cellynx_ex1012.htm

EXHIBIT
10.12

     

     

    THIS
NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED.

     

    CELLYNX,
INC.

     

    CONVERTIBLE
PROMISSORY NOTE

     

    
    

     

    
      	$20,000.00 	
              Issue Date: March
      27, 2007

            
	 	
              Laguna Niguel,
      California

            


    

     

    FOR VALUE
RECEIVED, Cellynx, Inc., a California corporation (the "Company") promises to pay to Tareq Risheq
("Investor"), or its registered assigns, in
lawful money of the United States of America, the principal sum of $20,000.00,
or such lesser amount as shall equal the outstanding principal amount hereof,
together with interest from the date of this Convertible Promissory Note ("Note") on the unpaid principal balance at
a rate equal to 4.00% per annum, computed on the basis of the actual number of
days elapsed and a year of 365 days. All unpaid principal, together with any
then unpaid and accrued interest
and any other amounts payable hereunder, shall be due and payable on the
earlier of (i) that date which is two years after the Issue Date listed above
(the "Maturity Date"), or (ii) when, upon or after the
occurrence of an Event of Default (as defined below), such amounts are declared
clue and payable by Investor or made automatically due and payable in accordance
with the terms hereof.

     

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

     

    1.  Definitions.
As
used in this Note, the following capitalized terms have the following
meanings:

     

    (a)  "Obligations"
shall mean and include all loans, advances, debts, liabilities and
obligations, howsoever arising, owed by the Company to Investor of every kind
and description (whether or not evidenced by any note or instrument and whether
or not for the payment of money), now existing or hereafter arising under or
pursuant to the terms of this Note, including, all interest, fees, charges,
expenses, attorneys' fees and costs and accountants' fees and costs chargeable
to and payable by the Company hereunder, in each case, whether direct or
indirect, absolute or contingent, due or to become due, and whether or not
arising after the commencement of a proceeding under Title 11 of the United
States Code (11 U. S. C. Section 101 et seq.), as
amended from time to time (including post-petition interest) and whether or not
allowed or allowable as a claim in any such proceeding.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (b)  "Person" shall mean and
include an individual, a partnership, a corporation. (including
a business trust), a joint stock company, a limited liability company, an
unincorporated association, a joint venture or other entity or a governmental
authority.

     

    (c)  "Securities Act" shall mean
the Securities Act of 1933, as amended.

     

    2.  Prepayment.
The Company may prepay this Note in whole or in part at any time without
penalty, provided that any such prepayment will be applied first to the payment
of expenses due under this Note, second to interest accrued on this Note and
third, if the amount of prepayment exceeds the amount of all such expenses and
accrued interest, to the payment of principal of this Note.

     

    3.  Events
of Default. The occurrence of any of the following shall constitute an
"Event of Default" under this
Note:

     

    (a)  Failure to Pay. The Company shall fail
to pay (i) when due any principal or interest payment on the due date hereunder
or (ii) any other payment required under the terms of this Note on the date due
and such payment shall not have been made within five days of the Company's
receipt of Investor's written notice to the Company of such failure to
pay;

     

    (b)  Voluntary
Bankruptcy or Insolvency Proceedings. The Company shall (i) apply for or
consent to the appointment of a receiver, trustee, liquidator or custodian of
itself or of all
or a substantial part of its property, (ii) be unable, or admit in
writing its inability, to pay its debts generally as they mature, (iii) make a
general assignment for the benefit of its or any of its creditors, (iv) be
dissolved or liquidated, (v) become insolvent (as such term may be defined or
interpreted under any applicable statute), (vi) commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or consent to any such relief or to the
appointment of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it, or (vii) take any
action for the purpose of effecting any of the foregoing; or

     

    (c)  Involuntary Bankruptcy or Insolvency
Proceedings. Proceedings for the appointment of a receiver,
trustee, liquidator or custodian of the Company or of all or a substantial part
of the property thereof, or an
involuntary case or other proceedings seeking liquidation., reorganization or
other relief with respect to the Company or the debts thereof under any
bankruptcy, insolvency or other similar law now or hereafter in effect shall be
commenced and an order for relief entered or such proceeding shall not be
dismissed or discharged within 30 days of commencement.


