 	With a copy
      to:	Prestige Brands
      Holdings, Inc.	 
	 	 	 	90 North
      Broadway	 
	 	 	 	Irvington, New
      York  10533	 
	 	 	 	Attention: Legal
      Department	 
	 	 	 	 	 
	 (iii)	 	To the
      Employee:	Timothy
      Connors	 
	 	 	 	40611 N. Shadow
      Creek Way	 
	 	 	 	Anthem
      AZ 85086	 

    

     

                                                        

    or to
such address as a party hereto may indicate by a notice delivered to the other
party.  Notice will be deemed received the same day when delivered
personally, five (5) days after mailing when sent by registered or certified
mail, and the next business day when delivered by overnight
courier.  Any party hereto may change its address to which all
communications and notices may be sent by addressing notices of such change in
the manner provided.

     

    (g)           Severability.  If
any provision of this Agreement is held to be invalid or unenforceable by a
court of competent jurisdiction, such invalidity or

     

    
      
        
        

      

      
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    unenforceability
shall not affect the validity and enforceability of the other provisions of this
Agreement and the provision held to be invalid or unenforceable shall be
enforced as nearly as possible according to its original terms and intent to
eliminate such invalidity or unenforceability.

    

    (h)           Governing
Law.  This Agreement will be governed by, construed and
enforced in accordance with the laws of the State of New York, without giving
effect to its conflicts of law provisions.

    

    (i)           Arbitration.  (a)
Except as provided in subsection (b) of this Section 4(i), the following
provisions shall apply to disputes between Employer and Executive arising out of
or related to either: (i) this Agreement (including any claim that any part of
this Agreement is invalid, illegal or otherwise void or voidable), or (ii) the
employment relationship that exists between Employer and Executive:

    

    
      	 	
              (i)  

            	
              The
      parties shall first use their reasonable best efforts to discuss and
      negotiate a resolution of the
dispute.

            

    

    

    
      	 	
              (ii)  

            	
              If
      efforts to negotiate a resolution do not succeed within 5 business days
      after a written request for negotiation has been made, the dispute shall
      be resolved timely and exclusively by final and binding arbitration in New
      York County or Westchester County, New York pursuant to the American
      Arbitration Association (“AAA”) National Rules for the Resolution of
      Employment Disputes (the “AAA Rules”).  Arbitration must be
      demanded within ten (10) calendar days after the expiration of the five
      (5) day period referred to above.  The arbitration opinion and
      award shall be final and binding on the Employer and the Executive and
      shall be enforceable by any court sitting within New York County or
      Westchester County, New York.  Employer and Executive shall
      share equally all costs of arbitration excepting their own attorney’s fees
      unless and to the extent ordered by the arbitrator(s) to pay the
      attorneys’ fees of the prevailing
party.

            

    

    

    
      	 	
              (iii)  

            	
              The
      parties recognize that this Section 4(i) means that certain claims will be
      reviewed and decided only before an impartial arbitrator or panel of
      arbitrators instead of before a court of law and/or a jury, but desire the
      many benefits of the arbitration process over court proceedings, including
      speed of resolution, lower costs and fees, and more flexible rules of
      evidence.  The arbitration or arbitrators duly selected pursuant
      to the AAA’s Rules shall have the same power and authority to order any
      remedy for violation of a statute, regulation, or ordinance as a court
      would have; and shall have the same power to order discovery as a federal
      district court has under the Federal Rules of Civil
    Procedure.

            

    

    

    
      
        
        

      

      
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    (b)      
The
provisions of this Section 4(i) shall not apply to any action by the Employer
seeking to enforce its rights arising out of or related to the provisions of
Sections 2 and 3 of this Agreement.

    
    

     

    (c)      
This
Section 4(i) is intended by the Employer and the Executive to be enforceable
under the Federal Arbitration Act (“FAA”).  Should it be determined by
any court that the FAA does not apply, then this Section 4(i) shall be
enforceable under the applicable arbitration statutes of the State of
Delaware.

     

    (j)           No Third-Party
Beneficiaries.  Each of the provisions of this Agreement is for
the sole and exclusive benefit of the parties hereto and shall not be deemed for
the benefit of any other person or entity.

