exv10w1






Exhibit 10.1




CONVERTIBLE PROMISSORY NOTE PURCHASE AGREEMENT




     This CONVERTIBLE PROMISSORY NOTE PURCHASE AGREEMENT, dated as of June 25, 2008 is made between
Robert Gipson (the “Purchaser”) and ALSERES PHARMACEUTICALS, INC., a Delaware corporation (the
“Company”).



RECITALS




     WHEREAS, the Company requires certain funds for the operation of its business; and



     WHEREAS, the Purchaser is willing to provide the Company with up to $5,000,000 through the
purchase of the Convertible Note (defined below) on the terms and conditions hereafter provided;



     NOW, THEREFORE, in order to induce the Purchaser to purchase the Convertible Note and for
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
and intending to be legally bound, the Purchaser and the Company hereby agree as follows:



     1. DEFINED TERMS. When used in this Agreement the following terms shall have the following
meanings (such meanings being equally applicable to both the singular and plural forms of the terms
defined):



     “Affiliates” shall mean any corporation, company, partnership, joint venture and/or firm that
controls, is controlled by, or is under common control with the Company. For purposes of this
definition, “control” shall mean (a) in the case of corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the stock or shares having the right to vote for the
election of directors and (b) in the case of non-corporate entities, direct or indirect ownership
of at least fifty percent (50%) of the equity interest with the power to direct the management and
policies of such non-corporate entities.



     “Agreement” means this Convertible Promissory Note Purchase Agreement, as it may be amended or
modified and in effect from time to time.



     “Closing” has the meaning set forth in Section 2.2 hereof.



     “Common Stock” means the common stock, $0.01 par value per share, of the Company.



     “Convertible Note” shall have the meaning set forth in Section 2.1 hereof.



     “Electing Purchaser” shall have the meaning set forth in Section 4.2 hereof.



     “Event of Default” shall have the meaning set forth in Section 9 hereof.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended.



 









 





     “First Commercial Sale” shall mean, with respect to each Molecular Imaging Product, the first
commercial sale in a country as part of a nationwide introduction by the Company, its Affiliates or
its or its Affiliates’ licensees or sublicensees.



     “Highest Lawful Rate” means the maximum lawful interest rate, if any, that at any time or from
time to time may be contracted for, charged, or received under the laws applicable to the Purchaser
which are presently in effect or, to the extent allowed by law, under such applicable laws which
allow a higher maximum nonusurious interest rate than applicable laws now allow.



     “Loan Documents” means collectively, this Agreement and the Convertible Note.



     “Maturity Date” means the earliest to occur of (a) December 31, 2010 and (b) the date on which
the Purchaser declares an Event of Default to have occurred.



     “Molecular Imaging Products” shall mean products approved for sale by the appropriate U.S.
and/or foreign regulatory body containing as the active ingredient the Company’s radio-labeled
molecular imaging agents, currently in development or developed by the Company in the future,
including, without limitation, the ALTROPANE® and FLUORATEC molecular imaging agents, for the
diagnosis and monitoring of Parkinson’s Disease and Attention Deficit Hyperactivity Disorder using
SPECT or PET camera imaging techniques.



     “Net Sales” shall mean the gross amount received by the Company, its Affiliates and/or its or
its Affiliates’ licensees or sublicensees on sales or other dispositions of Molecular Imaging
Products to Third Parties (other than licensees or sublicensees) in bonafide, arm’s-length
transactions, less the following deductions:



     (a) Trade, cash and/or quantity discounts actually allowed and taken directly with respect to
such sales, as reflected in the amount invoiced;



     (b) Tariffs, duties, excises, sales taxes or other taxes imposed upon and paid directly by the
Company with respect to the production, sale, delivery or use of the Molecular Imaging Product
(excluding national, state or local taxes based on income), as reflected in the amount invoiced;



     (c) Amounts repaid or credited by reason of rejections, defects, recalls or returns, or
because of chargebacks, refunds, rebates, retroactive price reductions or delayed ship orders;



     (d) Amounts credited for uncollectible amounts on previously sold products;



     (e) Freight, insurance and other transportation charges incurred in shipping a Molecular
Imaging Product to Third Parties, as reflected in the amount invoiced;



     (f) Deduction of one percent (1%) for distribution and warehousing expenses; and



     (g) Any other reduction or specifically identifiable amounts included in the gross invoice
that are creditable for reasons substantially equivalent to those listed above.



