exv10w1






Exhibit 10.1




ECHO THERAPEUTICS, INC.

10% Senior Secured Promissory Note




	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Issuance
Date:

	 	June 1, 2009
	 	 
	Principal Amount:

	 	$	1,990,000	 	 	 






     For value received, ECHO THERAPEUTICS, INC., a Delaware corporation (the “Maker”),
hereby promises to pay to the order of Platinum Montaur Life Sciences, LLC, a Delaware limited
liability company with an address of 152 West 57th Street, 54th Floor, New
York, NY 10019 (together with its successors, representatives, and permitted assigns, the
“Holder”), in accordance with the terms hereinafter provided, the principal amount of ONE
MILLION NINE HUNDRED AND NINETY THOUSAND DOLLARS ($1,990,000), together with interest thereon.



     All payments under or pursuant to this Note shall be made in United States Dollars in
immediately available funds to the Holder at the address of the Holder first set forth above or at
such other place as the Holder may designate from time to time in writing to the Maker or by wire
transfer of funds to the Holder’s account, as requested by the Holder. The outstanding principal
balance of this Note, together with all accrued and unpaid interest, shall be due and payable in
full on June 29, 2009 (the “Maturity Date”) or at such earlier time as provided herein.



ARTICLE I

PAYMENT




          Section 1.1 Interest. Beginning on the date of this Note (the “Issuance
Date”), the outstanding principal balance of this Note shall bear interest, in arrears, at a
rate per annum equal to ten percent (10%), payable on the Maturity Date. Interest shall be
computed on the basis of a 360-day year of twelve (12) 30-day months, shall compound monthly and
shall accrue commencing on the Issuance Date. Furthermore, upon the occurrence of an Event of
Default (as defined in Section 2.1 hereof), the Maker will pay interest to the Holder, payable on
demand, on the outstanding principal balance of and unpaid interest on the Note from the date of
the Event of Default until such Event of Default is cured at the rate of the lesser of eighteen
percent (18%) and the maximum applicable legal rate per annum. To the extent permitted by law, if
amounts outstanding hereunder are not paid in full on the Maturity Date hereof, the Maker shall be
obligated to pay to the Holder a late payment fee equal to 10% of the principal amount then
outstanding.




          Section 1.2 Payment of Principal; Prepayment. The Principal Amount hereof shall be
paid in full on the earliest of (i) the Maturity Date, (ii) the due date of any mandatory
prepayment as set forth herein, or (iii) upon acceleration of this Note in accordance with the
terms hereof. Any amount of principal repaid hereunder may not be reborrowed. The Maker may prepay
all or any portion of the principal amount of this Note upon not less than two (2) business days’
prior written notice to the Holder without premium or penalty.




          Section 1.3 Security Agreement; Covenants. The obligations of the Maker hereunder are
together with interest thereon and all other charges as provided herein, and in any




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other instrument or document executed in connection herewith, and together with all other sums
due from Maker to Holder (collectively, the “Obligations”), shall be secured by the Collateral (as
defined below).




     (a) The Maker hereby grants, assigns and pledges to the Holder all of its rights, title and
interest in, and a continuing security interest in all Inventory (as defined herein), all Accounts
from the sale of Inventory, receivable, contract rights, chattel paper and payment intangibles, and
General Intangibles relating to any of the foregoing types of property; and all additions,
accessions, accessories, amendments, attachments, modifications, substitutions, and replacements,
proceeds and products of any of the foregoing, together with all other property which the Maker
purchases using the proceeds of this Note (together referred to as the “Collateral”). This Note
shall serve as a security agreement securing Holder’s right in and to the Collateral for the
repayment of the Obligations. Maker authorizes Holder to file such UCC-1 Financing Statements
listing Holder as Secured Party and Maker as Debtor as Holder may require (which financing
statements may describe the collateral as “all assets”). The terms Inventory, Accounts and General
Intangibles shall have the respective meanings provided under the Uniform Commercial Code of the
State of New York.