    4.  Rights
of Investor upon Default. Upon the occurrence or existence of any Event
of Default described in Section
3(a) and at any time thereafter during the continuance of such Event of
Default, Investor may, by written notice to the Company, declare all outstanding
Obligations payable by the Company hereunder to be immediately due and payable
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived. Upon the occurrence or existence of any Event
of Default described in Sections 3(b) and 3(c), immediately and without
notice, all outstanding Obligations immediately
due and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived. In addition to the foregoing
remedies, upon the occurrence or existence of any Event of Default, Investor may
exercise any other right power or remedy granted to it by law, either by suit in
equity or by action at law, or both.

     

    
      
        
        

      

      
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    5.  Conversion.

     

    (a)  Optional
Conversion; Number of Shares Issuable Upon Conversion. All or a portion
of the outstanding principal amount of and all accrued interest under this Note
shall be convertible at the option of the Investor into that number of shares of
the Company's Common Stock as is determined by dividing the principal amount and
accrued interest on the date of conversion by $0.01 per share (adjusted to
reflect subsequent stock dividends, stock splits, combinations or
recapitalizations).

     

    (b)  Conversion
Procedure. Before Investor shall be entitled to convert this Note into
shares of Common Stock under this Section 5, the Investor shall, at the
request of the Company, execute and deliver to the Company a common stock
purchase agreement reasonably acceptable to the Company containing customary
representations and warranties and transfer restrictions (including a 180-day
lock-up agreement in connection with an initial public offering). In addition,
before Investor shall be entitled to convert this Note into shares of Common
Stock under this Section 5, it shall
surrender this Note, duly endorsed, at the office of the Company and shall give
written notice to the Company at its principal corporate office, of the election
to convert the same pursuant to this Section
5, and shall state therein the amount of the unpaid principal amount of
this Note to be converted and the name or names in which the certificate or
certificates for shares of Common Stock arc to be issued. If this Note has been
lost, stolen, destroyed or mutilated, then, in the case of loss, theft or
destruction, the Holder shall deliver an indemnity agreement reasonably
satisfactory in form and substance to the Company or, in the case of mutilation,
the Holder shall surrender and cancel this Note. The Company shall, as soon as
practicable thereafter, issue and deliver at such office to Investor a
certificate or certificates for the number of shares of Common Stock to which
Investor shall be entitled upon conversion (bearing such legends as are required
by the common stock purchase agreement, and applicable state and federal
securities laws in the opinion of counsel to the Company), together with a
replacement Note (if any principal amount is not converted) and any other
securities and property to which Investor is entitled upon such conversion under
the terms of this Note, including a check payable to Investor for any cash
amounts payable as described in Section 5(c). The conversion shall be
deemed to have been made immediately prior to the close of business on the date
of the surrender of this Note, and the Person or Persons entitled to receive the
shares of Common Stock upon such conversion shall be treated for all purposes as
the record Investor or Investors of such shares of Common Stock as of such
date.

     

    (c)  Fractional
Shares; Interest; Effect of Conversion. No fractional shares shall be
issued upon conversion of this Note. In lieu of the Company issuing any
fractional shares to Investor upon the conversion of this Note, the Company
shall pay to Investor an amount equal to the product
obtained by multiplying the conversion price by the fraction of a share not
issued pursuant to the previous sentence. Upon conversion of this Note in full
and the payment of any amounts specified in this Section
5(c), the Company shall be forever released from all its obligations and
liabilities under this Note.

     

    6.  Successors
and Assigns. Subject to the restrictions on transfer described in
Sections 8 and 9 below,
the rights and obligations of the Company and investor shall he binding upon and
benefit the successors, assigns, heirs, administrators and transferees of the
parties.

