EXHIBIT 10.1
THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS. NEITHER THE NOTE NOR SUCH SHARES OF COMMON
STOCK MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND UNDER
ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, SATISFACTORY TO
THE COMPANY, THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
AETHLON MEDICAL, INC.
10% CONVERTIBLE NOTE
$___,000
FOR VALUE RECEIVED, Aethlon Medical, Inc., a Nevada corporation (the
"Company"), promises to pay to ______________________, whose address is
_______________________________, or registered assigns (the "Holder"), the sum
of ___________________ Dollars ($___,000) in lawful money of the United States
of America on or before the Maturity Date as defined herein, with all Interest
thereon as defined and specified herein.
1. INTEREST. This Note shall bear interest ("Interest") equal to ten
percent (10%) per annum on the unpaid principal balance, computed on a three
hundred sixty (360)-day year, during the term of the Note. The Company shall pay
all Interest on or before the Maturity Date. In no event shall the rate of
Interest payable on this Note exceed the maximum rate of Interest permitted to
be charged under applicable law.
2. PAYMENTS. All payments under this Note shall first be credited
against the payment of accrued and unpaid Interest, if any, and the remainder
shall be credited against principal. All payments due hereunder shall be payable
in legal tender of the United States of America, and in same day funds delivered
to Holder by cashier's check, certified check, bank wire transfer or any other
means of guaranteed funds to the mailing address provided below, or at such
other place as the Holder shall designate in writing for such purpose from time
to time. If a payment under this Note otherwise would become due and payable on
a Saturday, Sunday or legal holiday (any other day being a "Business Day"), the
due date of the payment shall be extended to the next succeeding Business Day,
and Interest, if any, shall be payable thereon during such extension.
3. PRE-PAYMENTS AND MATURITY DATE. This Note shall be due and payable
in full, including all accrued Interest thereon, on _______, 2010 (the "Maturity
Date") reflecting the eighteen month term of this Note. At any time on or prior
to the Maturity Date, the Company shall have the right to prepay this Note, in
whole or in part, on ten (10) days' advance notice to the Holder and subject to
the right of the Holder to convert in advance of such prepayment date and
provided that on such prepayment date, the Company will pay in respect of the
redeemed Note cash equal to the face amount plus accrued Interest on the Note
(or portion thereof) redeemed. At any time after the Maturity Date, the Company
shall have the right to repay this Note, in whole or in part, on ten (10) days'
advance notice to the Holder and subject to the right of the Holder to convert
in advance of such repayment date. The Company may prepay this Note at any time
after issuance without penalty.
4. CONVERSION OF NOTE.
4.1 CONVERSION OF NOTE/CONVERSION PRICE. This Note is convertible,
at the option of the Holder, into shares of the Company's Common Stock (the
"Common Stock") at any time after the Issue Date prior to the close of business
on the Business Day prior to the Maturity Date at the rate of $0.50 per share
(the "Conversion Price"), subject to adjustment as hereinafter provided. No
fractional shares will be issued. In lieu thereof, the Company will pay cash for
fractional share amounts equal to the fair market value of the Common Stock as
quoted as the closing bid price of the Common Stock on the date of conversion.
4.2 ADJUSTMENT BASED UPON STOCK DIVIDENDS, COMBINATION OF SHARES
OR RECAPITALIZATION. The Conversion Price shall be adjusted in the event that
the Company shall at any time (i) pay a stock dividend on the Common Stock; (ii)
subdivide its outstanding Common Stock into a greater number of shares; (iii)
combine its outstanding Common Stock into a smaller number of shares; (iv) issue
by reclassification of its Common Stock any other special capital stock of the
Company; or (v) distribute to all holders of Common Stock evidences of
indebtedness or assets (excluding cash dividends) or rights or warrants to
subscribe for Common Stock (other than those mentioned above). Upon the
occurrence of an event requiring adjustment of the Conversion Price, and
thereafter, the Holder, upon surrender of this Note for conversion, shall be
entitled to receive the number of shares of Common Stock or other capital stock
of the Company that the Holder would have owned or have been entitled to receive
after the happening of any of the events described above had this Note been
converted immediately prior to the happening of such event.
