Document:

axdx_ex1019.htm

EXHIBIT 10.19

 

THIS NOTE DOES NOT REQUIRE PHYSICAL SURRENDER OF THIS NOTE IN THE EVENT OF A PARTIAL REDEMPTION OR REPAYMENT. AS A RESULT, FOLLOWING ANY REDEMPTION OR REPAYMENT OF ANY PORTION OF THIS NOTE, THE OUTSTANDING PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE MAY BE LESS THAN THE PRINCIPAL AMOUNT SET FORTH BELOW.

 

NON-INTEREST BEARING NOTE DUE 2020

 

 

	
 
	
 
	
Original Principal Amount: $445,000

	
Issuance Date: March 20, 2017 
	
 
	
Salt Lake City, Utah

  

FOR VALUE RECEIVED, Co-Diagnostics, Inc., a Utah corporation ( “Maker”) promises to pay to or upon the order of Zika Diagnostics, Inc, f/k/a/ Watermark Group, Inc. a Nevada corporation, or its registered assigns or successors-in-interest (the “Holder”) the principal sum of Four Hundred Forty Five Thousand Dollars ($445,000.00), on the Final Maturity Date, in accordance with the terms hereof. This Note is non-interest bearing during the term hereof. Notwithstanding anything contained herein, this Note shall bear interest on the outstanding Principal Amount from and after the occurrence and during the continuance of an Event of Default, at the rate (the “Default Rate”) equal to the lower of twelve percent (12%) per annum or the highest rate permitted by applicable law. Unless otherwise agreed or required by applicable law in the event of default, payments will be applied first to any unpaid collection costs, then to unpaid interest and fees and any remaining amount to unpaid principal. 

 

All payments of principal of and interest on this Note shall be made in lawful money of the United States of America by immediately available funds to as the Holder may from time to time designate by written notice in accordance with the provisions of this Note. This Note may be prepaid in whole or in part as specifically provided herein. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day (as defined below), the same shall instead be due on the next succeeding day which is a Business Day and such extension shall be taken into account in determining the amount of interest accrued on this Note.

 

The following terms and conditions shall apply to this Note:

 

	 
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1. Definitions.

 

(a) For purposes hereof the following terms shall have the meanings ascribed to them below:

 

“Bankruptcy Event” means any of the following events: (a) any one or more of the Makers commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Maker; (b) there is commenced against any of the Makers any such case or proceeding that is not dismissed within 60 days after commencement; (c) any of the Makers is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) any of the Makers suffers any appointment of any trustee, custodian or the like for it or any substantial part of his or her property that is not discharged or stayed within 60 days; (e) any of the Makers makes a general assignment for the benefit of creditors; (f) any of the Makers fails to pay, states that he is unable to pay, or is unable to pay, its debts (excluding those reasonably disputed in good faith by the Maker generally as they become due; or (g) any of the Makers, by any act or failure to act, expressly indicates his consent to, approval of or acquiescence in any of the foregoing or takes any other action for the purpose of effecting any of the foregoing.

 

“Cash” or “cash”means at any time such coin or currency of the United States of America as shall at such time be legal tender for the payment of public and private debts.

 

“Event of Default” shall have the meaning provided in Section 4(a).

 

“Final Maturity Date” means December 31, 2020.

 

“Force Majeure Event” means an event or circumstance that prevents the Makers from performing their obligations under this Note or that prevents an act or event required hereunder from happening or occurring (including, without limitation, an act of God, war, insurrection, riot, nuclear disaster, labor strike or threat of violence, labor and material shortage, fire, explosion, flood, river freeze-up, breakdown or damage to mines, plant, equipment, or facilities (including a forced outage or an extension of a scheduled outage of equipment or facilities to make repairs to avoid breakdowns thereof or damage thereto), interruption to or slowdown in transportation, railcar shortage, barge shortage, embargo, order, or act of civil or military authority, law, regulation, or administrative ruling, or total or partial interruption of the Makers’ businesses which are due to any enforcement action or other administrative or judicial action arising from an environmental law or regulation), but in any case which is not within the reasonable control of, or the result of the negligence of, the Makers, and which by the exercise of due diligence, the Makers are unable to overcome or avoid or cause to be avoided or are unable in good faith to obtain a substitute acceptable to the Holder therefor.

 

“Principal Amount” means at any time the sum of (i) the outstanding principal amount of this Note at such time, (ii) all accrued but unpaid Default Interest hereunder to such time, and (iii) any default payments owing at such time to the Holder but not theretofore paid or added to the Principal Amount.

 

	 
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Section 2. Payments of Principal and Interest.

 

(a) Principal. The Maker shall pay all Principal due and payable on the Final Maturity Date. 

