CONVERTIBLE NOTE PURCHASE AGREEMENT
Exhibit 6.3
THE SECURITIES TO WHICH THIS AGREEMENT RELATES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS ("BLUE SKY
LAWS"), AND MAY NOT BE OFFERED OR SOLD WITHOUT REGISTRATION UNDER
THE SECURITIES ACT, AND AS REQUIRED BY BLUE SKY LAWS IN EFFECT AS
TO SUCH TRANSFER, UNLESS AN EXEMPTION FROM SUCH REGISTRATION UNDER
STATE AND FEDERAL LAW IS AVAILABLE
THIS CONVERTIBLE NOTE PURCHASE
AGREEMENT (the “Agreement”) is made effective
and dated for references purposes as of February _____, 2015 (the
“Effective Date”), by and between Stocosil Inc., a
Delaware corporation (the “Company”) and the investor
whose name and signature are set forth on the signature page to
this Agreement (the “Investor”).
RECITALS
Investor desires to purchase from
the Company, and the Company desires to sell to Investor, a
convertible promissory note initially due and payable on January
31, 2017, in form and substance attached hereto as Exhibit A (the
“Note”), all on the terms and conditions hereinafter
set forth.
AGREEMENT
NOW, THEREFORE, in
consideration of the mutual agreements, covenants, representations
and warranties contained in this Agreement, the parties hereby
agree as follows:
1. Purchase
and Sale of Note.
a. Sale
and Issuance of Note. Subject to the terms and
conditions of this Agreement, Investor agrees to purchase at the
Closing (as defined below), and the Company agrees to sell and
issue to Investor at the Closing, the Note in the principal amount
set forth on the signature page hereto (the “Note
Principal”) to purchase at $0.60 per share (the
“Exercise Price”) that number of Shares equal to the
quotient obtained by dividing the Note Principal by the Exercise
Price (and where the reference is applicable, the Note and all
equity underlying the Note, collectively, the
“Securities”).
b. Payment
and Delivery. Investor shall purchase the Note by
making payment to the Company in cash, by check or wire transfer of
funds of the aggregate purchase price as set forth on the signature
page (the “Purchase Price”) delivered to the
Company on the date set forth on the signature page (the
"Closing").
c. Delivery
of Note. Upon Investor’s delivery of the
Purchase Price in full and a fully executed and completed original
of this Purchase Agreement, and after the Company determines that
all applicable securities laws have been satisfied, the Company
will deliver the Note to Investor.
2. Company's
Representations and Warranties. Except as set
forth on the Schedule of Exceptions attached hereto, the Company
hereby represents and warrants to Investor as of the Effective Date
as follows:
a. Organization,
Good Standing and Qualification. The Company is a
corporation duly organized and validly existing under the laws of
the State of Delaware. The Company has all requisite corporate
power and authority to own and operate its properties and assets,
to execute and deliver this Agreement and sell the Securities, and
to carry out the provisions of this Agreement and to carry on its
business as presently conducted. The Company is duly qualified and
is authorized to do business and is in good standing as a foreign
corporation in all jurisdictions in which the nature of its
activities and of its properties (both owned and leased) makes such
qualification necessary, except for those jurisdictions in which
failure to do so would not have a material adverse effect on the
Company or its business.
-1-
b. Authorization;
Binding Obligations . All
corporate action on the part of the Company, its officers,
directors and stockholders necessary for the authorization of this
Agreement, and the Securities and the performance of all
obligations of the Company hereunder and thereunder at the Closing
has been taken or will be taken prior to the Closing
c. Liabilities/Capitalization.
The Company does not have as of the Effective Date in excess of
$25,000 of liabilities in the aggregate (other than obligations of
the Company arising from trade payables incurred in the ordinary
course of business. The Company's capitalization of outstanding
equity is less than $100,000.
3. Investor
Representations and Warranties. Investor
represents and warrants to the Company that:
a. Requisite
Power and Authority. Investor has all necessary power and
authority under all applicable provisions of law to execute and
deliver this Agreement and to carry out their
provisions. All action on Investor’s part required
for the lawful execution and delivery of this Agreement and the
Note have been or will be effectively taken prior to the
Closing.
b. Account.