4.3 ADJUSTMENT BASED UPON MERGER OR CONSOLIDATION. In case of any
consolidation or merger to which the Company is a party (other than a merger in
which the Company is the surviving entity and which does not result in any
reclassification of or change in the outstanding Common Stock of the Company),
or in case of any sale or conveyance to another person, firm, or corporation of
the property of the Company as an entirety or substantially as an entirety, the
Holder shall have the right to convert this Note into the kind and amount of
securities and property (including cash) receivable upon such consolidation,
merger, sale or conveyance by the Holder of the number of shares of Common Stock
into which such Note might have been converted immediately prior thereto.
4.4 EXERCISE OF CONVERSION PRIVILEGE.
4.4.1 The Conversion Privilege provided for in this Note
shall be exercisable by the Holder by written notice to the Company or its
successor and the surrender of this Note in exchange for the number of shares
(or other securities and property, including cash, in the event of an adjustment
of the Conversion Price) into which this Note is convertible based upon the
Conversion Price.
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4.4.2 The Holder's conversion right may be exercised at any
time and from time to time but prior to payment in full of the principal amount
of the accrued interest on this Note. Conversion rights will expire at the close
of business on the Business Day prior to the Maturity Date or redemption date of
this Note.
4.4.3 The Holder may exercise the right to convert all or
any portion of the principal amount and accrued Interest on this Note by
delivery of (i) this Note and (ii) a completed Conversion Notice in the form
attached as EXHIBIT A on a Business Day to the Company's principal executive
offices. Such conversion shall be deemed to have been made immediately prior to
the close of business on the Business Day of such delivery a conversion notice
(the "Conversion Date"), and the Holder shall be treated for all purposes as the
record holder of the shares of Common Stock into which this Note is converted as
of such date.
4.4.4 Upon conversion of the entire principal amount and
accrued Interest of this Note and the delivery of shares of Common Stock upon
conversion of this Note, except as otherwise provided in Paragraph 20,
"Representations and Warranties to Survive Closing," the Company shall be
forever released from all of its obligations and liabilities under this Note.
4.5 CORPORATE STATUS OF COMMON STOCK TO BE ISSUED. All Common
Stock (or other securities in the event of an adjustment of the Conversion
Price) which may be issued upon the conversion of this Note shall, upon
issuance, be fully paid and nonassessable.
4.6 ISSUANCE OF CERTIFICATE. Upon the conversion of this Note, the
Company shall, within five (5) Business Days of such conversion, issue to the
Holder a certificate or certificates representing the number of shares of the
Common Stock (or other securities in the event of an adjustment of the
Conversion Price) to which the conversion relates.
5. STATUS OF HOLDER OF NOTE. This Note shall not entitle the Holder to
any voting rights or other rights as a shareholder of the Company or to any
rights whatsoever except the rights herein expressed, and no dividends shall be
payable or accrue in respect of this Note or the securities issuable upon the
conversion hereof unless and until this Note shall be converted. Upon the
conversion of this Note, the Holder shall, to the extent permitted by law, be
deemed to be the holder of record of the shares of Common Stock issuable upon
such conversion, notwithstanding that the stock transfer books of the Company
shall then be closed or that the certificates representing such shares of Common
Stock and Warrants shall not then be actually delivered.
6. RESERVATION OF SHARES OF COMMON STOCK. The Company shall reserve out
of its authorized shares of Common Stock, and other securities in the event of
an adjustment of the Conversion Price, a number of shares sufficient to enable
it to comply with its obligation to issue shares of Common Stock, and other
securities in the event of an adjustment of the Conversion Price, upon the
conversion of this Note.
7. TRANSFER RESTRICTIONS; EXEMPTION FROM REGISTRATION.
7.1 The Holder agrees that (i) this Note and the shares of Common
Stock issuable upon conversion have not been registered under the Act and may
not be sold or transferred without registration under the Act or unless an
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exemption from such registration is available; (ii) the Holder has acquired this
Note and will acquire the Common Stock for its own account for investment
purposes only and not with a view toward resale or distribution; and (iii) if a
registration statement that includes the Common Stock is not effective at the
time Common Stock is issued to Holder upon conversion under this Note, and the
Common Stock is not exempt from registration under Rule 144, then the Common
Stock shall be inscribed with the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF HOLDER'S COUNSEL,
IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.
