Exhibit 10.3

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS NOTE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
(I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL
(WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO
RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

Principal Amount: $1,067,527.40                                    Issue Date:
March 1, 2010

 

RESTATED 8 ½ % CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE RECEIVED, PHYTOMEDICAL TECHNOLOGIES, INC., A NEVADA CORPORATION
(HEREINAFTER CALLED “ BORROWER ”), HEREBY PROMISES TO PAY TO HARMEL S. RAYAT,
HAVING AN ADDRESS AT 1628 WEST 1ST AVENUE, SUITE 216, VANCOUVER, BRITISH
COLUMBIA,  V6J 1G1,  (THE “ HOLDER ”) OR ITS REGISTERED ASSIGNS OR SUCCESSORS IN
INTEREST OR ORDER, WITHOUT DEMAND, THE SUM OF ONE MILLION SIXTY-SEVEN THOUSAND
FIVE HUNDRED TWENTY SEVEN DOLLARS AND 40 CENTS ($1,067,527.40) (“PRINCIPAL
AMOUNT”), WITH INTEREST COMPOUNDED QUARTERLY AT THE ANNUAL RATE OF EIGHT AND
ONE-HALF PERCENT (8 ½ %) ON  MARCH 1, 2013  (THE “MATURITY DATE”), IF NOT SOONER
PAID.

 

This Note amends and restates in its entirety the demand promissory note dated
March 8, 2005 in the aggregate principal amount of $750,000 issued by the
Borrower to the Holder (the “Original Note”). All accrued and unpaid interest on
the outstanding principal of the Original Note as of the date hereof has been
included in the Principal Amount.

 

ARTICLE 1

 

INTEREST

 

            1.1           Interest Rate.   Interest on this Note shall compound
quarterly and shall accrue at the annual rate of eight and one-half percent (8 ½
%) as computed on the basis of a 365-day year.  .  Interest will begin to accrue
as of the date hereof is payable on the Maturity Date, accelerated or otherwise,
when the principal and remaining accrued but unpaid interest shall be due and
payable, or sooner as described below; provided, however, the Holder may elect
to convert, at any time during the term of this Note, all or any portion of
accrued and unpaid interest, through the date of such conversion, into shares of
Common Stock at the then applicable Conversion Price..  Interest will be payable
in cash, or at the election of the Borrower, and subject to Section 2.2, with
shares of Common Stock at a per share value equal to the Conversion Price set
forth in Section 2.1.  Interest may be paid at the Holder’s election in cash,
registered

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Common Stock or Common Stock immediately to the extent resellable pursuant to
Rule 144 to the extent such share issuance is not limited by transfer or volume
restrictions.

 

            1.2             Default Interest Rate.  Following the occurrence and
during the continuance of an Event of Default, which, if susceptible to cure is
not cured within the cure periods (if any) set forth in Article 3, otherwise
then from the first date of such occurrence until cured, the annual interest
rate on this Note shall (subject to Section 4.10) be ten percent (10%), and be
due on demand.

 

ARTICLE 2

 

CONVERSION RIGHTS

 

           2.1           Holder’s Conversion Rights.   Subject to Section 2.4,
for so long as this Note remains outstanding and not fully paid, the Holder
shall have the right, but not the obligation, to convert all or any portion of
the then aggregate outstanding Principal Amount of this Note, together with
interest, into shares of Common Stock (the “Conversion Shares”), subject to the
terms and conditions set forth in this Article 3, at the rate of  $0.01 per
share of Common Stock (“Conversion Price”), as the same may be adjusted pursuant
to this Note.  The Holder may exercise such right by delivery to the Borrower of
a written Notice of Conversion pursuant to Section 2.3.

