EX-4.1



 Exhibit 4.1 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO DISTRIBUTION OR RESALE. 
 Q THERAPEUTICS, INC. 

PROMISSORY NOTE 
  

			
	$             Original Principal Amount	  	 Salt Lake City, UT

June     , 2015


 1. Principal and Interest. Q Therapeutics, Inc., a Delaware corporation (the
“Company”), for value received, hereby promises to pay to the order of             or its assigns (the “Holder”) in lawful money of the United States, the
Original Principal Amount set forth above, plus interest (computed on the basis of a 360-day year) accrued on the unpaid Principal Amount of this Note at the rate of 5.00% per annum commencing on the date hereof with simple interest
accruing, plus an amount equal to ten percent (10%) of the Original Principal Amount (the “Repayment Charge”). 

Unless the entire outstanding original principal amount of this Note, plus all accrued but unpaid interest hereon, plus the Repayment
Charge, is converted in full in accordance with the provisions of Section 2 hereof, this Note, together with all accrued but unpaid interest thereon, plus the Repayment Charge, is due and payable (a) on the first to occur of
(i) December 31, 2015; (ii) the occurrence of a Liquidity Event, as defined below (the first of such events to occur, the “Maturity Date”), or (b) on demand by written notice following an Event of Default.
The Company shall, on the Maturity Date or, if earlier, within three (3) business days of receipt of the written notice referred to in the immediately preceding sentence (the “Payment Date”), pay the outstanding principal and
all accrued and unpaid interest on this Note, plus the Repayment Charge (as well as any other amounts payable hereunder) as of the Maturity Date or the Payment Date, as applicable. A “Liquidity Event” shall mean any of the
following: (A) the consummation by the Company of a Qualified Financing as defined herein below, (B) the sale by the Company of all or substantially all of its assets, or (3) the acquisition by a third party of all of the outstanding
equity interests of the Company or the consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, in which the shareholders of the Company immediately prior to such
consolidation, merger or reorganization, own fifty percent (50%) or less of the Company’s voting power immediately after such consolidation, merger or reorganization.  

The Company shall have one option to extend the Maturity Date of this Note for an additional 180 days by notifying the holder of this note in
writing at least 10 business days prior to the original Maturity Date. In the event the Company exercises its option to extend the Maturity Date as provided above, then the Repayment Charge set forth above shall be increased to an amount equal to
twenty percent (20%) of the Original Principal Amount. 
 2. Optional Conversion. In the event of the closing by the Company of
a Qualified Financing (as defined below) on or before the Maturity Date and any extension thereof, the Holder may, in its sole discretion, upon notification to the Company convert all of the outstanding principal of, and accrued interest on, this
Note plus the applicable Repayment 







 
Charge into the security or securities, as the case may be, issued and sold to the investors in the Qualified Financing (“QF Conversion Securities”). The number of QF Conversion
Securities to be issued to Holder shall be determined by dividing the total Principal Amount outstanding plus accrued interest being converted plus the Repayment Charge then in effect by the purchase price paid for each QF Conversion Securities
issued in the Qualified Financing. For example, if the Qualified Financing involved the issuance of units comprised of a share of common and a warrant to acquire a share of common, then the conversion price to be used for purposes of the Optional
Conversion shall be the price paid per unit in the Qualified Financing. A “Qualified Financing” shall mean the closing of an equity investment in the form of the Company’s capital stock and/or derivatives, occurring after the
date hereof in which the Company receives from one or more investors (which investors may include the Holder) with gross proceeds to the Company of at least $3,000,000 (not including any debt conversion or cancellation of indebtedness unless allowed
by investors in the Qualified Financing). Upon conversion of this Note in accordance with this Section 2, then the Holder shall become party to a purchase agreement and all related agreements, each in customary form, along with the investors
participating in such Qualified Financing. Company shall provide notice of its intention to complete a Qualified Financing at least 15 days prior to the anticipated closing date for the Qualified Financing and Holder shall then have 10 days to
advise the Company of its decision on whether to convert all or a portion of the outstanding principal and accrued interest into the securities to be issued by the Company in the Qualified Financing. 

