Exhibit 10.1

 

GEOVAX LABS, INC.

 

Term Promissory Note

 

 

Face Amount: $________________     December 27, 2018   New York, NY

 

 

FOR VALUE RECEIVED, the undersigned, Geovax Labs, Inc. (the “Borrower”),
promises to pay to the order of Sabby Volatility Warrant Master Fund, Ltd., its
successors or assigns (the “Holder”), $__________ (the “Face Amount”) by January
22, 2019 (the “Maturity Date”) or as otherwise provided in accordance with the
terms of this Term Promissory Note (the “Note”), together with accrued but
unpaid interest, as provided herein.

 

Section 1.         Maturity. Subject to the prepayment provisions contained in
Section 3 hereof, the Face Amount, along with any accrued but unpaid interest
thereon, shall be repaid in cash on the Maturity Date or as otherwise provided
herein.

 

Section 2.            [RESERVED]

 

Section 3.            Prepayment.

 

(a)         Optional Prepayment. So long as this Note is outstanding, the
Borrower may at any time prepay any portion of the outstanding Face Amount.

 

(b)      Mandatory Prepayment. In the event that the Borrower consummates any
private or public offering of securities or other financing or capital-raising
transaction of any kind (the “Offering”), within five (5) business days after
the closing of the Offering, the Borrower shall make payment to the Holder, from
up to 100% of the proceeds of such Offering, of an amount in cash equal to the
sum of the then outstanding Face Amount.

 

Section 4.           Transferability. This Note and any of the rights granted
hereunder are freely transferable or assignable by the Holder, in whole or in
part, in its sole discretion but with notice to the Borrower as set forth in the
preamble hereto.

 

Section 5.            Event of Default.

 

(a)        In the event that any one of the following events shall occur
(whatever the reason and whether it shall be voluntary or involuntary or
effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental
body), it shall be deemed an “Event of Default” hereunder:

 

(i)     any default in the payment of the outstanding Face Amount to the Holder
in respect of the Note, as and when the same shall become due and payable
(whether on the Maturity Date, any prepayment date pursuant to Section 3 hereof
or as otherwise provided herein) which default is not cured within seven (7)
business days;

 

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(ii)     the Borrower shall fail to observe or perform any other material
covenant, agreement or warranty contained in, or otherwise commit any breach or
default of, any provision of this Note, which default is not cured within the
earlier to occur of (A) seven (7) business days after notice of such failure
sent by the Holder to the Borrower and (B) ten (10) business days after the
Borrower has become or should have become aware of such failure;

 

(iii)     there shall be a breach of any of the representations and warranties
set forth in this Note, or any report, financial statement or certificate made
or delivered to the Holder pursuant hereto or thereto shall be untrue or
incorrect in any material respect as of the date when made or deemed made, which
default is not cured within seven (7) business days;

 

(iv)     the Borrower or any of its subsidiaries shall default on any of its
obligations under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be
issued, or by which there may be secured or evidenced, any indebtedness for
borrowed money or money due under any long term leasing or factoring arrangement
that (A) involves an obligation greater than $50,000 whether such indebtedness
now exists or shall hereafter be created, and (B) results in such indebtedness
becoming or being declared due and payable prior to the date on which it would
otherwise become due and payable;

 

(v)     the Borrower or any of its subsidiaries shall: (A) apply for or consent
to the appointment of a receiver, trustee, custodian or liquidator of it or any
of its properties, (B) admit in writing its inability to pay its debts as they
mature, (C) make a general assignment for the benefit of creditors, (D) be
adjudicated as bankrupt or be the subject of an order for relief under Title 11
of the United States Code or any bankruptcy, reorganization, insolvency,
readjustment of debt, dissolution or liquidation law or statute of any other
jurisdiction or foreign country, or (E) file a voluntary petition in bankruptcy,
or a petition or an answer seeking reorganization or an arrangement with
creditors or to take advantage or any bankruptcy, reorganization, insolvency,
readjustment of debt, dissolution or liquidation law or statute, or an answer
admitting the material allegations of a petition filed against it in any
proceeding under any such law, or (F) take or permit to be taken any action in
furtherance of or for the purpose of effecting any of the foregoing;

 

(vi)     if any order, judgment or decree shall be entered, without the
application, approval or consent of the Borrower or any of its subsidiaries, by
any court of competent jurisdiction, approving a petition seeking liquidation or
reorganization of the Borrower or any of its subsidiaries, or appointing a
receiver, trustee, custodian or liquidator of the Borrower or any of its
subsidiaries, or of all or any substantial part of its assets, and such order,
judgment or decree shall continue unstayed and in effect for any period of sixty
(60) days;

