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EXHIBIT 10.7
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
October 4, 2005
ORTHOMETRIX, INC., a Delaware corporation (the "Company"), for value
received, promises to pay to XXXXXXX X. XXXXX (the "Payee"), the principal sum
of Fifty Thousand U.S. Dollars ($50,000) on October 4, 2006 (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 December 31, 2005.
1. Payments and Prepayments.
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1.1 Payments and prepayments of principal and interest on this Note shall
be made to Payee at 000 Xxxxxx xx xxx Xxxxxx, Xxxxx 0, Xxxxxxxxxx, XX 00000, or
by wire to Payee's account at the First Union National Bank, 000 Xxxxx Xxxxxx,
Xxx Xxxx, XX 00000, ABA # 000000000, Acct. # 8881807686. Notice of a wire
transfer shall be given by the Company to the Payee at the Shrewsbury address.
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.
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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 $5,000,000 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:
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(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.
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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.
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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/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: President
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