Attached files
Exhibit 10.1
THIS NOTE AND THE SECURITIES INTO WHICH IT IS CONVERTIBLE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED
UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS
OR UNLESS THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL
THAT THE REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT
AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.
Convertible Promissory Demand Note
|
U.S. $___________
No.:
____________
|
Issuance
Date: ________, 2017
Maturity
Date: _________ 2017
|
FOR VALUE RECEIVED, QUANTRX BIOMEDICAL
CORPORATION, a Nevada corporation (the “Company”), hereby
promises to pay to the order of _______________ or any permitted
holder of this Convertible Promissory Demand Note (the
“Payee”), at the principal
office of the Payee set forth herein, or at such other place as the
Payee may designate in writing to the Company, the principal sum of
_____________ ($______), with interest on the unpaid principal
balance hereof at a rate equal to ten percent (10%) per annum
commencing on the date hereof, in such coin or currency of the
United States of America as at the time shall be legal tender for
the payment of public and private debts and in immediately
available funds, as provided in this Convertible Promissory Demand
Note (this “Note”).
1. Mandatory Conversion of Principal and
Interest upon Qualified Financing. Upon the closing by the Company of
an equity or equity based financing or a series of equity
financings following the Issuance Date (a “Qualified Financing”)
resulting in gross proceeds to the Company totaling at least
$1,500,000 (the “Qualified Financing Threshold
Amount”), the outstanding principal amount of this
Note together with all accrued and unpaid interest hereunder (the
“Outstanding
Balance”) shall convert at the sole option of the
Payee, into either 1) such securities, including warrants of the
Company as are issued in the Qualified Financing, the amount of
which shall be determined in accordance with the following formula:
(the Outstanding Balance as of the closing of the Qualified
Financing) x (1.20) / (the per security price of the securities
sold in the Qualified Financing); or 2) that number of shares of
common stock of the Company pursuant to the provisions of Section 2
herein. The principal amount of this Note and of notes of like
tenor issued between the date hereof and the closing of the
Qualified Financing shall not be included in determining the
Qualified Financing Threshold Amount. If the Payee elects to
convert into the Qualified Financing, the Payee shall be deemed to
be a purchaser in the Qualified Financing and shall be granted all
rights afforded to an investor in the Qualified Financing.
Notwithstanding anything to the contrary contained in this Section
1, the Company shall have the right, at the Company’s option,
to pay all or a portion of the accrued and unpaid interest due and
payable to Payee upon such automatic conversion in
cash.
2. Voluntary Conversion of Principal and
Interest. Subject to the terms and conditions of this
Section 2 and provided this Note remains outstanding and has not
been converted pursuant to Section 1, immediately prior to the
Maturity Date and thereafter (as defined below), the Payee shall
have the right, at the Payee’s option, to convert the
Outstanding Balance (the “Conversion Option”) into
such number of fully paid and non-assessable shares of the
Company’s common stock (the “Conversion Shares”) as is
determined in accordance with the following formula: (the
Outstanding Balance as of the date of the exercise of the
Conversion Option) / ($.08). If the Payee desires to exercise the
Conversion Option, the Payee shall, by personal delivery or
nationally-recognized overnight carrier, surrender the original of
this Note and give written notice to the Company (the
“Conversion
Notice”), which Conversion Notice shall (a) state the
Payee’s election to exercise the Conversion Option, and (b)
provide for a representation and warranty of the Payee to the
Company that, as of the date of the Conversion Notice, the Payee
has not assigned or otherwise transferred all or any portion of the
Payee’s rights under this Note to any third parties. The
Company shall, as soon as practicable thereafter, issue and deliver
to the Payee the number of Conversion Shares to which the Payee
shall be entitled upon exercise of the Conversion Option.