3. No Usury. This Note is hereby expressly limited so that in no event whatsoever, whether by reason of deferment or advancement of
loan proceeds, acceleration of maturity of the loan evidenced hereby, or otherwise, shall the amount paid or agreed to be paid to the Holder hereunder for the loan, use, forbearance or detention of money exceed the maximum interest rate permitted by
the laws of the State of Delaware or otherwise. If at any time the performance of any provision involves a payment exceeding the limit of the price that may be validly charged for the loan, use, forbearance or detention of money under applicable
law, then automatically and retroactively, ipso facto, the obligation to be performed shall be reduced to such limit, it being the specific intent of the Company and the Holder hereof that all payments under this Note are to be credited first to
interest as permitted by law, but not in excess of (i) the agreed rate of interest hereunder, or (ii) that permitted by law, whichever is the lesser, and the balance toward the reduction of principal. 

4. Attorneys’ Fees. If the indebtedness represented by this Note or any part thereof is collected in any judicial proceedings or
if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal and interest payable hereunder, reasonable attorneys’ fees and costs incurred by the Holder, as well as any
and all interest that has accrued on the outstanding principal after the commencement of bankruptcy, receivership or other judicial proceedings. 

5. Transfer. 
 (a) The
rights and obligations of the Company and the Holder of this Note will be binding upon and inure to the benefit of the successors, assigns and transferees of the parties hereto. 

  
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 (b) Notwithstanding the provisions of the legend appearing on the face of this Note, the Holder
may, prior to payment in full hereof, and with the Company’s consent or approval at its sole discretion, surrender this Note at the principal office of the Company for transfer or exchange of all or any portion of this Note; provided,
however, that such transferee to which all or a portion of this Note is transferred (i) shall be an accredited investor, as such term is defined in Rule 501 promulgated under the Securities Act of 1933, as amended (the
“Securities Act”), and (ii) shall agree in writing to be subject to the terms hereof to the same extent as if it were an original Holder. Within a reasonable time after notice to the Company by the Holder of its intention to
make such exchange and without expense to the Holder, the Company shall issue in exchange therefor another note or notes for the same aggregate principal amount as the unpaid principal amount of the Note so surrendered, having the same rate of
interest, containing the same provisions, and subject to the same terms and conditions as the Note so surrendered. Each such new Note shall be made payable to such person or persons, or transferees, as the Holder of such surrendered Note may
designate in writing. 
 6. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall
be faxed or delivered to each party to the facsimile number or its address set forth below (or to such other facsimile number or address as the recipient of any notice shall have notified the other in writing). All such notices and communications
shall be effective (a) when delivered by Federal Express or other overnight courier service of recognized standing; or (b) when delivered by hand, upon delivery; and (c) when faxed, upon confirmation of receipt. 

 

			
	If to the Holder, to:	  	
		
	If to the Company, to:	  	 Q Therapeutics, Inc.
 615 Arapeen Drive, Ste.
102
 Salt Lake City, UT 84108
 Ph (801) 582-5400

Fx (801) 582-5401
 Attention: Chief Executive
Officer


 7. Event of Default. 

(a) General. If an Event of Default (as defined below) occurs, the Holder may, by notice to the Company, declare the principal amount
then outstanding of, and the accrued interest and all other amounts payable on, this Note to be immediately due and payable. The Company agrees to give the Holder of this Note written notice of the occurrence of an Event of Default promptly (setting
forth in reasonable detail all facts related thereto). 
 (b) Definition. For purposes of this Note, an “Event of
Default” is any of the following occurrences: 

  
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 (i) The Company shall fail to pay the outstanding principal and all accrued and unpaid interest
and all other amounts payable on this Note on the Maturity Date; or 
 (ii) The Company shall have breached any covenant in this Note
(other than a payment default described in Section 7(b)(i)), and, with respect to breaches capable of being cured, such breach shall not have been cured within fifteen (15) days following notice of such breach to the Company by the Holder;
or 
 (iii) Any representation or warranty subject to a materiality qualification made by the Company herein or any other document referred
to herein shall prove to have been incorrect in any respect, or any representation or warranty not subject to a materiality qualification made by the Company herein or in any other such document shall prove to have been incorrect in any material
respect; or 
 (iv) The Company shall be involved in financial difficulties as evidenced (i) by its commencement of a voluntary case
under Title 11 of the United States Bankruptcy Code as from time to time in effect, or by its authorizing, by appropriate proceedings of its Board of Directors or other pleading admitting or failing to deny the material allegations of a petition
filed against it commencing an involuntary case under said Title 11, or seeking, consenting to or acquiescing in the relief therein provided, or by its failing to controvert timely the material allegations of any such petition, (ii) by the
entry of an order for relief in any involuntary case commenced under said Title 11, which order is not rescinded within 60 days of the date of entry of such order, (iii) by its seeking relief as a debtor under any applicable law, other than
said Title 11, of any jurisdiction relating to the liquidation or reorganization of debtors or to the modification or alteration of the rights of creditors, or by its consenting to or acquiescing in such relief, (iv) by the entry of an order by
a court of competent jurisdiction (A) finding it to be bankrupt or insolvent, (B) ordering or approving its liquidation, reorganization or any modification or alteration of the rights of its creditors, or (C) assuming custody of, or
appointing a receiver or other custodian for, all or a substantial part of its property, or (v) by its making an assignment for the benefit of, or entering into a composition with, its creditors, or appointing or consenting to the appointment
of a receiver or other custodian for all or a substantial part of its property; or 
 (v) The Company shall take any action authorizing, or
in furtherance of, any of the foregoing. 
 In case any one or more Events of Default shall occur and be continuing, the Holder may proceed
to protect and enforce its rights by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or for an injunction against a violation of any of the terms hereof, or in
aid of the exercise of any power granted hereby or by law or otherwise. In case of a default in the payment of any principal of or premium, if any, or interest on this Note, the Company will pay to the Holder such further amount as shall be
sufficient to cover the reasonable cost and expenses of collection, including, without limitation, reasonable attorneys’ fees, expenses and disbursements. No course of dealing and no delay on the part of the Holder in exercising any right,
power or remedy shall operate as a waiver thereof or otherwise prejudice the Holder’s rights, powers or remedies. No right, power or remedy conferred by this Note upon the Holder shall be exclusive of any other right, power or remedy referred
to herein or now or hereafter available at law, in equity, by statute or otherwise. 

  
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 8. Subordination. This Note is hereby expressly subordinated and junior in right of
payment to the prior payment in full of all the principal and unpaid accrued interest and all other obligations of the Borrower. 
 9.
Waivers and Amendments. The Company hereby waives presentment, demand for performance, notice of non-performance, protest, notice of protest and notice of dishonor. No delay on the part of the Holder in exercising any right hereunder shall
operate as a waiver of such right or any other right. Any term of this Note may be amended or waived only with the written consent of the Company and the Holder. Notwithstanding the foregoing, in the event that at any time prior to date that this
Note is paid in full or converted into QF Conversion Securities, the Company issues any additional convertible bridge notes on terms more favorable to the holders thereof than contained in this Note, than the terms and conditions of this Note shall
automatically be deemed to be revised to correspond to such more favorable terms. 
 10. Governing Law. This Note is being delivered
in, and shall be governed by and construed in accordance with, the laws of the State of Delaware, without regard to conflicts of laws provisions thereof. 

11. Fractional Shares. No fractional shares will be issued in connection with any conversion hereunder; in lieu of such fractional
shares, the Company shall pay to the Holder in cash that amount of the unconverted principal balance of, or accrued interest on, this Note. 

12. Prepayment. The Company may prepay all or any portion of this Note without the prior approval of the Holder. 

13. Miscellaneous. In the event any one or more of the provisions of this Note shall for any reason be held to be invalid, illegal or
unenforceable, in whole or in part or in any respect, or in the event that any one or more of the provisions of this Note operate or would prospectively operate to invalidate this Note, then and in any such event, such provision(s) only shall be
deemed null and void and shall not affect any other provision of this Note and the remaining provisions of this Note shall remain operative and in full force and effect and in no way shall be affected, prejudiced, or disturbed thereby. 

14. Arbitration. Any dispute arising under or in connection with any matter of any nature (whether sounding in contract or tort)
relating to or arising out of this Agreement, shall be resolved exclusively by arbitration. The arbitration shall be in conformity with and subject to the applicable rules and procedures of the American Arbitration Association. All parties agree to
be (1) subject to the jurisdiction and venue of the arbitration in the State of Utah, (2) bound by the decision of the arbitrator as the final decision with respect to the dispute, and (3) subject to the jurisdiction of the District
Courts of the State of Utah for the purpose of confirmation and enforcement of any award. 
 [Remainder of Page Intentionally Blank]


  
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	Q THERAPEUTICS, INC.,
	a Delaware corporation
		
	By:	 	  

		
	Name:	 	Deborah A. Eppstein
		 	Chief Executive Officer
		
	By:	 	  

		
	Name:	 	



  
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