Document:

exhibit10_1.htm

 

 

EX-10.1

 

 

THIS REVOLVING PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT.

 

 

______________________________________________________________________________

 

 

$500,000.00 As of February 14, 2011

 

 

Henderson, Nevada

 

 

REVOLVING PROMISSORY NOTE

 

 

In consideration of such advances (hereinafter “Advance” or “Advances”) as NYX CAPITAL ADVISORS, INC. or its assigns (collectively, “Holder”), from time to time may make hereon to or for the benefit of DIGIPATH INC., a Nevada corporation (the “Company”), at the Company’s offices or at such other place as the parties may mutually agree, pursuant to the Revolving Credit Commitment, as defined below, up to the maximum aggregate principal amount of Five Hundred Thousand Dollars ($500,000.00) (the “Maximum Aggregate Amount”), the Company hereby promises to pay to Holder the principal amount of all Advances, together with accrued interest thereon from the date of such Advances, all subject to the terms and conditions set forth below.

 

 

1. Revolving Credit Commitment.

 

 

1.1 Advances. The Holder agrees to make Advances to the Company from time to time during the Revolving Credit Commitment Period, as defined below, in an aggregate principal amount at any one time outstanding which does not exceed the Maximum Aggregate Amount (the “Revolving Credit Commitment”). During the Revolving Credit Commitment Period, the Company may use the Revolving Credit Commitment by borrowing, prepaying any Advances in whole or in part, and re-borrowing, all in accordance with the terms and conditions hereof.

 

 

1.2 Interest. Interest shall accrue from the date of any Advances on any principal amount withdrawn, and on accrued and unpaid interest thereon, at the rate of eight percent (8%) per annum, compounded annually.

 

 

2. Revolving Credit Commitment Period. The revolving credit commitment period (the “Revolving Credit Commitment Period”) shall commence as of the date hereof and shall expire on September 30, 2012 (the “Expiration Date”).

 

 

3. Procedure for Revolving Credit Advances.

 

 

3.1 The Company may request Advances under the Revolving Credit Commitment during the Revolving Credit Commitment Period on any day of the week, Monday through Friday, 9 a.m. through 5 p.m., Pacific Time, (hereinafter referred to as any “Business Day” or “Business Days”), provided that the Company shall give the Holder irrevocable notice (which notice must be received by the Holder prior to 12:00 Noon, Pacific Time) one (1) Business Day prior to the requested Advance date, specifying (i) the amount of the Advance, and (ii) the requested Advance date. Each Advance under the Revolving Credit Commitment shall be in an amount equal to $25,000 or a whole multiple of $25,000 in excess thereof. Upon receipt of any such notice from the Company, the Holder will make the amount of the Advance available prior to 12:00 Noon, Pacific Time, on the Advance date requested by the Company in funds immediately available to the Company.

 

 

3.2 The Holder shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Company to the Holder resulting from each Advance from time to time, including the amounts of principal and interest payable and paid to the Holder from time to time under this Note. The parties acknowledge and agree that as of the date hereof, an aggregate principal amount of $200,000 in Advances is outstanding.

 

 

4. Repayment Procedure.

 

 

4.1 General. Repayment on any Advances shall be made in lawful tender of the United States. Any payments on this Note made during the Revolving Credit Commitment Period, as defined below, shall be credited first to any interest due and the remainder to principal.

 

 

4.2 Repayment of Principal and Interest. All outstanding and unpaid principal, and all outstanding and accrued unpaid interest, shall become due and payable on and as of the Expiration Date.

 

 

4.3 Optional Prepayment. The Company may, at any time and from time to time and without penalty, prepay all or any portion of the accrued and unpaid interest on this Note and any outstanding principle amount of this Note.

 

 

5. Transfers.

 

 

5.1 Holder acknowledges that this Note has not been registered under the Securities Act of 1933, and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this Note in the absence of (i) an effective registration statement under the Securities Act as to this Note and registration or qualification of this Note under any applicable Blue Sky or state securities laws then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that such registration and qualification are not required.

 

 

5.2 Subject to the provisions of Section 5.1 hereof, this Note and all rights hereunder are transferable, in whole or in part, upon surrender of the Note with a properly executed assignment, in the form prescribed by the Company, at the principal office of the Company; provided, however, that this Note may not be transferred in whole or in part without the prior written consent of the Company.