 

           2.2           Conversion Limitation.   Intentionally left blank.

 

           2.3          Mechanics of Holder’s Conversion.

 

 (a)           In the event that the Holder elects to convert any amounts
outstanding under this Note into Common Stock, the Holder shall give notice of
such election by delivering an executed and completed notice of conversion (a
“Notice of Conversion”) to the Borrower, which Notice of Conversion shall
provide a breakdown in reasonable detail of the Principal Amount, accrued
interest and amounts being converted.  The original Note is not required to be
surrendered to the Borrower until all sums due under the Note have been
paid.  On each Conversion Date (as hereinafter defined) and in accordance with
its Notice of Conversion, the Holder shall make the appropriate reduction to the
Principal Amount, accrued interest and fees as entered in its records.  Each
date on which a Notice of Conversion is delivered or faxed to the Borrower in
accordance with the provisions hereof shall be deemed a “Conversion Date.”  A
form of Notice of Conversion to be employed by the Holder is annexed hereto as
Exhibit A.

 

(b)           Pursuant to the terms of a Notice of Conversion, the Borrower will
issue instructions to the transfer agent accompanied by an opinion of counsel
(if so required by the Borrower’s transfer agent), to issue the Conversion
Shares to the Holder within three (3) business days of the date of the Notice of
Conversion..

 

            2.4           Certain Adjustments. The number and class or series of
shares into which this Note may be converted under Section 2 shall be subject to
adjustment in accordance with the following provisions:

 

(a)    Computation of Adjusted Conversion Price.  Except as hereinafter
provided, in case the Borrower shall at any time after the date hereof issue or
sell any (i) shares of its common shares or preferred shares convertible into
its common shares, or (ii) debt, warrants, options or other instruments or
securities which are convertible into or exercisable for shares of Common Stock
(together herein referred to as “Equity Securities”), in each case for
consideration (or with a conversion price) per common share less than the
Conversion Price in effect immediately prior to the issuance or sale of such

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securities or instruments, or without consideration, then forthwith upon such
issuance or sale, the Conversion Price shall (until another such issuance or
sale) be reduced to the price (calculated to the nearest full cent) equal to the
price (or conversion price) of any such securities or instruments;  provided , 
however , that in no event shall the Conversion Price be adjusted pursuant to
this computation to an amount in excess of the Conversion Price in effect
immediately prior to such computation. For the purposes of this Section 2.4, the
term Conversion Price shall mean the Conversion Price per share set forth in
Section 2.1 hereof, as adjusted from time to time pursuant to the provisions of
this Section.

 

            For purposes of any computation to be made in accordance with this
Section 2.4, the following provisions shall be applicable:

 

(i)    In case of the issuance or sale of any shares of Equity Securities for a
consideration part or all of which shall be cash, the amount of the cash
consideration shall be deemed to be the amount of cash received by the Borrower
for such shares (or, if shares of stock are offered by the Borrower for
subscription, the subscription price, or, if either of such securities shall be
sold to underwriters or dealers for public offering without a subscription
price, the public offering price, before deducting therefrom any compensation
paid or discount allowed in the sale, underwriting or purchase thereof by
underwriters or dealers or other persons or entities performing similar
services), or any expenses incurred in connection therewith and less any amounts
payable to security holders or any affiliate thereof, including, without
limitation, any employment agreement, royalty, consulting agreement, covenant
not to compete, earnout or contingent payment right or similar arrangement,
agreement or understanding, whether oral or written; all such amounts shall be
valued at the aggregate amount payable thereunder whether such payments are
absolute or contingent and irrespective of the period or uncertainty of payment,
the rate of interest, if any, or the contingent nature thereof.

 

(ii)    In case of the issuance or sale (otherwise than as a dividend or other
distribution on any stock of the Borrower) of shares of Equity Securities for a
consideration part or all of which shall be other than cash, the amount of the
consideration therefore other than cash shall be deemed to be the value of such
consideration as determined in good faith by the Board of Directors of the
Borrower.

 

(iii)    Shares of Equity Securities issuable by way of dividend or other
distribution on any capital stock of the Borrower shall be deemed to have been
issued immediately after the opening of business on the day following the record
date for the determination of stockholders entitled to receive such dividend or
other distribution and shall be deemed to have been issued without
consideration.