     (b) Except for the security interest of the Holder therein (and any security interest granted
to the holders of indebtedness that is to be repaid with the proceeds of this Note, upon which
repayment such security interest shall terminate), the Maker is, and as to Collateral acquired
after the date hereof the Maker shall and will be, the owner of all Collateral free from any lien,
security interest, encumbrance or other right, title or interest of any other person, firm or
corporation, and the Maker shall defend the Collateral against all claims and demands of all
persons at any time claiming the same or any interest therein adverse to the Holder.



     (c) The Maker will maintain, keep and preserve its business assets in good working order and
condition, ordinary wear and tear excepted. The Maker agrees to maximize collections on all
accounts receivable and contract rights and to diligently pursue the collection of all sums due the
Maker under any purchase orders placed with Maker and all account obligors. The Maker shall not
sell or license any of its assets, other than in the ordinary course of business and consistent
with past practices.



     (d) The Maker will not create, incur, assume, or suffer to exist any lien, mortgage, pledge,
encumbrance, security interest, attachment or charge of any kind upon the Collateral, except:



          (i) liens in favor of the Holder;




          (ii) liens for taxes or assessments or other government charges or levies not yet due and
payable or, if due and payable, that are being contested in good faith by appropriate proceedings
diligently prosecuted and for which appropriate reserves are maintained; and




          (iii) liens imposed by law, such as mechanics’, materialmen’s, and similar liens, securing
obligations incurred in the ordinary course of business which are not past due for more than thirty
(30) days or which are being contested in good faith by appropriate proceedings diligently
prosecuted and for which appropriate reserves have been established.




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     (e) The Maker will not create, incur, assume, or suffer to exist any debt (as defined below),
except:



          (i) debt of the Maker under this Note; and




          (ii) debt described in Exhibit A attached hereto, but no renewals, extensions, or
refinancings thereof; and




          (iii) trade debt incurred in the ordinary course of business and consistent with past
practices.




As used in this Section 1.3(e), the term “debt” shall include all obligations, contingent and
otherwise, that in accordance with generally accepted accounting principles should be classified
upon the obligor’s balance sheet as liabilities, or to which reference should be made by footnotes
thereto, including without limitation all debt and similar monetary obligations, whether direct or
indirect, all liabilities secured by any mortgage, pledge, security interest, lien, charge or other
encumbrance, and all guarantees, endorsements and other contingent obligations whether direct or
indirect in respect of indebtedness of others.




          Section 1.4 Payment on Non-Business Days. Whenever any payment to be made shall be
due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such payment
may be due on the next succeeding business day and such next succeeding day shall be included in
the calculation of the amount of accrued interest payable on such date.




          Section 1.5 Use of Proceeds. The Maker shall use the proceeds of this Note only for
general working capital and to repay outstanding senior indebtedness of the Maker.




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




ARTICLE II

EVENTS OF DEFAULT; REMEDIES




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




          (a) any default in the payment of (1) the principal amount hereunder when due, or (2) interest
on, or liquidated damages in respect of, this Note, within three (3) business days after the same
shall become due and payable (whether on the Maturity Date or by acceleration or otherwise); or




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          (b) the Maker shall fail to observe or perform any other covenant or agreement contained in
this Note, which failure is not cured, if possible to cure, within 3 business days after notice of
such default sent by the Holder; or




          (c) [Reserved]; or




          (d) any material representation or warranty made by the Maker herein or otherwise to Holder
shall prove to have been false or incorrect or breached in a material respect on the date as of
which made; or




          (e) the Maker shall (A) default in any payment of any amount or amounts of principal of or
interest on any indebtedness (other than the indebtedness hereunder) the aggregate principal amount
of which indebtedness is in excess of $20,000 or (B) default in the observance or performance of
any other agreement or condition relating to any indebtedness, that, in the aggregate, exceeds
$20,000, or contained in any instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders or beneficiary or beneficiaries of such
indebtedness to cause with the giving of notice if required, such Indebtedness to become due prior
to its stated maturity; or




