Exhibit 4.4
AXONYX INC.
CONVERTIBLE NOTE
CONTENTS
1. Interest
2. Payment
(a) Interest
(b) Principal
(c) Manner and Place of Payment
3. Prepayment
4. Conversion Rights
(a) Right to Convert
(b) Fractional Shares
(c) Capital Adjustments
(d) Conversion Prices
5. Default
6. Remedies upon Default
(a) Acceleration
(b) Remedies at Law and in Equity
7. Attorneys' Fee, Costs, and Other Expenses
8. Assignment; Obligations Binding on Successors
9. Notices
10. Governing Law
11. Headings
12. Entire Agreement
13. Waiver
THE SECURITIES REPRESENTED BY THIS NOTE AND ANY SHARES OF COMMON STOCK ISSUABLE
UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, (THE "ACT"), AND IF ISSUED, THE SHARES WILL BE ISSUED PURSUANT
TO REGULATIONS D, RULE 505, UNDER THE ACT. THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, ENCUMBERED, OR OTHERWISE DISPOSED OF EXCEPT UNDER SATISFACTION OF
CERTAIN CONDITIONS OR EXEMPTIONS FROM REGISTRATION.
AXONYX INC.
NINE PERCENT CONVERTIBLE NOTE
$75,000.00 Due: September 1, 2000
Date of Note: September 1, 1998 New York, New York
Axonyx Inc., a Delaware corporation (the "Maker"), promises to pay to the
order of Boundary Bay Investments, Ltd. (the "Purchaser") the principal sum of
Seventy Five Thousand ($75,000) dollars (the "Principal Sum") together with
interest, upon the terms and conditions provided in this Convertible Note (the
"Note").
1. INTEREST.
The unpaid balance of the Principal Sum shall bear simple interest at a
fixed rate equal to Nine Percent (9%) from the date of this note until such
balance is paid or the debt is converted to common stock of Axonyx Inc., as
outlined in the Subscription Agreement.
2. PAYMENT.
(a) INTEREST. Maker shall pay accrued interest to Purchaser on each
anniversary of the Date of this Note (the "Interest Payment Date") beginning
with the first Interest Payment Date that is twelve months from the date of this
Note; except that all accrued interest shall be paid at the time the principal
amount is paid in full.
(b) PRINCIPAL. Maker shall pay Purchaser the outstanding Principal Sum on
or before September 1, 2000.
(c) MANNER AND PLACE OF PAYMENT. All payments shall be made by checks drawn
on Maker's corporate bank account and shall be in U.S. Dollars. All payments
shall be made to Purchaser at the address specified in Section 9 or at such
other place as Purchaser may specify in writing.
3. PREPAYMENT.
Maker may prepay any amount owing under this Note without premium or
penalty by giving written notice 30 days before the date of prepayment of intent
to prepay.
All notices of prepayment shall state: (1) the prepayment date; (2) the
principal amount of the Note to be redeemed, if less than the entire principal
amount of this Note; (3) that on the prepayment date, the prepayment price will
become due and payable upon this Note or any portion thereof, and that interest
thereof or any portion thereon shall cease to accrue on and after said payment
date; and (5) the current conversion price and
the date on which the right to convert this Note or portion thereof into capital
stock will expire.
Any Note which is to be prepaid only in part shall be surrendered in
exchange for a new Note in an aggregate principal amount equal to the unprepaid
portion of the principal of the Note surrendered and paid for by the Maker.
4. CONVERSION RIGHTS.
(a) RIGHT TO CONVERT. At any time prior to expiration of the prepayment
notice period described in Paragraph 3 or, if no such notice is given, to
maturity of this Note, the Purchaser has the right, at its option, to convert
this Note into shares of Maker's $0.001 par value common stock (the "Common
Stock") by giving a written notice that it is exercising its rights hereunder
and surrendering the Note for that purpose to the Maker. The number of shares of
common stock of the Maker that Purchaser shall be entitled to receive upon such
conversion shall be determined by dividing the unpaid balance of the Principal
Sum by Four (U.S. $4.00) dollars (the "Conversion Factor"). All accrued and
unpaid interest at the time of the conversion shall be paid in cash and shall
not be treated as part of the unpaid balance of the Principal Sum.
(b) FRACTIONAL SHARES. The Maker shall not be required to issue fractional
shares upon conversion of the Note, but shall pay in cash, in lieu of such
fractional interest, an amount equal to the difference between the unpaid
balance of the Principal Sum and the product of the Conversion Factor times the
number of whole shares determined under Paragraph 4(a).