 

(iv)    The reclassification of securities of the Borrower other than shares of
Equity Securities into securities including shares of Equity Securities shall be
deemed to involve the issuance of such shares of Equity Securities for
consideration other than cash immediately prior to the close of business on the
date fixed for the determination of security holders entitled to receive such
shares, and the value of the consideration allocable to such shares of stock
shall be determined as provided in this Section 2.4.

 

(v)    The number of shares of Equity Securities at any one time outstanding
shall include the aggregate number of shares issued or issuable (subject to
readjustment upon the actual issuance thereof) upon the exercise of then
outstanding options, rights, warrants, and convertible and exchangeable
securities.

  

(b)    Adjustment for Reorganization or Recapitalization.  If, while this Note
remains outstanding and has not been converted, there shall be a reorganization
or recapitalization of the

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Borrower (other than a combination, reclassification, exchange or subdivision of
shares otherwise provided for herein), all necessary or appropriate lawful
provisions shall be made so that the Holder shall thereafter be entitled to
receive upon conversion of this Note, the greatest number of shares of stock or
other securities or property that a holder of the class of securities
deliverable upon conversion of this Note would have been entitled to receive in
such reorganization or recapitalization if this Note had been converted
immediately prior to such reorganization or recapitalization, all subject to
further adjustment as provided in this Section 4. If the per share consideration
payable to the Holder for such class of securities in connection with any such
transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by the Borrower’s
Board of Directors. The foregoing provisions of this paragraph shall similarly
apply to successive reorganizations or recapitalizations and to the stock or
securities of any other corporation that are at the time receivable upon the  
conversion of this Note. In all events, appropriate adjustment shall be made in
the application of the provisions of this Note (including adjustment of the
conversion price and number of shares into which this Note is then convertible
pursuant to the terms and conditions of this Note) with respect to the rights
and interests of the Holder after the transaction, to the end that the
provisions of this Note shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable or
issuable after such reorganization or recapitalization upon conversion of this
Note.

 

(c)    Adjustments for Split Subdivision or Combination of Shares.  If the
Borrower at any time while this Note remains outstanding and unconverted, shall
split or subdivide any class of securities into which this Note may be converted
into a different number of securities of the same class, the number of shares of
such class issuable upon conversion of this Note immediately prior to such split
or subdivision shall be proportionately increased and the conversion price for
such class of securities shall be proportionately decreased. If the Borrower at
any time while this Note, or any portion hereof, remains outstanding and
unconverted shall combine any class of securities into which this Note may be
converted, into a different number of securities of the same class, the number
of shares of such class issuable upon conversion of this Note immediately prior
to such combination shall be proportionately decreased and the conversion price
for such class of securities shall be proportionately increased.

 

(d)    Adjustments for Dividends in Stock or Other Securities or Property. If,
while this Note remains outstanding and unconverted, the holders of any class of
securities as to which conversion rights under this Note exist at the time shall
have received, or, on or after the record date fixed for the determination of
eligible stockholders, shall have become entitled to receive, without payment
therefor, other or additional stock or other securities or property (other than
cash) of the Borrower by way of dividend, then and in each case, this Note shall
represent the right to acquire, in addition to the number of shares of such
class of security receivable upon conversion of this Note, and without payment
of any additional consideration therefor, the amount of such other or additional
stock or other securities or property (other than cash) of the Borrower that
such holder would hold on the date of such conversion had it been the holder of
record of the class of security receivable upon conversion of this Note on the
date hereof and had thereafter, during the period from the date hereof to and
including the date of such conversion, retained such shares and/or all other
additional stock available by it as aforesaid during said period, giving effect
to all adjustments called for during such period by the provisions of this
Section 2.4.