    

    (k)           Section 409A of the Internal
Revenue Code.  (a) Notwithstanding any provisions of this Agreement
to the contrary, if the Executive is considered a Specified Executive (as
defined below) at termination of employment other than on account of death or
Disability, under such procedures as established by the Employer in accordance
with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
benefit distributions, other than those that are deemed “separation pay” under
the Treas. Reg. §1.409A-1(b)(9), that are made upon termination of employment
may not commence earlier than six (6) months after the date of
termination.  Therefore, in the event this provision is applicable to
the Executive, any distribution which would otherwise be paid to the Executive
within the first six months following termination shall be accumulated and paid
to the Executive in a lump sum on the first day of the seventh month following
termination.  All subsequent distributions shall be paid in the manner
specified.  “Specified Executive” means a key employee (as defined in
Section 416(i) of the Code without regard to paragraph 5 thereof) of the
Employer if any stock of the Employer is publicly traded on an established
securities market or otherwise.

    

    (b) With
respect to the payment of all benefits under the Agreement, including separation
pay and deferred compensation, whether a “termination of employment” takes place
is determined based on the facts and circumstances surrounding the termination
of the Executive’s employment and whether the Employer and the Executive
intended for the Executive to provide significant services for the Employer
following such termination.  A change in the Executive’s employment
status will not be considered a termination of employment if:

    

    
      	 	
              (i)  

            	
              the
      Executive continues to provide services as an employee of the Employer at
      an annual rate that is twenty percent (20%) or more of the services
      rendered, on average, during the immediately preceding three full calendar
      years of employment (or, if employed less than three years, such
      

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	 	 	lesser period) and
      the annual remuneration for such services is twenty percent (20%) or more
      of the average annual remuneration earned during the final three full
      calendar years of employment (or, if less, such lesser period),
    or

    

     

    
      	 	
              (ii)  

            	
              the
      Executive continues to provide services to the Employer in a capacity
      other than as an employee of the Employer at an annual rate that is fifty
      percent (50%) or more of the services rendered, on average, during the
      immediately preceding three full calendar years of employment (or if
      employed less than three years, such lesser period) and the annual
      remuneration for such services is fifty percent (50%) or more of the
      average annual remuneration earned during the final three full calendar
      years of employment (or if less, such lesser
  period).

            

    

    

    For
purposes of applying the provisions of Section 409A of the Code, a reference to
the Employer shall also be deemed a reference to any affiliate thereof within
the contemplation of Sections 414(b) and 414(c) of the Code.  For
purposes of this Agreement, the definition of “termination of employment” shall
apply to all uses of such term, whether capitalized or not.

     

    (l)           Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which together will constitute one and the same
instrument.

     

    [Remainder
of page intentionally left blank]

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first written above.

     

    
      
        	 	PRESTIGE
      BRANDS HOLDINGS, INC.	 
	 	 	 	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Matthew
      M. Mannelly	 
	 	 	Name:
      Matthew M. Mannelly	 
	 	 	Title:
      Chief Executive Officer	 
	 	 	 	 
	 	By:	/s/
      Timothy Connors 	 
	 	 	Name:
      Timothy Connors	 
	 	 	 	 

      

    

    

    

                                                            

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    DEFINITIONS

     

    “Affiliate”
means, with respect to any Person, any other Person who directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such Person.  The term “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and the terms
“controlled” and “controlling” have meanings correlative thereto.

     

    “Cause”
is defined as (i) your  willful and continued failure to substantially
perform your duties with Employer (other than any such failure resulting from
your incapacity due to physical or mental illness) that has not been cured
within  10 days after a written demand for substantial performance is
delivered to you by the Board, which demand specifically identifies the manner
in which the Board believes that you have not substantially performed your
duties, (ii) the willful engaging by you in conduct which is demonstrably and
materially injurious to Employer or its Affiliates, monetarily or otherwise,
(iii) your conviction (or plea of nolo contendere) for any felony or any other
crime involving dishonesty, fraud or moral turpitude, (iv) your breach of
fiduciary duty to Employer or its Affiliates, (v) any violation of Employer's
policies relating to compliance with applicable laws which have a material
adverse effect on Employer or its Affiliates or (vi) your breach of any
restrictive covenant.  For purposes of clauses (i) and (ii) of this
definition, no act, or failure to act, on your part shall be deemed "willful"
unless done, or omitted to be done, by you not in good faith and without
reasonable belief that your act, or failure to act, was in the best interest
of  Employer.