 

 

5.3 Until any transfer of this Note is made in the Note register, the Company may treat the registered Holder of this Note as the absolute owner hereof for all purposes; provided, however, that if and when this Note is properly assigned in blank, the Company may (but shall not be required to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

 

 

5.4 The Company will maintain a register containing the name and address of the registered Holder of this Note. Any registered Holder may change such registered Holder’s address as shown on the Note register by written notice to the Company requesting such change.

 

 

5.5 In the discretion of the Company, the Company may condition any transfer of all or any portion of this Note (other than a disposition satisfying the conditions set forth in clause (i) of Section 5.1 above) upon the transferee’s delivery to the Company of a written agreement, in form and substance satisfactory to the Company, whereby the transferee agrees to be bound by the transfer restrictions set forth in this Section 5.

 

 

6. Events of Default.

 

 

6.1 Events of Default. The occurrence of any or all of the following events shall constitute an event of default (each, an “Event of Default”) by the Company under this Note:

 

 

(i) Default by the Company in any payment on this Note after any such payment becomes due and payable; or

 

 

(ii) Breach by the Company of any material provisions of any agreement between the Company and the Holder; or

 

 

(iii) The Company shall file a voluntary petition in bank­ruptcy or any petition or answer seeking for itself any reorganization, readjustment, arrangement, composition or similar relief; or shall commence a voluntary case under the federal bankruptcy laws; or shall admit in writing its insolvency or its inability to pay its debts as they become due; or shall make an assignment for the benefit of creditors; or shall apply for, consent to, or acquiesce in the appointment of, or the taking of possession by, a trustee, receiver, custodian or similar official or agent of the Company or of substantially all of its property and shall not be discharged within ninety (90) days; or a petition seeking reorganization, readjustment, arrangement, composition or other similar relief as to the Company under the federal bankruptcy laws or any similar law for the relief of debtors shall be brought against the Company and shall be consented to by it or shall remain undismissed for ninety (90) days.

 

 

6.2 Consequence of Default. Upon the occurrence of any Event of Default, the Holder shall be held in a first credit position on the entire amount due on this Note, and, this Note shall immediately become due and payable upon written notice from the Holder, and, from the time of the Company’s receipt of such written notice until this Note shall be paid in full, the unpaid outstanding principal balance of this Note shall bear interest at the rate of ten percent (10%) per annum or the legal rate of interest, whichever is lower, (calculated on the basis of a three hundred sixty-five (365) day year for the actual number of days elapsed) (the “Default Rate”). Moreover, after the occurrence of any such Event of Default, the Holder may proceed to protect and enforce its rights, at law, in equity or otherwise, against the Company.

 

 

6.3 Payment of Costs and Expenses. In the event that this Note is placed in the hands of any attorney for collection, or any suit or proceeding is brought for the recovery or protection of the indebtedness hereunder, then and in any such events, the Company shall pay on demand all reasonable costs and expenses of such suit or proceedings incurred by the Holder, including a reasonable attorneys' fee.

 

 

7. Miscellaneous.

 

 

7.1 Delay. No extension of time for payment of any amount owing hereunder shall affect the liability of the Company for payment of the indebtedness evidenced hereby. No delay by the Holder or any holder hereof in exercising any power or right hereunder shall operate as a waiver of any power or right hereunder.

 

 

7.2 Waiver and Amendment. No waiver or modification of the terms of this Note shall be valid without the written consent of the Holder.

 

 

7.3 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of California as applied to contracts entered into between California residents wholly to be performed in California, without regard to conflict of law principles of such State.

 

 

7.4 Severability. In case any provision contained herein (or part thereof) shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or other unenforceability shall not affect any other provision (or the remaining part of the affected provision) hereof, but this Note shall be construed as if such invalid, illegal, or unenforceable provision (or part thereof) had never been contained herein, but only to the extent that such provision is invalid, illegal, or unenforceable.

