Unassociated Document


    EXHIBIT
4.1                              
      

    


    THIS
PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES ACT (COLLECTIVELY, THE "SECURITIES LAWS").
THIS PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
OFFERED FOR SALE OR OTHERWISE TRANSFERRED UNLESS SUCH TRANSACTION (I) IS
REGISTERED UNDER THE SECURITIES LAWS OR (II) IS EXEMPT FROM REGISTRATION UNDER
THE SECURITIES LAWS AND MAKER IS PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO
MAKER THAT SUCH REGISTRATION IS NOT REQUIRED.

    


    PROMISSORY
NOTE

    


    October
14, 2010

    $
1,000,000

    


    FOR VALUE RECEIVED, the undersigned,
NuRx Pharmaceuticals, Inc., a Nevada corporation (the "Maker"), hereby
promises to pay to DYVA Management AG, a company organized under the laws
of Switzerland (“DYVA”) (the "Holder"), when due,
the total principal amount equal to the following: (i) all of the DYVA’s share
of the Initial Funding under the terms of Litigation Support Financing
Agreement, dated as of October 14, 2010 by and between Maker and Holder (the
“Financing
Agreement”), (ii) each Additional Funding made by DYVA under the
Financing Agreement, (iii) the accrued but unpaid Commitment Fee, (iv) the
accrued but unpaid Litigation Management Fee under the Financing Agreement, and
(v) the accrued but unpaid Risk Premium under the Financing Agreement (each an
“Advance” and
collectively, the “Advances”), which
total Advances shall not exceed One Million Dollars ($1,000,000) at any one time
outstanding.  Capitalized terms used but not defined herein shall have
the meaning assigned to such term in or by reference to the Financing
Agreement.

    


    1.           Advances. The date,
form and amount of each Advance shall be entered by Holder on Schedule I hereto;
provided, however, that failure to make such a notation shall not alter the
obligations of Maker to Holder hereunder in any way.

    


    2.           Maturity Date. Maker
shall repay to Holder the outstanding principal amount of this Note, and all
accrued unpaid interest thereon, on the earlier of (i) the closing of an
Institutional Placement, or (ii) the later to occur of (A) three years from the
date set forth above, (B) the settlement of the Delaware Action and any and all
Other Litigation, or (C) the entry of a final judgment of the Delaware
Action and any and all Other Litigation.

    


    3.           Interest. Maker shall
pay interest on the outstanding principal balance of this Note from the date of
each Advance until paid in full at a rate of interest equal to the lesser of
twelve percent (12%) per annum or the maximum rate permissible under applicable
law, due and payable on the Maturity Date.  Payments on this Note
shall be applied first to accrued, unpaid interest and thereafter to reduce the
outstanding principal amount in the order in which Advances are made
hereunder.


    
      
         


      

      
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    4.           
Conversion
Rights. Holder shall have the right to convert this Note and accrued and
unpaid Interest due under this Note into shares of common stock (the “Common Stock”) of the
Maker, as set forth below.

     

    (a) Conversion
into Maker’s Common Stock. Holder shall have the right from and after the
date of the issuance of this Note and then at any time until this Note is fully
paid, to convert any outstanding and unpaid principal portion of this Note, and
accrued but unpaid Interest on such portion, at the election of the Holder (the
date of such conversion being a “Conversion Date”)
into fully paid and non-assessable shares of Common Stock as such stock exists
on the date of issuance of this Note, or any shares of capital stock of the
Maker into which such Common Stock shall hereafter be changed or reclassified,
at the conversion price of $0.10 (the “Conversion Price”).
Upon delivery to the Maker of a completed Notice of Conversion, a form of which
is attached hereto as Exhibit A, the Maker shall issue and deliver to the Holder
within five (5) business days from the Conversion Date (such day being the
“Delivery
Date”) that number of shares for the portion of the Note and related
accrued Interest converted in accordance with the foregoing.  The number of
shares of Common Stock to be issued upon each conversion of this Note shall be
determined by dividing that portion of the principal of the Note and accrued
Interest to be converted, by the Conversion Price.

