Exhibit 10.7

 

REVOLVING CONVERTIBLE
SENIOR SECURED PROMISSORY NOTE

 

Up to $[      ]

 

June 18, 2003

 

For value received, Photogen Technologies, Inc., a Nevada corporation (the
“Company”), hereby absolutely and unconditionally promises to pay on or before
August 5, 2003 to the order of                       , or registered assigns
(the “Payee”), the outstanding principal balance of the revolving credit loans
(the “Revolving Credit Loans”) made by the Payee, together with interest
thereon, all as hereinafter provided.

 

The aggregate principal amount of the Revolving Credit Loans shall not exceed
$[     ], up to which an amount may be borrowed, prepaid in whole or in part and
re-borrowed as hereinafter provided.  Revolving Credit Loans shall be made in
amounts and at times as Payee determines in its sole discretion.  This Note does
not constitute and is not intended to be a commitment by the Payee to lend
further money to or to provide other financing of any nature, including without
limitation equity financing, to the Company.  The Payee is hereby authorized to
record on the schedule annexed hereto, and any continuation sheets which the
Payee may attach hereto, the (a) date and amount of each Revolving Credit Loan
made by the Payee, and (b) date and amount of each payment or prepayment of
principal of any such Revolving Credit Loan.  No failure to so record or any
error in so recording shall affect the obligation of the Company to repay the
Revolving Credit Loans, together with interest thereon, and the outstanding
principal balance of the Revolving Credit Loans made by the Payee as set forth
in such schedule shall be presumed to be correct absent manifest error.  The
Payee shall send the Company a copy of the schedule as and when updated.

 

The unpaid principal balance outstanding, from time to time, hereunder shall
accrue interest at a rate equal to 7.25% per annum.  Interest shall be
compounded monthly and shall be computed on the basis of a 360-day year and a
30-day month.  Notwithstanding any other provision of this Note, the Payee does
not intend to charge and the Company shall not be required to pay any interest
or other fees or charges in excess of the maximum permitted by applicable law;
and any payments in excess of such maximum shall be refunded to the Company or
credited to reduce principal hereunder.

 

Subject to the conversion of this Note pursuant the provisions herein, the
entire principal amount hereof, together with all interest incurred thereon and
all fees and expenses (if any) due hereunder, shall be due and payable ON DEMAND
on the sooner to occur of (the “Maturity Date”) (a) 5:00 P.M., Boston,
Massachusetts time on August 5, 2003, and (b) the date of an Acceleration Event
(as defined herein).  The Payee’s right to make such demand shall be
unconditional and unlimited.  The Company agrees that the Payee may make such
demand, at any time on or after the Maturity Date, in the exercise of the
Payee’s sole discretion.  The Company agrees that, in exercising its discretion,
the Payee may make demand for any reasons that it deems appropriate, and such
reasons may be related or unrelated to the Company, its business or financial
condition or prospects.  The Payee’s right to make demand shall be a continuing
right, and acceptance by the Payee of any payment after demand shall not be
deemed a waiver of such right to make demand on any other occasion.

 

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This Note may be prepaid, in whole or in part, at any time, without penalty or
premium, provided that the Company gives the Payee not less than three (3)
business days’ prior written notice of such prepayment.

 

Principal and interest shall be payable in lawful money of the United States of
America, at 222 Berkley Street, Suite 1650 Boston, MA 02116 or at such other
address as the Payee or any subsequent holder may designate from time to time to
the Company in writing.  If any day on which a payment is due pursuant to the
terms of this Note is not a business day, such payment shall be due on the next
business day following.  All payments received by the Payee hereunder will be
applied first to costs of collection and fees, if any, then to interest and the
balance to principal.

 

If any of the following events or circumstances (each an “Acceleration Event”)
shall occur:

 

(a)           the Company shall fail to cure any breach of its covenants,
agreements or obligations under the terms of that certain Security Agreement by
and between the Company and the Payee of even date herewith within five (5) days
after written notice by the Payee to the Company specifying such breach; or

 

(c)           any representation or warranty made by the Company in the Security
Agreement shall have been false in any material respect when made; or

 

(d)           the Company shall make an assignment for the benefit of creditors,
or admit in writing its inability to pay or generally fail to pay its debts as
they mature or become due, or shall petition or apply for the appointment of a
trustee or other custodian, liquidator or receiver of the Company or of any
substantial part of its assets or shall commence any case or other proceeding
relating to its assets under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law of
any jurisdiction, or shall take any action to authorize or in furtherance of any
of the foregoing; or any such petition or application shall be filed or any such
case or other proceeding shall be commenced against the Company, and the same
shall not have been dismissed within 60 days of the filing or commencement
thereof or the Company shall indicate its approval thereof, consent thereto or
acquiescence therein; or a decree or order shall be entered appointing any such
trustee, custodian, liquidator or receiver or adjudicating the Company bankrupt
or insolvent, or approving a petition in any such case or other proceeding, or a
decree or order for relief shall be entered in respect of the Company in an
involuntary case under any such bankruptcy or insolvency laws; or

