Document:

ex10-10.htm

    Exhibit
10.10

    DIATECT
INTERNATIONAL CORPORATION

     

    

    NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

     

    COMMON
STOCK PURCHASE WARRANT

     

    
      
        	
                Warrant
      Shares: 4,000,000

              	
                Issue
      Date: May 7, 2009

              

      

    

     

    THIS COMMON STOCK PURCHASE WARRANT (the
“Warrant”)
certifies that, for value received, Aspen Capital Partners LLC (the “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise
Date”) and on or prior to the close of business on the second anniversary
of the Initial Exercise Date (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Diatect International
Corporation, a California corporation (the “Company”), up to four
million (4,000,000) shares (the “Warrant Shares”) of
common stock, no par value per share, of the Company (the “Common
Stock”).  The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).

     

    Section
1.               Definitions.  Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
the Carr & Associates Promissory Note Agreement (the “Promissory Note
Agreement”), dated May 7, 2009, among the Company and the Holder.

     

    Section
2.                Exercise.

     

    a) Exercise of
Warrant.  Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by delivery to the
Company of a duly executed facsimile copy of the Notice of Exercise Form annexed
hereto (or such other office or agency of the Company as it may designate by
notice in writing to the registered Holder at the address of such Holder
appearing on the books of the Company); and, within five Business Days of the
date said Notice of Exercise is delivered to the Company, the Company shall have
received  payment of the aggregate Exercise Price of the shares
thereby purchased by wire transfer or cashier’s check drawn on a United States
bank.  Notwithstanding anything herein to the contrary, the Holder
shall not be required to physically surrender this Warrant to the Company until
the Holder has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall surrender
this Warrant to the Company for cancellation within five Business Days of the
date the final Notice of Exercise is delivered to the
Company.  Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased.  The Holder and any assignee, by acceptance of this
Warrant, acknowledge and agree that, by reason of the provisions of this
paragraph, following the purchase of a portion of the Warrant Shares hereunder,
the number of Warrant Shares available for purchase hereunder at any given time
may be less than the amount stated on the face hereof.

     

    b) Exercise
Price.  The exercise price per share of the Common Stock under
this Warrant shall be $0.025, subject to adjustment hereunder (the “Exercise
Price”).

     

    c) Mechanics of
Exercise.

     

    i. Authorization of Warrant
Shares.  The Company covenants that all Warrant Shares which
may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant,
be duly authorized, validly issued, fully paid and non-assessable and free from
all taxes, liens and charges created by the Company in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ii. Delivery of Certificates
Upon Exercise.  Certificates for shares purchased hereunder
shall be transmitted by the Company to the Holder by physical delivery to the
address specified by the Holder in the Notice of Exercise within five (5)
Business Days from the delivery to the Company of the Notice of Exercise Form,
surrender of this Warrant (if required) and payment of the aggregate Exercise
Price as set forth above (“Warrant Share Delivery
Date”).  This Warrant shall be deemed to have been exercised on
the date the Exercise Price is received by the Company.  The Warrant
Shares shall be deemed to have been issued, and Holder or any other person so
designated to be named therein shall be deemed to have become a holder of record
of such shares for all purposes, as of the date the Warrant has been exercised
by payment to the Company of the Exercise Price (or by cashless exercise, if
permitted) and all taxes required to be paid by the Holder, if any, pursuant to
Section 2(c)(v) prior to the issuance of such shares, have been
paid.

     

    iii. Delivery of New Warrants
Upon Exercise.  If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this
Warrant certificate, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant.

     

    iv. No Fractional Shares or
Scrip.  No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant.  As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall at its election, either pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.

     

    v. Charges, Taxes and
Expenses.  Issuance of certificates for Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the
event certificates for Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder;
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.

     

    vi. Closing of
Books.  The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

     

    Section
3.              
Certain
Adjustments.

     

    a) Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding:
(A) pays a stock dividend or otherwise make a distribution or distributions on
shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (B) subdivides outstanding shares of Common Stock into a larger number
of shares, (C) combines (including by way of reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, or (D) issues by
reclassification of shares of the Common Stock any shares of capital stock of
the Company, then in each case the Exercise Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event and the number of shares issuable upon
exercise of this Warrant shall be proportionately adjusted.  Any
adjustment made pursuant to this Section 3(a) shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
reclassification.

