FORM OF CONVERTIBLE PROMISSORY NOTE $500,000 PLUS INTEREST DUE & PAYABLE DOCUMENT A-0420201 1

Contract Categories: Business Finance - Note Agreements
EX-4.1 2 v220800_ex4-1.htm Unassociated Document
Exhibit 4.1

FORM OF
CONVERTIBLE PROMISSORY NOTE
$500,000 PLUS INTEREST DUE & PAYABLE
DOCUMENT A-0420201 1
 
THIS NOTE AND THE SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR APPLICABLE EXEMPTION OR SAFE HARBOR PROVISION.
 
FOR VALUE RECEIVED, on the Effective Date, as defined below on the signature page, Advaxis, Inc. as Obligor ("Borrower,” or “Obligor”), hereby promises to pay to the Lender (“Lender” or “ Holder”), as defined below on the signature page, the Principal Sum, as defined below, along with the Interest Rate, as defined below, according to the terms herein.
 
The "Lender" shall be:
JMJ Financial / Its Principal, or Its Assignees
The "Principal Sum" shall be:
$500,000 (five hundred thousand US Dollars) Subject to the following: accrued, unpaid interest shall be added to the Principal Sum.
The “Consideration” shall be:
$500,000 (five hundred thousand US dollars) in the form of cash payment by wire or check as set forth in the attached funding schedule.
The "Interest Rate" shall be:
8% one-time interest charge on the Principal Sum. No
interest or principal payments are required until the Maturity Date, but both principal and interest may be included in conversion prior to maturity date.
The "Conversion Price" shall be the following price:
As applied to the Conversion Formula set forth in 2.2, 80% (eighty percent) of the average of the two lowest trade prices in the 20 trading days previous to the conversion; as applies to Advaxis, Inc. voting common stock.
The "Maturity Date" is the date upon which the Principal Sum of this Note, as well as any unpaid interest shall be due and payable, and that date shall be:
3 (three) years from the Effective Date, as defined below on the signature page.
The “Prepayment Terms” shall be:
Prepayment is not permitted within the first 12 months of the execution of this agreement.
The “Conversion Floor” shall be:
$0.15, as set forth below in Section 2.8.
The “Conversion Amount” shall be:
The dollar amount of the Note converted at the time of conversion.
 
 
 

 
 
ARTICLE 1 PAYMENT-RELATED PROVISIONS
 
1.1 Interest Rate. Subject to the Holder's right to convert, interest payable on this Note will accrue interest at the Interest Rate and shall be applied to the Principal Sum.
 
 
ARTICLE 2 CONVERSION RIGHTS
 
The Holder will have the right to convert the Principal Sum and accrued interest under this Note into Shares of the Borrower's Common Stock as set forth below.
 
2.1 Conversion Rights and Cashless Exercise. Subject to the terms set forth in Section 2.7, the Holder will have the right at its election from and after 180 days from the Effective Date, and then at any time, to convert all or part of the outstanding and unpaid Principal Sum and accrued interest into shares of fully paid and nonassessable shares of common stock of Advaxis, Inc.(as such stock exists on the date of issuance of this Note, or any shares of capital stock of Advaxis, Inc. into which such stock is hereafter changed or reclassified, the "Common Stock") as per the Conversion Formula set forth in Section 2.2. Any such conversion shall be cashless, and shall not require further payment from Holder. Unless otherwise agreed in writing by both the Borrower and the Holder, at no time will the Holder convert any amount of the Note into common stock that would result in the Holder owning more than 4.99% of the common stock outstanding of Advaxis, Inc. Shares from any such conversion will be delivered to Holder by 2:30pm EST within 2 (two) business days of conversion notice delivery (see 3.1) by “DWAC/FAST” electronic transfer (see “Share Delivery” attachment).
 
2.2. Conversion Formula. The number of shares issued through conversion is the conversion amount divided by the conversion price.
 
# Shares = Conversion Amount
Conversion Price
 
2.3. This section 2.3 intentionally left blank.
 
2.4. This section 2.4 intentionally left blank.
 
2.5 Reservation of Shares. As of the issuance date of this Note and for the remaining period during which the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the full conversion of this Note. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. The Borrower agrees that its issuance of this Note constitutes full authority to its officers, agents and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note.
 