Notwithstanding anything to the contrary contained in this Section
2, the Company shall have the right, at the Company’s option,
to pay all or a portion of the accrued and unpaid interest due and
payable to Payee upon Payee’s exercise of the Conversion
Option in cash. In the event the Qualified Financing Threshold
Amount is satisfied and the Payee does not elect to the exchange
the Outstanding Balance into the Qualified Financing as provided
for under Section 1 herein, the Payee shall convert the Outstanding
Balance pursuant to the provisions of this Section 2 in connection
and simultaneous with the Qualified Financing.
3. Principal and Interest
Payments.
(a) In the event a
Qualified Financing is not completed and the Payee has not
exercised the Conversion Option, Company shall repay the entire
principal balance then outstanding under this Note on the later to
occur of September 30th (the
“Maturity
Date”) or upon written demand for payment by the
Payee
(b) Interest on the
outstanding principal balance of this Note shall accrue at a rate
of ten percent (10%) per annum commencing on the date hereof, which
interest shall be computed on the basis of the actual number of
days elapsed and a year of three hundred and sixty-five (365) days.
In the event a Qualified Financing is not completed and the Payee
has not exercised the Conversion Option, all accrued and unpaid
interest due under this Note shall be payable on the Maturity Date
by the Company in cash or shares of common stock. In determining
the number of interest shares due, the Company shall use a share
price calculated by taking the closing price of the Company’s
common stock for the ten trading days prior to the interest payment
date multiplied by eighty five (85%) percent. Furthermore, upon the
occurrence of an Event of Default (as defined below), or following
the Maturity Date the Company will pay interest to the Payee on the
then outstanding principal balance of the Note from such date until
this Note is paid in full at the rate of eighteen percent (18%) per
annum, with interest payable quarterly.
(c) At the
Company’s sole option, the Company may prepay all or a
portion of the outstanding principal amount of this Note and/or all
or a portion of the accrued and unpaid interest hereon in cash at
any time prior to the Maturity Date without penalty or premium. Any
payments made under this Note shall be applied first to the accrued
and unpaid interest, if any, and the remainder to the unpaid
principal amount. Notwithstanding the foregoing, the holder of this
Note shall retain the right to convert this Note, for a period of
ten (10) business days following the Company’s notice of its
intention to prepay this Note.
4. Non-Business Days. Whenever any
payment to be made shall be due on a Saturday, Sunday or a public
holiday under the laws of the State of New York, such payment may
be due on the next succeeding business day and such next succeeding
day shall be included in the calculation of the amount of accrued
interest payable on such date.
5. Representations and Warranties of the
Company. The Company represents and warrants to the Payee as
follows:
(a) The Company has
been duly incorporated and validly exists and is in good standing
under the laws of the State of Nevada, with full corporate power
and authority to own, lease and operate its properties and to
conduct its business as currently conducted.
(b) This Note has been
duly authorized, validly executed and delivered on behalf of the
Company and is a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms,
subject to limitations on enforcement by general principles of
equity and by bankruptcy or other laws affecting the enforcement of
creditors’ rights generally.
(c) The execution,
delivery and performance of this Note will not: (i) conflict with
or result in a material breach of or a default under any of the
terms or provisions of, (A) the Company’s Certificate of
Incorporation or by-laws, or (B) any material provision of any
indenture, mortgage, deed of trust or other material agreement or
instrument to which the Company is a party or by which it or any of
its material properties or assets is bound; (ii) result in a
violation of any material provision of any law, statute, rule,
regulation, or any existing applicable decree, judgment or order by
any court, Federal or state regulatory body, administrative agency,
or other governmental body having jurisdiction over the Company, or
any of its material properties or assets; or (iii) result in the
creation or imposition of any material lien or encumbrance upon any
material property or assets of the Company pursuant to the terms of
any agreement or instrument to which the Company is a party or may
be bound or to which the Company or any of its property is
subject.
(d) No consent,
approval or authorization of or designation, declaration or filing
with any governmental authority on the part of the Company is
required in connection with the valid execution and delivery of
this Note.