    

    “Disability”
means the Executive: (i) is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months; or (ii) is, by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than twelve (12) months, receiving income replacement benefits for a period of
not less than three (3) months under an accident and health plan covering
employees or directors of the Employer.  Medical determination of
Disability may be made by either the Social Security Administration or by the
provider of an accident or health plan covering employees or directors of the
Employer provided that the definition of “disability” applied under such
disability insurance program complies with the requirements of the preceding
sentence.  Upon the request of the plan administrator, the Executive
must submit proof to the plan administrator of the Social Security
Administration’s or the provider’s determination.  For purposes of
this Agreement the definition of “Disability” shall apply to all uses of such
term, whether capitalized or not.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Good
Reason” means that the Executive terminated his employment with the Employer
because, within the twelve (12) month period preceding the Executive’s
termination, one or more of the following conditions arose and the Executive
notified the Employer of such condition within 90 days of its occurrence and the
Employer did not remedy such condition within 30 days:

    

    
      	
               
      

            	
              (i)

            	
              a
      material diminution in the Executive’s base salary as in effect on the
      date hereof or as the same may be increased from time to
    time;

            

    

    

    
      	 	
              (ii)  

            	
              a
      material diminution in the Executive’s authority, duties, or
      responsibilities;

            

    

    

    
      	 	
              (iii)  

            	
              the
      relocation of the Employer’s headquarters outside a thirty-mile radius of
      Irvington, New York or the Employer’s requiring the Executive to be based
      at any place other than a location within a thirty-mile radius of
      Irvington, New York, except for reasonably required travel on the
      Employer’s business; or

            

    

    

    
      	 	
              (iv)  

            	
              any
      other action or inaction that constitutes a material breach by the
      Employer of this Agreement.

            

    

     

    “Person”
means any person or entity, whether an individual, trustee, corporation, limited
liability company, partnership, trust, unincorporated organization, business
association, firm, joint venture, governmental authority or similar
entity.

     

    “Subsidiary”
of any specified Person shall mean any corporation fifty percent (50%) or more
of the outstanding capital stock of which, or any partnership, joint venture,
limited liability company or other entity fifty percent (50%) or more of the
ownership interests of which, is directly or indirectly owned or controlled by
such specified Person, or any such corporation, partnership, joint venture,
limited liability company, or other entity which may otherwise be controlled,
directly or indirectly, by such Person.ex41.htm

Exhibit 4.1

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THESE SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

	
Original Issue Date: June 7, 2010     

	
$100,000

16% DEBENTURE

DUE September 30,  2010

THIS DEBENTURE of YouBlast Global, Inc., a Delaware corporation, having a principal place of business at 81 Greene St., 4th floor, New York, NY 10012 (the “Company”), designated as its 16% Debenture, due September 30, 2010 (the “Debenture”).

FOR VALUE RECEIVED, the Company promises to pay to John Thomas Bridge & Opportunity Fund, L.P. or its registered assigns (the “Holder”), the principal sum of up to $250,000, such amount to be advanced by Holder in multiple tranches as follows: (i) $100,000 on the Closing Date (as defined in the Securities Purchase Agreement) and (ii) $150,000 on or before June 30, 2010, together with accrued but unpaid interest upon the earlier of (A) September 30, 2010, unless such date is extended pursuant to Section 10 hereof, or (B) upon the New Financing Date, as defined in Section 11 (the “Maturity Date”), and to pay accrued interest to the Holder upon the Maturity Date on the outstanding principal amount of this Debenture at the rate of 16% per annum, payable in cash.

This Debenture is subject to the terms and conditions set forth in the Securuties Purchase Agreement, as well as to the following additional provisions:

Section 1.                      This Debenture is exchangeable for an equal aggregate principal amount of Debentures of different authorized denominations, as requested by the Holder surrendering the same.  No service charge will be made for such registration of transfer or exchange.

Section 2.                        This Debenture may be transferred or exchanged only in compliance with the applicable federal and state securities laws and regulations.  Prior to due presentment to the Company for transfer of this Debenture, the Company and any agent of the Company may treat the Person in whose name this Debenture is duly registered on the Debenture register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Debenture is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

 

  

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Section 3.                      Events of Default.

