--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Exhibit 10.1

 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN
STATES.  THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.  THE ISSUER
OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER
OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.
 
TETRAGENEX PHARMACEUTICALS, INC.
PROMISSORY NOTE
 
$[ _ ]
 
[Date]

 
FOR VALUE RECEIVED, Tetragenex Pharmaceuticals, Inc., a Delaware corporation
(the “Company”), promises to pay to the order of [ _ ] (the “Holder”), or its
assignees, the principal sum of [ _ ] dollars ($____) plus interest at the rate,
subject to Section 4 hereof, of twelve percent (12%) per annum, or so much,
thereof, which may be outstanding on the Maturity Date (as hereinafter defined).
 
 
Subject to Section 3 hereof, the entire outstanding principal amount and accrued
interest of this promissory note (this “Note”) shall be due and payable on a
date (the “Maturity Date”) which shall be the earlier to occur of: (i) two (2)
years from the date hereof, or (ii) the Company receiving equity financing after
the date hereof in excess of US $2,000,000 in the aggregate (or the closing on
the Offering at or in excess of $2 million.  For purposes hereof, “Offering”
means that certain private placement of “units” consisting of a promissory note
in the principal amount of $[ _ ], together with a warrant to purchase [ _ ]
shares of the Company’s common stock.
 
 
The following is a statement of the rights of the Holder and the conditions to
which this Note is subject and to which Holder, by the acceptance of this Note,
and the Company, by execution of this Note, agree as follows:
 

1.             If the Company shall (a) fail to pay any principal or interest
payable hereunder promptly on the due date thereof, or upon the occurrence of an
Event of Default or upon the Maturity Date then the entire unpaid principal sum,
together with all interest accrued payable hereunder added thereto, at the
option of the Holder, shall bear interest, from the date of such occurrence
through the date of judgment and until collection, at the rate which is the
lesser of (x) fifteen percent (15%) per annum, or (y) the highest rate permitted
by law.
 
2.             Events of Default.  The occurrence and continuation of any of the
following shall constitute an “Event of Default” under this Note:
 
 
a.
Failure to Pay or Other Defaults in Performance.  The Company fails to pay in
full the principal amount and any accrued interest on the Maturity Date,
pursuant to the terms herein; or

 
 
 

--------------------------------------------------------------------------------

 
 
 
b.
Other Breaches.  The  Company breaches its representations or warranties or
otherwise fails to duly observe, perform or comply with any material covenant,
agreement or provision of this Note, and such failure remains unremedied for a
period of thirty (30) days after notice of such failure is given by the Holder
to the Company; or

 
 
c.
Voluntary Bankruptcy or Insolvency Proceedings.  The Company shall (i) apply for
or consent to the appointment of a receiver, trustee, liquidator or custodian or
of all or a substantial part of its property, (ii) be unable, or admit in
writing its inability, to pay its debts generally as they mature, (iii) make a
general assignment for the benefit of any of its creditors, (iv) be dissolved or
liquidated, or sell or liquidate all or substantially all of its assets, (v)
become insolvent (as such term may be defined or interpreted under any
applicable statute), (vi) commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or consent to any such relief or to the appointment of or taking possession of
its property by any official in an involuntary case or other proceeding
commenced against it, or (vii) take any action for the purpose of effecting any
of the foregoing; or

 
 
d.
Involuntary Bankruptcy or Insolvency Proceedings.  Proceedings for the
appointment of a receiver, trustee, liquidator or custodian of the Company or of
all or a substantial part of the property thereof or an involuntary case or
other proceedings seeking liquidation, reorganization or other relief with
respect to the Company, or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced.

 
3.            Rights of Holder upon Default.  Upon the occurrence and during the
continuation of any Event of Default, immediately upon notice, all outstanding
principal and accrued but unpaid interest payable by the Company hereunder shall
become immediately due and payable.  In addition to the foregoing remedies, upon
the occurrence or existence of any Event of Default, Holder may exercise any
other right, power or remedy granted to it by this Note, or otherwise permitted
to it by law, either by suit in equity or by action at law, or both.
 