Investor is acquiring the Securities for investment for
Investor’s own account, and not with a view to, or for resale
in connection with, any distribution thereof, and Investor has no
present intention of selling or distributing any of the
Securities. Investor understands that the Securities
have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”) by reason of a specific
exemption from the registration provisions of the Securities Act
which depends upon, among other things, the bona fide nature of the
investment as expressed herein.
c. Access
to Data. Investor has had an opportunity to
discuss the Company's business, management and financial affairs
with its management and to obtain any additional information which
Investor has deemed necessary or appropriate for deciding whether
or not to purchase the Securities, including an opportunity to
receive, review and understand the Company's financial statements,
capitalization and other business information as Investor deems
prudent. Investor acknowledges that no other representations or
warranties, oral or written, have been made by the Company or any
affiliate or agent thereof except as set forth in this
Agreement.
d. No
Fairness Determination. Investor is aware that no
federal, state or other agency has made any finding or
determination as to the fairness of the investment, nor made any
recommendation or endorsement of the Securities.
e. Knowledge
and Experience. Investor has such knowledge and
experience in financial and business matters, including investments
in other start-up companies that such individual is capable of
evaluating the merits and risks of the investment in the Securities
and it is able to bear the economic risk of such investment.
Investor is an “accredited” investor as that term is
defined under Regulation D promulgated under the Securities Act of
1933, as amended. Further, Investor has such knowledge
and experience in financial and business matters that such
individual is capable of utilizing the information made available
in connection with the offering of the Securities, of evaluating
the merits and risks of an investment in the Securities and of
making an informed investment decision with respect to the
Securities.
g. No
Public Market. Investor is aware that there is currently no
public market for the Company's securities. There is no
guarantee that a public market will develop at any time in the
future. Investor understands that the Securities are all
unregistered and may not presently be sold. Investor understands
that the Securities cannot be readily sold or liquidated in case of
an emergency or other financial need. Investor has
sufficient liquid assets available so that the purchase and holding
of the Securities will not cause Investor undue financial
difficulties.
-2-
h. Rule
144. Investor acknowledges and agrees that the
Securities must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such
registration is available. Investor has been advised or
is aware of the provisions of Rule 144 promulgated under the
Securities Act as in effect from time to time, which permits
limited resale of shares purchased in a private placement subject
to the satisfaction of certain conditions, including, among other
things: the availability of certain current public information
about the Company, the resale occurring following the required
holding period under Rule 144 and the number of shares being sold
during any three-month period not exceeding specified
limitations.
i. Residence.
Investor resides in the state identified in the address
set forth on the signature page.
4. Public
Offering Lock-Up. In connection with any underwritten public
registration of the Company's securities, Investor agrees, upon the
request of the Company or the underwriters managing such
underwritten offering of the Company's securities, not to sell,
make any short sale of, loan, grant any option for the purchase of,
or otherwise dispose of any Securities without the prior written
consent of the Company and such underwriters, as the case may be,
for a period of time, not to exceed thirty days (30) before and one
hundred eighty (180) days after the effective date of such
registration. The Company and underwriters may request
such additional written agreements in furtherance of such standoff
in the form reasonably satisfactory to the Company and such
underwriter. The Company may impose stop-transfer instructions with
respect to the shares subject to the foregoing restrictions until
the end of said 180-day period.
5. Restrictive
Legends. Each instrument evidencing the
Securities which Investor may purchase hereunder and any other
securities issued upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event (unless no
longer required in the opinion of the counsel for the Company)
may be
imprinted with legends substantially in the following
form:
THE SECURITIES OF THE COMPANY OFFERED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), IN RELIANCE UPON REGULATION D PROMULGATED UNDER THE ACT,
AND THE SECURITIES OFFERED HEREBY HAVE NOT BEEN QUALIFIED UNDER
APPLICABLE STATE SECURITIES LAWS IN THE STATES WHERE THIS OFFERING
IS MADE. THEREFORE, THE SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE
ACT OR QUALIFICATION UNDER SUCH STATE SECURITIES LAWS OR AN OPINION
OF COUNSEL THAT SUCH REGISTRATION AND QUALIFICATION IS NOT
REQUIRED. THESE SECURITIES MAY BE SUBJECT TO ADDITIONAL
RESTRICTIONS PURSUANT TO EXEMPTIONS IN THE VARIOUS STATES WHERE
THEY ARE BEING SOLD.
THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THAT CERTAIN
CONVERTIBLE NOTE PURCHASE AGREEMENT DATED EFFECTIVE
February ________, 2015 BY AND BETWEEN THE ORIGINAL HOLDER HEREOF
AND THE COMPANY AS WELL AS THE COMPANY’S BYLAWS, A COPY OF
WHICH MAY BE OBTAINED UPON REQUEST.
The
Company shall be entitled to enter stop transfer notices on its
transfer books with respect to the Securities.
6. Reliance. Investor
is aware that the Company is relying on the accuracy of the above
representations to establish compliance with Federal and State
securities laws. If any such warranties or
representations are not true and accurate in any respect as of the
Closing, Investor shall so notify the Company in writing
immediately and shall be cause for rescission by the Company at its
sole election. Investor shall indemnify the Company and its
affiliates, legal counsel and agents against all losses, claims,
costs, expenses and damages or liabilities, including reasonable
attorneys' fees, which such parties may suffer or incur caused or
in connection with or arising out of, directly or indirectly, from
their reliance on such warranties and
representations.
-3-
7. Miscellaneous.
a. Survival.
The representations, warranties, covenants and agreements made
herein shall survive the closing of the transactions contemplated
hereby.
b. Successors
and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit
of, and be binding upon, the successors, assigns, heirs, executors
and administrators of the parties hereto.
c. Entire
Agreement. This Agreement and the Exhibits
attached hereto constitute the entire agreement and understanding
between the parties with respect to the subject matters herein, and
supersede and replace any prior agreements and understandings,
whether oral or written between and among them with respect to such
matters. The provisions of this Agreement may be waived,
altered, amended or repealed, in whole or in part, only upon the
written consent of the Company and Investor. Investor
acknowledges, however, that the Note may be amended by a majority
in interest of the holders thereof as set forth in the
Note.
d. Title
and Subtitles. The titles of the Sections and subsections of
this Agreement are for convenience of reference only and are not to
be considered in construing this Agreement.
e. Counterparts.
This Agreement may be executed in any number of counterparts, each
of which shall be an original, but all of which together shall
constitute one instrument.
f. Applicable
Law. This Agreement shall be governed by and
construed in accordance with laws of the State of California,
applicable to contracts between California residents entered into
and to be performed entirely within the State of
California.
g. Venue.
Any action, arbitration, or proceeding arising directly or
indirectly from this Agreement or any other instrument or security
referenced herein shall be litigated or arbitrated, as appropriate,
in Orange County, California.
h. Authority. If
Investor is a corporation, partnership, trust or estate: (i) the
individual executing and delivering this Agreement on behalf of
Investor has been duly authorized and is duly qualified to execute
and deliver this Agreement in connection with the purchase of the
Securities and (ii) the signature of such individual is binding
upon Investor.
i. Notices. All
notices and other communications provided for or permitted
hereunder shall be made by hand-delivery, facsimile, or overnight
air courier guaranteeing next day delivery at the addresses set
forth on the signature page hereof to the Investor and with respect
to the Company at its principal place of business. All such notices
and communications shall be deemed to have been duly given at the
time delivered by hand, if personally delivered; when receipt
acknowledged, if faxed; and the next business day after timely
delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery. The parties may change
the addresses to which notices are to be given by giving five days
prior written notice of such change in accordance
herewith.
j. Waiver
of Potential Conflicts of Interest. The
Investor represents that it has had the opportunity and been
advised by the Company to consult with independent counsel
concerning entering into the transactions contemplated
herein.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-4-
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year
first set forth above.
INVESTOR STOCOSIL
INC.
By: By:
(Signature) (Signature)
___________________ ______________________
(Print
Name) (Print
Name)
(Address
for Notices and Investment Decisions)
Note
Principal $__,000
Purchase
Price $__,000
Number
of Common Shares (rounded to nearest whole number and qualified in
its entirety by the terms of the Note) = ______,000 (100% of Note
Principal Divided by $0.60)
Closing
Date: _________________________
-5-
EXHIBIT
A
FORM OF
CONVERTIBLE NOTE
THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF
APPLICABLE STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY
MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR
AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER
OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
THIS NOTE AND THE SHARES ISSUABLE UPON CONVERSION OF THIS NOTE ARE
SUBJECT TO A 180-DAY MARKET STAND-OFF RESTRICTION AS SET FORTH
HEREIN. AS A RESULT OF SUCH RESTRICTION, THIS NOTE AND
THE SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE TRADED
PRIOR TO 180 DAYS AFTER THE EFFECTIVE DATE OF A REGISTRATION
STATEMENT BY THE COMPANY AS SET FORTH IN SECTION 10
BELOW. SUCH RESTRICTION IS BINDING ON TRANSFEREES OF
THIS NOTE AND THE SHARES ISSUABLE UPON CONVERSION OF THIS
NOTE.