(a)           “Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

 

(i)            any default in the payment of the principal amount of this Debenture when the same shall become due and payable, either at Maturity or by acceleration or otherwise; or

 

(ii)           default shall be made in the payment of interest on this Debenture when the same becomes due and payable and the default continues for a period of five (5)  business days; or

(iii)           any representation or warranty made by the Company in this Debenture, any of the other Transaction Documents, or the May Purchase Agreement, was incorrect in any material respect on or as of the date made; or

(iv)           the Company shall fail to observe or perform any other covenant or agreement contained in this Debenture, any of the other Transaction Documents, or the May Purchase Agreement, which failure is not cured, if possible to cure, within 10 calendar days after written notice of such default is sent by the Holder or by any other holder to the Company; or

(v)           the Company shall commence, or there shall be commenced against the Company a case under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Company  commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Company or there is commenced against the Company any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of 60 days; or the Company is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or the Company  suffers any appointment of any custodian or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of 60 days; or the Company makes a general assignment for the benefit of creditors; or the Company shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; or the Company; or any corporate or other action is taken by the Company or any subsidiary thereof for the purpose of effecting any of the foregoing; or

 

  

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(vi) default shall occur with respect to any indebtedness for borrowed money of the Company or under any agreement to which the Company is a party and such default shall exceed $175,000; or

 

(vii) default with respect to any contractual obligation of the Company under or pursuant to any contract, lease, or other agreement to which the Company is a party and such default shall continue for more than the period of grace, if any, therein specified, if the aggregate amount of the Company’s contractual liability arising out of such default exceeds or is reasonably estimated to exceed $175,000; or

 

(viii) final judgment for the payment of money in excess of $175,000 shall be rendered against the Company and the same shall remain undischarged for a period of 60 days during which execution shall not be effectively stayed;

(ix) any failure to pay non-executive employee wages; or

(x)  the Company fails to elect to its Board of Directors by June 30, 2010 two director nominees as designated by the Holder (as described in the May Purchase Agreement), provided that Holder designates two director nominees by June 1, 2010.

(b)           If any Event of Default occurs, the full principal amount of this Debenture, together with interest and other amounts owing in respect thereof, to the date of acceleration shall become immediately due and payable in cash; provided, however, that in an Event of Default pursuant to Section 3(i) or 3(ii) above, the Holder shall have the right to convert all or a portion of such principal of the Debenture into shares of Common Stock pursuant to the terms set forth in Section 4 below (and to receive cash on the (i) accrued interest and (ii) principal amount Holder elects not to convert); provided further, that in an Event of Default pursuant to any of the Sections 3(iii) through 3(x) above, the Company shall immediately issue to the Holder one million shares of Common Stock in addition to the acceleration of the Debenture which principal amount of the Debenture, together with interest and other amounts owing in respect thereof, shall become immediately due and payable in cash.  Commencing upon an Event of Default that results in the eventual acceleration of this Debenture, the interest rate on this Debenture shall accrue at the rate of 18% per annum, or such lower maximum amount of interest permitted to be charged under applicable law.  The Holder need not provide and the Company hereby waives any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law.  Such declaration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a Debenture holder until such time, if any, as the full payment under this Section shall have been received by it.  No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

 

  

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Section 4.                      Conversion Upon Event of Default.

(a)           The Holder, if elected pursuant to Section 3(b) above(as a result of a default of 3(b)(i) or (3b)(ii), shall convert all or a portion of the principal of this Debenture into shares of Common Stock, the Holder shall effect such conversion by delivering to the Company a notice of conversion (a “Notice of Default Conversion”), specifying therein the principal amount of the Debenture to be converted and the date on which such conversion is to be effected (a “Default Conversion Date”).

(b)           If the Holder elects to convert all of the principal of this Debenture into shares of Common Stock, then the number of shares of Common Stock issuable upon such conversion shall be an amount of Common Stock equal to the (i) multiple of (A) 20% times (B) Fully Diluted Shares Outstanding at the Default Conversion Date divided by (ii) 80%. If the Holder elects to convert a portion of the principal of this Debenture into shares of Common Stock, then the number of shares of Common Stock issuable upon such conversion shall be determined on a pro rata basis.

 

Section 5. This Debenture is a direct obligation of the Company, and the obligation of the Company to repay this Debenture is absolute and unconditional, but is expressly subordinated to all currently outstanding secured indebtedness of the Company outstanding on the date hereof. The repayment terms hereof reflect the substantial risks Holder is assuming by virtue of such subordination and Holder’s further agreement evidenced hereby that no recourse shall be had for the payment of the principal of, or interest on the Debenture, or for any claim based hereon, or otherwise in respect hereof, against any shareholder, officer or director, as such, past, present or future, of the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the express terms hereof and as part of the consideration for the repayment terms here or hereof, expressly waived and released.