7.2 If an opinion of counsel of Xxxxxx provides that registration
is not required for the proposed conversion or transfer of this Note or the
proposed transfer of the shares of Common Stock issuable upon conversion and
that the proposed conversion or transfer in the absence of registration would
require the Company to take any action including executing and filing forms or
other documents with the Securities and Exchange Commission (the "SEC") or any
state securities agency, or delivering to the Holder any form or document in
order to establish the right of the Holder to effectuate the proposed conversion
or transfer, the Company agrees promptly, at its expense, to take any such
action; and provided, further, that the Company will reimburse the Holder in
full for any expenses (including but not limited to the fees and disbursements
of such counsel, but excluding brokers' commissions) incurred by the Holder or
owner of shares of Common Stock on his, her or its behalf in connection with
such conversion or transfer of the Note or transfer of the shares of Common
Stock.
8. INFORMATION ON COMPANY. Xxxxxx has been furnished with or has had
access at the XXXXX Website of the SEC to the Company's Form 10-KSB filed on
July 15, 2008 for the fiscal year ended March 31, 2008, and the financial
statements included therein, together with all subsequent filings made with the
SEC available at the XXXXX website (hereinafter referred to collectively as the
"REPORTS"). In addition, Xxxxxx may have received in writing from the Company
such other information concerning its operations, financial condition and other
matters as Xxxxxx has requested in writing, identified thereon as OTHER WRITTEN
INFORMATION (such other information is collectively, the "OTHER WRITTEN
INFORMATION"), and considered all factors Holder deems material in deciding on
the advisability of investing in this Note (and underlying shares of Common
Stock).
8. INFORMATION ON SUBSCRIBER. Holder is, and will be at the time of the
exercise of the Warrants, an "ACCREDITED INVESTOR", as such term is defined in
Regulation D promulgated by the SEC under the 1933 Act, is experienced in
investments and business matters, has made investments of a speculative nature
and has purchased securities of United States publicly-owned companies in
private placements in the past and, with its representatives, has such knowledge
and experience in financial, tax and other business matters as to enable Holder
to utilize the information made available by the Company to evaluate the merits
and risks of and to make an informed investment decision with respect to the
proposed purchase, which represents a speculative investment. Holder has the
authority and is duly and legally qualified to purchase and own the Note and
underlying shares of Common Stock. Holder is able to bear the risk of such
investment for an indefinite period and to afford a complete loss thereof. The
information set forth on the signature page hereto regarding Holder is accurate.
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9. RULE 144.
If the Company (a) has or registers a class of securities under
Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") or (b) has or commences to file reports under Section 13 or 15(d) of the
Exchange Act, then, at the request of any Holder who proposes to sell securities
in compliance with Rule 144 of the SEC, the Company will (i) forthwith furnish
to such holder a written statement of compliance with the filing requirements of
the SEC as set forth in Rule 144, as such rules may be amended from time to time
and (ii) make available to the public and such Holder such information and take
such other action as is requested by the Holder to enable the Holder to make
sales pursuant to Rule 144.
10. DEFAULT. The Company shall perform its obligations and covenants
hereunder and in each and every other agreement between the Company and Holder
pertaining to the Indebtedness evidenced hereby. The following provisions shall
apply upon failure of the Company so to perform.
10.1 EVENT OF DEFAULT. Any of the following events shall constitute
an "Event of Default" hereunder:
10.1.1 Failure by the Company to pay principal when due and
payable hereunder on the Maturity Date;
10.1.2 Failure of the Company to pay Interest when due
hereunder, which failure continues for a period of thirty (30) days after the
due date of the amount involved; or
10.1.3 The entry of an order for relief under Federal
Bankruptcy Code as to the Company or entry of any order appointing a receiver or
trustee for the Company or approving a petition in reorganization or other
similar relief under bankruptcy or similar laws in the United States of America
or any other competent jurisdiction, and if such order, if involuntary, is not
satisfied or withdrawn within sixty (60) days after entry thereof; or the filing
of a petition by the Company seeking any of the foregoing, or consenting
thereto; or the filing of a petition to take advantage of any debtor's act; or
making a general assignment for the benefit of creditors; or admitting in
writing inability to pay debts as they mature.
