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EXHIBIT 10.28
THIS NOTE AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
SUPERCONDUCTOR TECHNOLOGIES INC.
DEMAND NOTE
$500,000 December 1, 1999
FOR VALUE RECEIVED, SUPERCONDUCTOR TECHNOLOGIES INC., A Delaware
corporation ("Company") promises to pay UPON DEMAND to WILMINGTON SECURITIES,
INC., a Delaware corporation ("Holder"), or its assigns, the principal sum of
Five Hundred Thousand Dollars ($500,000), or such lesser amount as shall equal
the outstanding principal amount hereof, together with interest from the date of
this Note on the unpaid principal balance at a rate equal to eight percent
(8.0%) per annum, computed on the basis of the actual number of days elapsed and
a year of 360 days. Company may repay this Note, in whole or in part, at any
time without prior notice to Holder.
If action is instituted to collect this Note, Company promises to pay
all costs and expenses, including without limitation, reasonable attorneys' fees
and costs, incurred by Holder in connection with such action. Company hereby
waives notice of default, presentment or demand for payment, protest or notice
of nonpayment or dishonor and all other notices or demands relative to this
instrument.
As partial consideration for the loan evidenced by this Note, the
Company agrees to issue to Holder a five-year warrant (the "Warrant") in the
form attached as Exhibit A providing Holder the right to purchase 20,000 shares
of Company Common Stock at a price of $3.00 per share.
The company hereby represents and warrants to the Holder that as of the
date of this Note the Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Company has
all requisite legal and corporate power and authority to execute and deliver
this Note and the Warrant and to carry out and perform its obligations under the
terms of this Note and the Warrant. The shares of Common Stock issuable upon
exercise of the Warrant have been validly reserved, and when issued in
compliance with the terms of the Warrant will be validly issued, fully paid and
nonassessable.
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By acceptance of this Note, the Holder hereby represents and warrants to
the Company as follows: (i) Holder is acquiring this Note and the Warrant for
investment for its own account, not as a nominee or agent, and not with the view
to, or for resale in connection with, any distribution thereof. Holder
understands that the Warrant and the Common Stock, if any, issuable upon
exercise thereof have not been, and will not be, registered under the Securities
Act of 1933, as amended (the "Securities Act") by reason of a specific exemption
form the registration provisions of the Securities Act, the availability of
which depends upon, among other things, the bona fide nature of the investment
intent and the accuracy of the Holder's representations as expressed herein.
Holder is an "accredited investor" within the meaning of Regulation D, Rule
501(a), promulgated by the Securities and Exchange Commission; (ii) Holder
acknowledges that the Warrant and the Common Stock, if any, issuable upon
exercise thereof, must be held indefinitely unless subsequently registered under
the Securities Act or unless an exemption from such registration is available.
Holder is aware of the provisions of Rule 144 promulgated under the Securities
Act which permit 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 not less than one year after a party has purchased
and paid for the security to be sold, the sale being effected through a
"broker's transaction" or in transactions directly with a "market maker" and the
number of shares being sold during any three-month period not exceeding
specified limitations; (ii) Holder understands that no public market now exists
for any of the Warrants and that the Company has made no assurances that a
public market will ever exist for the Warrants; and (iv) Holder has had an
opportunity to discuss the Company's business, management and financial affairs
with its management. Xxxxxx has also had an opportunity to ask questions of
officers of the Company, which questions were answered to its satisfaction.
Xxxxxx understands that such discussions, as well as any written information
issued by the Company, were intended to describe certain aspects of the
Company's business and prospects but were not a thorough or exhaustive
description.
This Note and all actions arising out of or in connection with this Note
shall be governed by and construed in accordance with the laws of the State of
California, without regard to the conflicts of law provisions of the State of
California or of any other state.
IN WITNESS WHEREOF, Company has caused this Note to be issued as of the
date first written above.
SUPERCONDUCTOR TECHNOLOGIES INC.
A Delaware corporation
By: /s/ X. Xxxxx Xxxxxx
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Name: X. Xxxxx Xxxxxx
Title: Chief Executive Officer
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