CONVERTIBLE
PROMISSORY NOTE
(Due: January 31, 2017)
$___,000 Effective
Date Jan. 26, 0000
Xxxxxxxx
Xxxxxx, Xxxxxxxxxx
FOR
VALUE RECEIVED, the undersigned, Autotelic Inc., a Delaware
corporation (“Payor” or the “Company”)
promises to pay to the order of ___________, an individual investor
or his/her assigns (hereinafter, with any subsequent holder, the
“Holder”) the principal sum of __________________
Dollars ($___,000) with interest on the unpaid principal from the
Commencement Interest Date at a rate of three percent (3.0%) per
annum. Interest shall be calculated on the basis of the actual
number of days elapsed over a 365-day year, and shall commence to
accrue on the date hereof and shall continue on the outstanding
principal until paid in full. This Note is issued pursuant to that
certain Convertible Note Purchase Agreement by and between the
Company and the original Holder hereof (the “Purchase
Agreement”). This Note is one of a duly
authorized series of Notes of the Company (which Notes are
substantively substantially identical except for the variations
necessary to express the name of the Holder, number, Commencement
Interest Date and the principal amount under each Note), which
Notes together are designated “Series A
Notes”.
1. Application
of Payments. All payments of principal and
interest shall be in lawful money of the United States of
America. All payments on account of the indebtedness
evidenced by this Note shall be applied first to any and all costs,
expenses and other charges then owed the Holder by Payor, second,
to accrued and unpaid interest, and thereafter to the unpaid
principal balance hereof.
2. Maturity
Date. Unless this Note has been converted
pursuant to the terms and conditions of this Note or unless earlier
accelerated by the terms of this Note, the principal amount hereof,
together with all unpaid accrued interest hereon and all other
fees, costs and charges, if any, shall be due and payable on
January 31, 2017 (the “Maturity Date”). No
payments of principal or interest are required hereunder until the
Maturity Date, except as otherwise provided herein. If this Note is
not repaid in full when due (either upon the Maturity Date or upon
an Event of Default or otherwise), then the default interest rate
shall be six percent per annum (6%), which shall continue to accrue
on the balance of any unpaid principal until such balance is paid
in full.
-6-
3. Prepayment.
Prior to the Maturity Date, this Note may not be prepaid by Payor,
in whole or in part, except with the express written consent of the
Holder or a “Majority Holders” (as defined
below).
4. Events
of Default. If any of the following events shall
occur (herein individually referred to as an “Event of
Default”), the Holder of the Note may, so long as such
condition exists, declare the entire principal and unpaid accrued
interest hereon immediately due and payable, by notice in writing
to Payor:
(a) a
failure by Payor to pay as and when due the principal and interest
due on this Note or any portion thereof, and such failure shall
continue for a period of thirty (30) days following written notice
from Holder to the Company of such failure; or
(b) a
failure by Payor to perform any term, covenant or agreement
contained in this Note or the Purchase Agreement and such default
is not cured by Payor within sixty (60) days after the Holder has
given Payor written notice of such default; or
(c) the
institution by Payor of proceedings to be adjudicated a bankrupt or
insolvent, or the appointment of a receiver, trustee, or other
similar official of Payor, or the making by Payor of an assignment
for the benefit of creditors, or the admission by Payor in writing
of its inability to pay its debts generally as they become due;
or
(d) if,
within ninety (90) days after the commencement of an action against
Payor seeking any bankruptcy, insolvency, reorganization,
dissolution or similar relief, such action shall not have been
dismissed.