 

(e)           the Company shall take any corporate action to liquidate its
assets, dissolve or sell all or substantially all of its assets or capital
stock, or shall take any corporate action to consolidate or merge with or into
any other corporation or business entity; or

 

(f)            the Company shall, on or after the date hereof, have incurred or
committed to incur indebtedness which is or will be senior or pari passu to its
indebtedness hereunder;

 

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then, the Payee at its option at any time thereafter may declare the entire and
unpaid principal of this Note and all interest, fees and expenses (if any)
payable on or in respect of this Note and the obligations evidenced hereby due
and payable, and the same shall thereupon forthwith become and be due and
payable to the Payee without presentment, demand, protest, notice of protest or
any other formalities of any kind, all of which are hereby expressly and
irrevocably waived by the Company.

 

The entire amount of principal and interest outstanding under this Note shall,
simultaneously with the closing of a Qualified Equity Financing (as defined
herein), automatically be converted into that number of shares of Equity
Financing Securities (as defined herein) at the same price and on the same terms
as sold to the investors in such Qualified Equity Financing.  In addition, the
Payee shall thereupon be permitted to become a party to, and shall have the
benefit of all of the rights granted to and shall be subject to all of the
obligations of the other purchasers of Equity Financing Securities in connection
with a Qualified Equity Financing, pursuant to each of the documents,
instruments and agreements executed and delivered by and between and/or among
the Company and such other purchasers of Equity Financing Securities in
connection with such Qualified Equity Financing.  No fractional shares or scrip
representing fractional shares shall be issued upon the conversion of this Note,
and the price with respect to any such fractional shares shall be payable to the
Payee in cash by the Company within ten (10) days after the date of any such
conversion. “Qualified Equity Financing” shall mean the issuance of equity
securities or other capital stock or other securities of the Company (“Equity
Financing Securities”) on or prior to August 5, 2003 for the purpose of and in
an amount sufficient for financing the acquisition by the Company of all of the
assets of Alliance Pharmaceutical Corp. related to the Alliance’s Imagent®
(formerly Imavist™) product.  Notwithstanding the foregoing, no amounts
outstanding under this Note shall convert or be convertable into shares of
common stock of the Company prior to stockholder approval, if and to the extent
such conversion would violate Nasdaq rules applicable to the Company, including
without limitation Rule 4350(i).

 

In the event any one or more of the provisions of this Note shall for any reason
be held to be invalid, illegal or unenforceable, in whole or in part or in any
respect, or in the event that any one or more of the provisions of this Note
operate or would prospectively operate to invalidate this Note, then and in any
such event, such provision(s) only shall be deemed null and void and shall not
affect any other provision of this Note and the remaining provisions of this
Note shall remain operative and in full force and effect and in no way shall be
affected, prejudiced, or disturbed thereby.  Should all or any part of the
indebtedness represented by this Note be collected by action at law, or in
bankruptcy, insolvency, receivership or other court proceedings, or should this
Note be placed in the hands of attorneys for collection after default, the
Company hereby promises to pay to the Payee, upon demand by the Payee at any
time, in addition to the outstanding principal balance of, accrued interest and
all (if any) other amounts payable on or in respect of this Note, all court
costs and reasonable attorneys’ fees and other collection charges and expenses
incurred or sustained by the Payee.  This Note shall be governed by, and
construed in accordance with, the laws of The Commonwealth of Massachusetts and
shall have the effect of a sealed instrument.  The Company hereby irrevocably
waives notice of acceptance, presentment, notice of nonpayment, protest, notice
of protest, suit and all other conditions precedent in connection with the
delivery, acceptance, collection and/or enforcement of this Note or any
collateral or security therefor.  The failure of the Payee to exercise any or
all of its rights, remedies, powers or privileges hereunder in any instance

 

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shall not constitute a waiver thereof in that or any other instance.  The
Company will at all times in good faith assist, insofar as it is able, in the
carrying out of all of the provisions of this Note in a reasonable manner and in
the taking of all other action which may be necessary in order to protect and
preserve the rights of the Payee set forth herein.

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed and
delivered as of the date hereof.

 

 

PHOTOGEN TECHNOLOGIES, INC.

 

 

 

 

 

By:

Brooks Bovereux

 

Its:

Chief Financial Officer

 

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