          (f) the Maker shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial
part of its property or assets, (ii) make a general assignment for the benefit of its creditors,
(iii) commence a voluntary case under the United States Bankruptcy Code (as now or hereafter in
effect) or under the comparable laws of any jurisdiction (foreign or domestic), (iv) file a
petition seeking to take advantage of any bankruptcy, insolvency, moratorium, reorganization or
other similar law affecting the enforcement of creditors’ rights generally, (v) acquiesce in
writing to any petition filed against it in an involuntary case under United States Bankruptcy Code
(as now or hereafter in effect) or under the comparable laws of any jurisdiction (foreign or
domestic), (vi) issue a notice of bankruptcy or winding down of its operations or issue a press
release regarding same, or (vii) take any action under the laws of any jurisdiction (foreign or
domestic) analogous to any of the foregoing; or




          (g) a proceeding or case shall be commenced in respect of the Maker, without its application
or consent, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization,
moratorium, dissolution, winding up, or composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of it or of all or any
substantial part of its assets in connection with the liquidation or dissolution of the Maker or
(iii) similar relief in respect of it under any law providing for the relief of debtors, and such
proceeding or case described in clause (i), (ii) or (iii) shall continue undismissed, or unstayed
and in effect, for a period of thirty (30) days or any order for relief shall be entered in an
involuntary case under United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic) against the Maker or action under the
laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing shall be taken
with respect to the Maker and shall continue undismissed, or unstayed and in effect for a period of
thirty (30) days.




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          Section 2.2 Remedies Upon An Event of Default. If an Event of Default shall have
occurred and shall be continuing, the Holder of this Note may, at any time, at its option, declare
the entire unpaid principal balance of this Note, together with all interest accrued hereon, due
and payable, and thereupon, the same shall be accelerated and so due and payable, without
presentment, demand, protest, or notice, all of which are hereby expressly unconditionally and
irrevocably waived by the Maker. Upon an Event of Default, the Holder may proceed to exercise all
rights and remedies against any and all collateral pledged to the Holder as security for this Note,
including all collateral pledged hereunder. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note, at law or in equity (including,
without limitation, a decree of specific performance and/or other injunctive relief), no remedy
contained herein shall be deemed a waiver of compliance with the provisions giving rise to such
remedy and nothing herein shall limit a holder’s right to pursue actual damages for any failure by
the Maker to comply with the terms of this Note.




ARTICLE III

MISCELLANEOUS




          Section 3.1 Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder shall be in writing and shall be effective (a) upon
hand delivery, telecopy or facsimile at the address or number set forth on the signature page
hereto (if delivered on a business day during normal business hours where such notice is to be
received), or the first business day following such delivery (if delivered other than on a business
day during normal business hours where such notice is to be received) or (b) on the second business
day following the date of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first occur.




          Section 3.2 Governing Law. This Note shall be governed by and construed in accordance
with the internal laws of the State of New York, without giving effect to any of the conflicts of
law principles which would result in the application of the substantive law of another
jurisdiction. This Note shall not be interpreted or construed with any presumption against the
party causing this Note to be drafted.




          Section 3.3 Headings. Article and section headings in this Note are included herein
for purposes of convenience of reference only and shall not constitute a part of this Note for any
other purpose.




          Section 3.4 Binding Effect; Amendments. The obligations of the Maker and the Holder
set forth herein shall be binding upon the successors and assigns of each such party. This Note
may not be modified or amended in any manner except in writing executed by the Maker and the
Holder.




          Section 3.5 Consent to Jurisdiction. Each of the Maker and the Holder (i) hereby
irrevocably submits to the exclusive jurisdiction of the United States District Court sitting in
the Southern District of New York and the courts of the State of New York located in New York
county for the purposes of any suit, action or proceeding arising out of or relating to this Note
and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any




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claim that it is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or
proceeding is improper. Each of the Maker and the Holder consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the address in effect
for notices hereunder and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing in this Section shall affect or limit any right to serve
process in any other manner permitted by law.




          Section 3.6 Failure or Indulgence Not Waiver. No failure or delay on the part of the
Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege.




          Section 3.7 Maker Waivers; Dispute Resolution. Except as otherwise specifically
provided herein, the Maker and all others that may become liable for all or any part of the
obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest
and all other demands’ and notices in connection with the delivery, acceptance, performance and
enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time
or payment hereof and agree that any such renewals or extensions may be made without notice to any
such persons and without affecting their liability herein and do further consent to the release of
any person liable hereon, all without affecting the liability of the other persons, firms or Maker
liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY JURY.