 

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(vii)     the occurrence of any levy upon or seizure or attachment of, or any
uninsured loss of or damage to, any property of the Borrower or any of its
subsidiaries having an aggregate fair value or repair cost (as the case may be)
in excess of $100,000 individually or in the aggregate, and any such levy,
seizure or attachment shall not be set aside, bonded or discharged within thirty
(30) days after the date thereof; or

 

(viii)     any monetary judgment, writ or similar final process shall be entered
or filed against the Borrower, any of its subsidiaries or any of their
respective property or other assets for more than $50,000, and such judgment,
writ or similar final process shall remain unvacated, unbonded or unstayed for a
period of forty-five (45) calendar days.

 

(b)     Remedies Upon Event of Default. If any Event of Default occurs, then the
outstanding Face Amount, accrued but unpaid interest, liquidated damages and
other amounts owing in respect thereof through the date of acceleration, shall
become, at the Holder’s election, immediately due and payable in cash at the
Mandatory Default Amount (as defined below). “Mandatory Default Amount” means
the payment of one hundred and twenty-five (125%) of the outstanding Face Amount
and accrued and unpaid interest hereon, in addition to the payment of all other
amounts, costs, expenses and liquidated damages due in respect of this Note.
After the occurrence of any Event of Default that results in the eventual
acceleration of this Note, the interest rate on this Note shall accrue at an
additional interest rate equal to the lesser of 1.5% per month (18% per annum)
or the maximum rate permitted under applicable law (the “Default Rate”). The
Default Rate shall be computed from the occurrence of the Event of Default until
the date upon which the Event of Default is cured. Upon the payment in full of
the Mandatory Default Amount, the Holder shall promptly surrender this Note to
or as directed by the Borrower. In connection with such acceleration described
herein, the Holder need not provide, and the Borrower hereby waives, any
presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under
applicable law. Such acceleration may be rescinded and annulled by the Holder at
any time prior to payment hereunder and the Holder shall have all rights as a
holder of the Note until such time, if any, as the Holder receives full payment
pursuant to this Section 5(b). No such rescission or annulment shall affect any
subsequent Event of Default or impair any right consequent thereon.

 

(c)     Upon the occurrence of an Event of Default, in addition to the Mandatory
Default Amount, the Holder shall be entitled to recover all of its costs, fees
(including without limitation, reasonable attorney’s fees and disbursements),
and expenses relating to the collection and enforcement of this Note.

 

(d)     The failure of the Holder to exercise any of its rights hereunder in any
particular instance shall not constitute a waiver of the same or of any other
right in that or any subsequent instance with respect to the Holder or any
subsequent holder. The Holder need not provide, and the Borrower hereby waives,
any presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under
applicable law. The remedies available to the Holder upon the occurrence of an
Event of Default shall be cumulative.

 

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(e)     Notwithstanding anything herein to the contrary, in the event that the
Borrower undertakes any financing, restructuring or exchange of its securities
for other securities of the Borrower, the Holder shall also have the right to
exchange all or part of this Note (in lieu of cash or in-kind payment) into such
other securities of the Borrower; provided that the Borrower shall not effect
any exchange of this Note, and a Holder shall not have the right to exchange any
portion of this Note, to the extent that after giving effect to such exchange,
the Holder (together with the Holder’s affiliates, would beneficially own in
excess of 4.9% of the Borrower’s issued and outstanding shares of common stock
on the date of such exchange. Beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder.

 

Section 6.       Negative Covenants. As long as any portion of this Note remains
outstanding, the Borrower shall not, and shall not permit any of the
Subsidiaries to, directly or indirectly:

 

(a)     enter into, create, incur, assume, guarantee or suffer to exist any
indebtedness for borrowed money of any kind, including, but not limited to, a
guarantee, on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom;

 

(b)     enter into, create, incur, assume or suffer to exist any Liens of any
kind, on or with respect to any of its property or assets now owned or hereafter
acquired or any interest therein or any income or profits therefrom;

 

(c)     amend its charter documents, including, without limitation, its
certificate of incorporation and bylaws, in any manner that materially and
adversely affects any rights of the Holder;

 

(d)     repay, repurchase or offer to repay, repurchase or otherwise acquire
more than a de minimis number of shares of its equity;

 

(e)     repay, repurchase or offer to repay, repurchase or otherwise acquire any
Indebtedness, other than the Note if on a pro-rata basis, other than regularly
scheduled principal and interest payments as such terms are in effect as of the
date of this Note;

 

(f)     pay cash dividends or distributions on any equity securities of the
Borrower;

 

(g)    enter into any transaction with any affiliate of the Borrower which would
be required to be disclosed in any public filing with the Commission, including
the issuance of any equity (other than an Exempt Issuance as defined in the
Purchase Agreement) or special voting rights and the like;

 

(h)     undertake an issuance of securities pursuant to Sections 3(a)(9) or
3(a)(10) of the Securities Act of 1933, as amended; or

 

(i)     enter into any agreement with respect to any of the foregoing.

