Blueprint





 






 Exhibit
10.19



 


THIS
PROMISSORY NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF
ANY STATE. 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 UNDER SUCH LAWS OR AN EXEMPTION FROM
SUCH REGISTRATION REQUIREMENT. 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 SATISFACTORY TO
THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
COMPLIANCE WITH THE ACT AND ALL APPLICABLE STATE SECURITIES
LAWS.


 


6%
CONVERTIBLE NOTE


 


	
 $250,000

	
 October
23, 2015







 




Subject to the terms and conditions of this Convertible Note, for
value received, Adgero Biopharmaceuticals,
Inc., a Delaware corporation
(the "Company"),
hereby promises to pay Adam K. Stern
(the “Investor”), with
its principal office at [●],
the principal sum of Two Hundred and Fifty Thousand
Dollars ($250,000) (the "Principal Amount"),
together with interest thereon accruing on and from the date hereof
on the Balance at an annual rate equal to six percent
(6%). Interest shall accrue daily and be calculated
based on a 360-day year of twelve 30-day months, but in no event
shall the rate of interest exceed the maximum rate, if any,
allowable under applicable law. "Balance"
means, at the applicable time, the
sum of all then outstanding principal of this Convertible Note and
all then accrued but unpaid interest.


 


This
Convertible Note is issued by the Company to the Investor pursuant
to that $250,000 payment made to the Company on
December 23, 2015 (the “Issuance
Date”).


 


The
following is a statement of the rights of the Investor and the
terms and conditions to which this Convertible Note is subject and
to which the Investor, by acceptance of this Convertible Note,
agrees:


 




1.

Payment. If this Convertible
Note has not been previously converted (as provided in Section 6
hereof), then the Balance of this Convertible Note, and all other
amounts accrued under this Convertible Note shall, on the Maturity
Date, shall at the sole option of the Investor be payable in (a)
cash or other immediately available funds or (ii) Company equity as
described below. "Maturity Date"
shall mean March 31, 2016. The amount of equity to be paid shall be
calculated as follows: For each $0.62 appropriately adjusted for
any stock split, reverse stock split, stock dividend or other
reclassification or combination of the Common Stock occurring after
the Issuance Date) of the Balance due to the Investor at the
Maturity Date, the Investor shall receive one share of Company
common stock, par value $0.00001 (the “Common
Stock”), and one cashless warrant, exercisable for one
(1) share of Common Stock, having an exercise price of $0.62, a
redemption price of $1.55 and an expiration date five years from
the Issuance Date (the “Cashless
Warrant”). Apart from the terms described in the
preceding sentence, all other terms and conditions of the Cashless
Warrant will be substantially the same as the terms and conditions
contemplated to be included in the warrants to be offered in the
Qualified Financing (as defined below). Unless the indebtedness
outstanding under this Convertible Note is converted in accordance
with Section 6 hereof, all payments on account of Principal Amount
and interest shall be made as described herein.






 



 

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2.

No Conversion at Option of the
Investor, No Redemption or Prepayment. Prior to the Maturity
Date, the Company may not redeem or otherwise prepay, in whole or
in part, the unpaid principal amount of and accrued and unpaid
interest on this Convertible Note. This Note shall not be
convertible at the option of the Investor thereof, except as set
forth above.






 




3.

Amendments and Waivers; Resolutions of
Dispute; Notice. The amendment or waiver of any term of this
Convertible Note, the resolution of any controversy or claim
arising out of or relating to this Convertible Note and the
provision of notice shall be conducted pursuant to the terms of
laws of the State of New York.






 




4.

