Exhibit
10.20


 


NEITHER
THIS CONVERTIBLE PROMISSORY NOTE NOR ANY SECURITIES THAT MAY BE ISSUED UPON CONVERSION HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY SIMILAR STATE LAW. NO OFFER, SALE OR OTHER DISPOSITION MAY BE EFFECTED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR LAW, UNLESS SUCH REGISTRATION IS NOT REQUIRED THEREBY. AN OPINION OF COUNSEL FOR THE HOLDER
REASONABLY SATISFACTORY TO THE COMPANY MAY BE REQUIRED TO OFFER, SELL OR OTHERWISE DISPOSE OF THIS CONVERTIBLE PROMISSORY NOTE OR ANY
SECURITIES THAT MAY BE ISSUED UPON CONVERSION HEREOF.


 


CONVERTIBLE
PROMISSORY NOTE


 


	$37,500	January
    31, 2021
	 	Seattle,
    Washington


 


For
value received EMulate Therapeutics, Inc., a Washington corporation formerly known
as Nativis, Inc. (the “Company”), promises to pay to John E. Kingma and Tamara J. Kingma or their permitted
assigns (the “Holder”) the principal sum of $37,500.00 (“Principal Amount”), with
simple interest on the outstanding Principal Amount at the rate of 3.0% per annum. Such interest shall commence with the date hereof
and shall continue on the outstanding principal until paid in full or converted. Interest shall be computed on the basis of a year of
365 days for the actual number of days elapsed.


 


1.
Expense Reimbursement. The parties acknowledge and agree that the amount under this Note is in consideration of payments due from
Company to Holder under the Payment Deferral Upon Termination Agreement dated June 20, 2012 (“Payment Agreement”),
Section 3, Continuation of Certain Benefits, accrued at $1,500.00 per month for the period May 2013 through January 2021.


 


2.
Additional Principal. Until such time as Company has paid in full its obligations under the Payment Agreement, the Company shall
be obligated to pay to Holder an additional amount equal to $1,500.00 per month (“Additional Amount”) beginning
February 2021. The Additional Amount shall accrue as additional principal under this Note and be subject to all of the terms hereof.


 


3.
Payments; Prepayment. All payments of interest and principal shall be in lawful money of the United States of America. All payments
shall be applied first to accrued interest, and thereafter to principal. The Company may not prepay this Note without the consent of
the Holder.


 


4.
Certain Definitions. For purposes of this Note, the following terms have the means set forth below. Capitalized terms used but not
defined herein have the meanings ascribed to them in the Agreement.


 


“Common
Stock” means the Company’s Common Stock.


 


“Conversion
Price” means of 100% of the Price Per Share.


 




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“Deemed
Liquidation” has the same meaning as provided in Article II, Section 2(b)(iv) of the Restated Articles.


 


“Equity
Securities” means the Company’s capital stock, whether authorized and/or issued on or after the date of this Note.


 


“Financing”
means any form of transaction resulting in a determination of the Company’s valuation, including but not limited to a merger, SPAC
merger, or any other form of financing, whether debt or common or preferred stock.


 


“Maturity
Date” means the earlier to occur of: (a) December 31, 2022, and (b) the consummation of a Deemed Liquidation.


 


“Outstanding
Balance” means the sum of the unpaid principal balance of this Note and the amount of accrued and unpaid interest on this
Note, less any Elected Balance (as defined in Section 3(a)(i)).


 


“Price
Per Share” means the price per share of the Company’s Equity Securities determined in the Financing.


 


“Restated
Articles” means the Company’s Amended and Restated Articles of Incorporation, as amended and in effect as of the
Agreement Date.


 


5.
Conversion.


 


(a)
Conversion into Capital Stock.


 


(i)
Financing. If the Company consummates a Financing prior to the Maturity Date, then, for one year after the closing of such Financing
and at the Holder’s election (which election shall be made by Holder by providing written notice thereof to the Company in writing),
such part of the Outstanding Balance as the Holder may elect (“Elected Balance”) shall be converted into that
number of shares of such Equity Securities obtained by dividing the Elected Balance by the Conversion Price, rounded down to the nearest
whole share.


 


(ii)
Other Voluntary Conversion. At any time this Note is outstanding prior to the Maturity Date, the Holder may elect to convert the
Elected Balance into Equity Securities by delivering notice of such election to the Company in writing. The Elected Balance may be converted
into that number of shares of Common Stock obtained by dividing the Elected Balance by a conversion price equal to 100% of the fair market
value per share of Common Stock as of date of conversion, as determined by the higher of the price per share for the most recent (A)
sale of Common Stock to a third party investor by the Company on or prior to the date of conversion, or (B) grant of options to purchase
Common Stock or similar equity awards to an employee or service provider of the Company on or prior to the date of conversion, in either
case rounded down to the nearest whole share.


 


(b)
Fractional Shares. Notwithstanding any other provision of this Note, no fractional shares shall be issued upon conversion of this
Note pursuant to Section 4, and the Holder hereby agrees to waive his rights with respect to such fractional share or any payment therefor.
Upon conversion of this Note pursuant to Section 4, the shares of capital stock received will be fully paid and non-assessable.


 




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(c)
Shareholder Agreements. The Holder agrees and covenants that at any time and from time to time it will promptly execute and deliver
to the Company such further instruments and documents and take such further action as the Company may reasonably require in order to
carry out the full intent and purpose of this Note and to comply with state or federal securities laws or other regulatory approvals.
Upon conversion of a Note pursuant to Section 3, the Holder agrees to execute counterpart signature pages to all applicable shareholder
agreements and thereafter be bound by such agreements in the same manner as the other holders of the Equity Securities into which such
Note is converted. In the event of a conversion of this Note pursuant to Section 3(a)(i) hereof, the Holder shall automatically be deemed
to have executed such agreements and hereby grants an irrevocable power of attorney to any officer of the Company to execute such agreements
on the Holder’s behalf. This power of attorney shall be deemed coupled with an interest.