2.6. Delivery of Conversion Shares. Shares from any such conversion will be delivered to Holder by 2:30pm EST within 2 (two) business days of conversion notice delivery (see 3.1) by “DWAC/FAST” electronic transfer (see “Share Delivery” attachment). If those shares are not delivered in accordance with this timeframe stated in this Section 2.6, at any time for any reason
prior to offering those shares for sale in a private transaction or in the public market through its broker, Holder may rescind that particular conversion to have the conversion amount returned to the note balance with the conversion shares returned to the Borrower. The Company will make its best efforts to deliver shares to Holder same day / next day.
 
 
 

 
 
2.6.1. Conversion Delay Penalties. Holder may assess penalties or liquidated damages (both referred to herein as “penalties”) as follows.
 
2.6.1 .A. For each conversion, Borrower agrees to deliver share issuance instructions to its transfer agent same day or next day. In the event that the share issuance instructions are not delivered to the Borrower’s transfer agent by the next day, a penalty of $2,000 per day will be assessed for each day until share issuance instructions are delivered to the transfer agent ($2,000 per day inclusive of the day of the conversion); and such penalty will be added to the principal balance of the Note (under Holder and Borrower’s expectation that any penalty amounts will tack back to the original date of the note).
 
2.6.1 .B. For each conversion, in the event that shares are not delivered by the third business day (inclusive of the day of the conversion), a penalty of $2,000 per day will be assessed for each day after the third business day (inclusive of the day of the conversion) until share delivery is made; and such penalty will be added to the principal balance of the Note (under Holder and Borrower’s expectation that any penalty amounts will tack back to the original date of the note). Borrower will not be subjected to any penalties once its transfer agent processes the shares to the DWAC system.
 
2.7. This section 2.7 intentionally left blank.
 
2.8. Conversion Price Adjustment. If the Conversion Price on the date that the Holder elects to convert all or part of the outstanding and unpaid Principal sum and accrued interest of the Note pursuant to Section 2.1 is below the price which would otherwise trigger any anti- dilution, price-reset or similar provision in any outstanding option, warrant or other derivative security of the Borrower, then the parties will agree to an adjusted Conversion Price with respect to such conversion such that no anti-dilution, price-reset or similar provision in any outstanding option, warrant or other derivative security of the Borrower would be triggered.
 
ARTICLE 3 MISCELLANEOUS
 
3.1. Notices. Any notice required or permitted hereunder must be in writing and either personally served, sent by facsimile or email transmission, or sent by overnight courier. Notices will be deemed effectively delivered at the time of transmission if by facsimile or email, and if by overnight courier the business day after such notice is deposited with the courier service for delivery.
 
3.2. Amendment Provision. The term "Note" and all reference thereto, as used throughout this instrument, means this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.
 
 
 

 
 
3.3. Assignability. This Note will be binding upon the Borrower and its successors and permitted assigns, and will inure to the benefit of the Holder and its successors and permitted assigns, and may be assigned by the Holder.
 
3.4. Governing Law. This Note will be governed by, and construed and enforced in accordance, with the laws of the State of Florida, without regard to the conflict of laws principles thereof. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of Florida or in the federal courts located in Miami-Dade County, in the State of Florida. Both parties and the individuals signing this Agreement agree to submit to the jurisdiction of such courts.
 
3.5. Delivery of Process By Holder To Borrower. In the event of any action or proceeding by Holder against Borrower, and only by Holder against Borrower, service of copies of summons and/or complaint and/or any other process which may be served in any such action or proceeding may be made by Holder via U.S. Mail, overnight delivery service such as FedEx or UPS, email, fax, or process server, or by mailing or otherwise delivering a copy of such process to the Borrower at its last known address or to its last known attorney as set forth in its most recent SEC filing.
 
3.6. Maximum Payments. Nothing contained herein may be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum will be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.
 
3.7. Attorney Fees. In the event any attorney is employed by either party to this Note with regard to any legal or equitable action, arbitration or other proceeding brought by such party for the enforcement of this Note or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Note, the prevailing party in such proceeding will be entitled to recover from the other party reasonable attorneys' fees and other costs and expenses incurred, in addition to any other relief to which the prevailing party may be entitled.
 
3.8. No Public Announcement. Except as required by securities law, no public announcement may be made regarding this Note, payments, or conversions without written permission by both Borrower and Holder.
 
3.9. Opinion of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Holder has the right to have any such opinion provided by its counsel. Holder also has the right to have any such opinion provided by Borrower’s counsel.
 
3.10. Director’s Resolution. Once effective, Borrower will execute and deliver to Holder a copy of a Board of Director’s resolution resolving that this note is validly issued, paid, and effective.
 
