Exhibit 10.1
 
THIS NOTE AND THE SECURITIES INTO WHICH IT IS CONVERTIBLE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR UNLESS THE COMPANY SHALL HAVE RECEIVED AN OPINION OF
COUNSEL THAT THE REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
 
 
Convertible Promissory Demand Note
 
U.S. $___________  
No.: ____________
  Issuance Date: ________, 2017
  Maturity Date: _________ 2017

 
 
FOR VALUE RECEIVED, QUANTRX BIOMEDICAL CORPORATION, a Nevada corporation (the
“Company”), hereby promises to pay to the order of _______________ or any
permitted holder of this Convertible Promissory Demand Note (the “Payee”), at
the principal office of the Payee set forth herein, or at such other place as
the Payee may designate in writing to the Company, the principal sum of
_____________ ($______), with interest on the unpaid principal balance hereof at
a rate equal to ten percent (10%) per annum commencing on the date hereof, in
such coin or currency of the United States of America as at the time shall be
legal tender for the payment of public and private debts and in immediately
available funds, as provided in this Convertible Promissory Demand Note (this
“Note”).
 
1. Mandatory Conversion of Principal and Interest upon Qualified Financing.
 Upon the closing by the Company of an equity or equity based financing or a
series of equity financings following the Issuance Date (a “Qualified
Financing”) resulting in gross proceeds to the Company totaling at least
$1,500,000 (the “Qualified Financing Threshold Amount”), the outstanding
principal amount of this Note together with all accrued and unpaid interest
hereunder (the “Outstanding Balance”) shall convert at the sole option of the
Payee, into either 1) such securities, including warrants of the Company as are
issued in the Qualified Financing, the amount of which shall be determined in
accordance with the following formula: (the Outstanding Balance as of the
closing of the Qualified Financing) x (1.20) / (the per security price of the
securities sold in the Qualified Financing); or 2) that number of shares of
common stock of the Company pursuant to the provisions of Section 2 herein. The
principal amount of this Note and of notes of like tenor issued between the date
hereof and the closing of the Qualified Financing shall not be included in
determining the Qualified Financing Threshold Amount. If the Payee elects to
convert into the Qualified Financing, the Payee shall be deemed to be a
purchaser in the Qualified Financing and shall be granted all rights afforded to
an investor in the Qualified Financing. Notwithstanding anything to the contrary
contained in this Section 1, the Company shall have the right, at the Company’s
option, to pay all or a portion of the accrued and unpaid interest due and
payable to Payee upon such automatic conversion in cash.
 
 
 

 
 
2. Voluntary Conversion of Principal and Interest. Subject to the terms and
conditions of this Section 2 and provided this Note remains outstanding and has
not been converted pursuant to Section 1, immediately prior to the Maturity Date
and thereafter (as defined below), the Payee shall have the right, at the
Payee’s option, to convert the Outstanding Balance (the “Conversion Option”)
into such number of fully paid and non-assessable shares of the Company’s common
stock (the “Conversion Shares”) as is determined in accordance with the
following formula: (the Outstanding Balance as of the date of the exercise of
the Conversion Option) / ($.08). If the Payee desires to exercise the Conversion
Option, the Payee shall, by personal delivery or nationally-recognized overnight
carrier, surrender the original of this Note and give written notice to the
Company (the “Conversion Notice”), which Conversion Notice shall (a) state the
Payee’s election to exercise the Conversion Option, and (b) provide for a
representation and warranty of the Payee to the Company that, as of the date of
the Conversion Notice, the Payee has not assigned or otherwise transferred all
or any portion of the Payee’s rights under this Note to any third parties. The
Company shall, as soon as practicable thereafter, issue and deliver to the Payee
the number of Conversion Shares to which the Payee shall be entitled upon
exercise of the Conversion Option. Notwithstanding anything to the contrary
contained in this Section 2, the Company shall have the right, at the Company’s
option, to pay all or a portion of the accrued and unpaid interest due and
payable to Payee upon Payee’s exercise of the Conversion Option in cash. In the
event the Qualified Financing Threshold Amount is satisfied and the Payee does
not elect to the exchange the Outstanding Balance into the Qualified Financing
as provided for under Section 1 herein, the Payee shall convert the Outstanding
Balance pursuant to the provisions of this Section 2 in connection and
simultaneous with the Qualified Financing.
 