5. Automatic
Conversion. Subject to Section 5 below and, at
the Company’s election and request, Holder’s
reaffirmation of Holder’s representations and warranties
under Section 3 of the Convertible Note Purchase Agreement, the
principal amount of this Note (and all interest accrued on this
Note at the option of the Payor) shall be converted into the number
of shares of common stock as follows:
(a) In
the event of a next equity financing by the Company in one
transaction or series of related transactions which raises an
aggregate amount of at least One Million Five Hundred Thousand
Dollars ($1,500,000) (the “Next Equity Financing”), the
principal amount on this Note shall automatically be
converted (regardless of whether or not the Note is surrendered to
Payor) into the equity securities issued in the Payor’s Next
Equity Financing (the “Next Equity Financing Stock”).
Any accrued interest outstanding at the time of the conversion
shall be paid in cash by the Company. This Note shall
convert into the number of shares at the time of the “Next
Equity Financing” equals to ___,000 shares of the
Company’s Common Stock at an exercise price of $0.60 per share (the
“Exercise
Price”) This Note shall be deemed automatically
cancelled immediately upon such conversion.
As
a condition precedent to the issuance of the Next Equity Financing
Stock to Holder upon such conversion, Holder shall execute and
deliver such agreements, instruments and other documents as are
executed and delivered by the other investors in connection with
their purchase of the Next Equity Financing Stock.
(b) In
the event of the “Company’s Sale”, defined below,
at the option of Payor, the principal hereunder and, at the option
of the Payor, shall automatically be converted (regardless of
whether or not the Note is surrendered to Payor) into the number of
shares (the “Company’s Sale Stock”) equals to
____,000
shares of the
Company’s Common Stock at an exercise price of $0.60 per share (the
“Exercise
Price”). This Note shall be deemed
automatically cancelled immediately upon such
conversion.
-7-
“Company’s
Sale” shall mean “(i) the acquisition of the
Company by another entity by means of any transaction or series of
related transactions to which the Company is party (including,
without limitation, any share acquisition, reorganization, merger
or consolidation but excluding any bona fide sale of shares for
capital raising purposes) other than a transaction or series of
related transactions in which the holders of the voting securities
of the Company outstanding immediately prior to such transaction or
series of related transactions retain, immediately after such
transaction or series of related transactions, as a result of
shares in the Company held by such holders prior to such
transaction or series of related transactions, at least a majority
of the total voting power represented by the outstanding voting
securities of the Company or such other surviving or resulting
entity (or if the Company or such other surviving or resulting
entity is a wholly-owned subsidiary immediately following such
acquisition, its parent); or (ii) a sale of all or
substantially all of the assets of the Company and its subsidiaries
taken as a whole by means of any transaction or series of related
transactions.
6. Notice. Written
notice shall be delivered to the Holder at the address last shown
on the records of Payor for the Holder or given by the Holder to
Payor, notifying the Holder or Payor of any conversion to be
effected hereunder, specifying the applicable conversion price and
the principal amount (together with any interest if applicable) of
the Note to be converted.
7. Mechanics
of Conversion. As promptly as practicable after
the conversion of this Note and after the Holder has surrendered
the Note to Payor and satisfied the conditions precedent to
issuance described above, Payor will issue and deliver
to the Holder of this Note, a certificate or certificates
representing the full number of shares issuable upon such
conversion (and the issuance of such certificate or certificates
shall be made without charge to the Holder of the Note for any
issuance tax in respect thereof or other cost incurred by Payor in
connection with such conversion and the related issuance of
shares). All rights with respect to
this Note shall terminate upon the issuance of the Next Equity
Financing Stock or Company’s Sale Stock upon conversion of
this Note, whether or not this Note has been surrendered and
whether or not all purchase, or other agreements have been executed
and delivered by Holder to the Company. Notwithstanding
the foregoing, Holder agrees to surrender this Note to the Company
for cancellation as soon as is possible following conversion of
this Note. Holder shall not be entitled to receive any
certificate representing the shares of the Next Equity Financing
Stock or Company’s Sale Stock to be issued upon conversion of
this Note until the original of this Note is surrendered to the
Company and the agreements and/or documents referenced herein have
been executed and delivered to the Company.
8. No
Rights or Liabilities as a Stockholder. This Note does not by itself entitle Holder to
any voting rights or other rights as a stockholder of the
Company. In the absence of conversion of this Note, no
provisions of this Note, and no enumeration herein of the rights or
privileges of Holder, shall cause Holder to be a stockholder of the
Company for any purpose.