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     Notwithstanding anything in this Agreement to the contrary, “Net Sales” shall exclude any
sales or other disposition of Molecular Imaging Products for test marketing, clinical trial
purposes or compassionate or similar use.



     Net Sales amounts shall be determined from the books and records of the Company, its
Affiliates and/or its or its Affiliates’ licensees or sublicensees, maintained in accordance with
generally accepted accounting principles, consistently applied.



     Sales between or among the Company, its Affiliates or their respective licensees and
sublicensees shall be disregarded for purposes of calculating Net Sales. In the case of any sale
or other disposal of a Molecular Imaging Product between or among the Company and its Affiliates,
licensees and sublicensees, for resale, Net Sales shall be calculated as above only on the value
charged or invoiced on the first arm’s-length sale thereafter to a Third Party.



     In the case of any sale or other disposal for value, such as barter or counter-trade, of any
Molecular Imaging Product, or part thereof, other than in an arm’s-length transaction exclusively
for money, Net Sales shall be calculated as above on the value of the non-cash consideration
received or the fair market price (if higher) of the Molecular Imaging Product in the country of
sale or disposal.



     In the event the Molecular Imaging Product is sold in a finished dosage form in combination
with one or more other active ingredients (a “Combination Product”), the Net Sales of the Molecular
Imaging Product, for the purposes of determining royalty payments, shall be determined by
multiplying the Net Sales (as defined above) of the Combination Product by the fraction, ‘A/(A+B)’
where ‘A’ is the weighted (by sales volume) average sale price in the relevant country of the
Molecular Imaging Product when sold separately in finished form and ‘B’ is the weighted average
sale price in that country of the other product(s) sold separately in finished form. In the event
that such average sale price cannot be determined for both the Molecular Imaging Product and the
other product(s) in the Combination Product, Net Sales for purposes of determining royalty payments
shall be agreed by the Parties based on the relative value contributed by each component, such
agreement not to be unreasonably withheld.



     “Obligations” means all unpaid principal of and accrued and unpaid interest on the Convertible
Note, and all other obligations, interest, fees, charges and expenses of the Company to the
Purchaser arising under the Loan Documents.



     “Pre-Commercial Income” shall mean, with respect to each Molecular Imaging Product, all
license fees, milestone payments and other amounts received by the Company and/or its Affiliates
from Third Parties in connection with or related to the licensing or sublicensing to such Third
Parties of the Company’s and/or its Affiliate’s rights under the intellectual property covering the
Molecular Imaging Product. Notwithstanding anything in the foregoing to the contrary,
“Pre-Commercial Income” shall exclude (a) any royalty payments or milestone payments based upon
commercial sales levels, (b) amounts received for research and development activities undertaken
for, or in collaboration with, such Third Parties, (c) amounts received for debt or equity
securities of the Company and/or its Affiliates, provided that any amounts received in excess of
the then current fair market value of such debt or equity securities



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shall, to the extent of such excess, be deemed to be Pre-Commercial Income, and (d) transfer
pricing amounts paid in respect of Molecular Imaging Products supplied to such Third Parties.



     “Purchaser” shall have the meaning set forth in the preamble to this Agreement.



     “Securities Act” means the Securities Act of 1933, as amended.



     “Stockholder Approval” shall have the meaning set forth in Section 4.1(b) hereof.



     “Third Party” shall mean any person or entity other than the Company or any of its Affiliates.



     “Total Converted Balance” shall have the meaning set forth in Section 4.2 hereof.



     “Valid Claim” means a claim of any issued, unexpired United States or foreign patent, which
shall not be disclaimed, nor held invalid or unenforceable by a court of competent jurisdiction in
an unappealed or unappealable decision.



     2. CONVERTIBLE NOTE FACILITY.



          2.1 Purchase and Sale of the Convertible Note. At the Closing (as defined below), the
Purchaser agrees on the terms of and subject to the conditions specified in this Agreement, to
purchase from the Company, and the Company agrees to sell to the Purchaser, a convertible
promissory note dated as of the date of the Closing in the form attached to this Agreement as
Exhibit A (the “Convertible Note”); provided, however, that in no event shall the Purchaser be
obligated hereunder to purchase, in the aggregate, more than a principal amount of $5 million in
Convertible Notes.