 

(b) Prepayment. The Maker shall be entitled to prepay all or any portion of the outstanding Principal Amount of this Note at any time and in any amount. Any prepayments shall be applied to any remaining portion to the outstanding principal amount.

 

Section3. Defaults and Remedies.

 

(a) Events of Default. An “Event of Default” is: (i) a failure to pay any Principal Amount of this Note when due at the Final Maturity Date, (ii) if Maker or any affiliate of Maker is subject to any Bankruptcy Event; or (iii) any material provisions hereof shall at any time and for any reason be declared by a court of competent jurisdiction to be null and void, or the Maker or any affiliate of the Maker shall repudiate or deny any portion of its liabilities or obligations thereunder.

 

(b) Remedies. If an Event of Default occurs and is continuing, the Holder may declare all of the then outstanding Principal Amount of this Note to be due and payable immediately in cash and this Note shall become automatically due and payable without further action or notice, and the Holder may exercise all other rights and remedies available at law or in equity. In any event the Maker shall pay interest on such amount in cash at the Default Rate to the Holder if such amount is not paid within one Business Day after such acceleration. The remedies under this Note shall be cumulative.

 

Section 5. Certain Covenants; General.

 

(a) Savings Clause. In case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby. In no event shall the amount of interest paid hereunder exceed the maximum rate of interest on the unpaid principal balance hereof allowable by applicable law. If any sum is collected in excess of the applicable maximum rate, the excess collected shall be applied to reduce the principal debt. If the interest actually collected hereunder is still in excess of the applicable maximum rate, the interest rate shall be reduced so as not to exceed the maximum allowable under law.

 

(b) Amendment. Neither this Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the Makers and Holder. 

 

(c) Assignment, Etc. The Holder may assign or transfer this Note, without the consent of the Maker. The Holder shall notify the Maker of any such assignment or transfer promptly. This Note shall be binding upon the Maker and its successors and shall inure to the benefit of the Holder and its successors and permitted assigns.

 

(d) No Waiver. No failure on the part of the Holder to exercise, and no delay in exercising any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Holder of any right, remedy or power hereunder preclude any other or future exercise of any other right, remedy or power. Each and every right, remedy or power hereby granted to the Holder or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Holder from time to time.

 

	 
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(e) Governing Law; Jurisdiction.

 

(i) Governing Law. THIS NOTE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF UTAH WITHOUT REGARD TO ANY CONFLICTS OF LAWS PROVISIONS THEREOF THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

 

(ii) Jurisdiction. The Maker (i) hereby irrevocably submits to the exclusive jurisdiction of the Third District Court, State of Utah, in Salt Lake City, Utah for the purposes of any suit, action or proceeding arising out of or relating to this Note or the transactions contemplated hereby, and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any 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. The Maker consents to process being served in any such suit, action or proceeding by mailing a copy thereof to the Maker at the address on the records of the Holder then in effect 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. The Maker hereby agrees that if the Holder is the prevailing party in any suit, action or proceeding arising out of or relating to this Note, the Holder shall be entitled to reimbursement for legal fees from the Maker.

 

(iii) NO JURY TRIAL. The Maker knowingly and voluntarily waives any and all rights it may have to a trial by jury with respect to any litigation based on, or arising out of, under, or in connection with, this Note.

 

[Signature Page Follows]

 

	 
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IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed on the day and in the year first above written.

 

	 	CO-DIAGNOSTICS, INC.	
	 	 	 	 
		By:	/s/ Dwight Egan	
	
 
	
 
	Dwight H. Egan 	 
	 	 	President 	 

 

 

	
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EXHIBIT 10.20

 

MUTUAL RESCISSION AGREEMENT

 

THIS MUTUAL RESCISSION AGREEMENT (“Agreement”) is entered into on the dates set forth below but effective as of September 22, 2016 (the “Effective Date”), by and between Co-Diagnostics, Inc., a Utah corporation (the “Company”), and Robert Salna and Ted Murphy, individuals with an address located at 64 Industrial Road, Richmond Hill, Ontario L4C 2Y1, Canada, and comprising all members of the Board of Watermark Group, Inc. n/k/a Zika Diagnostics, Inc. (“Murphy”) and Watermark Group, Inc. n/k/a Zika Diagnostics, Inc., a Nevada corporation (“Watermark”);

 

WITNESSETH:

 

WHEREAS, on September 22, 2016, the parties entered into a Stock Purchase Agreement, attached hereto as Exhibit A (the “SPA”), whereby Murphy effectively sold 19,800,000 shares (the “Shares”) of common stock of Watermark to the Company;

 

WHEREAS, effective October 13, 2016, the Company and Watermark entered into an Exclusive License Agreement (“ELA”) granting a license to Watermark to sell certain proprietary molecular diagnostic tests;

 