9. Assignment. The
Company and Holder hereby agree that neither this Note nor any
rights hereunder may be assigned, conveyed or transferred, in whole
or in part, without the Company’s prior written consent,
which the Company may withhold in its sole discretion;
provided,
however, that this Note may be
assigned, conveyed or transferred without the prior written consent
of the Company to any person that directly, or indirectly through
one or more intermediaries, controls, is controlled by, or is under
common control with Holder; provided,
further, that such transferee
executes an acknowledgement that such transferee is subject to all
the terms and conditions of this Note and satisfies the Company as
to compliance with State and federal securities law as provided in
the Purchase Agreement, including but not limited to re-affirmation
by transferee that it confirms as to itself all of the
representations and warranties set forth in Section 3 of the
Convertible Note Purchase Agreement. The rights and
obligations of the Company and Holder under this Note shall be
binding upon and benefit their respective permitted successors,
assigns, heirs, administrators and transferees. The
Company and Holder hereby agree that that all shares issuable upon
conversion of this Note pursuant to the provisions of this Note
shall be subject to the terms and conditions of the definitive
agreements entered into by Holder and the Company in connection
with such conversion and the Next Equity Financing or
Company’s Sale as applicable, including the restrictions on
transfer contained therein
-8-
10. Public
Offering Lock-Up. In
connection with any underwritten public registration of the
Corporation's securities, Holder agrees, upon the request of the
Company or the underwriters managing such underwritten offering of
the Company’s securities, not to sell, make any short sale
of, loan, grant any option for the purchase of, or otherwise
dispose of any securities issuable hereunder without the prior
written consent of the Company and such underwriters, as the case
may be, for a period of time, not to exceed thirty (30) days before
and one hundred and eighty (180) days after the effective date of
such registration (the “Lock-up
Period”). Upon request by the Company, Holder
shall enter into any further agreement in writing in a form
reasonably satisfactory to the Company and such underwriters to
effectuate this lock-up. The Company may impose
stop-transfer instructions with respect to the securities subject
to the foregoing restrictions until the end of the Lock-up
Period.
11. Binding
Intent. Subject to the restrictions on transfer
set forth above, the rights and obligations of Payor and the Holder
of this Note shall be binding upon and benefit the successors,
assigns, heirs, administrators and transferees of the
parties.
12. Payment
of Costs of Collection. Payor shall be liable for
all out-of-pocket costs and expenses of collection, including
reasonable attorneys’ fees, incurred by the Holder and
arising by virtue of an uncured default of this Note by the
Company.
13. Waivers. Payor
hereby waives demand, notice, presentment, protest and notice of
dishonor. The terms of this Note shall be construed in
accordance with the laws of the State of Delaware.
14. Amendment
or Waiver. Any
term of this Note, including but not limited to the Maturity Date
and conversion terms, together with any terms of all other Series A
Notes, may be amended or terminated with the written consent of the
Company and the holders of Series A Notes representing not less
than a majority of the then outstanding principal under all such
Series A Notes (“Majority Holders”). Any such amendment
or termination shall apply to all such Series A Notes and the
holders thereof whether any particular Holder consented or
not.
15. Severability. In
the event any one or more of the provisions contained in this Note
shall, for any reason, be held to be invalid, illegal, or
unenforceable in whole or in part or in any respect, or in the
event any one or more of the provisions of this Note operate or
would prospectively operate to invalidate this Note, such
invalidity, illegality, or unenforceability shall not affect any
other provision of this Note. In such instance, this
Note shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein and the
remaining provisions of this Note shall remain operative and in
full force and effect and in no way shall be affected, prejudiced
or disturbed thereby.
16. No
Setoff or Counterclaim. All payments by Payor
under this Note shall be made without setoff or counterclaim and be
free and clear and without any deductions or withholding for any
taxes or fees of any nature whatsoever, unless the obligation to
make such deduction or withholding is imposed by law.
17. Delays
or Omissions. No delay or omission on the part of
the Holder in exercising any right under this Note shall operate as
a waiver of such right or of any other right of the Holder, nor
shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future
occasion.
18. Headings. The
headings in this Note are for convenience of reference only and
shall not define or limit any terms or provisions
hereof.
-9-
IN
WITNESS WHEREOF, Payor has caused this Note to be signed in its
name as of the date first above written.
By:
Name:
__________, Director
Acknowledged
by:
_____________________________________
-10-