     

    (b) Manner
of Conversion. This Note may be converted by Holder by presentment of
this Note, accompanied by written notice stating that Holder elects to convert
all of the principal amount thereof and all accrued but unpaid Interest and
stating the name or names, together with addresses, in which the Conversion
Shares are to be issued.  The conversion shall be deemed to have been
effected immediately prior to the close of business on the date on which this
Note shall have been so surrendered to Maker; and at such time the rights of the
Holder to this Note shall cease, and the person in whose name or names any
certificate or certificates for Conversion Shares (or other securities) shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record thereof.

     

    (c) Adjustment
of Conversion Price. The Conversion Price shall be adjusted from time to
time as follows:

     

    (i) Dividends, Splits,
Combinations, Reclassifications. In the event Maker shall hereafter
(i) pay a stock dividend or make a stock distribution of shares of Common
Stock with respect to the Common Stock, (ii) subdivide its outstanding Common
Stock into a greater amount of Common Stock, (iii) combine its outstanding
Common Stock into a smaller amount of Common Stock, (iv) issue by
reclassification of its Common Stock any other security of Maker, or (v) enter
into a consolidation or merger or other business combination with or into
another corporation in which Maker is not the surviving entity, or
a  consolidation or merger or other business combination in which the
Maker is the surviving entity but the shares of the Maker’s capital stock
outstanding immediately prior to the merger are converted, by virtue of the
merger, consolidation or other business combination, into other property,
whether in the form of securities, cash or otherwise, the Conversion Price
in effect immediately prior to such action shall be adjusted so that Holder
shall be entitled to receive the amount of Common Stock or other capital stock
of Maker it would have owned immediately following such action had this Note or
any remaining portion hereof been converted in full immediately prior thereto.
All adjustments made pursuant to this subsection 4(c)(i) shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a
subdivision, combination, reclassification, merger, consolidation or other
business combination. If, as a result of an adjustment made pursuant to this
subsection 4(c)(i), Holder shall become entitled to receive the Conversion
Shares and other securities of Maker, the board of directors of Maker shall
reasonably determine the allocation of the adjusted Conversion Price between or
among the Conversion Shares and such other securities.


    
      
         


      

      
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    (d) Sale of
Shares of Common Stock Below Conversion Price.

     

    (i) If at
any time or from time to time after the date this Note is issued, Maker issues
or sells, or is deemed by the express provisions of this Section 4(d) to
have issued or sold, Additional Shares of Common Stock (as hereinafter defined),
other than as a dividend or other distribution on any class of stock as provided
in Section 4(c)(i) above, and other than a subdivision or combination of shares
of Common Stock as provided in Section 4(c)(i) above, for an Effective Price (as
hereinafter defined) less than the Conversion Price (subject to adjustment for
any events described in Section 4(c)(i), then the then existing Conversion Price
shall be reduced, as of the opening of business on the date of such issue or
sale, to a price equal to the Effective Price.

     

    (ii)
Determination of
Consideration. For the purpose of making any adjustment required under
this Section 4(d), the consideration received by Maker for any issue or sale of
securities shall (A) to the extent it consists of cash, be the amount of cash
received by Maker therefor before deducting any discounts, commissions or other
expenses allowed, paid or incurred by Maker for any underwriting or otherwise in
connection thereof, (B) to the extent it consists of property other than cash,
be computed at the fair value of that property as determined in good faith by
the Board of Directors, and (C) if Additional Shares of Common Stock,
Convertible Securities (as hereinafter defined) or rights or options to purchase
either Additional Shares of Common Stock or Convertible Securities are issued or
sold together with other stock or securities or other assets of Maker for a
consideration which covers both, be computed as the portion of the consideration
so received that may be reasonably determined in good faith by the board of
directors of the Maker to be allocable to such Additional Shares of Common
Stock, Convertible Securities or rights or options.