10.2 ACCELERATION. Upon any Event of Default (in addition to any
other rights or remedies provided for under this Note), at the option of the
Holder, all sums evidenced hereby, including all principal, Interest, fees and
all other amounts due hereunder, shall become immediately due and payable.
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10.3 NOTICE BY COMPANY. Upon the happening of any Event of Default
specified in this paragraph that is not cured within the respective periods
prescribed above, the Company will give prompt written notice thereof to the
Holder of this Note.
10.4 NO WAIVER. Failure of the Holder to exercise any option
hereunder shall not constitute a waiver of the right to exercise the same in the
event of any subsequent Event of Default, or in the event of continuance of any
existing Event of Default after demand or performance thereof.
10.5 DEFAULT INTEREST. Default Interest will accrue on an unpaid
principal or Interest due hereunder at the rate of fifteen percent (15%) per
annum upon the occurrence of any Event of Default until the Event of Default is
cured.
10.6 PURSUIT OF ANY REMEDY. Holder may not pursue any remedy under
the Note unless (i) the Company shall have received written notice of a
continuing Event of Default from the Holder and (ii) the Company shall have
received a request from Holder to pursue such remedy.
11. ASSIGNMENT, TRANSFER OR LOSS OF THE NOTE.
11.1 No Holder of this Note may assign, transfer, hypothecate or
sell all or any part of this Note or in any way alienate or encumber the Note
without the express written consent of the Company, the granting or denial of
which shall be within the absolute discretion of the Company. Any attempt to
effect such transfer without the consent of the Company shall be null and void.
The Company has not registered this Note under the Act or the applicable
securities laws of any state in reliance on exemptions from registration. Such
exemptions depend upon the investment intent of the Holder at the time he
acquires his Note. The Holder is acquiring this Note for his own account for
investment purposes only and not with a view toward distribution or resale of
such Note within the meaning of the Act and the applicable securities laws of
any state. The Company shall be under no duty to register the Note or to comply
with an exemption in connection with the sale, transfer or other disposition
under the applicable laws and regulations of the Act or the applicable
securities laws of any state. The Company may require the Holder to provide, at
his expense, an opinion of counsel satisfactory to the Company to the effect
that any proposed transfer or other assignment of the Note will not result in a
violation of the applicable federal or state securities laws or any other
applicable federal or state laws or regulations.
11.2 All expenses, including reasonable legal fees incurred by the
Company in connection with any permitted transfer, assignment or pledge of this
Note will be paid by the Holder requesting such transfer, assignment or pledge.
11.3 Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of any Note and, in the
case of any such loss, theft or destruction of any Note, upon delivery of an
indemnity bond in such reasonable amount as the Company may determine (or, in
the case of any Note held by the original Noteholder, of an indemnity agreement
reasonably satisfactory to the Company), or, in the case of any such mutilation,
upon the surrender of such Note to the Company at is principal office for
cancellation, the Company at its expense will execute and deliver, in lieu
thereof, a new Note of like tenor, dated the date to which interest hereunder
shall have been paid on such lost, stolen, destroyed or mutilated Note.
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12. NOTICES. All notices provided for herein shall be validly given if
in writing and delivered personally or sent by certified mail, postage prepaid,
to the office of the Company or such other address as the Company may from time
to time designate in writing sent by certified mail, postage prepaid, to the
Holder at his address set forth below or such other address as the Holder may
from time to time designate in writing to the Company by certified mail, postage
prepaid.