3. Principal and Interest Payments.
 
(a) In the event a Qualified Financing is not completed and the Payee has not
exercised the Conversion Option, Company shall repay the entire principal
balance then outstanding under this Note on the later to occur of September 30th
(the “Maturity Date”) or upon written demand for payment by the Payee
 
(b) Interest on the outstanding principal balance of this Note shall accrue at a
rate of ten percent (10%) per annum commencing on the date hereof, which
interest shall be computed on the basis of the actual number of days elapsed and
a year of three hundred and sixty-five (365) days. In the event a Qualified
Financing is not completed and the Payee has not exercised the Conversion
Option, all accrued and unpaid interest due under this Note shall be payable on
the Maturity Date by the Company in cash or shares of common stock. In
determining the number of interest shares due, the Company shall use a share
price calculated by taking the closing price of the Company’s common stock for
the ten trading days prior to the interest payment date multiplied by eighty
five (85%) percent. Furthermore, upon the occurrence of an Event of Default (as
defined below), or following the Maturity Date the Company will pay interest to
the Payee on the then outstanding principal balance of the Note from such date
until this Note is paid in full at the rate of eighteen percent (18%) per annum,
with interest payable quarterly.
 
(c) At the Company’s sole option, the Company may prepay all or a portion of the
outstanding principal amount of this Note and/or all or a portion of the accrued
and unpaid interest hereon in cash at any time prior to the Maturity Date
without penalty or premium. Any payments made under this Note shall be applied
first to the accrued and unpaid interest, if any, and the remainder to the
unpaid principal amount. Notwithstanding the foregoing, the holder of this Note
shall retain the right to convert this Note, for a period of ten (10) business
days following the Company’s notice of its intention to prepay this Note.
 
4. Non-Business Days. Whenever any payment to be made shall be due on a
Saturday, Sunday or a public holiday under the laws of the State of New York,
such payment may be due on the next succeeding business day and such next
succeeding day shall be included in the calculation of the amount of accrued
interest payable on such date.
 

 
 
5. Representations and Warranties of the Company. The Company represents and
warrants to the Payee as follows:
 
(a) The Company has been duly incorporated and validly exists and is in good
standing under the laws of the State of Nevada, with full corporate power and
authority to own, lease and operate its properties and to conduct its business
as currently conducted.
 
(b) This Note has been duly authorized, validly executed and delivered on behalf
of the Company and is a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, subject to limitations on
enforcement by general principles of equity and by bankruptcy or other laws
affecting the enforcement of creditors’ rights generally.
 
(c) The execution, delivery and performance of this Note will not: (i) conflict
with or result in a material breach of or a default under any of the terms or
provisions of, (A) the Company’s Certificate of Incorporation or by-laws, or (B)
any material provision of any indenture, mortgage, deed of trust or other
material agreement or instrument to which the Company is a party or by which it
or any of its material properties or assets is bound; (ii) result in a violation
of any material provision of any law, statute, rule, regulation, or any existing
applicable decree, judgment or order by any court, Federal or state regulatory
body, administrative agency, or other governmental body having jurisdiction over
the Company, or any of its material properties or assets; or (iii) result in the
creation or imposition of any material lien or encumbrance upon any material
property or assets of the Company pursuant to the terms of any agreement or
instrument to which the Company is a party or may be bound or to which the
Company or any of its property is subject.
 
(d) No consent, approval or authorization of or designation, declaration or
filing with any governmental authority on the part of the Company is required in
connection with the valid execution and delivery of this Note.
 