 

Section 6.  Interest on the amount advanced will accrue on this Debenture until the Maturity Date at the rate of sixteen percent (16% per annum), and be payable on the Maturity Date. If any portion of this Debenture is outstanding on the Maturity Date, interest at the rate of eighteen percent (18%) per annum or the highest rate allowed by law, whichever is lower, shall accrue on the outstanding principal of this Debenture from the Maturity Date to and including the date of payment by the Company.  All past due interest shall accrue on a daily basis and shall be payable in cash. The Holder may demand payment of all or any part of this Debenture, together with accrued interest, if any, and any other amounts due hereunder, as of the Maturity Date or any date thereafter.

 

Section 7. No Security Interest Granted.  This Debenture shall be unsecured obligation of the Company.

 

Section 8. Any payment made by the Company to the Holder, on account of this Debenture shall be applied in the following order of priority: (i) first, to any amounts other than principal and accrued interest, if any, hereunder, (ii) second, to accrued interest, if any, through and including the date of payment, and (iv) then, to principal of the Debenture.

 

 

  

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Section 9.  The outstanding principal of the loan evidenced by this Debenture may not be prepaid, except as set forth in Section 12 hereof.

Section 10.  The term “Maturity Date” means the earliest of (i) September 30, 2010, (the “Stated Maturity Date”), (ii) the New Financing Date (as defined below) or (iii) the accelerated Maturity Date applicable in the case of any uncured Event of Default prior to Maturity. The Company has the right to extend on two separate occasions the Stated Maturity Date by three (3) month periods if, on or prior to the Stated Maturity Date (as it may have been extended), the Company shall provide written notice to the Holder of such three-month extension prior to the Stated Maturity Date (as it may have been extended) and pay to Holder $25,000 in consideration for each such extension.

Section 11.  The term “New Financing Date” means the third business day after the date on which the Company closes any equity, equity equivalent, or debt financing (“New Financing”) in which the Company receives gross proceeds of at least One Million Five Hundred Thousand Dollars ($1,500,000) or more or the last of any such equity, equity equivalent, or debt financing which in the aggregate equal gross proceeds of $1,500,000 or more to the Company. All such gross proceeds are determined before deduction of any fees or other expenses or disbursements of any kind in connection with the relevant transaction, offering or placement of securities.

Section 12.  Upon the closing of one or more equity, equity equivalent, or debt financings in which the Company receives gross proceeds of less than One Million Five Hundred Thousand Dollars ($1,500,000) per financing and in the aggregate, the Company shall pay an amount equal to 50% of the proceeds of such financing to reduce the principal amount of this Debenture.

Section 13.  In the event of a Change of Control taking place otherwise than in connection with the New Financing, Holder, at its option, will have the right (a) immediately prior to the Change in Control, to convert the Debenture into securities of the Company of the same class as those held by the persons acquiring control of the Company, or (b) to require the Company, upon the Change in Control, to purchase the Debenture at a purchase price of 125% of the price, plus accrued interest.  The Company shall give Holder 20 days notice prior to the event of a Change of Control.

Section 14.  This Debenture shall be governed by and interpreted in accordance with the laws of the State of Texas for contracts to be wholly performed in such state and without giving effect to the principles thereof regarding the conflict of laws. Each of the parties consents to the exclusive jurisdiction of the state courts of the State of Texas located in Harris County and and the United States District Court for the Southern District of Texas in connection with any dispute arising under this Agreement and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non convenes, to the bringing of any such proceeding in such jurisdictions. To the extent determined by such court, the Company shall reimburse the Holder for any reasonable legal fees and disbursements incurred by the Holder in enforcement of or protection of any of its rights under this Debenture. The Company and the Holder hereby waive a trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other in respect of any matter arising out of or in connection with this Agreement or the Debenture

 

 

  

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Section 15.  The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock solely for the purpose of issuance upon Default Conversion of the Debenture, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder, not less than such number of shares of the Common Stock as shall be issuable upon the conversion of the outstanding principal amount of the Debenture.  The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid and nonassessable.

Section 16.  Upon a Default Conversion hereunder the Company shall not be required to issue stock certificates representing fractions of shares of the Common Stock, but may if otherwise permitted, make a cash payment in respect of any final fraction of a share.  If the Company elects not, or is unable, to make such a cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock.