 

 

7.5 Notice. All notices and other communica­tions among the parties shall be in writing and shall be deemed to have been duly given when (i) delivered in person, or (ii) five (5) days after posting in the U.S. mail as registered mail or certified mail, return receipt re­quest­ed, or (iii) delivered by telecopier and promptly confirmed by delivery in person or post as aforesaid in each case, with postage prepaid, addressed as follows:

 

 

If to the Company, to:

 

 

DigiPath Inc.

 

	
2360 CORPORATE CIR STE 400

	
HENDERSON, NV 89074

 

If to the Holder, to:

 

 

NYX Capital Advisors, Inc.

 

 

Attention: CFO

 

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed and delivered by its authorized officer as of the date first above written.

 

 

DIGIPATH INC., a Nevada corporation

 

 

By: /s/ ERIC STOPPENHAGEN

 

 

Name: Eric Stoppenhagen

 

 

Title: President

 

 

ACKNOWLEDGED:

 

 

NYX CAPITAL ADVISORS, INC.

 

 

By: /s/ Eric Stoppenhagen

 

 

Name: Eric Stoppenhagen

 

 

Title: Presidentexhibit10_2.htm

January 20, 2011

 

Mr. Eric Stoppenhagen

President

DigiPath, Inc.

2360 Corporate Circle

Suite 400

Henderson NV 89074

Dear Eric:

 

Medica Corporation (“Medica”) is pleased to propose the terms under which it would enter into a supply and distributor relationship with DIGIPATH.

Medica is interested in a collaboration with DIGIPATH whereby Medica would supply to DIGIPATH, and DIGIPATH would market, sell and service Medica’s high and low cost automated digital imaging systems known as the EasyScope H and EasyScope L (the “Products”) in the North American (i.e., U.S. and Canada) digital imaging histology markets (“the Territory”).  This Term Sheet outlines below the terms and conditions related to a supply and distribution arrangement that would be reflected in a definitive agreement between the parties (the “Definitive Agreement”).

	
1. Distributorship

	
a. DIGIPATH would have the exclusive right to market, sell and service the Product to end-users in the Territory provided that agreed-upon minimums are met. Failure to meet the minimums might result in termination of the agreement or conversion to a nonexclusive agreement. During the term of this Agreement, DIGIPATH agrees not to sell, anywhere in the Territory, any product which is competitive with the Products.   Outside the Territory, DigiPath shall have a non-exclusive license to market, sell, and install systems where Medica does not have an exclusive distributorship.  Where Medica has an exclusive distributorship the parties will agree to work together.

b. The Products would be marketed and sold solely under Medica’s trademarks.

c. DIGIPATH would take all steps necessary to maximize the sales potential for the Product in the Territory.  DIGIPATH would agree: (1) to use best efforts to meet the quarterly sales forecast set by DIGIPATH; (2) to advertise the Products, (3) actively demonstrate the Products to potential end user customers in the Territory; (4) to attend and display the Products frequently at important trade shows in the Territory; (5) to promptly answer all requests, both written and oral, for information relating to Products; and (6) provide literature, promotional materials and technical information to end users in the Territory. Promotional materials used would be either provided or approved by Medica.

 

	
2. Prices and Orders

	
The prices at which Medica would supply the products to DIGIPATH.  DIGIPATH and Medica would mutually agree on certain discounted “seed pricing” for 10 units whereby the Product would be offered to customers at a discount in order to promote early sales of the Product.

 

Medica would supply the Products in order to meet forecasts set by DIGIPATH.

 

	
3. Regulatory Compliance

 

	
Medica would, at its sole cost, obtain, maintain and comply with any and all registrations, licenses, permits, and governmental approvals applicable to the manufacturer/supplier of the Products in the Territory, including any U.S. Food and Drug Administration (“FDA”) or other similar regulatory approval, necessary for the marketing, sale and distribution of the Products by DIGIPATH in the Territory.

 

	
4. Product Service

	
Medica and DIGIPATH would provide service on all Products placed in the Territory. As used in the Definitive Agreement “service” would mean “First Level Support” and “Second Level Support” for such warranty and out-of-warranty repair work for the Products as described below.