          2.2 Closing. The closing of the issuance and sale of the Convertible Note issued
hereunder shall be held at the offices of counsel to the Company at 5:00 p.m. on the date and place
as the Company and the Purchaser mutually agree in writing (such date, a “Closing”).




          2.3 Payment of Convertible Note Purchase Price. At the Closing, (i) the Company shall
deliver to the Purchaser a Convertible Note, and (ii) as payment in full for the Convertible Note
being purchased by the Purchaser at the Closing, the Purchaser shall pay its purchase amount to the
Company by wire transfer of immediately available funds to an account designated by the Company.




          2.4 Interest. Interest shall accrue on the Convertible Note from the date of issuance
until the Convertible Note is paid in full or otherwise converted pursuant to Section 4 hereof.
The Company promises to pay interest on the outstanding principal amount of the Convertible Note
(i) until the Maturity Date, or if earlier, conversion pursuant to Section 4 hereof, at a per annum
interest rate equal to five percent (5%), (ii) from and after the Maturity Date, or during the
continuance of an Event of Default, at a per annum rate equal to ten percent (10%) or (iii) if less
than the rates applicable under both clauses (i) and (ii), the Highest Lawful Rate. Interest shall
be calculated on the basis of a 360-day year for the actual number of days elapsed. Interest shall
accrue until paid in full and all unpaid interest shall be due and payable on the Maturity Date,
unless otherwise converted pursuant to Section 4 hereof.




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          2.5 Method of Payment. All payments of principal, interest, and fees hereunder shall
be made on the date when due in immediately available funds in United States Dollars to the
Purchaser at his address specified on the signature page hereof, or at such other address as shall
be directed by the applicable Purchaser in a writing received by the Company.




          2.6 Prepayments. The Company may not prepay any amounts under the Convertible Note
whether principal or interest.




          2.7 Usury Savings Clause. Notwithstanding any other provision herein, the aggregate
interest rate charged with respect to any of the Obligations, shall not exceed the Highest Lawful
Rate. If the rate of interest (determined without regard to the preceding sentence) under this
Agreement at any time exceeds the Highest Lawful Rate, the outstanding amount under the Convertible
Note issued hereunder shall bear interest at the Highest Lawful Rate until the total amount of
interest due hereunder equals the amount of interest which would have been due hereunder if the
stated rates of interest set forth in this Agreement had at all times been in effect. In addition,
if when the Convertible Note issued hereunder is repaid in full the total interest due hereunder is
less than the total amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect, then to the extent permitted
by law, the Company shall pay to the Purchaser an amount equal to the difference between the amount
of interest paid and the amount of interest which would have been paid if the Highest Lawful Rate
had at all times been in effect. Notwithstanding the foregoing, it is the intention of the
Purchaser and the Company to conform strictly to any applicable usury laws. Accordingly, if the
Purchaser contracts for, charges, or receives any consideration which constitutes interest in
excess of the Highest Lawful Rate, then any such excess shall be cancelled automatically and, if
previously paid, shall be applied to the outstanding principal amount of the Convertible Note
issued hereunder or be refunded to the Company.




     3. CONDITIONS PRECEDENT. The obligations of the Purchaser to purchase the Convertible Note
shall be subject to the following conditions precedent that on the date of the Closing:



          3.1 Each of the representations and warranties of the Company contained in this Agreement and
the Convertible Note shall be true and correct in all material respects; and




          3.2 At the time of, and immediately after giving effect to, the issuance of the Convertible
Note, no Event of Default shall have occurred and be continuing.




     4. OPTIONAL CONVERSION.



          4.1 Conversion to Equity.




               (a) At any time during which the Convertible Note remains outstanding, up to all of the
outstanding principal and accrued interest under the Convertible Note then outstanding may be
converted, at the sole option of the holder thereof and by written notice to the Company, into
shares of Common Stock of the Company at a conversion price equal to $2.50 per share.