     

    (iii)
Treatment of
Convertible Securities. For the purpose of the adjustment required under
this Section 4(d), if Maker issues or sells any rights or options for the
purchase of, or stock or other securities convertible into, Additional Shares of
Common Stock (such convertible stock or securities being herein referred to as
“Convertible
Securities”) and if the Effective Price of such Additional Shares of
Common Stock is less than the Conversion Price (subject to adjustment as
aforesaid), in each case Maker shall be deemed to have issued at the time of the
issuance of such rights or options or Convertible Securities the maximum number
of Additional Shares of Common Stock issuable upon exercise or conversion
thereof and to have received as consideration for the issuance of such shares an
amount equal to the total amount of the consideration, if any, received by Maker
for the issuance of such rights or options or Convertible Securities, plus, in
the case of such rights or options, the amounts of consideration, if any,
payable to Maker upon the exercise of such rights or options, plus, in the case
of Convertible Securities, the amounts of consideration, if any, payable to
Maker (other than by cancellation of liabilities or obligations evidenced by
such Convertible Securities) upon the conversion thereof; provided that if, in
the case of Convertible Securities, the amounts of such consideration cannot be
ascertained but are a function of anti-dilution or similar protective clauses,
Maker shall be deemed to have received the amounts of consideration without
reference to such clauses; and provided further that if the amount of
consideration payable to Maker upon the exercise or conversion of rights,
options or Convertible Securities is reduced over time or on the occurrence or
non-occurrence of specified events other than by reason of anti-dilution
adjustments, the Effective Price shall be recalculated using the figure to which
such amount of consideration is reduced; and provided further that if the amount
of consideration payable to Maker upon the exercise or conversion of such
rights, options or Convertible Securities is subsequently increased, the
Effective Price shall be again recalculated using the increased amount of
consideration payable to Maker upon the exercise or conversion of such rights,
options or Convertible Securities. No further adjustment of the Conversion
Price, as adjusted upon the issuance of such rights, options or Convertible
Securities, shall be made as a result of the actual issuance of Additional
Shares of Common Stock on the exercise of any such rights or options or the
conversion of any such Convertible Securities. If any such rights or options or
the conversion privilege represented by any such Convertible Securities shall
expire without having been exercised, the Conversion Price as adjusted upon the
issuance of such rights, options or Convertible Securities shall be readjusted
to the Conversion Price which would have been in effect had an adjustment been
made on the basis that the only Additional Shares of Common Stock so issued were
the Additional Shares of Common Stock, if any, actually issued or sold on the
exercise of such rights or options or rights of conversion of such Convertible
Securities, and such Additional Shares of Common Stock, if any, were issued or
sold for the consideration actually received by Maker upon such exercise, plus
the consideration, if any, actually received by Maker for the granting of all
such rights or options, whether or not exercised, plus the consideration
received for issuing or selling the Convertible Securities actually converted,
plus the consideration, if any, actually received by Maker (other than by
cancellation of liabilities or obligations evidenced by such Convertible
Securities) on the conversion of such Convertible Securities, provided that such
readjustment shall not apply to prior conversions of this Note.


    
      
         


      

      
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    (iv)
Excluded
Issuances. For purposes of this Note, the term “Additional Shares of Common
Stock” shall mean all shares of Common Stock issued by Maker or deemed to
be issued pursuant to this Section 4(d), whether or not subsequently reacquired
or retired by Maker other than (i) shares of Common Stock issued upon
conversion of this Note; (ii) the issuance of the Warrant Shares; (iii)
shares of Common Stock issued pursuant to the exercise of options, warrants or
convertible securities outstanding as of the date this Note is issued; and (iv)
options to purchase up to 1,199,440 shares of Common Stock, and the shares of
Common Stock issuable upon exercise of such options, issued after the date of
this Note under the Maker’s 2007 Stock Compensation Plan.

     

    (v) Effective Price. For
purposes of this Note, the term “Effective Price” of
Additional Shares of Common Stock shall mean the quotient determined by dividing
the total number of Additional Shares of Common Stock issued or sold, or deemed
to have been issued or sold by Maker under this Section 4(d), into the
aggregate consideration received, or deemed to have been received by Maker for
such issue under this Section 4(d), for such Additional Shares of Common
Stock.

