Exhibit 10.2

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION, AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT IN COMPLIANCE WITH, OR PURSUANT TO AN EXEMPTION FROM, THE
REQUIREMENTS OF SUCH ACT OR SUCH LAWS.

 

 

 

BIONIK LABORATORIES CORP.

 

CONVERTIBLE PROMISSORY NOTE

 

Principal Amount: US$[_____] Issue Date: [_____]

 

Bionik Laboratories Corp., a Delaware corporation (the “Company”), for value
received, hereby promises to pay to [_____] or his permitted assigns or
successors (the “Holder”), the principal amount of [_____] Dollars (US$[___])
(the “Principal Amount”), without demand, on the Maturity Date (as hereinafter
defined), together with any accrued and unpaid interest due thereon. This Note
shall bear interest at a fixed rate of 3% per month, beginning on the Issue
Date. Interest shall be computed based on a 360-day year of twelve 30-day months
and shall be payable, along with the Principal Amount, on the Maturity Date.
Except as set forth in Section 3.1, payment of all principal and interest due
shall be in such coin or currency of the United States of America as shall be
legal tender for the payment of public and private debts at the time of payment.

 

This Note is a convertible promissory note referred to in that certain
Subscription Agreement dated as of the date hereof, or series of like
subscription agreements (the “Subscription Agreement”), among the Company and
the subscribers named therein, pursuant to which the Company is seeking to
borrow up to $14,000,000 (the “Offering”).

 

1.           Definitions.

 

1.1           Definitions. The terms defined in this Section 1 whenever used in
this Note shall have the respective meanings hereinafter specified.

 

“Change in Control” means a merger or consolidation of the Company with or into
any other entity in which the stockholders of the Company immediately prior to
the merger or consolidation do not own more than 50% of the outstanding voting
power (assuming conversion of all convertible securities and the exercise of all
outstanding options and warrants) of the surviving entity or the sale, lease,
licensing, transfer or other disposition of all or substantially all the assets
of the Company; provided, however, that any new issuance of capital stock (or
securities convertible or exercisable into capital stock) of the Company to one
or more third parties for the sole purpose of providing funding for the Company
shall not constitute a Change in Control.

 

“Common Stock” means the common stock, par value $0.001 per share, of the
Company.

 

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“Conversion Shares” means the New Round Stock issued or issuable to the Holder
pursuant to Article 3.

 

“Event of Default” shall have the meaning set forth in Section 6.1.

 

“Holder” or “Holders” means the person named above or any Person who shall
thereafter become a recordholder of this Note in accordance with the terms
hereof.

 

“Issue Date” means the issue date stated above.

 

“Maturity Date” shall mean the earlier of: (a) January 31, 2018 and (b) the
consummation of a Qualified Financing.

 

“New Round Stock” means Common Stock.

 

“Note” means this Convertible Note, as amended, modified or restated.

 

“Person” means an individual, corporation, partnership, limited liability
company, association, trust, joint venture, unincorporated organization or any
government, governmental department or agency or political subdivision thereof.

 

“Qualified Financing” means the Offering, provided the Company raises in one or
more tranches aggregate gross proceeds of no less than $7,000,000 and up to
$14,000,000 pursuant to the Subscription Agreement.

 

“Securities Act” means the United States Securities Act of 1933, as amended.

 

“Trading Market” means the OTCQX market place of the OTC Markets; provided
however, that in the event the Company’s Common Stock is ever listed or traded
on the New York Stock Exchange, the NYSE Amex Equities, the Nasdaq Global Select
Market, the NASDAQ Global Market, the NASDAQ Capital Market, or the OTCQB market
place of the OTC Markets, then the “Trading Market” shall mean such other market
or exchange on which the Company’s Common Stock is then listed or traded.

 

“VWAP” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a
trading day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)), (b) if the Common Stock is not then listed or quoted for trading on a
Trading Market and if prices for the Common Stock are then reported on the OTC
Markets, Inc. (or a similar organization or agency succeeding to its functions
of reporting prices), the most recent bid price per share of the Common Stock so
reported, or (c) in all other cases, the fair market value of a share of Common
Stock as determined by the Board of Directors of the Company in good faith.