Transfer and Exchange. The
holder of this Convertible Note may, prior to the Maturity Date or
the conversion in full of such Convertible Note in accordance with
Section 6, surrender such Convertible Note at the principal office
of the Company for transfer or exchange. Within a reasonable time
after notice to the Company from such holder of its intention to
make such exchange and without expense to such holder, except for
any transfer or similar tax which may be imposed on the transfer or
exchange, the Company shall issue in exchange therefore another
convertible note or securities for the same aggregate principal
amount as the unpaid principal amount of the Convertible Note so
surrendered, having the same maturity and rate of interest,
containing the same provisions and subject to the same terms and
conditions as the Convertible Note so surrendered. Each new
Convertible Note shall be made payable to such person or persons,
or transferees, as the holder of such surrendered Convertible Note
may designate, and such transfer or exchange shall be made in such
a manner that no gain or loss of principal or interest shall result
therefrom. The Company may elect not to permit a transfer of the
Convertible Note if it has not obtained satisfactory assurance that
such transfer: (a) is exempt from the registration
requirements of, or covered by an effective registration statement
under, the Securities Act of 1933, as amended, and the rules and
regulations thereunder and (b) is in compliance with all
applicable state securities laws, including without limitation
receipt of an opinion of counsel, which opinion shall be
satisfactory to the Company.






 




 

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5.

New Convertible Note. Upon
receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of the Convertible Note, the
Company will issue a new Convertible Note, for the same aggregate
principal amount as the unpaid principal amount of the Convertible
Note so lost, stolen, destroyed or mutilated, having the same
maturity and rate of interest, containing the same provisions and
subject to the same terms and conditions as the Convertible Note so
lost, stolen, destroyed or mutilated and dated as of the Issuance
Date, in lieu of such lost, stolen, destroyed or mutilated
Convertible Note, and in such event the Investor agrees to
indemnify and hold harmless the Company in respect of any such
lost, stolen, destroyed or mutilated Convertible Note.






 




6.


Conversion of Convertible Note upon Close of the Qualified
Financing.






 




a.

Mandatory Conversion of Convertible
Note upon Close of the Qualified Financing. Immediately upon
the closing of the Qualified Financing (as defined below)
consummated on or prior to the Maturity Date, the entire Balance
then outstanding under this Convertible Note shall be automatically
converted into that number of units of the security or securities
sold in the Qualified Financing as is equal to the Conversion
Amount (as defined below) divided by the Equity Financing Purchase
Price (as defined below). The Company shall deliver to Investor
notice of the Qualified Financing prior to the closing of the
Qualified Financing, notifying the Investor of the conversion to be
effected, including (i) the Conversion Amount (calculated as of the
anticipated date of the closing of the Equity Financing), (ii) the
Equity Financing Purchase Price and (iii) the anticipated date of
the closing of the Equity Financing. The date on which such
conversion occurs is referred to herein as the “Conversion
Date.”






 


(i)
Qualified Financing
Defined. For purposes of this Convertible Note, the term
Qualified Financing shall mean the consummation of the Minimum
Offering Amount transaction contemplated on Exhibit A attached
hereto.


 


(ii)
Equity Financing Purchase
Price Defined. For purposes of this Convertible Note, the
term Equity Financing Purchase Price shall mean an amount equal to
the per unit purchase price paid by those investors participating
in that investment round which caused the minimum offering amount
of the Qualified Financing to be met.


 


(iii)
Conversion Amount
Defined. For purposes of this Convertible Note, the term
Conversion Amount shall mean the Balance outstanding under this
Convertible Note as of the date of closing of the Qualified
Financing.


 




b.

Conversion Procedures. Promptly
following the Conversion Date or, if applicable, the Maturity Date,
the Investor shall deliver to the Company this Convertible Note
(or, in lieu thereof, of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of the
Convertible Note) to the Company at its principal office (or such
other office or agency of the Company as the Company may designate
by notice in writing to the Investor), together with a statement of
the name or names (with address) in which the certificate or
certificates for units of the security or securities sold in the
Qualified Financing should be issued. Promptly following the
Conversion Date or the Maturity Date, as applicable, and the
compliance by the Investor with the requirements of the immediately
preceding sentence, the Company shall issue and deliver, or cause
to be issued and delivered, to the Investor, registered in such
name or names as the Investor may direct in writing, certificates
representing the units of the security or securities sold in the
Qualified Financing. The conversion shall be deemed to have been
effected, as of the close of business on the Conversion Date or the
Maturity Date, as applicable, and at such time, the rights of the
Investor shall cease with respect to this Convertible Note, and the
person or persons in whose name or names the units of the security
or securities sold in the Qualified Financing into which this
Convertible Note shall be issuable upon such conversion shall be
deemed to have become the holder or holders of record of such
units. No fractional shares of any of the units of the security or
securities sold in the Qualified Financing will be issued in
connection with any conversion hereunder. In lieu of fractional
shares which would otherwise be issuable, Investor shall pay cash
equal to the product of such fraction multiplied by the price per
share of such other securities issuable to Investor upon such
conversion.