          (a) No delay or omission on the part of the Holder in exercising its rights under this Note,
or course of conduct relating hereto, shall operate as a waiver of such rights or any other right
of the Holder, nor shall any waiver by the Holder of any such right or rights on any one occasion
be deemed a waiver of the same right or rights on any future occasion.




          (b) THE MAKER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL
TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND
HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY
DESIRE TO USE.




          Section 3.8 Fees and Expenses. Upon execution of this Note, the Maker shall reimburse
the Holder for legal fees incurred by the Holder in the drafting and negotiation of this Note
(which amount may be withheld by the Holder from amounts to be delivered to the Maker in connection
with the issuance of this Note). The Maker will pay on demand all costs of collection and
attorneys’ fees paid or incurred by the Holder in enforcing the obligations of the Maker. The
Maker represents and warrants that this Note is the legal, valid and binding obligation of the
Maker, enforceable in accordance with its terms.




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



	 	 	 	 	 
	 	ECHO THERAPEUTICS, INC.

 	 
	 	By:  	 	/s/ Patrick T. Mooney
 	 
	 	Name:  	Patrick T. Mooney 	 
	 	Title:  	Chief Executive Officer 	 
	 


The undersigned Guarantor herby acknowledges and agrees that the obligations of the Maker contained
in this Note jointly and severally and unconditionally guaranteed by the undersigned.




	 	 	 	 	 
	GUARANTOR:	 	 
	SONTRA MEDICAL INC.	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	By:

	 	/s/ Patrick T. Mooney	 	 
	 

	 	 	 	 
	Name:

	 	Patrick T. Mooney	 	 
	Title:

	 	Chief Executive Officer	 	 






Accepted and agreed to by the undersigned as Holder.




	 	 	 	 	 
	 

	 	 	 	 
	PLATINUM MONTAUR LIFE SCIENCES, LLC	 	 
	 
	 	 	 	 
	By:

	 	/s/ Michael M. Goldberg	 	 
	 

	 	 	 	 
	Name:

	 	Michael M. Goldberg	 	 
	Title:

	 	Portfolio Manager	 	 






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Exhibit A




     The Company has outstanding approximately $312,247.00 in principal amount of 8% Senior
Convertible Promissory Notes due February 12, 2011. The terms of these notes require the Company
to make quarterly interest payments that may be satisfied by the payment of cash, the issuance of
additional shares of common stock (valued at the quotient of (x) the applicable interest payment
divided by (y) the lesser of (A) the conversion price then in effect and (B) 100% of the volume
weighted average price for the five consecutive trading days immediately preceding the interest
payment date) or the issuance of additional 8% senior convertible promissory notes with an
aggregate principal amount equal to such interest payment. The Company has paid a total of
$25,739.20 in interest through March 31, 2009 by payment in kind in the form of additional 8%
Senior Convertible Promissory Notes. The Company’s subsidiary, Sontra Medical, Inc., agreed to
guarantee the obligations of the Company under its 8% Senior Convertible Promissory Notes due
February 12, 2011 pursuant to a separate guaranty agreement.



     The Company finances its liability insurance through an insurance funding company. The total
amount financed at 4.73% was approximately $60,834, with monthly principal and interest payments of
$7,113. The Company’s current obligation on the insurance financing is approximately $28,175.
Payments are due in arrears on the first of each month through October 1, 2009.



     The Company leases 12,999 square feet of office, laboratory and manufacturing space in
Franklin, Massachusetts under a lease expiring March 31, 2010. Future minimum rental payments under
this operating lease are approximately as follows:



	 	 	 	 	 
	 	 	Amount	 
	For the years ended December 31,
	 	 	 	 
	 
	 	 	 	 
	2009 (June through December, 2009)
	 	$	113,000	 
	 
	 	 	 	 
	2010
	 	$	49,000	 
	 
	 	 	 
	 
	 	 	 	 
	Total
	 	$	162,000	 







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