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               (b) Notwithstanding anything to the contrary contained herein, the Purchaser shall be
prohibited from effecting a conversion pursuant to this Section 4.1 if at the time of such
conversion (i) the Common Stock issuable to the Purchaser pursuant to such conversion or as a
result of such conversion, when taken together with all shares of Common Stock then held or
otherwise beneficially owned by the Purchaser exceeds 19.9% of the total number of issued and
outstanding shares of Common Stock of the Company immediately prior to such conversion, (ii) the
Common Stock issuable to the Purchaser pursuant to such conversion or as a result of such
conversion, exceeds 19.9% of the total number of issued and outstanding shares of Common Stock of
the Company immediately prior to such conversion, in each case unless the stockholders of the
Company have approved the conversion of all of the shares of Common Stock issuable hereunder and
the transactions contemplated hereby pursuant to Nasdaq Marketplace Rule 4350(i)(l)(D)(ii) and any
other applicable rules and regulations (“Stockholder Approval”). The foregoing provision however
shall not restrict the number of shares of Common Stock which the Purchaser may receive or
beneficially own in order to determine the amount of securities or other consideration that the
Purchaser may receive in the event of a merger, sale or other business combination involving the
Company.



               (c) The Company hereby covenants and agrees that in the event the Purchaser is prohibited from
effecting a conversion of the Convertible Note pursuant to this Section 4.1, then upon receipt of
written notice of such event from the Purchaser, the Company shall use its best efforts to seek
Stockholder Approval.



          4.2 Conversion to Royalty Stream.




               (a) At any time the Purchaser may elect (as such, the “Electing Purchaser”), at his sole
option and by written notice to the Company, to convert, in $1 million increments, up to the entire
amount of the principal and accrued interest then outstanding on the Convertible Note then held by
the Electing Purchaser (the “Total Converted Balance”), into the right to receive from the Company
the following payments related to the Company’s Molecular Imaging Products:



                    (i) For each One Million ($1,000,000) of Total Converted Balance,



                         (A) 2% of Pre-Commercial Income; plus



                         (B) a royalty at a rate of one half of one percent (0.5%) of Net Sales of Molecular Imaging
Products.



               By way of example only, if the Total Converted Balance being converted by the Electing
Purchaser is $3.5 million, the Company would be required to pay 7% of Pre-Commercial Income (2% x
3.5) to the Electing Purchaser plus a royalty of 1.75% on Net Sales of Molecular Imaging Products
(0.5% x 3.5).



                    (ii) The Company agrees to provide the Purchaser with at least 30 days prior written notice of
the execution of a partnership agreement for the Molecular Imaging products to enable them to make
an election to convert under this Section 4.2. Upon receipt of such notice, the Purchaser will
have 30 days to elect such conversion. For purposes of



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clarity, any amounts which may be owed by the Company under Section 4.2(a)(i) above after
proper notice is given and no election is made, shall be owed on a going-forward basis and shall
not apply retroactively to any Pre-Commercial Income received by the Company and/or its Affiliates
or Net Sales of Molecular Imaging Products prior to the date of such election to convert.



               (b) The Company shall make the payments set forth in Section 4.2(a)(i) above on a calendar
quarterly basis to the Electing Purchaser.



               (c) The Company shall deliver to the Electing Purchaser within sixty (60) days after the end
of each calendar quarter following the Electing Purchaser’s election to convert, reasonably
detailed written accountings of Pre-Commercial Income and Net Sales of Molecular Imaging Products
that are subject to payments due to the Electing Purchaser hereunder for such calendar quarter.
When the Company delivers such accountings to the Electing Purchaser, the Company shall also
deliver all payments due under Section 4.2(a)(i) for such calendar quarter.



               (d) On a country-by-country and Molecular Imaging Product-by-Molecular Imaging Product basis,
the royalty obligation of the Company hereunder shall cease at the expiration of the last-to-expire
Valid Claim covering a Molecular Imaging Product in said country or, in the case of countries where
no Valid Claims covering a Molecular Imaging Product have been granted, ten (10) years after the
First Commercial Sale of a Molecular Imaging Product in said country. In no event will the
Company’s royalty obligation hereunder cease so long as royalties in excess of those owed hereunder
are paid to the Company by its licensee of any or all of the Molecular Imaging Products.