  

(e)          Adjustment for Subsequent Equity Sales. If the Borrower, at any
time while this Note  is outstanding, shall sell or grant any option to
purchase, or sell or grant any right to reprice, or otherwise dispose of or
issue (or announce any offer, sale, grant or any option to purchase or other
disposition) any Common Stock or Common Stock Equivalents entitling any Person
to acquire shares of Common Stock, at an effective price per share less than the
then Conversion Price (such lower price, the “Base Share Price” and such
issuances collectively, a “Dilutive Issuance”) (if the holder of the Common
Stock or Common Stock Equivalents so issued shall at any time, whether by
operation of purchase price adjustments, reset provisions, floating conversion,
exercise or exchange prices or otherwise, or due to

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warrants, options or rights per share which are issued in connection with such
issuance, be entitled to receive shares of Common Stock at an effective price
per share which is less than the Conversion Price, such issuance shall be deemed
to have occurred for less than the Conversion Price on such date of the Dilutive
Issuance), then the Conversion Price shall be reduced and only reduced to equal
the Base Share Price and the number of Conversion Shares issuable hereunder
shall be increased such that the aggregate Conversion Price payable hereunder,
after taking into account the decrease in the Conversion Price, shall be equal
to the aggregate Exercise Price prior to such adjustment.  Such adjustment shall
be made whenever such Common Stock or Common Stock Equivalents are issued.  The
Company shall notify the Holder in writing, no later than the Trading Day
following the issuance of any Common Stock or Common Stock Equivalents subject
to this Section 2.4 (e), indicating therein the applicable issuance price, or
applicable reset price, exchange price, conversion price and other pricing terms
(such notice the “Dilutive Issuance Notice”).  For purposes of clarification,
whether or not the Company provides a Dilutive Issuance Notice pursuant to this
Section 2.4 (e) upon the occurrence of any Dilutive Issuance, after the date of
such Dilutive Issuance the Holder is entitled to receive a number of Conversion
Shares based upon the Base Share Price regardless of whether the Holder
accurately refers to the Base Share Price in the Notice of Conversion.

  

(f)    No Fractional Shares. Conversion calculations pursuant to Article 2 shall
be rounded up to the nearest whole Conversion Share, and no fractional shares
shall be issuable by the Borrower upon conversion of this Note. All shares
issuable upon a conversion of this Note (including fractions thereof) shall be
aggregated for purposes of determining whether such conversion would result in
the issuance of a fractional share.

 

(g)    No Impairment.  The Borrower will not, by amendment of its Articles of
Incorporation or through any reorganization, recapitalization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Borrower, but will
at all times in good faith assist in the carrying out of all the provisions of
this Article 2 and in the taking of all such action as may be necessary or
appropriate in order to protect the conversion rights of the Holder of this Note
against impairment.

 

(h)    No Change Necessary. The form of this Note need not be changed because of
any adjustment in the number of shares of Common Stock issuable upon its
conversion.

 

2.5.    Further Adjustments. In case at any time or, from time to time, the
Borrower shall take any action that affects the class of securities into which
this Note may be converted under Section 2, other than an action described
herein, then, unless such action will not have a material adverse effect upon
the rights of the Holder, the number of shares of such class of securities (or
other securities) into which this Note is convertible shall be adjusted in such
a manner and at such time as shall be equitable under the circumstances.

 

2.6.    Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment pursuant to Section 2.4 or Section 2.5, the Borrower at its sole
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to the Holder a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Borrower shall, upon the written
request at any time of the Holder, furnish or cause to be furnished to the
Holder a like certificate setting forth (i) such adjustments and readjustments,
and (ii) the number and class of securities and the amount, if any, of other
property which at the time would be received upon the conversion of this Note
under Article 2.

 

2.7.    Change of Control. In the event of (i) any transaction or series of
related transactions

5

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(including any reorganization, merger or consolidation) that results in the
transfer of 50% or more of the outstanding voting power of the Borrower, or (ii)
a sale of all or substantially all of the assets of the Borrower to another
person or entity, this Note shall be automatically due and payable. The Borrower
will give the Holder not less than ten (10) business days prior written notice
of the occurrence of any events referred to in this Section 2.7.