 


6.
Payment of the Outstanding Balance. The Outstanding Balance under this Note shall be due and payable upon demand by the Holder; provided
however, that the Holder shall not demand payment of all or any portion of the Outstanding Balance at any time before the Maturity Date.


 


7.
Default. If there shall be any Event of Default hereunder, upon written notice to the Company (which notice shall not be required
in the case of an Event of Default under Section 4(c) or 4(d)), this Note shall accelerate and all principal and unpaid accrued interest
shall become due and payable. The occurrence of any one or more of the following shall constitute an “Event of Default”:


 


(a)
The Company fails to pay timely any of the principal amount due under this Note on the date the same becomes due and payable or any
accrued interest or other amounts due under this Note on the date the same becomes due and payable;


 


(b)
The Company shall default in its performance of any covenant under the Agreement and such default shall constitute a material breach
of the Agreement;


 


(c)
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, debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes
any corporate action in furtherance of any of the foregoing; or


 


(d)
An involuntary petition is filed against the Company (unless such petition is dismissed or discharged within sixty (60) days) under
any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other
similar official) is appointed to take possession, custody or control of any property of the Company.


 


8.
Waiver. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.


 




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9.
Market Standoff Agreement. The Holder shall not sell, dispose of, transfer, make any short sale of, grant any option for the purchase
of, or enter into any hedging or similar transaction with the same economic effect as a sale, any common stock (or other securities,
including without limitation the Equity Securities) of the Company held by such Purchaser pursuant to this Note, for a period of time
specified by the managing underwriter(s) (not to exceed one hundred eighty (180) days) following the effective date of a registration
statement of the Company filed under the Act in connection with the Company’s initial public offering. Each Purchaser agrees to
execute and deliver such other agreements as may be reasonably requested by the Company and/or the managing underwriter(s) which are
consistent with the foregoing or which are necessary to give further effect thereto. In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to such common stock (or other securities) until the end of such period. The
underwriters of the Company’s stock are intended third party beneficiaries of this Section 6 and shall have the right, power and
authority to enforce the provisions hereof as though they were a party hereto.


 


10.
Governing Law. This Note shall be governed by and construed under the laws of the State of Washington, as applied to agreements among
Washington residents, made and to be performed entirely within the State of Washington, without giving effect to conflicts of laws principles.


 


11.
Senior Indebtedness. The indebtedness evidenced by this Note is subordinated in right of payment to the prior payment in full of
any Senior Indebtedness. “Senior Indebtedness” means, unless expressly subordinated to or made on a parity
with the amounts due under this Note, all amounts due now or in the future in connection with (a) indebtedness of the Company to banks
or other lending institutions regularly engaged in the business of lending money (excluding venture capital, investment banking or similar
institutions and their affiliates that sometimes engage in lending activities but that are primarily engaged in investments in equity
securities), and (b) any such indebtedness or any debentures, notes or other evidence of indebtedness issued in exchange for such Senior
Indebtedness, or any indebtedness arising from the satisfaction of such Senior Indebtedness by a guarantor.


 


12.
Amendment; Waiver. No modification or waiver of any provision of this Note or consent to departure therefrom shall be effective unless
in writing and approved by the Company and the Holder.


 


13.
Transfer. This Note may be transferred only upon its surrender to the Company for registration of transfer, duly endorsed, or accompanied
by a duly executed written instrument of transfer in form satisfactory to the Company. Thereupon, this Note shall be reissued to, and
registered in the name of, the transferee, or a new Note for like principal amount and interest shall be issued to, and registered in
the name of, the transferee. Interest and principal shall be paid solely to the registered holder of this Note. Such payment shall constitute
full discharge of the Company’s obligation to pay such interest and principal.


 




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14.
Notices. Any notice required or permitted by this Note shall be given in writing and shall be deemed effectively given (a) upon personal
delivery to the party to be notified, (b) upon confirmation of receipt by fax by the party to be notified, (c) one business day after
deposit with a reputable overnight courier, prepaid for overnight delivery and addressed as set forth in (d) or (d) three days after
deposit with the United States Post Office, postage prepaid, registered or certified with return receipt requested and addressed to the
party to be notified at the address indicated below, or at such other address as such party may designate by 10 days’ advance written
notice to the other party given in the foregoing manner.


 


	 	Address
    of Debtor:	 	EMulate
    Therapeutics, Inc.
	 	 	 	425
    Pontius Avenue North
	 	 	 	Suite
    200
	 	 	 	Seattle,
    WA 98109
	 	 	 	 
	 	Address
    of Holder:	 	John
    E. and Tamara J. Kingma
	 	 	 	1566
    Scenic Heights Road
	 	 	 	Oak
    Harbor, WA 98277 


 


15.
Titles and Subtitles. The titles and subtitles used in this Note are used for convenience only and are not to be considered in construing
or interpreting this Note.


 


16.
Entire Agreement. This Note constitutes the full and entire understanding and agreement between the parties with regard to the subject
matter hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants and
agreements except as specifically set forth herein.


 


17.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING PAYMENT OF A DEBT 


 




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ARE
NOT ENFORCEABLE UNDER WASHINGTON LAW.


 


	 	EMULATE
    THERAPEUTICS, INC.
	 	 	 
	 	By:	 
	 	Name:
    	Chris
    E. Rivera
	 	Title:
    	President
    and Chief Executive Officer


 


	HOLDER:	 	 
	 	 	 
	 	 	 
	John
    E. Kingma	 	 
	 	 	 
	 	 	 
	Tamara
    J. Kingma	 	 


 




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