 

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Section 7.     Notices. Any and all notices, service of process or other
communications or deliveries required or permitted to be given or made pursuant
to any of the provisions of this Note shall be in writing and shall be deemed
given and effective on the earliest of: (a) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number or by
email attachment at the email address set forth below at or prior to 5:30 p.m.
(New York City time) on a business day, (b) the next business day after the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile number or by email attachment at the email address set forth below
on a day that is not a business day or later than 5:30 p.m. (New York City time)
on any business day, (c) the second (2nd) business day following the date of
mailing, if sent by a U.S. nationally recognized overnight courier service or
(d) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall be as set forth on
the records of the Borrower, or such other facsimile number, email address or
address as may be given by the parties in accordance with the notice provisions
hereof.

 

Section 8.     Usury. This Note is hereby expressly limited so that in no event
whatsoever, whether by reason of acceleration of maturity of the loan evidenced
hereby or otherwise, shall the amount paid or agreed to be paid to the Holder
hereunder for the loan, use, forbearance or detention of money exceed that
permissible under applicable law. If at any time the performance of any
provision of this Note or of any other agreement or instrument entered into in
connection with this Note involves a payment exceeding the limit of the interest
that may be validly charged for the loan, use, forbearance or detention of money
under applicable law, then automatically and retroactively, ipso facto, the
obligation to be performed shall be reduced to such limit, it being the specific
intent of the Borrower and the Holder that all payments under this Note are to
be credited first to interest as permitted by law, but not in excess of (a) the
agreed rate of interest set forth herein or therein or (b) that permitted by
law, whichever is the lesser, and the balance toward the reduction of the
outstanding Face Amount. The provision of this Section 7 shall never be
superseded or waived and shall control every other provision of this Note and
all other agreements and instruments between the Borrower and the Holder entered
into in connection with this Note. To the extent permitted by applicable law,
the Borrower waives any right to assert the defense of usury. Furthermore, for
the avoidance of doubt, the Borrower covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law or other law which would prohibit or forgive the Borrower from
paying all or any portion of the Face Amount or interest on this Note as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Note, and the Borrower
(to the extent it may lawfully do so) hereby expressly waives all benefits or
advantage of any such law, and covenants that it will not, by resort to any such
law, hinder, delay or impede the execution of any power herein granted to the
Holder, but will suffer and permit the execution of every such power as though
no such law has been enacted.

 

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Section 9.     Governing Law; Waiver of Jury Trial. This Note and the provisions
hereof are to be construed according to and are governed by the laws of the
State of New York, without regard to principles of conflicts of laws thereof.
Each party hereto hereby agrees that all legal proceedings concerning the
interpretation, enforcement and defense of the transactions contemplated by this
Note and any other Transaction Documents (whether brought against a party hereto
or its respective affiliates, directors, officers, shareholders, partners,
members, employees or agents) shall be commenced exclusively in the state and
federal courts sitting in the City of New York, Borough of Manhattan. Each party
hereto hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any action, suit or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or that
such court is improper or is an inconvenient venue for such proceeding. Each
party hereby irrevocably waives personal service of process and consents to
process being served in any such action, suit or proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Note and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any other manner permitted by
applicable law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW
OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATING TO THIS NOTE.

 

Section 10.     Successors and Assigns. Subject to applicable securities laws,
this Note and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Borrower and the successors
and assigns of the Holder.

 

Section 11.     Payment of Legal Fees. All costs of collection, including any
legal fees associated with this Note, will be paid by the Borrower.

 

Section 12.     Amendment. This Note may be modified or amended or the
provisions hereof waived only with the written consent of the Holder and the
Borrower.

 

Section 13.     Severability. Wherever possible, each provision of this Note
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Note shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Note.

 

Section 14.     Next Business Day. Whenever any payment or other obligation
hereunder shall be due on a day other than a business day, such payment shall be
made on the next succeeding business day.

 

Section 15.     Headings. The headings contained herein are for convenience
only, do not constitute a part of this Note and shall not be deemed to limit or
affect any of the provisions hereof.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Borrower has caused this Note to be executed by a duly
authorized officer as of the date first above indicated.

 

 

 

geovax labs, inc

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name: 

 

 

 

Title: 

 

 

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