 

ARTICLE 3

 

 EVENTS OF DEFAULT

 

The occurrence of any of the following events of default (“Event of Default”)
shall, at the option of the Holder hereof, make all sums of principal and
interest then remaining unpaid hereon and all other amounts payable hereunder
immediately due and payable, upon demand, without presentment, or grace period,
all of which hereby are expressly waived, except as set forth below:

 

3.1       Failure to Pay Principal or Interest.  The Borrower fails to pay any
installment of Principal Amount, interest or other sum due under this Note when
due and such failure continues for a period of eight (8) business days after the
due date.

 

3.2      Breach of Covenant.  The Borrower breaches any material covenant or
other term or condition of this Note and such breach, if subject to cure,
continues for a period of ten (10) business days after written notice to the
Borrower from the Holder.  Notwithstanding the foregoing, in the event that the
provisions of Section 2.2 wherein the Borrower does not have sufficient number
of shares available for issuance pursuant to its Articles of Incorporation, as
amended, then the default shall be deemed cured at the time of the initial
filing of a preliminary information statement or proxy statement, provided, that
the Company makes best efforts to obtain effectiveness of the same and complete
the filing of any Amendment to the Articles of Incorporation (or amended and
restated Articles of Incorporation) within 45 days thereafter.

 

3.3      Breach of Representations and Warranties.  Any material representation
or warranty of the Borrower made herein, or in any agreement, statement or
certificate given in writing pursuant hereto or in connection herewith or
therewith shall be false or misleading in any material respect as of the Closing
Date.

 

3.4      Receiver or Trustee.  The Borrower shall make an assignment for the
benefit of creditors, or apply for or consent to the appointment of a receiver
or trustee for them or for a substantial part of their property or business; or
such a receiver or trustee shall otherwise be appointed.

 

3.5      Judgments.  Any money judgment, writ or similar final process shall be
entered or filed against Borrower or any subsidiary of Borrower in the United
States or any of their property or other assets in the United States for more
than $100,000, and shall remain unvacated or unsatisfied, for a period of sixty
days.

 

3.6      Non-Payment.   A default by the Borrower under any one or more
obligations in an aggregate monetary amount in excess of $100,000 for more than
twenty (20) days after the due date, unless the Borrower is contesting the
validity of such obligation in good faith and has segregated cash funds equal to
not less than one-half of the contested amount.

 

3.7      Bankruptcy.  Bankruptcy, insolvency, reorganization, or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law,
or the issuance of any notice in relation to such event, for the relief of
debtors shall be instituted by or against the Borrower or any Subsidiary of

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Borrower and if instituted against them are not dismissed within forty-five (45)
days of initiation.

 

3.8      Delisting.   Delisting of the Common Stock from the OTCBB or such other
exchange on which the Borrower’s common stock is then listed for trading (the
“Principal Market”) for a period of seven consecutive trading days; or
notification from a Principal Market that the Borrower is not in compliance with
the conditions for such continued listing on such Principal Market.

 

3.9      Stop Trade.  the issuance of a Securities and Exchange Commission or
judicial stop trade order or, a Principal Market trading suspension with respect
to Borrower’s Common Stock that lasts for five or more consecutive trading days.

 

3.10      Failure to Deliver Common Stock or Replacement Note.  Borrower’s
failure to timely deliver certificates representing the Conversion Shares to the
Holder pursuant to and in the form required by this Note, or if required, a
replacement Note.

 

3.11     Reservation Default.   Failure by the Borrower to have reserved for
issuance upon conversion of the Note the amount of Common Stock as set forth in
this Note.

 

3.12     Financial Statement Restatement.   The restatement of any financial
statements filed by the Borrower for any date or period from two years prior to
the Issue Date of this Note and until this Note is no longer outstanding, if the
result of such restatement would, by comparison to the unrestated financial
statements, have constituted a Material Adverse Effect.