6. Events of Default. The
occurrence of any of the following events shall be an
“Event of
Default” under this Note:
(a) the Company shall
fail to make the payment of any principal amount outstanding for a
period of five (5) business days after the date such payment shall
become due and payable hereunder; or
(b) the Company shall
fail to make the payment of any accrued and unpaid interest for a
period of five (5) business days after the date such interest shall
become due and payable hereunder; or
(c) any material breach
by the Company of any representations or warranties made by the
Company herein; or
(d) the holder of any
indebtedness of the Company shall accelerate any payment of any
amount or amounts of principal or interest on any such indebtedness
(the “Indebtedness”) (other
than with respect to this Note and notes of like tenor) prior to
its stated maturity or payment date, the aggregate principal amount
of which Indebtedness is in excess of $250,000, whether such
Indebtedness now exists or shall hereinafter be created, and such
accelerated payment entitles the holder thereof to immediate
payment of such Indebtedness which is due and owing and such
indebtedness has not been discharged in full or such acceleration
has not been stayed, rescinded or annulled within fifteen (15)
business days of such acceleration; or
(e) A judgment or
judgments for the payment of money shall be rendered against the
Company for an amount in excess of $500,000 in the aggregate (net
of any applicable insurance coverage) for all such judgments that
shall remain unpaid for a period of sixty (60) consecutive days or
more after its entry or issue or that shall not be discharged,
released, dismissed, stayed or bonded (due to an appeal or
otherwise) within the sixty (60) consecutive day period after its
entry or issue; or
(f) the Company shall
(i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property or assets,
(ii) make a general assignment for the benefit of its creditors,
(iii) commence a voluntary case under the Federal Bankruptcy Code,
as amended (the “Bankruptcy Code”) or
under the comparable laws of any jurisdiction (foreign or
domestic), (iv) file a petition seeking to take advantage of any
bankruptcy, insolvency, moratorium, reorganization or other similar
law affecting the enforcement of creditors’ rights generally,
or (v) acquiesce in writing to any petition filed against it in an
involuntary case under the Bankruptcy Code or under the comparable
laws of any jurisdiction (foreign or domestic); or
(g) a proceeding or
case shall be commenced in respect of the Company without its
application or consent, in any court of competent jurisdiction,
seeking (i) the liquidation, reorganization, moratorium,
dissolution, winding up, or composition or readjustment of its
debts, (ii) the appointment of a trustee, receiver, custodian,
liquidator or the like of it or of all or any substantial part of
its assets or (iii) similar relief in respect of it under any law
providing for the relief of debtors, and such proceeding or case
described in clause (i), (ii) or (iii) shall continue undismissed,
or unstayed and in effect, for a period of forty-five (45)
consecutive days or any order for relief shall be entered in an
involuntary case under the Bankruptcy Code or under the comparable
laws of any jurisdiction (foreign or domestic) against the Company
or any of its subsidiaries and shall continue undismissed, or
unstayed and in effect for a period of forty-five (45) consecutive
days.
7. Remedies Upon An Event of
Default. If an Event of Default shall have occurred and
shall be continuing, the Payee of this Note may at any time at its
option, (a) declare, by providing the Company with not less than
five (5) days prior written notice, the entire unpaid principal
balance of this Note together with all interest accrued and unpaid
hereon, due and payable, and upon the Company’s receipt of
such notice, the same shall be accelerated and so due and payable;
provided,
however, that upon
the occurrence of an Event of Default described in (i) Sections
7(f) and (g), without presentment, demand, protest, or notice, all
of which are hereby expressly unconditionally and irrevocably
waived by the Company, the outstanding principal balance and
accrued and unpaid interest hereunder shall be immediately due and
payable, and (ii) Sections 7(a) through (e), the Payee may exercise
or otherwise enforce any one or more of the Payee’s rights,
powers, privileges, remedies and interests under this Note or
applicable law. No course of delay on the part of the Payee shall
operate as a waiver thereof or otherwise prejudice the right of the
Payee. No remedy conferred hereby shall be exclusive of any other
remedy referred to herein or now or hereafter available at law, in
equity, by statute or otherwise. Notwithstanding anything to the
contrary contained in this Note, Payee agrees that its rights and
remedies hereunder are limited to receipt of cash or shares of the
Company’s common stock in the amounts described
herein.