     

    b) Issuances of Common Stock or
Common Stock Equivalents. If the Company at any time while this Warrant
is outstanding, shall issue shares of Common Stock or rights, warrants, options
or other securities or debt that are convertible into or exchangeable for shares
of Common Stock (“Common Stock
Equivalents”) entitling any Person to acquire shares of Common Stock, at
a price per share less than the Exercise Price (if the holder of the Common
Stock or Common Stock Equivalent so issued shall at any time be entitled to
receive shares of Common Stock at a price per share which is less than the
Exercise Price, such issuance shall be deemed to have occurred for less than the
Exercise Price), then the Exercise Price shall be determined by (i) multiplying
(x) the difference between the Exercise Price prior to the issuance of such
Common Stock or Common Stock Equivalents and the price per share of such Common
Stock or Common Stock Equivalents by (y) one minus the percentage amount
determined by dividing the number of shares of Common Stock Equivalents issued
by the total number of shares of Common Stock Equivalents held by the Holders;
and then (ii) adding the resulting product to the price per share of such Common
Stock or Common Stock Equivalent.  Such adjustment shall be made
whenever such Common Stock or Common Stock Equivalents are issued, and shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such Common Stock or Common Stock
Equivalents.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    c) Subsequent Rights
Offerings.  If the Company, at any time while the Warrant is
outstanding, shall issue rights, options or warrants (“Distribution
Securities”) to all holders of Common Stock (and not to Holder) entitling
them to subscribe for or purchase shares of Common Stock at a price per share
less than the Exercise Price, then the Exercise Price shall be multiplied by a
fraction, of which the denominator shall be the number of shares of the Common
Stock outstanding on the date of issuance of such Distribution Securities plus
the number of additional shares of Common Stock offered for subscription or
purchase, and of which the numerator shall be the number of shares of the Common
Stock outstanding on the date of issuance of such Distribution Securities plus
the number of shares which the aggregate offering price of the total number of
shares so offered (assuming receipt by the Company in full of all consideration
payable upon exercise of such Distribution Securities) would purchase at the
Exercise Price.  Such adjustment shall be made whenever such rights or
warrants are issued, and shall become effective immediately after the record
date for the determination of stockholders entitled to receive such Distribution
Securities.

     

    d) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (A) the
Company effects any merger or consolidation of the Company with or into another
Person, (B) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (C) any tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (D) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (each, “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, the number of shares of Common Stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate
Consideration”) receivable as a result of such merger, consolidation or
disposition of assets by a Holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such event. For purposes
of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration.  If holders of Common Stock are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental
Transaction.

     

    Section
4.               Transfer of
Warrant.

     

    a) Transferability.  Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 4(d) hereof and to the provisions of the Purchase Agreement, this
Warrant and all rights hereunder (including, without limitation, any
registration rights) are transferable, in whole or in part, upon surrender of
this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form
attached hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such
transfer.  Upon such surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled.  A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued.

     

    b) New Warrants. This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney.  Subject to compliance
with Section 4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.

     

    c) Warrant Register. The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time.  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.

     

    d) Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with
any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer, that (i) the
Holder or transferee of this Warrant, as the case may be, furnish to the Company
a written opinion of counsel (which opinion shall be in form, substance and
scope customary for opinions of counsel in comparable transactions) to the
effect that such transfer may be made without registration under the Securities Act and under applicable state securities
or blue sky laws, and (ii) the
Holder or transferee execute and deliver to
the Company an investment letter in form and substance acceptable to the
Company, and (iii) the transferee be an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7),
or (a)(8) promulgated under the Securities Act or a “qualified
institutional buyer” as defined in Rule 144A(a) promulgated under
the Securities Act.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
5.              
Miscellaneous.

     

    a) No Rights as Shareholder
Until Exercise.  This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to the
exercise hereof as set forth in Section 2(c)(ii).

     

    b) Loss, Theft, Destruction or
Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the posting of any bond), and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

     

    c) Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then such action may be taken or such right may be exercised
on the next succeeding Business Day.

     

    d) Authorized
Shares.  The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant.

     

    e) Jurisdiction. All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the provisions of the
Purchase Agreement.

     

    f) Restrictions.  The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.

     

    g) Nonwaiver and
Expenses.  No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date.  If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.

     

    h) Notices.  Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.

     

    i) Remedies.  Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant.  The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be
adequate.

     

    j) Successors and
Assigns.  Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors of the Company and the successors and
permitted assigns of Holder.  The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant
Shares.

     

    k) Amendment.  This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.

     

    l) Severability.  Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.