 

a. First Level Support would consist of first line phone support and standard troubleshooting techniques by DIGIPATH.

b. Second Level Support would consist of an elevated level of support over and above First Level Support and would include on-site troubleshooting by DIGIPATH.

c. In the event that Medica determined that one of its field service representatives (“FSR”) must be utilized to provide in-warranty service for any Products after First Level Support and Second Level Support have proved unsuccessful, Medica would make an FSR available, at Medica’s cost.  However, in the event an FSR was required to provide out-of-warranty service, DIGIPATH would make such FSR at DIGIPATH’s cost, except in the case of a product recall.

 

	
5. Training

	
DIGIPATH would train, at DIGIPATH's expense, customers regarding the operation and use of the Products in accordance with Medica's published Product manuals, specifications and instructions.

 

Medica would provide DIGIPATH with a minimum of forty (40) hours of technical training on the Products to not less than twelve (12) of DIGIPATH’s service personnel, at Medica’s headquarters.  Each party would bear its own costs related to such support and training. Medica would furnish DIGIPATH with customary training and service materials, in English, such as Product schematics, manuals and documentation.

	  	  
	
6. Product Supply and Recalls

	
Medica would supply the Products that meet product specifications.  The Definitive Agreement would contain customary acceptance and rejection and Product replacement terms.  Medica would be solely responsible for any and all costs incurred by DIGIPATH in connection with any voluntary or involuntary recall of the Product in the Territory, including the cost of removal or replacement of any Product.

 

	
7. Representations, Warranties, Covenants and Indemnities

	
The Definitive Agreement would include customary representations, warranties (including warranties of no Product defects or intellectual property infringement), covenants and indemnities.

 

	
8. Term and Termination

	
The initial term of the Definitive Agreement would be for five (5) years following the date of Medica’s first sale to DIGIPATH. Thereafter, the Definitive Agreement automatically would continue for successive one (1) year terms, unless either party notified the other party of its intention to terminate the Definitive Agreement sixty (60) days prior to the expiration of the initial term or any successive term. The primary cause for termination of the Definitive Agreement by Medica would be the failure of DIGIPATH to meet annual minimums for the Product, however DIGIPATH will have the right to cure this event within a period to be specified. DIGIPATH sales volumes would be permitted to reach any quantity greater than the minimums without penalty.

 

 

	  	  
	
9. Publicity and Non-disclosure

	
This Term Sheet, including the terms and condition hereof and any disclosures made by either party to the other party in connection herewith are subject to the Nondisclosure Agreement, dated as of October 10, 2010 between DIGIPATH and  Medica.

	  	  
	
10. Governing Law

 

	
This Term Sheet shall be governed by the laws of the Commonwealth of Massachusetts without regard to the conflicts of laws principles thereof.

	
11. Consultation

	
DIGIPATH will, from time to time, advise Medica on distribution, product specifications, strategic alliances and other matters.  DIGIPATH shall have a non-exclusive relationship for consultations services with Medica.

 

Medica shall pay DIGIPATH a monthly retainer of $10,000 from January 1, 2011 to April 30, 2011.    Payments shall be made on 30th of the month for the current month services rendered with first payment shall start on January 30, 2011.

DIGIPATH shall dislose if it may enter into an arrangement with a Digital Pathology Hardware Scanning manufacturer.  Upon notice and with 24 hours of notice, Medica shall have right with a written notice, and to make the consultation exclusive between DIGIPATH and Medica.  If the Consultation is exclusive, Medica shall pay DIGIPATH $10,000 per month as detailed above for each month from May 1, 2011 to launch date, or June 30, 2011, whichever is later.

 

	
12. Miscellaneous

	
This Term Sheet outlines some of the key terms of a proposed agreement between DIGIPATH and the Medica.  This Term Sheet (i) is a non-binding indication of interest only regarding the subject matter hereof, (ii) does not create a binding obligation, or agreement between the parties.

	
13. Definitive Agreement

	
The parties agree to complete and execute the definitive agreement by March 15, 2011.

Medica is excited about the prospect of working with you the DigiPath team.  Please do not hesitate to contact me if you have any questions or comments regarding this Term Sheet.  We look forward to your favorable response and to initiating a successful agreement.

Executed by:

/s/ Doug Moe

_______________________________________

Mr. Doug Moe, Vice President Business Development, Medica Corporation

January 20, 2011

/s/ Eric Stoppenhagen

_______________________________________

Mr. Eric Stoppenhagen, President, DigiPath, Inc.

January 20, 2011

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