EXHIBIT 10.5
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JUNE 12, 2008
SECURED CONVERTIBLE PROMISSORY NOTE
THEREFORE, FOR VALUE RECEIVED the undersigned, promises to pay to iVoice, Inc.,
all of the Fees as defined in Section 3 of Administrative Services Agreement by
and between Xxxxxx Pharmaceuticals, Ltd. (the "Company") and iVoice, Inc. dated
March 1, 2007, as amended, that have been earned, accrued and remain unpaid and
have been converted into this Secured Convertible Promissory Note at the rate of
Prime plus 1 percent per annum on the unpaid balance until paid or until
default, both principal and interest payable in lawful money of the United
States of America, at iVoice, Inc. (the "iVoice") 000 Xxxxxxx 00, Xxxxxxx, Xxx
Xxxxxx 00000, or at such place as the legal holder hereof may designate in
writing. It is understood and agreed that additional amounts may be advanced by
the holder hereof as provided in the instruments, if any, securing this Secured
Convertible Promissory Note and such advances will be added to the principal of
this Secured Convertible Promissory Note and will accrue interest at the above
specified rate of interest from the date of advance until paid. The principal
and interest shall be due and payable as follows: (a) interest shall accrue
monthly on the unpaid balance and shall be paid annually, and (b) principal
shall be payable on demand.
1. Notwithstanding anything to the contrary herein, the Secured Convertible
Promissory Note holder may elect payment of the principal and/or interest,
at the holder's sole discretion, owed pursuant to this Note by the Company
to issue to iVoice, or his assigns either: (i) one Class B common stock
share of Xxxxxx Pharmaceuticals no par value per share, for each dollar
owed, (ii) the number of Class A common stock shares of Xxxxxx
Pharmaceuticals calculated by dividing (x) the sum of the principal and
interest that the Note holder has decided to have paid by (y) eighty
percent (80%) of the lowest trading price of Xxxxxx Pharmaceuticals Class A
common stock in the previous thirty (30) trading days, or (iii), payment of
the principal of this Secured Convertible Promissory Note, before any
repayment of interest. For purposes of determining the holding period of
this Secured Convertible Promissory Note under Rule 144 of the regulations
promulgated by the Securities and Exchange Commission under the Securities
Act of 1933, as amended, Exhibit I attached herein shows the date that each
monthly obligation pursuant to the Agreement became due and unpaid. This
Exhibit I shall be amended from time to time to reflect additional monthly
advances made pursuant to the Agreement referenced above. Notwithstanding
anything to the contrary, The Company shall not issue iVoice either Class A
and/or Class B Common Stock as required in the paragraph should the total
aggregate beneficial holdings of Xxxxxx Pharmaceuticals Class A Common
Stock by iVoice exceeds 9.99% of the total outstanding Class A Common Stock
at the time of conversion of the monies owed under this Secured Convertible
Promissory Note.
2. Unless otherwise provided, this Secured Convertible Promissory Note may be
prepaid in full or in part at any time without penalty or premium. Partial
prepayments shall be applied to installments due in reverse order of their
maturity.
3. In the event of (a) default in payment of any installment of principal or
interest hereof as the same becomes due and such default is not cured
within ten (10) days from the due date, or (b) default under the terms of
any instrument securing this Secured Convertible Promissory Note, and such
default is not cured within fifteen (15) days after written notice to
maker, then in either such event the holder may, without further notice,
declare the remainder of the principal sum, together with all interest
accrued thereon, and the prepayment premium, if any, at once due and
payable. Failure to exercise this option shall not constitute a waiver of
the right to exercise the same at any other time. The unpaid principal of
this Secured Convertible Promissory Note and any part thereof, accrued
interest and all other sums due under this Secured Convertible Promissory
Note shall bear interest at the rate of prime plus 2 percent per annum
after default until paid.
4. All parties to this Secured Convertible Promissory Note, including maker
and any sureties, endorsers, or guarantors, hereby waive protest,
presentment, notice of dishonor, and notice of acceleration of maturity and
agree to continue to remain bound for the payment of principal, interest,
and all other sums due under this Secured Convertible Promissory Note,
notwithstanding any change or changes by way of release, surrender,
exchange, modification or substitution of any security for this Secured
Convertible Promissory Note or by way of any extension or extensions of
time for the payment of principal and interest; and all such parties waive
all and every kind of notice of such change or changes and agree that the
same may be made without notice or consent of any of them.
5. Upon default, the holder of this Secured Convertible Promissory Note may
employ an attorney to enforce the holder's rights and remedies and the
maker, principal, surety, guarantor and endorsers of this Secured
Convertible Promissory Note hereby agree to pay to the holder reasonable
attorneys fees, plus all other reasonable expenses incurred by the holder
in exercising any of the holder's right and remedies upon default. The
failure to exercise any such right or remedy shall not be a waiver or
release of such rights or remedies or the right to exercise any of them at
another time.
6. This Secured Convertible Promissory Note is to be governed and construed in
accordance with the laws of the State of New Jersey.
7. The monies owed under this Secured Convertible Promissory Note shall be
secured by a security interest as set forth in a Security Agreement dated
the date hereof.
IN TESTIMONY WHEREOF, each corporate maker has caused this instrument to be
executed in its corporate name by its President, and its corporate seal to be
hereto affixed, all by order of its Board of Directors first duly given, the day
and year first written above:
XXXXXX PHARMACEUTICALS, LTD.
By: ___________________________
Xxxx Xxxxxx
President and
Chief Executive Officer