8. Conversion
Restrictions.
(a) Notwithstanding
anything to the contrary as set forth in Section 1 and 2 of this
Note, at no time may a holder of this Note convert this Note if the
number of shares of Common Stock to be issued pursuant to such
conversion would cause the number of shares of Common Stock owned
by such holder at such time to exceed, when aggregated with all
other shares of Common Stock owned by such holder at such time, the
number of shares of Common Stock which would result in such holder
beneficially owning (as determined in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended, and the rules
thereunder) in excess of 4.99% of the then issued and outstanding
shares of Common Stock outstanding at such time; provided, however,
that upon the Note holder providing the Company with sixty-one (61)
days notice (the "Waiver Notice") that such holder would like to
waive such Conversion Restriction. This Section 9(a) with regard to
any or all shares of Common Stock issuable upon conversion of this
Note, shall be of no force or effect with regard to those shares of
referenced in the Waiver Notice.
(b) Notwithstanding
anything to the contrary as set forth in Section 1 and 2 of this
Note, at no time may a holder of this Note convert this Note if the
number of shares of Common Stock to be issued pursuant to such
conversion would cause the number of shares of Common Stock owned
by such holder at such time to exceed, when aggregated with all
other shares of Common Stock owned by such holder at such time, the
number of shares of Common Stock which would result in such holder
beneficially owning (as determined in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended, and the rules
thereunder) in excess of 9.99% of the then issued and outstanding
shares of Common Stock outstanding at such time; provided, however,
that upon the Note holder providing the Company with sixty-one (61)
days notice (the Waiver Notice") that such holder would like to
waive such Conversion Restriction, this Section 9(b) with regard to
any or all shares of Common Stock issuable upon conversion of this
Note, shall be of no force or effect with regard to those shares of
referenced in the Waiver Notice.
9. Replacement. Upon receipt of a
duly executed and notarized written statement from the Payee with
respect to the loss, theft or destruction of this Note (or any
replacement hereof), and without requiring an indemnity bond or
other security, or, in the case of a mutilation of this Note, upon
surrender and cancellation of such Note, the Company shall issue a
new Note, of like tenor and amount, in lieu of such lost, stolen,
destroyed or mutilated Note.
10. Parties in Interest;
Transferability. This Note shall be binding upon the Company
and its successors and assigns and the terms hereof shall inure to
the benefit of the Payee and its successors and permitted assigns.
This Note may not be transferred or sold, pledged, hypothecated or
otherwise granted as security by the Payee without the prior
written consent of the Company, which consent will not be
unreasonably withheld.
11. Amendments. This Note may not
be modified or amended in any manner except in writing executed by
the Company and the Payee.
12. Notices. Any notice, demand,
request, waiver or other communication required or permitted to be
given hereunder shall be in writing and shall be effective (a) upon
hand delivery by telecopy or facsimile at the address or number
designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to
be received) or (b) on the second business day following the date
of mailing by express courier service, fully prepaid, addressed to
such address, or upon actual receipt of such mailing, whichever
shall first occur.
Address of the
Payee:
_____________________
_____________________
_____________________
_____________________
Attention:
Tel.
No.:
Fax
No.:
Address of the
Company:
_____________________
_____________________
_____________________
_____________________
Attention:
Tel.
No.:
Fax
No.:
13. Governing Law. This Note shall
be governed by and construed in accordance with the internal laws
of the State of New York, without giving effect to the choice of
law provisions. This Note shall not be interpreted or construed
with any presumption against the party causing this Note to be
drafted.
14. Headings. Article and section
headings in this Note are included herein for purposes of
convenience of reference only and shall not constitute a part of
this Note for any other purpose.