6. Events of Default. The occurrence of any of the following events shall be an
“Event of Default” under this Note:
 
(a) the Company shall fail to make the payment of any principal amount
outstanding for a period of five (5) business days after the date such payment
shall become due and payable hereunder; or
 
(b) the Company shall fail to make the payment of any accrued and unpaid
interest for a period of five (5) business days after the date such interest
shall become due and payable hereunder; or
 
(c) any material breach by the Company of any representations or warranties made
by the Company herein; or
 
(d) the holder of any indebtedness of the Company shall accelerate any payment
of any amount or amounts of principal or interest on any such indebtedness (the
“Indebtedness”) (other than with respect to this Note and notes of like tenor)
prior to its stated maturity or payment date, the aggregate principal amount of
which Indebtedness is in excess of $250,000, whether such Indebtedness now
exists or shall hereinafter be created, and such accelerated payment entitles
the holder thereof to immediate payment of such Indebtedness which is due and
owing and such indebtedness has not been discharged in full or such acceleration
has not been stayed, rescinded or annulled within fifteen (15) business days of
such acceleration; or
 
 
 

 
 
(e) A judgment or judgments for the payment of money shall be rendered against
the Company for an amount in excess of $500,000 in the aggregate (net of any
applicable insurance coverage) for all such judgments that shall remain unpaid
for a period of sixty (60) consecutive days or more after its entry or issue or
that shall not be discharged, released, dismissed, stayed or bonded (due to an
appeal or otherwise) within the sixty (60) consecutive day period after its
entry or issue; or
 
(f) the Company shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator of itself
or of all or a substantial part of its property or assets, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a voluntary case
under the Federal Bankruptcy Code, as amended (the “Bankruptcy Code”) or under
the comparable laws of any jurisdiction (foreign or domestic), (iv) file a
petition seeking to take advantage of any bankruptcy, insolvency, moratorium,
reorganization or other similar law affecting the enforcement of creditors’
rights generally, or (v) acquiesce in writing to any petition filed against it
in an involuntary case under the Bankruptcy Code or under the comparable laws of
any jurisdiction (foreign or domestic); or
 
(g) a proceeding or case shall be commenced in respect of the Company without
its application or consent, in any court of competent jurisdiction, seeking (i)
the liquidation, reorganization, moratorium, dissolution, winding up, or
composition or readjustment of its debts, (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of it or of all or any substantial
part of its assets or (iii) similar relief in respect of it under any law
providing for the relief of debtors, and such proceeding or case described in
clause (i), (ii) or (iii) shall continue undismissed, or unstayed and in effect,
for a period of forty-five (45) consecutive days or any order for relief shall
be entered in an involuntary case under the Bankruptcy Code or under the
comparable laws of any jurisdiction (foreign or domestic) against the Company or
any of its subsidiaries and shall continue undismissed, or unstayed and in
effect for a period of forty-five (45) consecutive days.
 
7. Remedies Upon An Event of Default. If an Event of Default shall have occurred
and shall be continuing, the Payee of this Note may at any time at its option,
(a) declare, by providing the Company with not less than five (5) days prior
written notice, the entire unpaid principal balance of this Note together with
all interest accrued and unpaid hereon, due and payable, and upon the Company’s
receipt of such notice, the same shall be accelerated and so due and payable;
provided, however, that upon the occurrence of an Event of Default described in
(i) Sections 7(f) and (g), without presentment, demand, protest, or notice, all
of which are hereby expressly unconditionally and irrevocably waived by the
Company, the outstanding principal balance and accrued and unpaid interest
hereunder shall be immediately due and payable, and (ii) Sections 7(a) through
(e), the Payee may exercise or otherwise enforce any one or more of the Payee’s
rights, powers, privileges, remedies and interests under this Note or applicable
law. No course of delay on the part of the Payee shall operate as a waiver
thereof or otherwise prejudice the right of the Payee. No remedy conferred
hereby shall be exclusive of any other remedy referred to herein or now or
hereafter available at law, in equity, by statute or otherwise. Notwithstanding
anything to the contrary contained in this Note, Payee agrees that its rights
and remedies hereunder are limited to receipt of cash or shares of the Company’s
common stock in the amounts described herein.
 