     5. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to the Purchaser that
on the date hereof:



          5.1 The Company is duly organized, validly existing, and in good standing under the laws of
its jurisdiction of incorporation and is duly qualified and in good standing in every other
jurisdiction where the nature of its business or the location or ownership of its properties
requires such qualification and where the failure to be so qualified would reasonably be expected
to have a material adverse effect on the Company’s business, operations, properties, assets or
condition (financial or otherwise).




          5.2 The Company has the corporate power and authority to execute and deliver this Agreement
and the Convertible Note and to perform all of the obligations hereunder, and all necessary
corporate action has been taken to execute and deliver this Agreement and the Convertible Note and
to issue and sell the Convertible Note hereunder.




          5.3 This Agreement and the Convertible Note constitute the legal, valid, and binding
obligations of the Company, enforceable against the Company in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization or similar laws generally
affecting the enforcement of the rights of creditors.




          5.4 The execution, delivery and performance by the Company of this Agreement and the
Convertible Note does not (i) violate any provisions of the Company’s



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Certificate of Incorporation, as amended, bylaws, as amended, or any material contract,
agreement, law, regulation, order, decree or writ to which the Company or any of its properties are
subject or (ii) require the consent or approval of any person, entity or authority, including,
without limitation, any regulatory authority or governmental body of the United States of America
or any state thereof or any political subdivision of any of the foregoing.




     6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser represents and warrants to
the Company as follows:



          6.1 Investment Intent. The Purchaser understands that the Convertible Note has not
been registered under the Securities Act or any applicable state securities law and is acquiring
the Convertible Note as principal for its own account for investment purposes only and not with a
view to or for distributing or reselling the Convertible Note, has no present intention of
distributing the Convertible Note and has no arrangement or understanding with any other persons
regarding the distribution of the Convertible Note. The Purchaser is acquiring the Convertible
Note hereunder in the ordinary course of its business. The Purchaser does not have any agreement
or understanding, directly or indirectly, with any person to distribute the Convertible Note.




          6.2 Purchaser Status. At the time the Purchaser was offered the Convertible Note, he
was, and at the date hereof he is an “accredited investor” as defined in Rule 501(a) under the
Securities Act. The Purchaser (if not already a registered broker-dealer under Section 15 of the
Exchange Act) is not required to be registered as a broker-dealer under Section 15 of the Exchange
Act.




          6.3 Experience of Purchaser. The Purchaser, either alone or together with his
representatives, has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the prospective investment in the
Convertible Note, and has so evaluated the merits and risks of such investment. The Purchaser is
able to bear the economic risk of an investment in the Convertible Note and, at the present time,
is able to afford a complete loss of such investment.




          6.4 General Solicitation. The Purchaser is not purchasing the Convertible Note as a
result of any advertisement, article, notice or other communication regarding the Convertible Note
published in any newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general advertisement.




          6.5 Certain Fees. No brokerage or finder’s fees or commissions are or will be payable
by the Purchaser to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other person with respect to the transactions contemplated by this
Agreement. The Company shall have no obligation with respect to any fees or with respect to any
claims made by or on behalf of other persons for fees of a type contemplated in this Section 6.5
that may be due in connection with the transactions contemplated by this Agreement.




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     7. AFFIRMATIVE COVENANTS. During the term of this Agreement and while the Convertible Note
remains outstanding, unless the Purchaser consents thereto in writing:



          7.1 The Company shall maintain its corporate existence, business and assets, keep its business
and assets adequately insured and comply in all material respects with all requirements of
applicable law.




          7.2 The Company (a) shall provide the Purchaser at least 10 days prior written notice of the
Company’s intent to change its name or its mailing address and (b) shall not change its type of
organization or jurisdiction of organization.