13. USURY. All Interest, Default Interest, fees, charges, goods, things
in action or any other sums or things of value, or other contractual obligations
(collectively, the "Additional Sums") paid by the Company hereunder, whether
pursuant to this Note or otherwise, with respect to the Indebtedness evidenced
hereby, or any other document or instrument in any way pertaining to the
Indebtedness, which, under the laws of the State of California may be deemed to
be Interest with respect to such loan or Indebtedness, shall, for the purpose of
any laws of the State of California, which may limit the maximum amount of
Interest to be charged with respect to such loan or Indebtedness, be payable by
the Company as, and shall be deemed to be, Interest and for such purposes only,
the agreed upon and contracted rate of Interest shall be deemed to be increased
by the Additional Sums. Notwithstanding any provision of this Note to the
contrary, the total liability for payments in the nature of Interest under this
Note shall not exceed the limits imposed by applicable law. The Company shall
not assert a claim, and shall actively resist any attempts to compel it to
assert a claim, respecting a benefit under any present or future usury laws
against any Holder of this Note.
14. BINDING EFFECT. This Note shall be binding upon the parties hereto
and their respective heirs, executors, administrators, representatives,
successors and permitted assigns.
15. COLLECTION FEES. Except as otherwise provided herein, the Company
shall pay all costs of collection, including reasonable attorneys' fees and all
costs of suit and preparation for such suit (and whether at trial or appellate
level), in the event the unpaid principal amount of this Note, or any payment of
Interest is not paid when due, or in the event Holder is made party to any
litigation because of the existence of the Indebtedness evidenced by this Note,
or if at any time Holder should incur any attorneys' fees in any proceeding
under the Federal Bankruptcy Code (or other similar laws for the protection of
debtors generally) in order to collect any Indebtedness hereunder or to
preserve, protect or realize upon any security for, or guarantee or surety of,
such Indebtedness whether suit be brought or not, and whether through courts of
original jurisdiction, as well as in courts of appellate jurisdiction, or
through a bankruptcy court or other legal proceedings.
16. CONSTRUCTION. This Note shall be governed as to its validity,
interpretation, construction, effect and in all other respects by and in
accordance with the laws and interpretations thereof of the State of California.
Unless the context otherwise requires, the use of terms in singular and
masculine form shall include in all instances singular and plural number and
masculine, feminine and neuter gender.
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17. SEVERABILITY. In the event any one or more of the provisions
contained in this Note or any future amendment hereto shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this Note
or such other agreement, and in lieu of each such invalid, illegal or
unenforceable provision there shall be added automatically as a part of this
Note a provision as similar in terms to such invalid, illegal or unenforceable
provision as may be possible and be valid, legal and enforceable.
18. ENTIRE AGREEMENT. This Note Agreement represents the entire
agreement and understanding between the parties concerning the subject matter
hereof and supersede all prior and contemporaneous agreements, understandings,
representations and warranties with respect thereto.
19. GOVERNING LAW; JURISDICTION; JURY TRIAL. The corporate laws of the
State of Nevada shall govern all issues concerning the relative rights of the
Company and its shareholders. All other questions concerning the construction,
validity, enforcement and interpretation of this Note shall be governed by the
internal laws of the State of California, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of California or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of California. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of San Diego for the adjudication of any dispute hereunder or in
connection herewith or therewith, or with any transaction contemplated hereby or
discussed herein, or in any manner arising in connection with or related to the
transactions contemplated hereby or involving the parties hereto whether at law
or equity and under any contract, tort or any other claim whatsoever and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is brought in an inconvenient forum
or that the venue of such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing or faxing a copy
thereof to such party at the address for such notices as listed in this Note and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR
ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.
20. HEADINGS. The headings used in this Note are used for convenience
only and are not to be considered in construing or interpreting this Note.
21. Definitions.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
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"BOARD OF DIRECTORS" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person duly authorized to act on behalf of the Board of Directors of such
Person.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, equity participations or other equivalents (however designated) of
corporate stock or partnership interests and any and all warrants, options and
rights with respect thereto (whether or not currently exercisable), including
each class of common stock and preferred stock of such Person.
"GAAP" means generally accepted accounting principles as in effect in the
United States of America as of the Issue Date.
"HOLDER" means a Person in whose name a Note is registered on the
Company's books.