WHEREAS, pursuant to the SPA, Murphy represented and warranted, inter alia, that Watermark had no debt and owed no operational expenses to any party, related or unrelated as of the date of SPA, and further represented and warranted that Watermark had no convertible instruments (including without limitation, warrants, options, convertible debt, etc.);

 

WHEREAS, the Company, relying on Murphy’s representations entered into the SPA and purchased the Shares for $55,000 and entered into the ELA; 

 

WHEREAS, during the month of January 2017, the Company became aware that a Promissory Note dated November 1, 2011, amended and modified on December 11, 2014, July 7, 2015 and December 11, 2015, owned by P&G Holdings LLC (the “Note”) was allegedly still outstanding as of the Effective Date; 

 

NOW, THEREFORE, in consideration of the foregoing recitals and the covenants herein, the parties hereto agree to rescind the SPA and the ELA in their entirety, effective as of inception of such agreement, and further agree as follows:

 

1. Rescission of the SPA.

 

The SPA is hereby explicitly rescinded in its entirety effective as of the Effective Date and is declared and shall be considered void ab initio, as are any other agreements, whether oral or written, between the parties concerning the subject matter herein prior to the date of complete execution of this Agreement. 

 

2. Return of Funds.

 

In view of the current belief of the Company that Murphy was similarly deceived regarding representations concerning the status of Watermark, the Company does not demand refund of the $55,000 purchase price for the Shares, but the parties agree to offset the $55,000 against amounts the Company agrees to refund to Watermark as set forth hereinafter.

 

	 
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3. Return of Shares.

 

The Company agrees to return the Shares of Watermark to Murphy, after cancelling 16,200,000 shares issued to the Company as part of an alleged stock dividend making Murphy the controlling shareholder of Watermark. 

 

4. Licensing Agreement.

 

The parties acknowledge that pursuant to the ELA between the Company and Watermark dated October 13, 2016, this Agreement constitutes a change of control of Watermark pursuant 12.3 D. of the ELA, and the ELA shall be terminated effective immediately. Further, the parties hereto agree to waive all notice requirements and cure periods associated with the termination of the ELA as set forth therein. 

 

Further, in partial consideration for this Agreement, to recognize the fact that certain funds were advanced to the Company as advanced royalties pursuant to the ELA, and to place the parties as close as possible to their respective positions prior to the transaction referenced herein, Company agrees to enter into a promissory note payable to Watermark in the amount of $445,000 representing the advanced royalties paid, less the Company’s purchase price of the 19.8 million shares of Watermark. A copy of the note is attached hereto as Exhibit B.

 

5. Name Change. Watermark agrees to make all necessary filings with the State of Nevada to changes its name back to Watermark Group, Inc. 

 

6. Amendments.

 

This Agreement may not be modified or amended except by a written document signed by the parties.

 

7. Parties.

 

This Agreement is for the benefit of, and binds, the parties, their successors and permitted assigns. Neither party shall have any further rights or duties thereunder. 

 

8. Severability.

 

The provisions of this Agreement will be deemed severable, and if any part of any provision is held illegal, void or invalid under applicable law, such provision will be changed to the extent reasonably necessary to make the provision, as so changed, legal, valid and binding. If any provision of this Agreement is held illegal, void or invalid in its entirety, the remaining provisions of this Agreement will not in any way be affected or impaired but will remain binding in accordance with their terms.

 

9. Governing Law.

 

This Agreement shall be construed as to both validity and performance and enforced in accordance with the laws of the State of New York, without giving effect to the conflicts of law principles thereof. Any action brought by either party against the other concerning the Agreement or SPA shall be brought only in the federal courts located in the State of New York, New York County. 

 

	 
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10. Counterparts.

 

This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. This Agreement may be executed by facsimile or by email of PDF or digital image format files of the executed signature page hereto.

 

11. Further Assurances.

 

Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to rescind the SPA, and to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

The parties have executed this Agreement on the dates indicated below to be effective as of the Effective Date.

 

	 	CO-DIAGNOSTICS, INC.:	
	 	 	 	 
	Date: March __, 2017	By:	/s/ Dwight Egan	
	
 
	
Name: 
	Dwight Egan 	 
	 	Title: 	President 	 
	 	 	 	 
	
 
	
TED MURPHY: 
	
 

	
 
	
 
	
 
	
 

	
Date: March __, 2017
	
By:
	
/s/ Ted Murphy
	
 

	
 
	
 
	
Individually, and on behalf of Watermark
	
 

	
 
	
 
	
 
	
 

	
 
	
Agree and Acknowledge:
	
 

	
 
	
 
	
 

	
 
	
ROBERT SALNA:
	
 

	
 
	
 
	
 
	
 

	
Date: March __, 2017
	
By:
	
/s/ Robert Salna
	
 

	
 
	
 
	
Individually, and on behalf of Watermark
	
 

  

 

	
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