     8. NEGATIVE COVENANTS. So long as any principal and interest remains outstanding under the
Convertible Note, the Company shall not:



          8.1 Create, incur, assume, guaranty, become liable with respect to (contingently or
otherwise), or permit to be outstanding any indebtedness for money borrowed (including, without
limitation, any indebtedness evidenced by any notes, instruments or agreements or in connection
with any capitalized lease), except for obligations under this Agreement and the Convertible Note;




          8.2 (i) Declare or pay any cash dividend, or make a distribution on, repurchase, or redeem,
any class of stock of the Company, other than pursuant to repurchase obligations under existing
employee stock purchase or option plans or (ii) sell, lease, transfer or otherwise dispose of any
material assets or property of the Company; or




          8.3 Dissolve or liquidate.




     9. DEFAULTS. The occurrence of any one or more of the following events shall constitute an
“Event of Default”:



          9.1 The Company fails to pay any of the principal, interest or any other amounts payable under
this Agreement or the Convertible Note when and as the same becomes due and payable;




          9.2 The Company files any petition or action for relief under any bankruptcy, reorganization,
insolvency or moratorium law or any other law for the relief of, or relating to, Company, now or
hereafter in effect, or seeks the appointment of a custodian, receiver, trustee (or other similar
official) of the Company or all or any substantial portion of the Company’s assets, or makes any
assignment for the benefit of creditors or takes any action in furtherance of any of the foregoing,
or fails to generally pay its debts as they become due;




          9.3 An involuntary petition is filed, or any proceeding or case is commenced, against the
Company (unless such proceeding or case is dismissed or discharged within ninety (90) days of the
filing or commencement thereof) under any bankruptcy, reorganization, arrangement, insolvency,
adjustment of debt, liquidation or moratorium statute now or hereafter in effect, or a custodian,
receiver, trustee, assignee for the benefit of creditors (or other similar official) is applied
for, appointed for the Company or to take possession, custody or control of



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any property of the Company, or an order for relief is entered against the Company in any of
the foregoing; or




          9.4 Any representation or warranty made by the Company under this Agreement shall have been
false or misleading in any material respect when made or deemed made.




     10. REMEDIES.



          10.1 Upon the occurrence and during the continuance of an Event of Default hereunder, the
Purchaser may, without notice or demand upon the Company, do any or all of the following:




               (a) Declare all unpaid principal and accrued interest owing under the Convertible Note held by
him, and, in the case of an Event of Default pursuant to Section 9.2 or 9.3 above, automatically,
to be immediately due, payable and collectible by him pursuant to applicable law;



               (b) Declare any and all unpaid principal and accrued interest due under the Convertible Note
held by him to thereafter bear interest at the maximum rate set forth in Section 2.4 hereof;



               (c) Terminate any and all of his obligations to purchase any additional Convertible Note
hereunder; and



               (d) Exercise any and all rights and remedies he may have under this Agreement, under the
Convertible Note held by him or under applicable law.



          10.2 All of the foregoing rights and remedies shall be cumulative and not exclusive. The
failure to exercise all or any rights, remedies, powers or privileges hereunder, under the
Convertible Note or under applicable law, in any instance shall not constitute a waiver thereof in
that or any other instance.




     11. WAIVERS, AMENDMENTS AND OTHER PROVISIONS.



          11.1 Entire Agreement; Amendments; Invalidity. This Agreement and the Convertible
Note constitute the entire agreement and understanding of the parties, and supersede and replace in
their entirety any prior discussions or agreements, all of which are merged herein and therein.
None of the terms of this Agreement or the Convertible Note may be amended or otherwise modified
except by an instrument executed by the Company and the Purchaser. If any term of this Agreement
or the Convertible Note shall be held to be invalid, illegal or unenforceable, the validity of all
other terms hereof shall in no way be affected thereby, and this Agreement and the Convertible Note
shall be construed and be enforceable as if such invalid, illegal or unenforceable term had not
been included herein.




          11.2 Expenses. The Company agrees to and shall pay to the Purchaser on demand, any
and all expenses, including, without limitation, reasonable attorney’s fees and disbursements,
incurred or paid by the Purchaser in connection with the collection on or



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enforcement of amounts outstanding hereunder, for protecting, preserving or enforcing the
Purchaser’s rights or remedies (including fees, costs and expenses relating to any proceedings with
respect to the bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation of the Company).




          11.3 Nonliability of the Purchaser; Several Obligation. The relationship between the
Company, on the one hand, and the Purchaser, on the other hand, shall be solely that of Company and
Purchaser. The Purchaser shall have no fiduciary responsibilities to the Company as holder of the
Convertible Note.