     

    m) Headings.  The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

     

    

    ********************

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

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

     

    
      	
              DIATECT
      INTERNATIONAL CORPORATION

               

               

            
	
              By:__________________________________________

               Name:   Robert
      Rudman

               Title:     Chief
      Financial Officer

               

            
	 
      

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    NOTICE
OF EXERCISE

    

    TO:           DIATECT
INTERNATIONAL CORPORATION

    

    (1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full in immediately available
funds, together with all applicable transfer taxes, if any.

     

    (2) Please
issue a certificate or certificates representing said Warrant Shares in the name
of the undersigned or in such other name as is specified below:

     

    _______________________________

    

    (3)  The undersigned is an
“accredited investor” as defined in Regulation D promulgated under the
Securities Act of 1933, as amended.

    

    
      	
              ASPEN
      CAPITAL PARTNERS, LLC

               

               

            
	
              By:__________________________________________

                   Name:

                   Title:

               

            

    

    

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ASSIGNMENT
FORM

    

    (To
assign the foregoing warrant, execute

    this form
and supply required information.

    Do not
use this form to exercise the warrant.)

    

    

    

    FOR VALUE
RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all
rights evidenced thereby are hereby assigned to

     

    

    _______________________________________________
whose address is

    

    _______________________________________________________________.

    

    

    

    _______________________________________________________________

    

    Dated:  ______________,
_______

    

    

    Holder’s
Signature:                                           _____________________________

    

    Holder’s
Address:                                     
      _____________________________

    

                       
       
_____________________________

    

    

    

    Signature
Guaranteed:  ___________________________________________

    

    

    NOTE:  The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company.  Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.ex10-1.htm

    EXHIBIT
10.01

     

    THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED OR
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.

     

    BIOXCELL,
INC.

     

    CONVERTIBLE
TERM NOTE

     

    
      	$96,462.00   	 Beverly,
      Massachusetts

    

     

    September
18, 2008

     

    FOR VALUE
RECEIVED, the undersigned, BioXcell, Inc. (“Maker”) a Massachusetts corporation
with its principal place of business in Beverly, Massachusetts promises to pay
to Claude Ranoux (“Holder”), at 8 Chestnut Street, Winchester, MA 01890 or at
such other place as Holder shall have designated to Maker in writing, a
principal amount equal to Ninety Six Thousand Four Hundred Sixty Two Dollars
($96,462.00) (the “Principal Amount”) together with interest thereon as set
forth below.

     

    
      	
              1)  

            	
              Repayment.  Maker
      promises to pay the entire Principal Amount plus accrued and unpaid
      interest thereon, and all other sums and charges due Holder hereunder on
      March 31, 2009 (the “Maturity Date”).  The Maturity Date is
      subject to acceleration as set forth
below.

            

    

    

    
      	
              2)  

            	
              Interest.  This
      Note shall bear interest at the rate of five percent (5%) per annum from
      the date hereof.  All interest shall accrue and be paid with the
      Principal Amount on the Maturity
Date.

            

    

    

    
      	
              3)  

            	
              Conversion.  The
      Principal Amount plus all accrued interest may be converted by Holder into
      shares of common stock of Maker (“Shares”) at any time prior to payment
      upon ten (10) days advance written notice by Holder to
      Maker.  The conversion price shall be the fair market value of a
      Share.  For purposes of this Note, fair market value shall
      mean:

            

    

     

    
      	
              a.  

            	
              The
      average of the closing bid and asked prices of the Shares quoted in the
      Over-The Counter Market Summary (if not on the NASDAQ system) or the
      closing price quoted o the Nasdaq Stock Market or any exchange on which
      the Shares are listed, whichever is applicable, as published in the Wall
      Street Journal for the ten (10) trading days prior to the date of
      determination of fair market value,
or

            

    

     

    
      	
              b.  

            	
              If
      the Shares are not traded over-the-counter or on an exchange, the fair
      market value of a Share shall be as determined by an independent appraiser
      appointed in good faith by the Maker’s Board of Directors.  The
      Principal Amount and all accrued interest must be converted at one
      time.

            

    

     

    
      	
              4)  

            	
              Application of
      Payments.  All payments shall be made in legal tender of
      the United States of America and shall be applied first to the payment of
      any sums or charges other than principal or interest due Holder; second,
      to the payment of accrued and unpaid interest on the unpaid Principal
      Amount; and third, the balance on account of the Principal
      Amount.