 

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2.           GENERAL PROVISIONS.

 

2.1           Loss, Theft, Destruction of Note. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Note and, in the case of any such loss, theft or destruction, upon receipt
of indemnity or security reasonably satisfactory to the Company, or, in the case
of any such mutilation, upon surrender and cancellation of this Note, the
Company will make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Note, a new Note of like tenor and unpaid principal amount dated as of
the date hereof. This Note shall be held and owned upon the express condition
that the provisions of this Section 2.1 are exclusive with respect to the
replacement of a mutilated, destroyed, lost or stolen Note and shall preclude
any and all other rights and remedies notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the replacement of
negotiable instruments or other securities without their surrender.

 

2.2           Prepayment; Redemption. This Note may not be prepaid by the
Company in whole or in part, except with the prior written consent of the
Holder. This Note may not be redeemed by the Company in whole or in part, except
with the prior written consent of the Holder.

 

3.           CONVERSION OF NOTE.

 

3.1         Conversion.

 

(a)          Conversion upon Maturity Date. On the Maturity Date without any
action on the part of the Holder, the outstanding principal and accrued and
unpaid interest under the Notes will be converted into shares of New Round Stock
based upon a fifteen percent (15%) discount to the lesser of (i) (A) the VWAP
average of the last 30 days ending on the closing of the Qualified Financing
(or, in the event of multiple closings, the lowest VWAP average of the last 30
days ending on each closing of a Qualified Financing) in the event of a Maturity
Date referred to in clause (b) of the definition thereof, or (B) the VWAP
average of the last 30 days before the Maturity Date in the event of a Maturity
Date referred to in clause (a) of the definition thereof, and (ii) eighteen
cents ($0.18).

 

(b)          Conversion upon Change of Control. If a Change of Control
transaction occurs prior to the Maturity Date, the outstanding principal and
accrued and unpaid interest under the Note would, at the election of the holders
of a majority of the outstanding principal of the Notes, be either (i) payable
upon demand as of the closing of such Change of Control transaction or (ii)
convertible into shares of the Common Stock immediately prior to such Change of
Control transaction at a price per share equal to the lesser of (x) the VWAP
average of the last 30 days before the date of consummation of the Change of
Control, or (y) the per share consideration to be received by the holders of the
Common Stock in such Change of Control transaction.

 

(c)          Cancellation. Upon and as of the Maturity Date, this Note will be
cancelled on the books and records of the Company and shall solely represent the
right to receive the Conversion Shares.

 

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3.2         Delivery of Securities Upon Conversion.

 

(a)          As soon as is practicable after January 31, 2018 or an event
pursuant to Section 3.1(b)(ii), the Company shall deliver to the Holder a
certificate or certificates evidencing the Conversion Shares issuable to the
Holder. Notwithstanding the foregoing and anything else to the contrary in this
Note and the Subscription Agreements, if and to the extent the Company does not
have enough authorized shares to issue Common Stock to the holders of notes in
the Offering (the “Current Offering Noteholders”) and to all holders of existing
convertible promissory notes of the Company that also convert upon a Qualified
Financing (such holders of convertible promissory notes other than the Current
Offering Noteholders, the “Existing Noteholders”), the Company shall first issue
the necessary and applicable shares upon conversion to the Existing Noteholders
and the Company shall issue the shares of Common Stock that would otherwise have
been issued to the Current Offering Noteholders as of January 31, 2017 pursuant
to Section 3.1(a), upon the earlier of (i) a reverse stock split of the
Company’s Common Stock that allows for the issuance of the shares of Common
Stock pursuant to this Note without violating the authorized share number of the
Company and (ii) the approval of a proposal to increase the Company’s authorized
shares of common stock at its next meeting of stockholders.

 

(b)          The issuance of certificates for Conversion Shares upon conversion
of this Note shall be made without charge to the Holder for any issuance tax in
respect thereof or other cost incurred by the Company in connection with such
conversion and the related issuance of securities. Upon conversion of this Note,
the Company shall take all such actions as are necessary in order to ensure that
the Conversion Shares so issued upon such conversion shall be validly issued,
fully paid and nonassessable.