(c) CAPITAL ADJUSTMENTS. If this Note is converted, as provided in
Paragraph 4(a), subsequent to any share dividend, split-up, recapitalization,
merger, consolidation, combination or exchange of shares, separation,
reorganization, or liquidation ("Capital Adjustments") occurring after the date
hereof, as a result of which shares of any class shall be issued in respect of
outstanding Common Stock or Common Stock shall be changed into the same or a
different number of shares of the same or another class or classes, the
Purchaser shall receive the aggregate number and class of shares which, if this
Note had been converted at the date hereof ("Deemed Conversion") and Common
Stock received upon the Deemed Conversion had not been disposed of, the
Purchaser would be holding, at the time of actual conversion, as a result of the
Deemed Conversion and such Capital Adjustments.
(d) CONVERSION PRICE. The Purchaser of this note may, at his, her or its
option, convert this Note into shares of $.001 par value common stock of the
Maker at the following rates: one share of common stock for each Four ($4.00)
dollars of principal (the "Conversion Price") any time prior to when the Maker
acquires, mergers or consolidates with a public Maker, undertakes an Initial
Public Offering or until the Note matures. This Note is an unsecured obligation
of the Maker and the payment of the principle and interest is not subordinated
to the prior or future obligations of the Maker,
or any successor corporation. There is no legal limitation upon the incurring of
additional indebtedness that may be incurred by the Maker.
This Note is subject to prepayment at any time at the option of the Maker.
No sinking fund has been established for such prepayment. The right to convert
to common stock by the holder of this Note will be lost unless it is exercised
prior to prepayment.
5. DEFAULT.
The term "Default" as used in this Note means any of the following events:
(i) Maker at any time fails to pay any interest payment due on this Note
within 45 days of the time that it receives notice from Purchaser that such
payment is past due, or Maker fails to pay any payment of principal due on this
Note within 15 days of the time that it receives notice from Purchaser that such
payment is past due; or
(ii) Maker admits, in writing, its inability to pay its debts as they
become due.
6. REMEDIES UPON DEFAULT.
(a) ACCELERATION. Upon Default, Purchaser may, by written notice to Maker,
accelerate the due date of the Principal Sum owing under this Note. Such
accelerated amounts shall become immediately due and payable upon receipt of
such notice by Maker.
(b) REMEDIES AT LAW AND IN EQUITY. If Purchaser accelerates the amounts
owing under this Note, Purchaser shall have the right to pursue any or all
remedies available at law or in equity, including, but not limited to, the right
to bring suit on this Note.
7. ATTORNEYS' FEES, COSTS, AND OTHER EXPENSES.
Maker agrees to pay all costs and expenses which Purchaser may incur in
enforcing this Note upon Default, including, but not limited to, reasonable
attorneys' fees, expenses and costs incurred in any action undertaken with
respect to this Note, or any appeal of such an action.
8. ASSIGNMENT; OBLIGATIONS BINDING ON SUCCESSORS.
Maker may not assign any of its rights, duties, or obligations under this
Note without the prior written consent of Purchaser. This Note shall bind Maker
and its successors and assigns. All rights and powers established in this Note
shall benefit Purchaser and Purchaser's successors and assigns; provided,
however, that all transfers of this Note by Purchaser are subject to the
restrictions described in the legend at the end of this Note.
9. NOTICES.
All notices, requests, consents, payments and other communications required
or provided for herein to any party shall be in writing, and shall be deemed to
be given when: (a) delivered in person; (b) sent by first class registered or
certified mail with postage prepaid; (c) delivered by overnight receipted
courier service; or (d) except with respect to payments, sent by confirmed
facsimile transmission. Notices shall be sent to the addresses set forth below,
or to such other addresses as may hereafter be designated in writing by the
party:
(i) If to the Maker:
Axonyx Inc.
0000 Xxxxx Xxx 00
Xxx 000, Xxxxxxxxx, XX 00000
(ii) If to Purchaser:
Boundary Bay Investments, Ltd.
0 Xxxxxx Xxxxxx
Xxxxxxxx XX XX Xxxxxxx
10. GOVERNING LAW.
This Note will be construed, and the rights, duties and obligations of the
parties will be determined, in accordance with the laws of the State of New
York.
11. HEADINGS.
Headings used in this Note have been included for convenience and ease of
reference only, and will not in any manner influence the construction or
interpretation of any provision of this Note.
12. ENTIRE AGREEMENT.
This Note and the Convertible Note Subscription Agreement represent the
entire understanding of the parties with respect to the transaction giving rise
to the issuance of the Note. There are no other prior or contemporaneous
agreements, either written or oral, between the parties with respect to this
subject.
13. WAIVER.
No right or obligation under this Note will be deemed to have been waived
unless evidenced by a writing signed by the party against whom the waiver is
asserted, or by the party's duly authorized representative. Any waiver will be
effective only with respect to the specific instance involved, and will not
impair or limit the right of the waiving party
to insist upon strict performance of the right or obligation in any other
instance, in any other respect, or at any other time.
MAKER: Axonyx Inc.
By: /s/ Xxxxxx X. Xxxxxxx, M.D.
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Xxxxxx X. Xxxxxxx, President &CEO