 
 

 
 
3.11. No Shorting. Holder agrees that so long as any Notes from Borrower to Holder remain outstanding, Holder or any affiliate of Holder will not enter into or effect any “short sales” of the common stock or hedging transaction which establishes a net short position with respect to the common stock of Advaxis, Inc. Borrower acknowledges and agrees that upon submission of conversion notice as set forth in Section 3.1 (up to the amount of cash paid in under the Notes), Holder immediately owns the common shares described in the conversion notice and any sale of those shares issuable under such conversion notice would not be considered short sales.
 
 
 
BORROWER[S]:
   
     
     
     
     
Thomas Moore 
Chairman & CEO 
Advaxis, Inc. 
 
Mark Rosenblum
CFO
Advaxis, Inc.
 
 
 
LENDER/HOLDER:
   
     
     
     
     
JMJ Financial / Its Principal
   
 
 
 
EFFECTIVE DATE AS EXECUTED BY LENDER/HOLDER:
 
NOTARY FOR SIGNATURE BY LENDER/HOLDER:
 
 
 
 
 

 
 
Additional Default Provisions
 
These additional default provisions apply to Document A-042020 11 and B-042020 11 a-d:
 
Default. In the event that (i) the Borrower shall fail to pay any principal under this Note when due and payable (or payable by conversion) hereunder; or (ii) the Borrower shall fail to pay any interest or any other amount under this Note when due and payable (or payable by conversion) hereunder; or (iii) a receiver, trustee or other similar official shall be appointed over the Borrower or a material part of its assets and such appointment shall remain uncontested for twenty (20) days or shall not be dismissed or discharged within sixty (60) days; or (iv) the Borrower shall become insolvent or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; or (v) the Borrower shall make a general assignment for the benefit of creditors; or (vi) the Borrower shall file a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); or (vii) an involuntary proceeding shall be commenced or filed against the Borrower; or (viii) the Borrower shall lose its ability to electronically transfer shares by “DWAC/FAST” transfer; or (ix) the Borrower shall lose its status as “DTC Eligible”; or the borrower’s shareholders shall lose the ability to deposit (either electronically or by physical certificates, or otherwise) shares into the DTC System; or (x) the Borrower shall become delinquent in its filing requirements as a fully-reporting issuer registered with the Securities & Exchange Commission; (each event specified in clauses (i) through (x) above, an “Event of Default”); then, in the case of any of the events specified in clauses (i) through (x) above, the outstanding principal amount under this Note, together with accrued and unpaid interest thereon, and all other amounts payable by Borrower under this Note, shall become immediately due and payable without any action on the part of the Lender. Borrower waives demand, presentment, protest, notice of protest, dishonor, notice of dishonor or any other notice of any kind.
 
 
 
BORROWER[S]:
   
     
     
     
     
Thomas Moore 
Chairman & CEO 
Advaxis, Inc. 
 
Mark Rosenblum
CFO
Advaxis, Inc.
 
 
 
LENDER/HOLDER:
   
     
     
     
     
JMJ Financial / Its Principal
   
 
 
 

 
 
April 28, 2011
 
Advaxis, Inc.
 
Re: Document A-0420201 1 and B&C-0420201 1a-d:
 
 
1.
By entering into this transaction, the Company agrees to take responsibility and accountability for the conversion terms of the agreements, and to honor the conversion terms as set forth in the agreements.
 
 
2.
The Company understands and agrees that with regard to all documents Secured & Collateralized Promissory Note C-0420201 1a-d, any payments that may be made prior to maturity are on a best efforts basis by JMJ, and that JMJ does not guarantee that it will make any payments prior to maturity. Any payments by JMJ prior to maturity are solely at JMJ’s election.
 
 
3.
Regarding DWAC electronic transfer of shares:
 
 
·
If the Company is currently not able to electronically transfer shares via DWAC, you agree to apply for DWAC electronic transfer within 5 business days of execution of this agreement (at your own expense).
 
 
·
You agree that as long as the Company is not able to electronically DWAC shares, that JMJ Financial may, at its election, indefinitely stall or cancel (without penalty or liability) any payments as set forth.
 
 
 
BORROWER[S]:
   
     
     
     
     
Thomas Moore 
Chairman & CEO 
Advaxis, Inc. 
 
Mark Rosenblum
CFO
Advaxis, Inc.
 
 
 
LENDER/HOLDER:
   
     
     
     
     
JMJ Financial / Its Principal