 

3.3         Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon conversion of this Note. If any
conversion of this Note would create a fractional share or a right to acquire a
fractional share, the Company shall round to the nearest whole number.

 

4.           STATUS; RESTRICTIONS ON TRANSFER.

 

4.1         Status of Note. This Note is a direct, general and unconditional
obligation of the Company, and constitutes a valid and legally binding
obligation of the Company, enforceable in accordance with its terms subject, as
to enforcement, to bankruptcy, insolvency, reorganization and other similar laws
of general applicability relating to or affecting creditors’ rights and to
general principles of equity. This Note does not confer upon the Holder any
right to vote or to consent or to receive notice as a stockholder of the
Company, as such, in respect of any matters whatsoever, or any other rights or
liabilities as a stockholder, prior to conversion hereof into Conversion Shares.

 

4.2         Restrictions on Transferability. This Note and any Conversion Shares
issued with respect to this Note, have not been registered under the Securities
Act, or under any state securities or so-called “blue sky laws,” and may not be
offered, sold, transferred, hypothecated or otherwise assigned except (a)
pursuant to a registration statement with respect to such securities which is
effective under the Act or (b) upon receipt from counsel satisfactory to the
Company of an opinion, which opinion is satisfactory in form and substance to
the Company, to the effect that such securities may be offered, sold,
transferred, hypothecated or otherwise assigned (i) pursuant to an available
exemption from registration under the Act and (ii) in accordance with all
applicable state securities and so-called “blue sky laws.” The Holder agrees to
be bound by such restrictions on transfer. The Holder further consents that the
certificates representing the Conversion Shares that may be issued with respect
to this Note may bear a restrictive legend to such effect. In addition, this
Note shall be subject to the restrictions on transfer set forth in Article III
of the Subscription Agreement.

 

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4.3        COVENANTS. In addition to the other covenants and agreements of the
Company set forth in this Note, the Company covenants and agrees that so long as
this Note shall be outstanding, if any one or more events occur which constitute
or which, with the giving of notice or the lapse of time or both, would
constitute an Event of Default or if the Holder shall demand payment or take any
other action permitted upon the occurrence of any such Event of Default, the
Company will forthwith give notice to the Holder, specifying the nature and
status of the Event of Default or other event or of such demand or action, as
the case may be.

 

5.           REMEDIES.

 

5.1         Events of Default. “Event of Default” wherever used herein means any
one of the following events:

 

(a)          The Company shall fail to issue and deliver the Conversion Shares
in accordance with Section 3;

 

(b)          Default in the due and punctual payment of the principal of, or any
other amount owing in respect of (including interest), this Note when and as the
same shall become due and payable;

 

(c)          Default in the performance or observance of any covenant or
agreement of the Company in this Note (other than a covenant or agreement a
default in the performance of which is specifically provided for elsewhere in
this Section 6.1), and the continuance of such default for a period of 10 days
after there has been given to the Company by the Holder a written notice
specifying such default and requiring it to be remedied;

 

(d)          The entry of a decree or order by a court having jurisdiction
adjudging the Company as bankrupt or insolvent; or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under the Federal Bankruptcy Code or any other applicable
federal or state law, or appointing a receiver, liquidator, assignee, trustee or
sequestrator (or other similar official) of the Company or of any substantial
part of its property, or ordering the winding-up or liquidation of its affairs,
and the continuance of any such decree or order unstayed and in effect for a
period of 60 calendar days;

 

(e)          The institution by the Company of proceedings to be adjudicated as
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under the Federal Bankruptcy Code or
any other applicable federal or state law, or the consent by it to the filing of
any such petition or to the appointment of a receiver, liquidator, assignee,
trustee or sequestrator (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;

 

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(f)          The Company seeks the appointment of a statutory manager or
proposes in writing or makes a general assignment or an arrangement or
composition with or for the benefit of its creditors or any group or class
thereof or files a petition for suspension of payments or other relief of
debtors or a moratorium or statutory management is agreed or declared in respect
of or affecting all or any material part of the indebtedness of the Company; or

 

(g)          It becomes unlawful for the Company to perform or comply with its
obligations under this Note.