 




 

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7.

Events of Default. Upon the
occurrence and continuance of an Event of Default beyond any
applicable cure period, the Investor may, upon written notice to
the Company, make the entire Balance then outstanding under this
Convertible Note immediately due and payable.






 




a.

Failure to Pay Principal, Interest or
other Fees. The Company fails to pay when due the Balance of
this Convertible Note in accordance herewith, and in any such case,
such failure shall continue for a period of ten (10) days following
the date upon which any such payment was due.






 




b.

Bankruptcy. Bankruptcy,
insolvency, reorganization or liquidation proceedings or other
proceedings or relief under any bankruptcy law or any law for the
relief of debtors shall be instituted by or against the Company and
such proceeding is not dismissed or discharged within thirty (30)
days of the filing thereof.






 




c.

Breach. Breach of Covenant. The
Company breaches any obligation or any other term or condition of
this Convertible Note in any material respect, and, in any such
case, such breach, if subject to cure, continues for a period of
fifteen (15) days after the occurrence thereof.





 




d.

Terminatino of Qualified
Financing. The Placement Agency Agreement with respect to
the Qualified Financing is terminated for any reason prior to the
initial closing of such financing.






 




 

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8.

Officers and Directors not
Liable. In no event shall any officer or director of the
Company be liable for any amounts due and payable pursuant to this
Convertible Note.






 




9.

Governing Law. All questions
concerning the construction, validity, enforcement and
interpretation of this Convertible Note shall be governed by and
construed and enforced in accordance with the internal laws of the
State of New York, without regard to the principles of conflict of
laws thereof. All legal proceedings concerning the interpretation,
enforcement and defense of this Convertible Note (whether brought
against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in
the state and federal courts sitting in the City of New York,
Borough of Manhattan (the "New York Courts"). Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New
York Courts 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 suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such New York Courts, or
such New York Courts are improper or inconvenient venue for such
proceeding. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS CONVERTIBLE NOTE OR THE TRANSACTIONS CONTEMPLATED
HEREBY.






 




10.

Severability. The invalidity or
unenforceability of any provision hereof shall in no way affect the
validity or enforceability of any other provision.






 




11.

Interpretation. In this
Convertible Note, (i) the meaning of defined terms shall be equally
applicable to both the singular and plural forms of the terms
defined; (ii) the captions and headings are used only for
convenience and are not to be considered in construing or
interpreting this Convertible Note and (iii) the words "including,"
"includes" and "include" shall be deemed to be followed by the
words "without limitation". All references in this Convertible Note
to sections, paragraphs, exhibits and schedules shall, unless
otherwise provided, refer to sections and paragraphs hereof and
exhibits and schedules attached hereto, all of which exhibits and
schedules are incorporated herein by this reference. All references
to dollars or "$" shall refer to United States dollars or U.S.
“$”.






 




12.

Transfer of Rights. In the
event that Investor is deceased or otherwise incapacitated at the
time of the Qualified Financing Conversion, his rights under this
Convertible Note shall be transferred to his estate or legal
trustee as the case may be.






 




13.

Addresses for Notices, etc. Any
notice required or permitted hereunder shall be given in writing
and shall be conclusively deemed effectively given upon personal
delivery or delivery by courier, or on the first business day after
transmission if sent by confirmed facsimile transmission, or four
(4) business days after deposit in the United States mail, by
registered or certified mail, postage prepaid, addressed
to:






 




 

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If to
Company, to:


 


Adgero
Biopharmaceuticals, Inc.


