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EXHIBIT 10.31
FORM OF
ALLONGE TO
10% SERIES A CONVERTIBLE NOTES
This Allonge (the "Allonge"), dated as of March 5, 2007, attached
to
and forming a part of certain 10% Series A Convertible Promissory
Notes, dated
in November and December, 2005 (collectively, the "Note"), made by
AETHLON
MEDICAL, INC., a Nevada corporation (the "Company"), payable to the
order of the
Ellen R. Weiner Family Revocable Trust (the "Holder"), in the total
principal
amount of $760,000.
1. Paragraph 1, "Interest," is hereby amended and restated in
its
entirety as follows:
1.
INTEREST
1.1 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. Interest will accrue on each Advance
commencing on the date of the Advance, as set forth on Exhibit
A to this Note. The Company shall pay all accrued Interest
after the date of the Allonge on a quarterly basis on the
first day of April, July, October and on 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.
1.2
Within five (5) business days of the execution date of
this Allonge, the Company will pay accrued Interest through
February 15, 2007. The Company will pay the Interest in units
(the "Units") at the rate of $.20 per Unit (the "Interest
Payment Rate"). Each Unit is composed of one share of the
Company's Common Stock and one Class A Common Stock Purchase
Warrant (the "Class A Warrant"). The Company will pay the
accrued Interest through February 15, 2007 by issuing 527,577
Units and will pay all accrued Interest thereafter in Units at
the Interest Payment Rate. Each Class A Warrant will be
exercisable to purchase one share of Common Stock at a price
of $.20 per share (the Exercise Price"). If the Holder
exercises Class A Warrants on or before July 3, 2008, the
Company will issue the Holder one Class B Common Stock
Purchase Warrant (the "Class B Warrant") for every two Class A
Warrants exercised. Each Class B Warrant will be exercisable
to purchase one share of Common Stock at a price equal to the
greater of $.20 per share or seventy-five percent (75%) of the
average of the closing bid prices of the Common Stock for the
five (5) trading days immediately preceding the date of the
notice of conversion. The forms of the Class A Warrant and
Class B Warrant are set forth as Exhibits B and C,
respectively. The Class A Warrants and Class B Warrants are
referred to as the "Warrants."
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1.3 All Interest payable under the Note after the date of the
Allonge will, at the option of the Holder, be payable in cash
or Units, valued at the Interest Payment Rate, as such term is
defined in this Note. The Company will pay any Interest that
cannot be paid in full Units in cash.
1.4 Paragraph 3 of the Note is hereby amended and restated in
its entirety as follows:
3. PRE-PAYMENTS AND MATURITY DATE. This Note shall be due and
payable in full, including all accrued Interest thereon, on
January 3, 2008 (the "Maturity Date"). At any time prior to
the Maturity Date, the Company shall have the right to prepay
this Note, in whole or in part, without penalty, on ten (10)
days' advance written notice to the Holder, 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)
redeemed. If the Company plans to pay the Note in full on or
after the Maturity Date, it will give the Holder the
opportunity to convert at the Conversion Price for a period of
ten (10) days after delivery of written notice of the payment
to the Holder. The Company may prepay this Note at anytime
after issuance without penalty.
1.5 Paragraph 5.1 of the Note is hereby amended and restated
in its entirety as follows:
5.1 CONVERSION OF NOTE/CONVERSION PRICE. This Note is
convertible, at the option of the Holder, into Units at any
time after
the Issue Date prior to the close of business on
the Business Day preceding the Maturity Date at the rate of
$.20 per Unit (the "Conversion Price"), subject to adjustment
as hereinafter provided. Each Unit is composed of one share of
Common Stock and one Class A Warrant. Each Class A Warrant is
exercisable to purchase one share of Common Stock at the
Exercise Price. If the Holder exercises Class A Warrants on or
before July 3, 2008, the Company will issue the Holder one
Class B Warrant for every two Class A Warrants exercised. The
Common Stock comprising the Units shall be deemed to have a
value of $0.199 per share and the Class A Warrant and Class B
Warrant shall each be deemed to have a value of $0.001. No
fracti