8. Conversion Restrictions.
 
(a) Notwithstanding anything to the contrary as set forth in Section 1 and 2 of
this Note, at no time may a holder of this Note convert this Note if the number
of shares of Common Stock to be issued pursuant to such conversion would cause
the number of shares of Common Stock owned by such holder at such time to
exceed, when aggregated with all other shares of Common Stock owned by such
holder at such time, the number of shares of Common Stock which would result in
such holder beneficially owning (as determined in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended, and the rules thereunder) in
excess of 4.99% of the then issued and outstanding shares of Common Stock
outstanding at such time; provided, however, that upon the Note holder providing
the Company with sixty-one (61) days notice (the "Waiver Notice") that such
holder would like to waive such Conversion Restriction. This Section 9(a) with
regard to any or all shares of Common Stock issuable upon conversion of this
Note, shall be of no force or effect with regard to those shares of referenced
in the Waiver Notice.
 
 
 

 
 
(b) Notwithstanding anything to the contrary as set forth in Section 1 and 2 of
this Note, at no time may a holder of this Note convert this Note if the number
of shares of Common Stock to be issued pursuant to such conversion would cause
the number of shares of Common Stock owned by such holder at such time to
exceed, when aggregated with all other shares of Common Stock owned by such
holder at such time, the number of shares of Common Stock which would result in
such holder beneficially owning (as determined in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended, and the rules thereunder) in
excess of 9.99% of the then issued and outstanding shares of Common Stock
outstanding at such time; provided, however, that upon the Note holder providing
the Company with sixty-one (61) days notice (the Waiver Notice") that such
holder would like to waive such Conversion Restriction, this Section 9(b) with
regard to any or all shares of Common Stock issuable upon conversion of this
Note, shall be of no force or effect with regard to those shares of referenced
in the Waiver Notice.
 
9. Replacement. Upon receipt of a duly executed and notarized written statement
from the Payee with respect to the loss, theft or destruction of this Note (or
any replacement hereof), and without requiring an indemnity bond or other
security, or, in the case of a mutilation of this Note, upon surrender and
cancellation of such Note, the Company shall issue a new Note, of like tenor and
amount, in lieu of such lost, stolen, destroyed or mutilated Note.
 
10. Parties in Interest; Transferability. This Note shall be binding upon the
Company and its successors and assigns and the terms hereof shall inure to the
benefit of the Payee and its successors and permitted assigns. This Note may not
be transferred or sold, pledged, hypothecated or otherwise granted as security
by the Payee without the prior written consent of the Company, which consent
will not be unreasonably withheld.
 
11. Amendments. This Note may not be modified or amended in any manner except in
writing executed by the Company and the Payee.
 
12. Notices. Any notice, demand, request, waiver or other communication required
or permitted to be given hereunder shall be in writing and shall be effective
(a) upon hand delivery by telecopy or facsimile at the address or number
designated below (if delivered on a business day during normal business hours
where such notice is to be received), or the first business day following such
delivery (if delivered other than on a business day during normal business hours
where such notice is to be received) or (b) on the second business day following
the date of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first occur.
 
Address of the Payee: 
_____________________
_____________________
_____________________

_____________________
Attention:
Tel. No.:
Fax No.:
 
 
Address of the Company: 
_____________________
_____________________
_____________________
_____________________
Attention:
Tel. No.:
Fax No.:
 
 
 

 
 
13. Governing Law. This Note shall be governed by and construed in accordance
with the internal laws of the State of New York, without giving effect to the
choice of law provisions. This Note shall not be interpreted or construed with
any presumption against the party causing this Note to be drafted.
 
14. Headings. Article and section headings in this Note are included herein for
purposes of convenience of reference only and shall not constitute a part of
this Note for any other purpose.
 