Attn:
Frank G. Pilkiewicz, Chief Executive Officer


301 N.
Harrison St., Suite 9F #459


Princeton, NJ
08540


Facsimile: (609)
936-1341


 


 If
to the Investor, to:


 


Name:
Adam K. Stern


Address (Number & Street):
[●]


Address (City, State & Zip Code):
[●]


Facsimile: [●]


 


Notices
may be sent to such other address as the Company or Investor may
designate by advance written notice to the other parties hereto.
For purposes of this Section 12, a “business day”
means a weekday on which banks are open for general banking
business in New York City, New York.


[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]


 




 

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IN
WITNESS WHEREOF, the undersigned has caused this instrument to be
executed by its duly authorized officers as of the date Payment
above written.


 


 


 


 


ADGERO
BIOPHARMACEUTICALS, INC.


 


By:/S/Frank
Pilkiewicz  


Name:
Frank Pilkiewicz


Title:
CEO


 


 


 




 

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Exhibit A


 


SCHEDULE
A


SUMMARY
OF TERMS OF NEWCO OFFERING OF UNITS COMPRISED OF
COMMON


SHARES
AND WARRANTS (THE “PPO”)


 


	

Offeror


 

	

A newly
formed corporation (“Newco”)


 


	

Placement
Agent


 

	

SternAegis
Ventures through Aegis Capital Corp. (“Placement
Agent”)


 


	

Description
of Securities Offered


 

	

Units
comprised of one share of Common Stock and one five-year Investor
Warrant


 


	

Offering
Amount


 

	

Minimum
Amount: $ 3,000,000


Maximum
Amount: $ 7,500,000


Overallotment:
up to $ 7,500,000


 


	

Offering
Period


 

	

The
Units will be offered through a date which is 45 days from the date
of the Private Placement Memorandum (the “PPM”)
utilized in the Offering, which period may be extended by the
Placement Agent, the Company, and Newco, in their joint discretion,
to a date not later than 90 days from the date of the PPM (such
date, the “Termination Date”). Newco may hold a Closing
at any time after subscriptions for the Minimum Amount have been
received and accepted and after other conditions to closing have
been satisfied.


 


	

Investor
Warrant Terms


 

	

Five-year
term, exercisable for one share of Common Stock at $5.00 per
share


 


	

Price
per Unit


 

	

$5.00


 


	

Minimum
Investment Amount


 

	

$250,000,
provided that a lower subscription Amount may be accepted at the
discretion of Newco, the Company, and the Placement
Agent


 






 




 

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Number
of Newco Common SharesIssuable to the Company’s securities
holders


 

	

2,000,000


 


	

Pro-Forma
Number of Newco Common Shares Outstanding Before
Offering


 

	

1,000,000


 


	

Number
of Newco Common Shares Issued to Investors in the


Offering
(without giving effect to Investor and PA


Warrants),
at Maximum Amount


 

	

1,500,000


 


	

Pro-Forma
Capitalization of Newco following Offering (without


giving
effect to Investor, Merger, and Placement Agent
Warrants)

	

4,500,000


 


 


	

Use of
Proceeds

	

To be
determined between the Company and the Placement
Agent.


 


	

Placement
Agent Compensation


 

	

At each
closing, the Placement Agent will receive (i) a cash commission of
10% of the aggregate purchase price of the Units sold at such
closing and, at final closing, (ii) five year warrants, issuable to
designees of the Placement Agent, to purchase 10% of the shares of
Common Stock included in the Units sold at such closing and
underlying warrants in the Units sold at such closing, at an
exercise price of $5.00. The warrants issuable to the Placement
Agent’s designees will be exercisable on a
“cashless” basis. In addition, at each closing the
Placement Agent shall be entitled to receive a non-accountable
expense allowance equal to 3% of the aggregate purchase price of
the Units sold at such closing


 


	

Offering
Commencement


 

	

As soon
as practicable following agreement as to a definitive Placement
Agency Agreement and the preparation of appropriate offering
documentation, including but not limited to the PPM.


 


	

Escrow


 

	

All
subscription payments received will be held in a non-interest
bearing escrow account maintained by Signature Bank, N.A., New
York, New York. If the Minimum Amount is not closed on by the
Termination Date, none of the Units will be sold and all investor
funds will be returned in full and without offset or interest
thereon to investors


 







 


 




 

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