4.            Successors and Assigns.  The rights and obligations of the Company
and Holder of this Note shall be binding upon and benefit the successors,
assigns, heirs, administrators and transferees of the parties.
 
5.            Waiver and Amendment.  Any provision of this Note may be amended
or modified only upon the written consent of the Company and Holder (or holder’s
respective assigns).  No delay or omission of Holder or any other holder hereof
to exercise any power, right or remedy accruing to Holder or any other holder
hereof shall impair any such power, right or remedy or shall be construed to be
a waiver of the right to exercise any such power, right or remedy.
 
6.            Expenses.  Each party shall pay its costs and expenses incurred in
connection with this Note.
 
7.            Assignment by The Company.  This Note and the rights, interests or
obligations hereunder may not be assigned, in whole or in part, by the Company
without the prior approval of the Holder.

 
 

--------------------------------------------------------------------------------

 
 
8.            Notices.  Any notice, or other communication required or permitted
to be given under this Agreement shall be deemed given when received in writing
by the Parties at the address below or to such other address or the attention of
such other Party as the Parties shall advise the other by written notice given
in conformity herewith:
 

 
If to the Company:
Tetragenex Pharmaceuticals, Inc.
   
1 Maynard Drive, Suite 105
   
Park Ridge, New Jersey 07656
       
With a Copy to:
Gersten Savage, LLP
   
600 Lexington Avenue
   
New York, New York, 10022
   
Attention: Arthur S. Marcus, Esq.
   
If to the Holder at the address set forth on the signature page hereto.

 
or to such other address or the attention of such other Party as the Parties
shall advise the other by notice in conformity herewith.
 
9.            Partial Invalidity.  Each part of this Note is intended to be
separate.  If any term, covenant, condition or provision hereof is illegal or
invalid or unenforceable for any reason whatsoever, such illegality, invalidity
or unenforceability shall not affect the legality, validity or enforceability of
the remaining parts of this Note and all such remaining parts hereto shall not
be impaired or invalidated in any way, but shall be legal, valid and enforceable
and have full force and effect as if the illegal, invalid, unenforceable part
has not been included.
 
10.           Expenses; Waivers.  If action is instituted to collect this Note,
the Company promises to pay all costs and expenses, including, without
limitation, reasonable attorneys’ fees, and costs, incurred in connection with
such action. The Company hereby waives notice of default, presentment or demand
for payment, protest or notice of nonpayment or dishonor and all other notices
or demands relative to this Note.
 
11.           Governing Law.  This Note and all actions arising out of or in
connection with this Note shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the conflicts of law
provisions of the State of New York, or of any other state.  Venue shall be
exclusively in the federal and state courts of New York County, New York.
 
12.           Waiver of Jury Trial.  To the fullest extent permitted by
applicable law, the Company and the Holder hereby irrevocably and expressly
waive all right to a trial by jury in any action, proceeding, counterclaim
(whether based upon contract, tort or otherwise) arising out of or relating to
this Note, or other documents entered in connection herewith or the transactions
contemplated hereby.
 
13.           Headings.  The headings of the sections and subsections of this
Note are inserted for convenience only and do not constitute a part of this
Note.
 
14.           Miscellaneous.  If this Note any other document related to this
loan are lost, stolen, mutilated or destroyed, and the Holder delivers to the
Company an indemnification in the Company’s favor, signed by the Holder, the
Company will sign and deliver to Holder, a new Note in form and content which
will have the effect of the original for all purposes.

 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company has caused this Note to be issued as of the date
first written above.
 

 
TETRAGENEX PHARMACEUTICALS, INC.
   
By:
       
   Name: Martin Schacker
     
   Title: Co-CEO
 

 
 
 
The undersigned Holder does
hereby accept and agree to all of the
terms and conditions of the above Note.

By:
     
Name:
   
Address
 

 

--------------------------------------------------------------------------------