"INDEBTEDNESS" means, without duplication, with respect to any Person, (a)
all obligations of such Person (i) in respect of borrowed money (whether or not
the recourse of the lender is to the whole of the assets of such person or only
to a portion thereof); (ii) evidenced by bonds, notes, debentures or similar
instruments; (iii) representing the balance deferred and unpaid of the purchase
price of any property or services (other than accounts payable or other
obligations arising in the ordinary course of business); (iv) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks, (v) for
the payment of money relating to a capitalized lease obligation under GAAP; or
(vi) evidenced by a letter of credit or a reimbursement obligation of such
Person with respect to any letter of credit; (b) all net obligations of such
Person under interest rate swap obligations and foreign currency xxxxxx; (c) all
liabilities of others of the kind described in the preceding clauses (a) or (b)
that such Person has guaranteed or that are otherwise its legal liability; (d)
Indebtedness (as otherwise defined in this definition) of another Person secured
by lien on any asset of such Person, whether or not such Indebtedness is assumed
by such Person, the amount of such obligations being deemed to be the lesser of
(1) the full amount of such obligations so secured, and (2) the fair market
value of such asset, as determined in good faith by the Board of Directors of
such Person, which determination shall be evidenced by a board resolution; and
(e) any and all deferrals, renewals, extensions, refinancings and refundings
(whether direct or indirect) of, or amendments, modifications or supplements to,
any liability of the kind described in any of the preceding clauses (a), (b),
(c), (d) or this clause (e), whether or not between or among the same parties.
"ISSUE DATE" means the date on which the Note is originally issued.
"MATURITY DATE" means _________, 2010.
"PERSON" means any individual, corporation, partnership, joint venture,
trust, estate, unincorporated organization or government or any agency or
political subdivision thereof.
A "SUBSIDIARY" of any Person means (i) a corporation a majority of whose
Voting Stock is at the time, directly or indirectly, owned by such Person, by
one or more subsidiaries of such Person or by such Person and one or more
subsidiaries of such Person, (ii) a partnership in which such Person or a
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subsidiary of such Person is, at the date of determination, a general or limited
partner of such partnership, but only if such Person or its subsidiary is
entitled to receive more than fifty percent (50%) of the assets of such
partnership upon its dissolution, or (iii) any other Person (other than a
corporation or partnership) in which such Person, directly or indirectly, at the
date of determination thereof, has (x) at least a majority ownership interest or
(y) the power to elect or direct the election of a majority of directors or
other governing body of such Person.
"SUBSIDIARY" means any subsidiary of the Company.
"VOTING STOCK" means, with respect to any Person, securities of any class
or classes of Capital Stock in such Person entitling the holders thereof,
whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency to vote in the election of members of the
Board of Directors or other governing body of such Person.
22. MISCELLANEOUS. Except as otherwise provided herein, the Company
waives demand, diligence, presentment for payment and protest, notice of
extension, dishonor, maturity and protest. Time is of the essence with respect
to the performance of each and every covenant, condition, term and provision
hereof.
IN WITNESS WHEREOF, this Note has been issued on the _______ day of
_________________ 2008.
AETHLON MEDICAL, INC.
By /s/ Xxxxx Xxxxx
--------------------------------
Xxxxx Xxxxx
Chief Executive Officer
[HOLDER:]
BY:
--------------------------------
NAME:
------------------------------
TITLE:
-----------------------------
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EXHIBIT A
EXECUTED WARRANT
See Attached
A-1
EXHIBIT B
CONVERSION NOTICE
(To be signed only upon conversion of this Note)
TO: AETHLON MEDICAL, INC.
The undersigned, the registered holder of the 10 % Convertible Note (the "Note")
of AETHLON MEDICAL, INC. (the "Company"), hereby surrenders the Note for
conversion into shares of Common Stock of the Company (the "Common Stock") to
the extent of $_______ unpaid principal amount of the Note and $_______ unpaid
accrued Interest due under the Note, all in accordance with the provisions of
such Note. The undersigned requests (i) that a certificate representing shares
of Common Stock, bearing the appropriate legends, be issued to the undersigned,
and (ii) if the unpaid principal amount so converted is less than the entire
unpaid principal amount of the Note, that a new substitute note representing the
portion of said unpaid principal amount that is not so converted be issued in
accordance with the provisions of the Note.
------------------------------------------------
(Signature and name of the registered holder)
------------------------------------------------
Print Name
Dated:
-------------------------------
B-1