15. Remedies, Characterizations, Other
Obligations, Breaches and Injunctive Relief. The remedies
provided in this Note shall be cumulative and in addition to all
other remedies available under this Note, at law or in equity
(including, without limitation, a decree of specific performance
and/or other injunctive relief), no remedy contained herein shall
be deemed a waiver of compliance with the provisions giving rise to
such remedy and nothing herein shall limit a Payee’s right to
pursue actual damages for any failure by the Company to comply with
the terms of this Note. The Company acknowledges that a breach by
it of its obligations hereunder will cause irreparable and material
harm to the Payee and that the remedy at law for any such breach
may be inadequate. Therefore the Company agrees that, in the event
of any such breach or threatened breach, the Payee shall be
entitled, in addition to all other available rights and remedies,
at law or in equity, to seek and obtain such equitable relief,
including but not limited to an injunction restraining any such
breach or threatened breach, without the necessity of showing
economic loss and without any bond or other security being
required.
16. Failure or Delay Not Waiver. No
failure or delay on the part of the Payee in the exercise of any
power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise
thereof or of any other right, power or privilege.
17. Enforcement Expenses. The
Company agrees to pay all reasonable costs and expenses of
enforcement of this Note, including, without limitation, reasonable
attorneys’ fees and expenses.
18. Binding Effect. The obligations
of the Company and the Payee set forth herein shall be binding upon
the successors and permitted assigns of each such
party.
19. Compliance with Securities
Laws. The Payee acknowledges and agrees that this Note and
the securities issuable upon the conversion of this Note, is being,
and will be, acquired solely for the Payee’s own account and
not as a nominee for any other party, and for investment purposes
only and not with a view to the resale or distribution of any part
thereof, and that the Payee shall not offer, sell or otherwise
dispose of this Note or the securities issuable upon the conversion
of this Note other than in compliance with applicable federal and
state laws. The Payee understands that this Note and the securities
issuable upon the conversion of this Note are “restricted
securities” under applicable federal and state securities
laws and that such securities have not been, and will not be,
registered under the Securities Act of 1933, as amended (the
“Securities
Act”). The Payee represents and warrants to the
Company that the Payee is an “accredited investor” as
such term is defined in Rule 501 of Regulation D promulgated under
the Securities Act. This Note and any Note issued in substitution
or replacement therefore, and the securities issuable upon the
conversion of this Note, shall be stamped or imprinted with a
legend in substantially the following form:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY SHALL HAVE
RECEIVED AN OPINION OF COUNSEL THAT THE REGISTRATION OF SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF
APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.”
20. Severability. The provisions of
this Note are severable, and if any provision shall be held invalid
or unenforceable in whole or in part in any jurisdiction, then such
invalidity or unenforceability shall not in any manner affect such
provision in any other jurisdiction or any other provision of this
Note in any jurisdiction.
21. Consent to Jurisdiction. Each
of the Company and the Payee (i) hereby irrevocably submits to the
jurisdiction of the United States District Court sitting in the
Southern District of New York and the courts of the State of New
York located in New York county for the purposes of any suit,
action or proceeding arising out of or relating to this Note and
(ii) hereby waives, and agrees not to assert in any such suit,
action or proceeding, any claim that it is not personally subject
to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. Each of the Company and
the Payee consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the
address set forth in Section 12 hereof and agrees that such service
shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 21 shall affect or limit any right
to serve process in any other manner permitted by applicable
law.
22. Waivers. Except as otherwise
specifically provided herein, the Company hereby waives
presentment, demand, notice of nonpayment, protest and all other
demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note, and does hereby consent
to any number of renewals or extensions of the time for payment
hereof and agrees that any such renewals or extensions may be made
without notice and without affecting its liability herein, AND DOES
HEREBY WAIVE TRIAL BY JURY. No delay or omission on the part of the
Payee in exercising its rights under this Note, or course of
conduct relating hereto, shall operate as a waiver of such rights
or any other right of the Payee, nor shall any waiver by the Payee
of any such right or rights on any one occasion be deemed a waiver
of the same right or rights on any future occasion.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has
executed and delivered this Note as of the date first written
above.
QUANTRX
BIOMEDICAL CORPORATION
By:
Name:
Title:
__________________________________________
Name of
Payee
By:________________________________
Name:
Title: