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Exhibit 10.1
 
ECHO THERAPEUTICS, INC.
8% Senior Promissory Note

Issuance Date:                                 January 5, 2011
Principal Amount: $1,000,000

For value received, ECHO THERAPEUTICS, INC., a Delaware corporation (the
“Maker”), hereby promises to pay to the order of Platinum Montaur Life Sciences,
LLC, a Delaware limited liability company with an address of 152 West 57th
Street, 54th Floor, New York, NY 10019 (together with its successors,
representatives, and permitted assigns, the “Holder”), in accordance with the
terms hereinafter provided, the principal amount of ONE MILLION DOLLARS
($1,000,000), together with interest thereon.
 
All payments under or pursuant to this Note shall be made in United States
Dollars in immediately available funds to the Holder at the address of the
Holder first set forth above or at such other place as the Holder may designate
from time to time in writing to the Maker or by wire transfer of funds to the
Holder’s account, as requested by the Holder.  The outstanding principal balance
of this Note, together with all accrued and unpaid interest, shall be due and
payable in full on February 1, 2011 (the “Maturity Date”) or at such earlier
time as provided herein.

ARTICLE I
PAYMENT

Section 1.1 ­Interest.  Beginning on the date of this Note (the “Issuance
Date”), the outstanding principal balance of this Note shall bear interest, in
arrears, at a rate per annum equal to eight percent (8%), payable on the
Maturity Date.  Interest shall be computed on the basis of a 360-day year of
twelve (12) 30-day months, shall compound monthly and shall accrue commencing on
the Issuance Date.  Furthermore, upon the occurrence of an Event of Default (as
defined in Section 2.1 hereof), the Maker will pay interest to the Holder,
payable on demand, on the outstanding principal balance of and unpaid interest
on the Note from the date of the Event of Default until such Event of Default is
cured at the rate of the lesser of eighteen percent (18%) and the maximum
applicable legal rate per annum. To the extent permitted by law, if amounts
outstanding hereunder are not paid in full on the Maturity Date hereof, the
Maker shall be obligated to pay to the Holder a late payment fee equal to 10% of
the principal amount then outstanding.
 
Section 1.2 Payment of Principal; Prepayment.   The Principal Amount hereof
shall be paid in full on the earliest of (i) the Maturity Date, (ii) the due
date of any mandatory prepayment as set forth herein, or (iii) any acceleration
of this Note in accordance with the terms hereof. Any amount of principal repaid
hereunder may not be reborrowed.  The Maker may prepay all or any portion of the
principal amount of this Note upon not less than two (2) business days’ prior
written notice to the Holder without premium or penalty.
 
Section 1.3 Covenants.
 
(a) The Maker will maintain, keep and preserve its business assets in good
working order and condition, ordinary wear and tear excepted.  The Maker agrees
to maximize collections
 

 
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on all accounts receivable and contract rights and to diligently pursue the
collection of all sums due the Maker under any purchase orders placed with Maker
and all account obligors.  The Maker shall not sell or license any of its
assets, other than in the ordinary course of business and consistent with past
practices.
 
(b) The Maker will not create, incur, assume, or suffer to exist any lien,
mortgage, pledge, encumbrance, security interest, attachment or charge of any
kind upon the any of its assets, except:
 
(i) liens for taxes or assessments or other government charges or levies not yet
due and payable or, if due and payable, that are being contested in good faith
by appropriate proceedings diligently prosecuted and for which appropriate
reserves are maintained; and
 
(ii) liens imposed by law, such as mechanics,’ materialmen’s and similar liens
securing obligations incurred in the ordinary course of business which are not
past due for more than thirty (30) days or which are being contested in good
faith by appropriate proceedings diligently prosecuted and for which appropriate
reserves have been established.
 
(c) The Maker will not create, incur, assume, or suffer to exist any debt (as
defined below), except:
 
(i) debt of the Maker under this Note; and
 
(ii) debt described in Exhibit A attached hereto, but no renewals, extensions,
or refinancings thereof;
 
(iii) trade debt incurred in the ordinary course of business;
 
(iv) debt for the acquisition of capital assets related to manufacturing and
production; and
 
(v) ordinary accounts payable and accrued expenses.
 
As used in this Section 1.3(c), the term “debt” shall include all obligations,
contingent and otherwise, that in accordance with generally accepted accounting
principles should be classified upon the obligor’s balance sheet as liabilities,
or to which reference should be made by footnotes thereto, including without
limitation all debt and similar monetary obligations, whether direct or
indirect, all liabilities secured by any mortgage, pledge, security interest,
lien, charge or other encumbrance, and all guarantees, endorsements and other
contingent obligations whether direct or indirect in respect of indebtedness of
others.
 
Section 1.4 Payment on 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.
 
Section 1.5 Use of Proceeds.  The Maker shall use the proceeds of this Note only
for general working capital.

 
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Section 1.6 Term Sheet and Definitive Documentation.  The Maker agrees to work,
in good faith, with the Holder to consummate the transactions described in the
Term Sheet, dated the date hereof, between the Holder and the Maker, which the
parties acknowledge is a binding agreement.  The Maker acknowledges that the
Holder’s agreement to extend credit pursuant to this Note is made in connection
with the Holder’s investment in the Maker as described in the Term Sheet, and a
failure of the Maker to act in good faith to negotiate the consummation of the
transactions described in the Term Sheet shall, in addition to remedies
available under the Term Sheet, be deemed an Event of Default hereunder.

ARTICLE II
EVENTS OF DEFAULT;  REMEDIES

Section 2.1 ­Events of Default.  The occurrence of any of the following events
shall be an “Event of Default” under this Note:

(a) any default in the payment of (1) the principal amount hereunder when due,
or (2) interest on, or liquidated damages in respect of, this Note, in each case
within three (3) business days after the same shall become due and payable
(whether on the Maturity Date or by acceleration or otherwise); or
 
(b) the Maker shall fail to observe or perform any other covenant or agreement
contained in this Note, which failure is not cured, if possible to cure, within
3 business days after notice of such default sent by the Holder; or
 
(c) [Reserved]; or
 
(d) any material representation or warranty made by the Maker herein or
otherwise to Holder shall prove to have been false or incorrect or breached in a
material respect on the date as of which made; or
 
(e) the Maker shall (A) default in any payment of any amount or amounts of
principal of or interest on any indebtedness (other than the indebtedness
hereunder) the aggregate principal amount of which indebtedness is in excess of
$20,000 or (B) default in the observance or performance of any other agreement
or condition relating to any indebtedness (except ordinary accounts payable and
accrued expenses), that, in the aggregate, exceeds $20,000, or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders or beneficiary or
beneficiaries of such indebtedness to cause with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity; or
 
(f) the Maker 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 United States Bankruptcy Code (as now or hereafter in effect) or under
the comparable laws of any jurisdiction (foreign or domestic), (iv) file a
petition seeking to take advantage of any bankruptcy, insolvency, moratorium,
 

 
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reorganization or other similar law affecting the enforcement of creditors’
rights generally, (v) acquiesce in writing to any petition filed against it in
an involuntary case under United States Bankruptcy Code (as now or hereafter in
effect) or under the comparable laws of any jurisdiction (foreign or domestic),
(vi) issue a notice of bankruptcy or winding down of its operations or issue a
press release regarding same, or (vii) take any action under the laws of any
jurisdiction (foreign or domestic) analogous to any of the foregoing; or
 
(g) a proceeding or case shall be commenced in respect of the Maker, 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 in connection with the liquidation or dissolution of the Maker 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 thirty
(30) days or any order for relief shall be entered in an involuntary case under
United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic) against the Maker or
action under the laws of any jurisdiction (foreign or domestic) analogous to any
of the foregoing shall be taken with respect to the Maker and shall continue
undismissed, or unstayed and in effect for a period of thirty (30) days.
 
Section 2.2 ­Remedies Upon An Event of Default.  If an Event of Default shall
have occurred and shall be continuing, the Holder of this Note may, at any time,
at its option, declare the entire unpaid principal balance of this Note,
together with all interest accrued hereon, due and payable, and thereupon, the
same shall be accelerated and so due and payable, without presentment, demand,
protest, or notice, all of which are hereby expressly unconditionally and
irrevocably waived by the Maker.  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 holder’s right to pursue actual damages for any
failure by the Maker to comply with the terms of this Note.
 

ARTICLE III
­MISCELLANEOUS

Section 3.1 ­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, telecopy or facsimile at the
address or number set forth on the signature page hereto (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.

 
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Section 3.2 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 any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction.  This Note shall not
be interpreted or construed with any presumption against the party causing this
Note to be drafted.
 
Section 3.3 ­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.
 
Section 3.4 Binding Effect; Amendments.  The obligations of the Maker set forth
herein shall be binding upon the successors and assigns of the Maker.  No
amendments of or waivers or consents with respect to this Note shall be
effective unless such amendment, waiver or consent is in writing executed by
each of the Maker and the Holder.   The Maker may not assign its obligations
hereunder without the Holder’s prior written consent.
 
Section 3.5 ­Consent to Jurisdiction.  Each of the Maker and the Holder, by its
acceptance of this Note, (i) hereby irrevocably submits to the exclusive
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 Maker and the Holder, by its acceptance of this Note,
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices
hereunder and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing in this Section shall affect or
limit any right to serve process in any other manner permitted by law.
 
Section 3.6 ­Failure or Indulgence Not Waiver.  No failure or delay on the part
of the Holder 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.
 
Section 3.7 ­Maker Waivers; Dispute Resolution.  Except as otherwise
specifically provided herein, the Maker and all others that may become liable
for all or any part of the obligations evidenced by this Note, hereby waive
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 do hereby consent to any number of renewals of extensions of
the time or payment hereof and agree that any such renewals or extensions may be
made without notice to any such persons and without affecting their liability
herein and do further consent to the release of any person liable hereon, all
without affecting the liability of the other persons, firms or Maker liable for
the payment of this Note, AND DO HEREBY WAIVE TRIAL BY JURY.
 
(a) No delay or omission on the part of the Holder in exercising its rights
under this Note, or course of conduct relating hereto, shall operate as a waiver
of such rights or
 

 
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any other right of the Holder, nor shall any waiver by the Holder of any such
right or rights on any one occasion be deemed a waiver of the same right or
rights on any future occasion.
 
(b) THE MAKER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS
A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY
WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY
WHICH THE HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

Section 3.8 Fees and Expenses.  The Maker will pay on demand all costs of
collection and attorneys’ fees paid or incurred by the Holder in enforcing the
obligations of the Maker.  The Maker represents and warrants that this Note is
the legal, valid and binding obligation of the Maker, enforceable in accordance
with its terms.
 

[Signature Page Follows]

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

ECHO THERAPEUTICS, INC.

By:           /s/ Harry G. Mitchell
Name:           Harry G. Mitchell
Title:             COO and CFO

 
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Exhibit A

 
 
The Company leases 12,999 square feet of office, laboratory and manufacturing
space in Franklin, Massachusetts under a lease expiring March 31, 2014. Future
minimum rental payments under this operating lease are approximately as follows:

 
Amount
   
For the years ended December 31,
     
2011
  $ 143,000  
2012
    143,000  
2013
    143,000  
2014
    36,000  
Total
  $ 465,000  

Promissory Note dated September 24, 2010 in the principal amount of $100,000, as
amended by a letter agreement dated December 23, 2010.
 
 

 

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