EXHIBIT 10.38
THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT
AND HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES
LAWS OF ANY STATE. THIS NOTE MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED BY SAID ACT
OR STATE LAWS,
ORTHOMETRIX, INC.
$50,000.00 White Plains, New York
June 23, 2004
THIS NOTE REPLACES NOTES DATED JUNE 19, 2003 AND JUNE 23, 2003 IN THE AGGREGATE
AMOUNT OF $50,000.
ORTHOMETRIX, INC., a Delaware corporation (the "Company"), for value
received, promises to pay to XXXXXXX XXXXXXX (the "Payee"), the principal sum of
Fifty Thousand U.S. Dollars ($50,000) on June 23, 2005 (the "Maturity Date"),
except as otherwise provided herein, together with interest on the outstanding
principal amount of this Note at the rate of prime (as published from time to
time by XX Xxxxxx Xxxxx) plus one per annum, except as otherwise provided
herein. Interest shall be payable quarterly on the last business day of each
March, June, September and December, commencing June 30, 2004.
1. Payments and Prepayments.
1.1 Payments and prepayments of principal and interest on this Note
shall be made to Payee at 000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxx Xxxxxx,
X.X. 10604.
1.2 Payments and prepayments of principal and interest on this Note
shall be made in lawful money of the United States of America.
1.3 If any payment on this Note becomes due and payable on a Saturday,
Sunday or other day an which commercial banks in New York City are authorized or
required by law to close, the maturity thereof shall be extended to the next
succeeding business day, and, with respect to payments of principal, interest
thereon shall be payable during such extension at the then applicable rate.
1.4 The Company shall be obligated to prepay the outstanding principal
amount of this Note within ten (10) days after such time as (i) the Company
receives net proceeds of at least $1,000,000 from an equity financing, or (ii)
the Company sells substantially all its assets. The Company shall have the right
at any time and from time to time to prepay this Note in whole or in part,
together with interest on the amount prepaid to the date of prepayment, without
penalty or premium. Upon payment of part of the principal amount of this Note,
the Company may require the holder to present this Note for notation of such
payment and, if this Note is paid in full, require the holder to surrender this
Note.
1.5 Upon payrnent in full of all outstanding principal and interest due
under this Note, the Company's obligations in respect of payment of this Note
shall terminate and the holder shall return it to the Company.
2. Events of Default. In the event that:
(a) the Company defaults for more than five business days in making
any payment required to be made on this Note; or
(b) the Company hereafter makes an assignment for the benefit of
creditors, or files a petition in bankruptcy as to itself, is
adjudicated insolvent or bankrupt, petitions or applies to any
tribunal for the appointment of any receiver of or any trustee for
the Company or any substantial part of its property under any
bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction,
whether now or hereafter in effect; or if there is hereafter
commenced against the Company any such proceeding and an order
approving the petition is entered or such proceeding remains
undismissed for a period of 60 day, or the Company or its general
partner by any act or omission to act indicates its consent to or
approval of or acquiescence in any such proceeding or the
appointment of any receiver of, or trustee for, the Company or any
substantial part of its property, or suffers any such receivership
or trusteeship to continue undischarged for a period of 60 days;
then, and in any such event, and at any time thereafter, if such event shall
then be continuing, the holder of this Note may, by written notice to the
Company, declare the Note due and payable, whereupon the same shall be due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived.
3. Investment Representation.
3.1 The Payee hereby acknowledges that the Note is not being registered
(i) under the Securities Act of 1933, as amended (the "Act"), on the ground that
the issuance of the Note is exempt from registration under Section 4(2) of the
Act as not involving any public
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offering or (ii) under any applicable state securities law because the issuance
of the Note does not involve any public offering; and that the Company's
reliance on the Section 4(2) exemption of the Act and under applicable state
securities laws is predicated in part on the representations hereby made to the
Company by the Payee that it is acquiring the Note for investment for its own
account, with no present intention of dividing its participation with others or
reselling or otherwise distributing the same, subject, nevertheless, to any
requirement of law that the disposition of its property shall at all times be
within its control.
3.2 The Payee hereby agrees that it will not sell or transfer all or
any part of this Note unless and until it shall first have given notice to the
Company describing such sale or transfer and furnished to the Company an
opinion, reasonably satisfactory to counsel for the Company, of counsel skilled
in securities matters (selected by the holder and reasonably satisfactory to the
Company) to the effect that the proposed sale or transfer may be made without
registration under the Act and without registration or qualification under any
state.
3.3 The Company may refuse to recognize a transfer of this Note on its
books should a holder attempt to transfer this Note otherwise than in compliance
with this Section 3.
4. Miscellaneous.
4.1 Upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Note and of a letter of
indemnity reasonably satisfactory to the Company, and upon reimbursement to the
Company of all reasonable expenses incident thereto, and upon surrender or
cancellation of the Note, if mutilated, the Company will make and deliver a new
Note of like tenor in lieu of such lost, stolen, destroyed or mutilated Note.
4.2 This Note and the rights and obligations of the Company and each
holder hereunder shall be construed in accordance with and be governed by the
laws of the State of New York.
IN WITNESS WHEREOF, the Company has executed this Note as of the day
and year first above written.
ORTHOMETRIX, INC,
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Chief Financial Officer
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