15. Remedies, Characterizations, Other Obligations, Breaches and Injunctive
Relief. The remedies provided in this Note shall be cumulative and in addition
to all other remedies available under this Note, at law or in equity (including,
without limitation, a decree of specific performance and/or other injunctive
relief), no remedy contained herein shall be deemed a waiver of compliance with
the provisions giving rise to such remedy and nothing herein shall limit a
Payee’s right to pursue actual damages for any failure by the Company to comply
with the terms of this Note. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable and material harm to the Payee and
that the remedy at law for any such breach may be inadequate. Therefore the
Company agrees that, in the event of any such breach or threatened breach, the
Payee shall be entitled, in addition to all other available rights and remedies,
at law or in equity, to seek and obtain such equitable relief, including but not
limited to an injunction restraining any such breach or threatened breach,
without the necessity of showing economic loss and without any bond or other
security being required.
 
16. Failure or Delay Not Waiver. No failure or delay on the part of the Payee in
the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege.
 
17. Enforcement Expenses. The Company agrees to pay all reasonable costs and
expenses of enforcement of this Note, including, without limitation, reasonable
attorneys’ fees and expenses.
 
18. Binding Effect. The obligations of the Company and the Payee set forth
herein shall be binding upon the successors and permitted assigns of each such
party.
 
19. Compliance with Securities Laws. The Payee acknowledges and agrees that this
Note and the securities issuable upon the conversion of this Note, is being, and
will be, acquired solely for the Payee’s own account and not as a nominee for
any other party, and for investment purposes only and not with a view to the
resale or distribution of any part thereof, and that the Payee shall not offer,
sell or otherwise dispose of this Note or the securities issuable upon the
conversion of this Note other than in compliance with applicable federal and
state laws. The Payee understands that this Note and the securities issuable
upon the conversion of this Note are “restricted securities” under applicable
federal and state securities laws and that such securities have not been, and
will not be, registered under the Securities Act of 1933, as amended (the
“Securities Act”). The Payee represents and warrants to the Company that the
Payee is an “accredited investor” as such term is defined in Rule 501 of
Regulation D promulgated under the Securities Act. This Note and any Note issued
in substitution or replacement therefore, and the securities issuable upon the
conversion of this Note, shall be stamped or imprinted with a legend in
substantially the following form:
 
“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY
SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT THE REGISTRATION OF SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.”
 
 
 

 
 
20. Severability. The provisions of this Note are severable, and if any
provision shall be held invalid or unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Note in any jurisdiction.
 
21. Consent to Jurisdiction. Each of the Company and the Payee (i) hereby
irrevocably submits to the jurisdiction of the United States District Court
sitting in the Southern District of New York and the courts of the State of New
York located in New York county for the purposes of any suit, action or
proceeding arising out of or relating to this Note and (ii) hereby waives, and
agrees not to assert in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. Each of the Company and the Payee
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address set forth in Section 12
hereof and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing in this Section 21 shall affect or limit
any right to serve process in any other manner permitted by applicable law.
 
22. Waivers. Except as otherwise specifically provided herein, the Company
hereby waives presentment, demand, notice of nonpayment, protest and all other
demands and notices in connection with the delivery, acceptance, performance and
enforcement of this Note, and does hereby consent to any number of renewals or
extensions of the time for payment hereof and agrees that any such renewals or
extensions may be made without notice and without affecting its liability
herein, AND DOES HEREBY WAIVE TRIAL BY JURY. No delay or omission on the part of
the Payee in exercising its rights under this Note, or course of conduct
relating hereto, shall operate as a waiver of such rights or any other right of
the Payee, nor shall any waiver by the Payee of any such right or rights on any
one occasion be deemed a waiver of the same right or rights on any future
occasion.
 
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IN WITNESS WHEREOF, the Company has executed and delivered this Note as of the
date first written above.
 
 
QUANTRX BIOMEDICAL CORPORATION
 
                                                           By:                                                                                                                                 
Name:
Title:
 
 
__________________________________________
Name of Payee
 
 
 
By:________________________________
           
Name:
Title: