THIS NOTE HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED BY ANY
PERSON, INCLUDING A PLEDGEE, UNLESS (1) EITHER (A) A REGISTRATION
STATEMENT WITH RESPECT THERETO SHALL BE EFFECTIVE UNDER THE
SECURITIES ACT, OR (B) THE COMPANY SHALL HAVE RECEIVED AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT IS AVAILABLE, AND (2) THERE
SHALL HAVE BEEN COMPLIANCE WITH ALL APPLICABLE STATE SECURITIES OR
“BLUE SKY” LAWS.
INTELLECT NEUROSCIENCES,
INC.
FORM OF PROMISSORY
NOTE
|
$______
|
New York, New York
|
|
|
_________, 2009
|
INTELLECT NEUROSCIENCES, INC.
, a Delaware corporation (the
“Company”), for value received, hereby promises to pay
to NAME , or its assigns (the “Payee”), the
principal sum of INSERT AMOUNT ($XXXXX) together with all
interest accruing hereunder and all other costs and fees accruing
hereunder in cash no later than six (6) months from the date
hereof; provided , however , that in the event that a
Liquidity Event (as defined below) occurs earlier than the
expiration of such six month period, then the full
principal amount together with any interest due and outstanding
shall become due and payable in full no later than five business
days following the Liquidity Event (hereinafter, the expiration of
such six month period or the fifth business day following the
occurrence of a Liquidity Event, whichever is earlier, is referred
to as the "Due Date") Interest shall accrue on the
unpaid principal balance at an annual interest rate of ten percent
(10%). All such accrued interest shall be payable at the
same time that the Company pays any principal amount of this
Note.
A “Liquidity Event” shall mean the
receipt by the Company of cash proceeds in an amount of at least
$1,125,000 from the sale of Company common stock. The Company
agrees to notify Payee of the occurrence of a Liquidity Event no
later than two business days after it has occurred.
The Company and all endorsers of this Note
hereby waive presentment, demand, protest and
notice. Payee shall, promptly upon full payment by the
Company of the principal of and interest on this Note, together
with all costs and expenses, if any, due hereon, surrender this
Note to the Company for retirement and cancellation,
provided , however , that to the extent the Company
makes a payment or payments to Payee, which payment or payments or
any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, and/or required to be repaid
to a trustee, receiver, or any other party under the United States
Bankruptcy Code, as amended, or any other applicable law, common
law, or equitable causes (a "Voidable Transfer") and Payee is
required to repay or restore any such Voidable Transfer or the
amount or any portion thereof, or upon the advice of its counsel is
advised to do so, then as to any such Voidable Transfer or the
amount repaid or restored (including all costs, expenses and
attorneys' fees of Payee related thereto), the liability of the
Company shall automatically be revived, reinstated and restored and
shall exist in full force and effect as though such Voidable
Transfer had never been made.
Should the indebtedness evidenced by this Note
or any part thereof be collected in any proceeding at law, or this
Note be placed in the hands of an attorney for collection after
default by the Company in making any payment of principal and
interest hereunder, the Company agrees to pay all costs of
collecting the balance due under this Note, including reasonable
attorneys' fees and expenses and court costs, if any.
1. Event of
Default . In the case of an Event of Default (as
defined below) as specified in clauses (i) or (ii) of the
definition thereof, the principal of and accrued and unpaid
interest on the Note shall ipso facto become and be
immediately due and payable without any declaration or other act on
the part of any holder of this Note. In