     

    7.  Waiver
and Amendment. Any provision of this Note may be amended, waived or
modified upon the written consent of the Company and the Investor.

     

    
      
        
        

      

      
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    8.  Market
Stand-Off Covenant. Investor hereby agrees that it will not, without the
prior written consent of the managing underwriter, during the period commencing
on the date of the final prospectus relating to the Company's initial public
offering and ending on the date specified by the Company and the managing
underwriter (such period not to exceed one hundred eighty (180) calendar days)
(i) lend, offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any securities of the Company, whether now owned or hereafter
acquired, or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
any securities of the Company, whether now owned or hereafter acquired, whether
any such transaction described in clause (i) or (ii) above is to be settled by
delivery of securities, in cash or otherwise. The foregoing covenants shall
apply only to the Company's initial public offering of equity securities, shall
not apply to the sale of any shares by Investor to an underwriter pursuant to an
underwriting agreement. Investor agrees to execute an agreement(s) reflecting
(i) and (ii) above as may be requested by the managing underwriters at the time
of the initial public offering, and further agrees that the Company may impose
stop transfer instructions with its transfer agent in order to enforce the
covenants in (i) and (ii) above. The underwriters in connection with the
Company's initial public offering are intended third party beneficiaries of the
covenants in this Section 8 and shall
have the right, power and authority to enforce such covenants as though they
were a party hereto.

     

    9.  Assignment.
Neither this Note nor any of the rights, interests or obligations
hereunder may be assigned, by operation of law or otherwise, in whole or in
part, by the Company or the Investor without the prior written consent of
the other party.

     

    10.  Notices.
All notices, requests, demands, consents, instructions or other
communications required or permitted hereunder shall in writing and faxed,
mailed or delivered to each party at the following addresses, or at such other
address(es) or facsimile number(s) as the Company or Investor shall have
furnished to the other in writing:

     

    
      
        	
                If to
      Company: 

              	27795 Country Lane,
      Suite B1 
	 	Laguna Niguel,
      California 92677 

                Attention:
      President

                Telephone:
      (949) 305-5389 

                Facsimile:
      (___) ___-____

              
	 	 
	If to
      Investor:   	27795 Country Lane,
      Suite B1
	 	Laguna
      Niguel, California 92677 

                Telephone:
      (949) 702-2701

                Facsimile:
      (949) 305-5718

              


      

       

    

     

    
      
        
        

      

      
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    All such
notices and communications will be deemed effectively given the earlier of (i)
when received, (ii) when delivered personally, (iii) one business day after
being delivered by facsimile (with receipt of appropriate confirmation), (iv)
one business day after being deposited with an overnight courier service of
recognized standing or (v) four days after being deposited in the U.S. mail,
first class with postage prepaid.

     

    11.  Usury.
In the event any interest is paid on this Note which is deemed to be in
excess of the then legal maximum rate, then that portion of the
interest payment representing an amount in excess of the then legal maximum rate
shall be deemed a payment of principal and applied against the principal of this
Note.

     

    12.  Waivers.
The Company hereby waives notice of default, presentment or demand for
payment, protest or notice of nonpayment or dishonor and all other notices or
demands relative to this instrument.

     

    13.  Governing
Law. This Note and all actions arising out of or in connection with this
Note shall be governed by and construed in accordance with the laws of the State
of California, without regard to the conflicts of law provisions of the State of
California, or of any other state.

     

     

    (Signature Page
Follows)

     

     

     

    
      
        
        

      

      
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    The
Company has caused this Convertible Promissory Note to be issued as of the date
first written. above.

     

    
       

      
        	 	
                CELLYNX,
      INC.

                a
      California corporation 

              
	 	 
	 	By:       /s/
      Tareq
      Risheq                       
      
	 	 
	 	Name:  Tareq
      Risheq                             
      
	 	 
	 	Title:    CEO                                            
      
	 	 


      

       

       

       

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