    


    5.           Payment. Principal of
and interest on this Note shall be payable in lawful money of the United States
of America. If a payment hereunder becomes due and payable on a Saturday, Sunday
or legal holiday, the due date thereof shall be extended to the next succeeding
business day, and interest shall be payable thereon during such
extension.  Maker shall have the right to prepay this Note in whole at
any time without the consent of Holder, upon sixty (60) days written notice to
Holder accompanied by proof of availability of funds for such prepayment ) (the
“Prepayment
Notice”), provided,
that all accrued, unpaid interest on the amount of the prepayment is also
paid with such prepayment; and provided further following
delivery of such Prepayment Notice, Holder shall have the right to exercise its
rights conversion rights under Section 4 of this Agreement in lieu of such
prepayment.


    
      
         


      

      
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    6.           Events of Default;
Remedies.

    


    6.1  Events of Default.
The occurrence of any of the following events shall constitute an "Event of Default"
hereunder:

    


    (a) 
Maker shall default in the payment of any part of the principal or Interest
under this Note when due;

    


    (b)  Maker shall be dissolved or
liquidated, or shall sell all or substantially all of its assets;

    


    (c)  a
court having jurisdiction shall enter a decree or order for relief in respect of
Maker in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of Maker or for any substantial part of its property, or ordering the
winding-up or liquidation of its affairs, and such decree or order shall remain
unstayed and in effect for a period of sixty (60) consecutive days;
or

    


    (d)  Maker
shall commence a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, shall consent to the entry of an
order for relief in an involuntary case under any such law, or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of Maker or for any
substantial part of its property, or shall make any general assignment for the
benefit of its creditors or shall take any action in furtherance of any of the
foregoing

    


    (e)  Maker
is in breach of its obligations under the Financing Agreement, the Warrant or
this Note which is not cured within five (5) days of its receipt of written
notice of such breach.

    


    6.2
Remedies; Notices of Default. Upon the occurrence of any Event of Default,
Holder may at any time (unless all defaults theretofore shall have been
remedied), declare this Note to be due and payable without presentment, demand,
protest or notice, all of which are hereby waived. Holder may then proceed to
protect and enforce the rights of Holder by suit in equity, action at law or
other appropriate proceeding. No course of dealing and no delay on the part of
Holder in exercising any right shall operate as a waiver thereof or otherwise
prejudice Holder's rights. No remedy conferred hereby on Holder shall be
exclusive of any other remedy referred to herein or now or hereafter available
at law, in equity, by statute or otherwise.


    
      
         


      

      
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    7.           Miscellaneous.

    


    7.1  Replacement. On
receipt of evidence reasonably satisfactory to Maker of the loss, theft,
destruction or mutilation of this Note and, in the case of loss, theft or
destruction, on delivery of an indemnity agreement or bond reasonably
satisfactory to Maker, or in the case of mutilation, on surrender and
cancellation of this Note, Maker shall execute and deliver, in lieu of this
Note, a new Note of like denomination, tenor and date as this Note.

    


    7.2  Successors and
Assigns.  This Note may not be assigned, transferred or
hypothecated by either party without the prior written consent of the other
party, which consent may be withheld in its sole and absolute discretion.
Subject to the foregoing, the rights and obligations of Maker and Holder
pursuant to this Note shall be binding upon and inure to the benefit of the
parties’ respective successors, permitted assigns, heirs, administrators and
permitted transferees.

    


    7.3  Amendment; Waiver.
This Note and any of its terms may be modified, amended, waived or terminated
only by a written instrument signed by the party against whom enforcement of
such modification, amendment, waiver or termination is sought.

    


    7.4  Governing Law. This
Note shall be governed by and construed in accordance with the
laws of the State of Delaware, without regard to conflict of laws
principles.

    


    7.5 Severability. If any
provision of this Note or the application thereof to any person, place or
circumstance shall be held by a court of competent jurisdiction to be invalid,
unenforceable or void, the remainder of this Note and such provisions as applied
to other persons, places and circumstances shall remain in full force and
effect.

    


    7.6  Interpretation. The
section and other headings used in this Note are for reference purposes only and
shall not constitute a part hereof or affect the meaning or interpretation of
this Note. Except where otherwise indicated, all references to sections refer to
sections of this Note.