          11.4 Governing Law: Consent to Jurisdiction. THIS AGREEMENT AND THE CONVERTIBLE NOTE
ARE INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS (AND NOT THE LAWS OF CONFLICT) OF THE COMMONWEALTH OF MASSACHUSETTS. THE
COMPANY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS AND THE UNITED STATES DISTRICT COURT FOR THE COMMONWEALTH OF MASSACHUSETTS FOR THE
PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND
THE CONVERTIBLE NOTE AND THE COMPANY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE PURCHASER TO BRING PROCEEDINGS AGAINST THE COMPANY IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE COMPANY AGAINST THE PURCHASER OR ANY AFFILIATE OF THE
PURCHASER UNDER OR INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH THIS AGREEMENT OR THE CONVERTIBLE NOTE SHALL BE BROUGHT ONLY IN A COURT IN
THE COMMONWEALTH OF MASSACHUSETTS.




          11.5 Waiver of Jury Trial and Certain Damages. EACH OF THE COMPANY AND THE PURCHASER
WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT OR ANY CONVERTIBLE NOTE, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER OR THE PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, the
Company waives any right which it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or any damages other
than, or in addition to, actual damages. The Company (i) certifies that neither the Purchaser nor
any representative, agent or attorney of the Purchaser has represented, expressly or otherwise,
that the Purchaser would not, in the event of litigation, seek to enforce the foregoing waivers and
(ii) acknowledges that, in entering into this Agreement and the Convertible Note, the Purchaser is
relying upon, among other things, the foregoing waivers and certifications.




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          11.6 Successors and Assigns. This Agreement and the other Loan Documents and all
obligations of the Company hereunder and thereunder shall be binding upon the successors and
assigns of the Company, and shall, together with the rights and remedies of the Purchaser
hereunder, inure to the benefit of the Purchaser, any future holder of this Agreement or any other
Loan Document and their respective successors and assigns, provided, however, the Company may not
transfer or assign its rights or obligations hereunder or thereunder without the express written
consent of the Purchaser, and any purported transfer or assignment by the Company without the
approval of the Purchaser shall be null and void. The Purchaser may assign, transfer, participate
or endorse his rights under this Agreement or any of the other Loan Documents without the consent
or approval of the Company, and all such rights shall inure to the Purchaser’s successors and
assigns; provided, that such transferee agrees in writing to be bound by all of the terms of this
Agreement. No sales of participations, other sales, assignments, transfers, endorsements or other
dispositions of any rights hereunder or thereunder or any portion hereof or thereof or interest
herein or therein shall in any manner affect the obligations of the Company under this Agreement or
the other Loan Documents. The Company agrees that in connection with any such assignment, to
execute and deliver such additional documents or agreements, including, without limitation, a new
Convertible Note, as may be reasonably requested.




          11.7 Counterparts. This Agreement may be executed in any number of separate
counterparts, all of which, when taken together, shall constitute one and the same instrument,
notwithstanding the fact that all parties did not sign the same counterpart.




          11.8 No Reliance. The Purchaser hereby acknowledges (i) that Wilmer Cutler Pickering
Hale and Dorr LLP has served as counsel solely to the Company in connection with entering into this
Agreement and the Convertible Note and the transactions contemplated hereby and thereby and not as
counsel to the Purchaser, and (ii) that the Purchaser (a) has sought the advice of his own legal
counsel and has not relied upon Wilmer Cutler Pickering Hale and Dorr LLP, (b) has had an
opportunity to fully discuss and review the terms of this Agreement and the Convertible Note and
the transactions contemplated hereby and thereby with the Purchaser’s counsel, and (c) understands
the contents herein and freely and voluntarily assents to all of the terms and conditions hereof
and the transactions contemplated hereby.




[Remainder of Page Intentionally Left Blank]




12









 





     IN WITNESS WHEREOF, this Agreement has been duly executed as an instrument under seal as of
the date first set forth above.





	 	 	 	 	 
	 	COMPANY:


ALSERES PHARMACEUTICALS, INC.

 	 
	 	By:  	Kenneth L. Rice, Jr.
 	 