 

 

 

ARTICLE 4

 

MISCELLANEOUS

 

4.1      Failure or Indulgence Not Waiver.  No failure or delay on the part of
Holder hereof 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.  All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

 

4.2       Notices.  All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, 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.  The addresses for
such communications shall be: (i) if to the Borrower to: PhytoMedical
Technologies, Inc., 100 Overlook Drive, 2nd Floor, Princeton, New Jersey 08540
with a copy to Joseph Sierchio, Esq., Sierchio & Company, LLP, Suite 702, 430
Park Avenue, New York, New York 10022; and (ii) if to the Holder, to the name,
address and

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facsimile number provided to the Borrower by the Holder.

 

4.3       Amendment Provision.  The term “Note” and all reference thereto, as
used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented.

 

4.4       Assignees.  This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns.

 

4.5       Cost of Collection.  If default is made in the payment of this Note,
Borrower shall pay the Holder hereof reasonable costs of collection, including
reasonable attorneys’ fees.

 

4.6    No Rights or Liabilities as Shareholder. This Note does not by itself
entitle the Holder to any voting rights or other rights as a shareholder of the
Borrower. In the absence of conversion of this Note, no provisions of this Note,
and no enumeration herein of the rights or privileges of the Holder, shall cause
the Holder to be a shareholder of the Borrower for any purpose.

 

            4.7       Binding Effect. This Note shall be binding on the Parties
and their respective heirs, successors, and assigns; provided, however, that the
Borrower shall not assign its rights hereunder in whole or in part without the
express written consent of the Holder.

 

4.8      Severability. If any part of this Note is construed to be in violation
of any law, such part shall be modified to achieve the objective of the parties
to the fullest extent permitted by law and the balance of this Note shall remain
in full force and effect.

 

4.9    Final Note. This Note contains the complete understanding and agreement
of the Borrower and Holder and supersedes all prior representations, warranties,
agreements, arrangements, understandings, and negotiations.

 

4.10       Maximum Payments.  Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law.  In the event that the rate
of interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Borrower to the Holder and thus refunded to the
Borrower.

 

4.11      Construction.   Each party acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.

 

4.12      Redemption.  This Note may not be redeemed, prepaid or called without
the consent of the Holder except as described in this Note.

 

4.13     Shareholder Status.  The Holder shall not have rights as a shareholder
of the Borrower with respect to unconverted portions of this Note.  However, the
Holder will have the rights of a shareholder of the Borrower with respect to the
Shares of Common Stock to be received after delivery by the Holder of a
Conversion Notice to the Borrower.

 

4.14    Non-Business Days.   Whenever any payment or any action 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 or action shall be required on the next
succeeding business day and, for such payment, such next

8

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succeeding day shall be included in the calculation of the amount of accrued
interest payable on such date.

 

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an
authorized officer as of the 1st day of March, 2010.

 

 

PHYTOMEDICAL TECHNOLOGIES, INC.

                                                                                         
 

 By:__/s/ Greg Wujek

 Name: Greg Wujek

 Title:   President and Chief Executive Officer

 

 

WITNESS:

 

 

 

_/s/ Raymond Krauss__

Name:  Raymond Krauss

Title:    Chief Financial Officer

 

 

 

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NOTICE OF CONVERSION

 

(To be executed by the Registered Holder in order to convert the Note)

 

 

The undersigned hereby elects to convert $_________ of the principal and
$_________ of the interest due on the Note issued by PhytoMedical Technologies,
Inc. on March 1, 2010 into Shares of Common Stock of PhytoMedical Technologies,
Inc. (the “ Borrower ”) according to the conditions set forth in such Note, as
of the date written below.

 

 

 

Date of
Conversion:____________________________________________________________________

 

 

Conversion
Price:______________________________________________________________________

 

 

Number of Shares of Common Stock Beneficially Owned on the Conversion Date: Less
than <> % of the outstanding Common Stock of PhytoMedical Technologies, Inc.

 

 

Shares To Be
Delivered:_________________________________________________________________

 

 

Signature:____________________________________________________________________________

 

 

Print
Name:___________________________________________________________________________

 

 

Address:_____________________________________________________________________________

 

_____________________________________________________________________________

 

 

 

 

 

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