 

5.2         Effects of Default. If an Event of Default occurs and is continuing,
then and in every such case the Holder may declare this Note to be due and
payable immediately, by a notice in writing to the Company, and upon any such
declaration, the Company shall pay to the Holder the outstanding principal
amount of this Note plus all accrued and unpaid interest through the date the
Note is paid in full.

 

5.3         Remedies Not Waived; Exercise of Remedies. No course of dealing
between the Company and the Holder or any delay in exercising any rights
hereunder shall operate as a waiver by the Holder. No failure or delay by the
Holder in exercising any right, power or privilege under this Note shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. By acceptance hereof, the Holder acknowledges and agrees that this
Note is one of a series of Convertible Subordinated Promissory Notes of similar
tenor issued by the Company (collectively, the “Related Notes”) and that upon
the occurrence and during the continuance of any Event of Default, the holders
of a majority in original principal amount of the Related Notes shall have the
right to act on behalf of the holders of all such Notes in exercising and
enforcing all rights and remedies available to all of such holders under this
Note, including, without limitation, foreclosure of any judgment lien on any
assets of the Company. By acceptance hereof, the Holder agrees not to
independently exercise any such right or remedy without the consent of the
holders of a majority in original principal amount of the Related Notes.

 

6.           MISCELLANEOUS.

 

6.1         Severability. If any provision of this Note shall be held to be
invalid or unenforceable, in whole or in part, neither the validity nor the
enforceability of the remainder hereof shall in any way be affected.

 

6.2         Notice. Where this Note provides for notice of any event, such
notice shall be given (unless otherwise herein expressly provided) in writing
and either (a) delivered personally, (b) sent by certified, registered or
express mail, postage prepaid or (c) sent by facsimile or other electronic
transmission, and shall be deemed given when so delivered personally, sent by
facsimile or other electronic transmission (confirmed in writing) or mailed.
Notices shall be addressed, if to Holder, to its address as provided in the
Subscription Agreement or, if to the Company, to its principal office.

 

6.3         Governing Law. This Note shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without giving effect to any
conflicts or choice of law provisions that would cause the application of the
domestic substantive laws of any other jurisdiction).

 

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6.4         Forum. The Holder and the Company hereby agree that any dispute
which may arise out of or in connection with this Note shall be adjudicated
before a court of competent jurisdiction in the State of Delaware and they
hereby submit to the exclusive jurisdiction of the courts of the State of
Delaware, as well as to the jurisdiction of all courts to which an appeal may be
taken from such courts, with respect to any action or legal proceeding commenced
by either of them and hereby irrevocably waive any objection they now or
hereafter may have respecting the venue of any such action or proceeding brought
in such a court or respecting the fact that such court is an inconvenient forum.

 

6.5         Headings. The headings of the Articles and Sections of this Note are
inserted for convenience only and do not constitute a part of this Note.

 

6.6         Amendments. This Note may be amended or waived only with the written
consent of the Company and the holders of a majority in original aggregate
principal amount of this Note and the Related Notes. Any such amendment or
waiver shall be binding on all holders of the Notes, even if they do not execute
such consent, amendment or waiver.

 

6.7         No Recourse Against Others. The obligations of the Company under
this Note are solely obligations of the Company and no officer, employee or
stockholder shall be liable for any failure by the Company to pay amounts on
this Note when due or perform any other obligation.

 

6.8         Assignment; Binding Effect. This Note may be assigned by the Company
without the prior written consent of the Holder. This Note shall be binding upon
and inure to the benefit of both parties hereto and their respective permitted
successors and assigns.

 

Signature on the Following Page

 

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In Witness Whereof, the Company has caused this Note to be signed by its duly
authorized officer on the date hereinabove written.

 

  Bionik Laboratories Corp.         By:     Name: Eric Dusseux   Title: CEO

 

Signature Page to Convertible Promissory Note