	 	Printed Name:  	Kenneth L. Rice, Jr. 	 	 
	 	Title:  

Address:	EVP & CFO

 85 Main Street

Hopkinton, Massachusetts 01748 	 	 
	 






	 	 	 	 	 
	PURCHASER:	 	 
	 
	 	 	 	 
	ROBERT GIPSON	 	 
	 
	 	 	 	 
	Signature:

	 	Robert L. Gipson
 

	 	 
	Address:

	 	c/o Ingalls & Snyder LLC	 	 
	 

	 	 61 Broadway, NY, NY 10006	 	 











13









 








EXHIBIT A



THIS CONVERTIBLE PROMISSORY NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), NOR UNDER ANY STATE
SECURITIES LAWS AND MAY NOT BE PLEDGED, SOLD, ASSIGNED OR OTHERWISE TRANSFERRED UNTIL A (1)
REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW HAS BECOME EFFECTIVE
WITH RESPECT THERETO, OR (2) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL TO THE COMPANY TO THE
EFFECT THAT REGISTRATION UNDER THE ACT OR APPLICABLE STATE SECURITIES LAW IS NOT REQUIRED IN
CONNECTION WITH THE PROPOSED TRANSFER.




CONVERTIBLE PROMISSORY NOTE




			
	 	 	 
	 $[                    ]
	 	 , 2008





Hopkinton, Massachusetts




     FOR VALUE RECEIVED, on the Maturity Date, Alseres Pharmaceuticals, Inc., a Delaware
corporation having a principal place of business at 85 Main Street, Hopkinton, Massachusetts 01748
(the “Company”), hereby unconditionally promises to pay to [Purchaser] (the “Purchaser”),
or order, at
[                    ], or such other place as Purchaser or any holder hereof may from time to time
designate, the principal sum of
[                    ] Dollars
[($                    )], in United States Dollars and in
immediately available funds as provided in the Convertible Promissory Note Purchase Agreement of
even date between the Company and the Purchaser (the “Agreement”), together with interest on the
unpaid principal amount hereof from time to time outstanding at the rate and on the dates set forth
in the Agreement. This Convertible Promissory Note may be one of a series of Convertible
Promissory Notes issued pursuant to the Agreement and each such Convertible Promissory Note shall
rank pari passu in right of repayment to such other Convertible Promissory Note.



     This Convertible Promissory Note is issued pursuant to, and is entitled to the benefits of,
the Agreement, as it may be amended from time to time. Reference is hereby made thereto for a
statement of the terms and conditions under which this Convertible Promissory Note may be
converted, prepaid or its maturity date accelerated. This Convertible Promissory Note is
convertible at the election of the Purchaser pursuant to Sections 4.1 and 4.2 of the Agreement.
Capitalized terms used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.



     No delay or omission on the part of the Purchaser in exercising any right hereunder shall
operate as a waiver of such right or of any other right of Purchaser, nor shall any delay, omission
or waiver on any one occasion be deemed a bar to or waiver of the same or any other right on any
future occasion. The Company and every endorser or guarantor of this Convertible Promissory Note
regardless of the time, order or place of signing waives presentment, demand, protest and notices
of every kind and assents to any extension or postponement of the time of



 









 







payment or any other indulgence, and to the addition or release of any other party or person
primarily or secondarily liable.



     The terms and provisions of this Convertible Promissory Note may be excluded, modified, or
amended only as set forth in the Agreement. This Convertible Promissory Note shall be binding upon
the successors and assigns of the Company and inure to the benefit of Purchaser and its successors,
endorsees and assigns as set forth in the Agreement. If any term or provision of this Convertible
Promissory Note shall be held to be invalid or unenforceable, in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall only effect such term or provision,
and shall not effect such term or provision in any other jurisdiction or any other term or
provision of this Convertible Promissory Note.



     The Company hereby waives its right to a jury trial with respect to any action or claim
arising out of any dispute in connection with this Convertible Promissory Note or any of the other
Loan Documents, any rights or obligations hereunder or thereunder or the performance of such rights
and obligations.



     All rights and obligations hereunder shall be governed by the laws of the Commonwealth of
Massachusetts (without giving effect to principles of conflicts or choice of laws) and this
Convertible Promissory Note shall be deemed to be made under seal.



	 	 	 	 	 	 	 
	 	 	Alseres Pharmaceuticals, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	 

	 	 
	 

	 		 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 






2