            

    

    

    
      	
              5)  

            	
              Payment of Charges and
      Expenses.  Maker agrees to pay the debt evidenced hereby,
      and, after default, to pay all reasonable costs, expenses and attorneys’
      fees incurred by the Holder in connection with any proceeding for
      collection of the debt evidenced hereby, or in any litigation or
      controversy arising from or connected with this Note.  The
      Maker’s obligation to pay such costs, expenses and attorneys’ fees of
      Holder after default in connection with the protecting, enforcing or
      realizing of the rights and remedies above described or otherwise set
      forth herein, shall exist whether or not proceedings are instituted or
      legal appearances made in any court of competent jurisdiction on behalf of
      the Holder.

            

    

    

    
      	
              6)  

            	
              Event of
      Default.  Upon the occurrence of any one or more of the
      following events Maker shall be in default hereunder and the entire
      indebtedness with accrued interest due thereon under this Note shall, at
      the option of Holder, accelerate and become immediately due and payable
      without demand or notice of any
kind:

            

    

     

    
      	
              a.  

            	
              Failure
      by Maker to pay (i) the outstanding Principal Amount of this Note,
      together with interest accrued thereon, at final maturity of this Note; or
      (ii) any other sums required to be paid by Maker hereunder;
    or

            

    

     

     

    
      	
              b.  

            	
              If
      (i) a petition is filed against Maker under any bankruptcy,
      reorganization, arrangement, composition, readjustment, liquidation,
      dissolution, or insolvency law, and is not dismissed within ninety (90)
      days after such filing; or (ii) Maker (x) files a petition in voluntary
      bankruptcy or seeks relief under any provision of any bankruptcy,
      reorganization, arrangement, insolvency, readjustment of debt, dissolution
      or liquidation law of any jurisdiction, whether now or hereafter in
      effect, or consents to the filing of any petition against it under any
      such law, or (y) makes any general assignment for the benefit of creditors
      or admits in writing its inability to pay, or fails to pay, its debts
      generally as they become due, or consents to or otherwise suffers the
      appointment of a receiver, custodian, liquidator or trustee for itself, or
      of all or any part of its property.

            

    

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              7)  

            	
              Waiver of
      Rights.  Maker hereby waives presentment, demand, notice,
      protest, and all other demands and notices in connection with the
      delivery, acceptance, performance and enforcement of this Note, and
      assents to extensions of the time of payment of forbearance or other
      indulgence without notice.

            

    

    

    
      	
              8)  

            	
              Holder’s
      Rights.  Holder’s rights hereunder shall be cumulative
      and not exclusive and may be exercised at the sole discretion of Holder
      until this Note and all accrued and unpaid interest and other sums and
      charges due hereunder shall have been paid in full.  Further, no
      failure on the part of Holder to exercise any right or remedy hereunder,
      whether before or after the occurrence of any event of default hereunder,
      shall constitute a waiver hereof, and no waiver of any past default shall
      constitute waiver of any future default or of any other
      default.  No failure to accelerate the indebtedness evidenced
      hereby by reason of default hereunder, or waiver granted from time to time
      shall be construed to be a waiver of the right to insist upon prompt
      payment thereafter or a waiver of any right of acceleration or any other
      right, or be construed so as to preclude the exercise of any right which
      Holder may have, whether by the laws of the Commonwealth of Massachusetts,
      by agreement or otherwise; and Maker hereby expressly waives the benefit
      of any statute or rule of law or equity which would produce a result
      contrary to or in conflict with the
foregoing.

            

    

    

    
      	
              9)  

            	
              Prepayment.  Maker
      shall not have the right to prepay this
Note.

            

    

    

    
      	
              10)  

            	
              Binding
      Effect.  This Note shall bind the successors and assigns
      of Maker and shall inure to the benefit of Holder, his heirs,
      administrators, representatives, trustees, successors and
      assigns.

            

    

    

    
      	
              11)  

            	
              Captions and Section
      Headings.  The captions and section headings used in this
      Note are for convenience only and shall not be used to interpret, modify
      or affect in any way the covenants and agreements herein
      contained.

            

    

    

    
      	
              12)  

            	
              Severability.  In
      the event that 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 shall operate or would prospectively operate, to
      invalidate this Note, then the remaining provisions of this Note shall
      remain operative and in full force and effect, shall be valid, legal and
      enforceable and shall in no way be affected, prejudiced or disturbed
      thereby.

            

    

    

    
      	
              13)  

            	
              Governing
      Law.  This Note shall be governed by and construed in
      accordance with the laws of the Commonwealth of Massachusetts without
      reference to its conflict of laws
provisions.

            

    

     

    .

    
      
        
          	 MAKER:   
       	BIOXCELL,
      INC	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Philip H.
      Warren                             
      	 
	 	 	Philip
      H. Warren	 
	 	 	Its
      President

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