Section 17.  Issuance of certificates for shares of the Common Stock on Default Conversion of the Debentures shall be made without charge to the Holder thereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate.

Section 18.  Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any notice of conversion, shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, facsimile number (212) 343-8897, Attn: Philmore Anderson, IV or such other address or facsimile number as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section.  Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile telephone number or address of Holder appearing on the books of the Company, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder.  Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:30 p.m. Houston, Texas time), (ii) the date after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:30 p.m. (Houston, Texas time) on any date and earlier than 11:59 p.m. (Texas time) on such date, (iii) the second Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

Section 19. If this Debenture shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution for a lost, stolen or destroyed Debenture, a new Debenture for the principal amount of this Debenture so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the Company.

 

  

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Section 20.  If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances.  If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Debenture as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impeded the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

Section 21.  Definitions.  For the purposes hereof, in addition to the terms defined elsewhere in this Debenture: (a) capitalized terms not otherwise defined herein have the meanings given to such terms in the Securities Purchase Agreement, and (b) the following terms shall have the following meanings:

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

“Change of Control” as used herein shall mean the occurrence of the following events:

(i)           A sale, transfer, or other disposition by the Company through a single transaction or a series of transactions occurring within a 90-day period of securities of the Company representing Beneficial Ownership (as defined below) of fifty (50%) percent or more of the combined voting power of the Company then outstanding securities to any “Unrelated Person” or “Unrelated Persons” acting in concert with one another.  For purposes of this definition, the term “Person” shall mean and include any individual, partnership, joint venture, association, trust corporation, or other entity [including a “group” as referred to in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (“1934 Act”)].  For purposes of this definition, the term “Unrelated Person” shall mean and include any Person other than the Company, a wholly-owned subsidiary of the Company, an existing shareholder, or an employee benefit plan of the Company; provided however, a sale of the Company’s securities in a capital raising transaction shall not be a Change of Control.

(ii)           A sale, transfer, or other disposition through a single transaction or a series of transactions occurring within a 90-day period of all or substantially all of the assets of the Company to an Unrelated Person or Unrelated Persons acting in concert with one another.

(iii)           A change in the ownership of the Company through a single transaction or a series of transactions occurring within a 90-day period such that any Unrelated Person or Unrelated Persons acting in concert with one another become the “Beneficial Owner,” directly or indirectly, of securities of the Company representing at least fifty-one (51%) percent of the combined voting power of the Company then outstanding securities.  For purposes of this Agreement, the term “Beneficial Owner” shall have the same meaning as given to that term in Rule 13d-3 promulgated under the 1934 Act, provided that any pledgee of voting securities is not deemed to be the Beneficial Owner of the securities prior to its acquisition of voting rights with respect to the securities.

 

  

7

  

 

(iv)           Any consolidation or merger of the Company with or into an Unrelated Person, unless immediately after the consolidation or merger the holders of the Common Stock of the Company immediately prior to the consolidation or merger are the beneficial owners of securities of the surviving corporation representing at least fifty-one (51%) percent of the combined voting power of the surviving corporation’s then outstanding securities.

“Fully Diluted Shares Outstanding” means the sum of (i) the shares of Common Stock issued and outstanding and (ii) the maximum number of shares of Common Stock issuable upon exercise or conversion of outstanding Company derivative securities, irrespective if such shares are vested or currently exercisable.

“May Purchase Agreement” means the Purchase Agreement, dated as of March 24, 2010, to which the Company and the original Holder are parties, as amended, modified or supplemented from time to time in accordance with its terms.

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

“Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date hereof, to which the Company and the original Holder are parties, as amended, modified or supplemented from time to time in accordance with its terms, pursuant to which the Company will register the shares of Company common stock to be issued pursuant to the Securities Purchase Agreement.

“Securities Purchase Agreement” means the Securities Purchase Agreement, dated as of the date hereof, to which the Company and the original Holder are parties, as amended, modified or supplemented from time to time in accordance with its terms.

“Transaction Documents” shall mean this Debenture, the Securities Purchase Agreement, the Warrant, and the Registration Rights Agreement.

*********************

 

 

  

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

 

	 	YOUBLAST GLOBAL, INC.	 
	 	 	 	 
	 	
By: 

	/s/ Philmore Anderson IV	 
	 	 	Name: Philmore Anderson IV 

Title:  CEO

	 
	 	 	 	 
	 	 	 	 

 

 

 

9

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