    


    7.7  Legal Fees and Costs;
Reimbursement. In the event that any party to this Note shall commence
any suit or action to interpret or enforce this Note, the prevailing party in
such action shall recover such party's costs and expenses incurred in connection
therewith, including attorneys' fees and cost of appeal, if any.

    


    7.8  Entire Agreement. The
parties intend that the terms of this Note shall be the final expression of
their agreement with respect to its subject matter and may not be contradicted
by evidence of any prior or contemporaneous agreement. The parties further
intend that this Note shall constitute the complete and exclusive statement of
its terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative or other legal proceedings involving this
Note.

    


    [Signature
Page Follows]


    
      
         


      

      
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    IN WITNESS WHEREOF, the
Company has caused this Note to be signed in its name by its duly authorized
officers effective as of October 14, 2010.

    


    
      
        
          
            
              
                	 
      	 	 	
                        MAKER:

                      
	 
      	 	 	 
      
	 
      	 	 	
                        NURX
      PHARMACEUTICALS,

                      
	 
      	 	 	
                        INC.

                      
	 
      	 	 	 
      
	 
      	 	 	
                        By:

                      	
                        /s/
      Harin
      Padma-Nathan

                      
	 
      	 	 	
                        Name:

                      	
                        Harin
      Padma-Nathan

                      
	 
      	 	 	
                        Title:

                      	
                        CEO

                      
	 
      	 	 	 
      
	
                        Attest:

                      	 	 
      
	
                         

                      	
                        /s/
      Steven Gershick

                      	 	 
      
	
                        Name:

                      	Steven
      Gershick	 	 
      
	
                        Title:

                      	CFO	 	 
      


              

            

          

        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Schedule
I

    


    To

    


    Promissory
Note dated October 14, 2010

     

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      	
                                                              Date of Advance

                                                            	 
      	
                                                              Form of Advance

                                                            	 
      	
                                                              Amount

                                                            	 
      	
                                                              Holder’s Initials

                                                            	 
	
                                                              6/30/10

                                                            	
                                                                

                                                            	
                                                              Initial
      Litigation Management Fee

                                                            	
                                                                

                                                            	
                                                              $25,000.00  
      

                                                            	
                                                                

                                                            	
                                                              /s/
      EK

                                                            	 
	
                                                              6/30/10

                                                            	 	
                                                              Monthly
      Litigation Management Fee

                                                            	 	$4,000.00  
      	 	
                                                              /s/
      EK

                                                            	 
	
                                                              7/30/10

                                                            	 	
                                                              Monthly
      Litigation Management Fee

                                                            	 	$4,000.00  
      	 	
                                                              /s/
      EK

                                                            	 
	
                                                              8/11/10

                                                            	 	
                                                              Initial
      Funding

                                                            	 	$37,500.00  
      	 	
                                                              /s/
      EK

                                                            	 
	
                                                              8/11/10

                                                            	 	
                                                              Risk
      Premium - Initial Funding

                                                            	 	$9,375.00  
      	 	
                                                              /s/
      EK

                                                            	 
	
                                                              8/11/10

                                                            	 	
                                                              Commitment
      Fee

                                                            	 	$25,000.00  
      	 	
                                                              /s/
      EK

                                                            	 
	
                                                              8/30/10

                                                            	 	
                                                              Monthly
      Litigation Management Fee

                                                            	 	$4,000.00  
      	 	
                                                              /s/
      EK

                                                            	 
	
                                                              9/23/10

                                                            	 	
                                                              Additional
      Funding

                                                            	 	$50,000.00  
      	 	
                                                              /s/
      EK

                                                            	 
	
                                                              9/23/10

                                                            	 	
                                                              Risk
      Premium - Additional Funding

                                                            	 	$25,000.00  
      	 	
                                                              /s/
      EK

                                                            	 
	
                                                              9/30/10

                                                            	 	
                                                              Monthly
      Litigation Management Fee

                                                            	 	$4,000.00  
      	 	
                                                              /s/
      EK