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EXHIBIT 4.1
FORM OF SECURED CONVERTIBLE PROMISSORY NOTE
(THE "NOTE")
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT
BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT AND
APPLICABLE LAWS OR SOME
OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT
AND APPLICABLE
LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION
IS NOT REQUIRED.
$_____________ February __, 2005
FOR VALUE RECEIVED, XECHEM INTERNATIONAL, INC., a Delaware
corporation (the
"Company"), promises to pay to the order of _______________ (the
"Holder"), the
sum of _____________________________________ Dollars
($______________) in legal
and lawful money of the United States of America, together with
interest from
the date hereof on the principal amount from time to time
remaining unpaid as
provided below. Payment for all amounts due hereunder shall be
made at the
principal office of Holder, or such other address as the Holder
may hereafter
direct in writing.
The following is a statement of the rights of the Holder of this
Note and the
conditions to which this Note is subject, and to which the
Holder hereof, by the
acceptance of this Note agrees:
1. Interest/Debt Service/Term/Security. This Note shall bear
simple
interest at the rate of ten percent (10%) per annum on the
unpaid principal
balance of this Note from time to time outstanding from the date
of this Note
until such Note is paid in full. The Note, together with other
promissory notes
of the Company of like tenor and having an aggregate initial
principal balance
of not more than $2.5 million (collectively, the "Bridge
Notes"), is repayable
on a pro rata basis with the other Bridge Notes out of the
proceeds of the sale
by the Company of CepTor Corporation ("CepTor") common stock,
par value $.00001
per share (the "CepTor Common"), not including sales of CepTor
Common to William
Pursley in exchange for shares of common stock, par value
$.00001 per share, of
the Company or options to purchase such stock, as described in
the Security
Agreement as hereinafter defined. The Company agrees that it
shall sell at least
twenty-five (25%) percent of the CepTor Common held by it on the
date hereof
(the "Initial CepTor Position"), to the extent required to repay
the Bridge
Notes, by December 31, 2005, provided, however, that if CepTor
shall have failed
to register such CepTor Common pursuant to the Securities Act of
1933, as
amended (the "Securities Act"), by September 30, 2005, such
outside date for the
sale of twenty-five (25%) percent of the Initial CepTor Position
shall be
extended to March 31, 2006. The Company further agrees that it
shall sell an
additional twenty-five (25%) percent of the Initial CepTor
Position, to the
extent required to repay the Bridge Notes, by June 30, 2006. In
the event that
the entire principal balance and all accrued interest on this
Note, together
with any other amounts that may be due hereunder, have not been
paid in full by
December 31, 2006, then all such amounts shall be immediately
payable on such
date (the "Maturity Date"). Payments hereunder shall be applied
first to
amounts, if any, due hereunder that are not interest or
principal, then to
accrued and unpaid interest and then to the unpaid principal
balance of this
Note.
<PAGE>
This Note is secured by collateral under a Security Agreement
(the
"Security Agreement") among the Company, the holders of the
Bridge Notes and
Greenberg & Kahr as Escrow Agent, dated as of February __,
2005, and the Holder
of this Note is entitled to the benefit of all of the security
provisions
thereof.
2. Events of Default. If any of the events specified in this
Section 2
shall occur (herein individually referred to as an "Event of
Default"), the
Holder of this Note may, at the Holder's option, in addition to
any other rights
the Holder may have in equity or at law and in addition to the
Holder's rights
of conversion under Section 4 of this Note as to all or any part
of the
principal and interest then due and owing, declare this Note
mature, and all
sums owing hereon and under any instrument or agreement executed
in connection
with this Note shall be due and payable immediately without
presentment,
protest, demand, notice of intention to accelerate, notice of
acceleration,
notice of non-payment, notice of protest, or other notice of any
kind, all of
which are hereby expressly waived by the Company:
(a) Default in the payment of the principal and unpaid
accrued
interest of this Note when due and payable pursuant to Section
1; or
(b) The institution by the Company of proceedings to be
adjudicated
as bankrupt or insolvent, or the consent by it to institution
of
bankruptcy or insolvency proceedings against it or the filing by
it of a
petition or answer or consent seeking reorganization or release
under any
statute, law or regulation, or the consent by it to the filing
of any such
petition or the appointment of a receiver, liquidator, assignee,
trustee
or other similar official of the Company, or of any substantial
part of
its property, or the making by it of an assignment for the
benefit of
creditors, or the taking of corporate action by the Company in
furtherance
of any such action; or
(c) If, within thirty (30) days after the commencement of an
action
against the Company (and service of process in connection
therewith on the
Company) seeking any bankruptcy, insolvency, reorganization,
liquidation,
dissolution or similar relief under any present or future
statute, law or
regulation, such action shall not have been resolved in favor of
the
Company or all orders or proceedings thereunder affecting the
operations
or the business of the Company stayed, or if the stay of any
such order or
proceeding shall thereafter be set aside, or if, within sixty
(60) days
after the appointment without the consent or acquiescence of the
Company
of any trustee, receiver or liquidator of the Company or of all
or any
substantial part of the properties of the Company, such
appointment shall
not have been vacated; or
(d) Any consolidation or merger or like transaction of the
Company
with or into any other corporation or other entity or person, or
any other
corporate reorganization in which the Company shall not be the
continuing
or surviving entity in such consolidation, merger or
reorganization, any
transaction or series of related transactions by or affecting
the Company
in which the right to control securities possessing in excess of
fifty
percent (50%) of the voting power of all Company securities is
transferred
(calculated on a fully diluted basis giving effect to conversion
or
exercise of all instruments or securities entitling the holder
to convert
into or to receive common stock or its equivalent (including
this Note)),
a dissolution of the Company, or a sale of all or substantially
all of the
assets of the Company; or
2
<PAGE>
(e) A material default by the Company of any of its
obligations
under the Note, the Security Agreement or the Subscription
Agreement
between the Company and Holder.
3. Waivers. Unless otherwise specifically set forth in this
Note, the
Company waives (i) all notices, demands and presentments for
payments, (ii) all
notices of non-payment, default, intention to accelerate
maturity, acceleration
of maturity, protest and dishonor and (iii) diligence in taking
any action to
collect amounts hereunder and in the handling of any collateral
securing this
Note.
4. Conversion.
4.1 Conversion. Subject to the procedures provided in Section
4.2
below, the Holder of this Note has the right, at the Holder's
option, at
any one time or from time to time from and after the date hereof
and until
this Note is paid in full, to convert this Note, on demand, in
accordance
with the provisions of Section 4.2 hereof, in whole or in part,
into
shares of the Company's common stock, $0.00001 par value
("Common Stock"),
at $0.015 per Share (the "Conversion Price"), subject to
adjustment as set
forth in Section 4.3 through Section 4.6 hereof.
4.2 Conversion Procedure. To convert this Note, the holder of
this
Note shall give written notice ("Conversion Notice") to the
Company of its
election to convert this Note to shares of Common Stock pursuant
to
Section 4.1. The conversion, and all of the rights of the Holder
hereof in
and with respect to the Common Stock, shall be effective
immediately upon
delivery of the Conversion Notice and surrender of this Note to
the
Company. The Company shall, immediately following such
conversion, deliver
to the Holder of this Note a certificate or certificates for the
number of
shares of Common Stock to which the holder of this Note shall be
entitled,
together with a promissory of like tenor with this Note for
any
unconverted portion of this Note.
4.3 Adjustment of Conversion Price for Dilutive Events. If
and
whenever on or after the date of this Note, the Company issues,
sells or
grants shares of Common Stock, or in accordance with Section 4.4
below is
deemed to have issued, sold or granted shares of its Common
Stock, for
consideration p
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