SECURED SENIOR CONVERTIBLE PROMISSORY NOTE Date of Issuance $ December ____, 2010
EX-10.2 3 c09339exv10w2.htm EXHIBIT 10.2 Exhibit 10.2
Exhibit 10.2
THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
SECURED SENIOR CONVERTIBLE PROMISSORY NOTE
Date of Issuance | ||
$ | December ____, 2010 |
FOR VALUE RECEIVED, Neurologix, Inc., a Delaware corporation (the Company), hereby promises to pay to the order of [____] as nominee (the Lender), the principal sum of [____] ($[____]), together with interest thereon from the date of this Note. Interest shall accrue daily at a rate of ten percent (10%) per annum, compounded quarterly. Unless earlier converted into Conversion Shares pursuant to Section 2.2 of that certain Note and Warrant Purchase Agreement dated December ____, 2010 among the Company, Lender and certain other Lenders (the Purchase Agreement), an amount equal to (i) 1.2 multiplied by the then outstanding principal amount on this Note, plus (ii) the accrued but unpaid interest thereon, shall be due and payable by the Company on demand by the Lender at any time after the earlier of (i) the Maturity Date and (ii) the declaration of an acceleration of this Note by the Required Note Holders upon the occurrence of an Event of Default.
This Note is one of a series of Notes issued pursuant to the Purchase Agreement, and capitalized terms not defined herein shall have the meaning set forth in the Purchase Agreement.
1. Payment. All payments shall be made in lawful money of the United States of America at the principal office of the Company, or at such other place as the holder hereof may from time to time designate in writing to the Company. Payment shall be credited first to Costs (as defined below), if any, then to accrued interest due and payable and any remainder applied to principal. Prepayment of principal, together with accrued interest, may be made in part or in whole; provided that (i) any prepayments made prior to July 1, 2011 shall be for an amount equal to (A) 1.1 multiplied by the then outstanding principal amount on this Note, plus (B) the unpaid accrued interest thereon, (ii) any prepayments made between July 1, 2011 and October 30, 2011 shall be for an amount equal to (A) 1.2 multiplied by the then outstanding principal amount on this Note, plus (B) the unpaid accrued interest thereon, (iii) any prepayments must be made pro rata to all holders of Notes based on the ratio that the aggregate principal value of this Note bears to the aggregate principal value of all outstanding Notes issued pursuant to the Purchase Agreement, and (iv) prepayment of any of the Notes issued pursuant to the Purchase Agreement shall be credited to the Notes issued to a particular Lender in the order of the issuance of such Notes starting with the earliest Notes issued. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.
2. Security. This Note is secured under that certain Security Agreement (the Security Agreement) between the Company and the Lenders of even date herewith. Reference is hereby made to the Security Agreement for a description of the nature and extent of the security for this Note and the rights with respect to such security of the holder of this Note.
3. Priority. This Note and the other Notes shall be senior in all respects (including right of payment) to all other indebtedness of the Company, now existing or hereafter.
4. Conversion of the Notes. This Note and any amounts due hereunder shall be convertible into Conversion Shares in accordance with the terms of Section 2.2 of the Purchase Agreement. As promptly as practicable after the conversion of this Note, the Company at its expense shall issue and deliver to the holder of this Note, upon surrender of the Note, a certificate or certificates for the number of full Conversion Shares issuable upon such conversion.
5. Amendments and Waivers; Resolutions of Dispute; Notice. The amendment or waiver of any term of this Note, the resolution of any controversy or claim arising out of or relating to this Note and the provision of notice shall be conducted pursuant to the terms of the Purchase Agreement.
6. Successors and Assigns. This Note applies to, inures to the benefit of, and binds the successors and assigns of the parties hereto. Any transfer of this Note may be effected only pursuant to the Purchase Agreement and by surrender of this Note to the Company and reissuance of a new note to the transferee. The Lender and any subsequent holder of this Note receives this Note subject to the foregoing terms and conditions, and agrees to comply with the foregoing terms and conditions for the benefit of the Company and any other Lenders.
7. Officers and Directors not Liable. In no event shall any officer or director of the Company be liable for any amounts due and payable pursuant to this Note.
8. Expenses. The Company hereby agrees, subject only to any limitation imposed by applicable law, to pay all expenses, including reasonable attorneys fees and legal expenses, incurred by the holder of this Note in endeavoring to collect any amounts payable hereunder which are not paid when due, whether by declaration or otherwise (Costs). The Company agrees that any delay on the part of the holder in exercising any rights hereunder will not operate as a waiver of such rights. The holder of this Note shall not by any act, delay, omission or otherwise be deemed to have waived any of its rights or remedies, and no waiver of any kind shall be valid unless in writing and signed by the party or parties waiving such rights or remedies.
9. Governing Law. This Note shall be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to the choice of law principles thereof.
10. Approval. The Company hereby represents that its board of directors, in the exercise of its fiduciary duty, has approved the Companys execution of the Notes based upon a reasonable belief that the principal provided hereunder is appropriate for the Company after reasonable inquiry concerning the Companys financing objectives and financial situation. In addition, the Company hereby represents that it intends to use the principal of this Secured Senior Convertible Promissory Note for the purposes set forth in Section 8.3 of the Purchase Agreement.
[Signature Page Follows]
NEUROLOGIX, INC. | ||||
By: | ||||
Name: | Clark A. Johnson | |||
Title: | President and Chief Executive Officer | |||
By: | ||||
Name: | Marc L. Panoff | |||
Title: | Chief Financial Officer, Treasurer and Secretary |