Document:

exhibit10-3.htm

 

 

Exhibit 10.3

 

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of ____________, 2015 by and between Q BioMed, Inc., a Nevada corporation, with headquarters located at 501 Madison Avenue 14th Floor New York, NY 10022 (the “Company”), and __________, with its address at ______________ (the “Buyer”). The Company is defined as “the Borrower” and the Buyer is defined as “the Lender”, under the terms of the 10% Convertible Promissory Note(s) issued thereunder, issued under the terms of this Agreement.

 

WHEREAS:

 

A.           The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”);

B.           Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement one or more 10% convertible Note(s)s of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of $______________ (together with any Note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, a “Note(s)” in the singular and “Note(s)s” in the plural), convertible into shares of common stock, $0.001 par value per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note(s).

C.           The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note(s) as is set forth immediately below its name on the signature pages hereto; and

NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

1.           Purchase and Sale of Note(s).

 

a.           Purchase of Note(s). Commencing on the date hereof, the Buyer elects to purchase and the Company shall issue and sell to the Buyer such principal amount of Note of $__________.

_____

Compnay Initials

  

Exhibit 10.3, 1

  

 

b.           Form of Payment. On each Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note(s) to be issued and sold to it at the Closing (as defined below) (each a “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note(s) in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on each Note, and (ii) the Company shall deliver such duly executed Note(s) on behalf of the Company, to the Buyer, against delivery of such Purchase Price.

c.           Closing Date. The date and time of the issuance and sale of the Note pursuant to this Agreement (“Closing Date”) shall the date of this Agreement. The closing of the transactions contemplated by this Agreement (each a “Closing”) shall occur on the Closing Date.

2.           Buyer’s  Representations  and  Warranties. The  Buyer  represents  and warrants to the Company that as of the date hereof and on each Closing Date:

a.           Investment Purpose. The Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note, such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with the Note, the “Securities”) for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.

b.           Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).

c.           Reliance on Exemptions. The Buyer understands that the  Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

d.           Information. The Buyer and its advisors, if any, have been, and for so long as the Note remainsoutstanding will continue to be, furnished with all materials relating  to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for so long as the Note remainsoutstanding will continue to be, afforded the opportunity to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will  not disclose such information unless such information is disclosed to the public prior to or   promptly

  

Exhibit 10.3, 2

  

 

following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations and warranties contained  in Section 3 below. The Buyer understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company's representations and warranties made herein.

e.           Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.

f.           Transfer or Re-sale. The Buyer understands that (i) the sale or re- sale of the Securities has not been and is not being registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise  transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant  to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

g.           Legends. The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):

  

Exhibit 10.3, 3

  

 

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR  SALE,  SOLD,  TRANSFERRED OR  ASSIGNED

 

(I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED  BY THE SECURITIES.”

 

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, within 2 business days, it will be considered an Event of Default under the Note.

h.           Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf  of  the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

i.           Residency. The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the signature pages hereto.

3.           Representations   and   Warranties   of   the   Company.  The   Company represents and warrants to the Buyer that as of the date herein and on each Closing Date:

  

Exhibit 10.3, 4

  

 

a.           Organization and Qualification. The Company and each of its subsidiaries, if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.

b.           Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

c.           Issuance of Shares. The Conversion Shares are duly authorized  and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability  upon the holder thereof.

d.           Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance of the Conversion Shares upon conversion of the Note. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

e.           No Conflicts. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws

  

Exhibit 10.3, 5

  

 

 

and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a material adverse effect). All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company is not in violation of the listing requirements of the Over-the-Counter Bulletin Board (the “OTCBB”) or applicable trading market and does not reasonably anticipate that the  Common Stock will be delisted by the OTCBB or applicable trading market in the foreseeable future, nor are the Company’s securities “chilled” by FINRA. The Company and its subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

 

f.           Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its subsidiaries, threatened against or affecting the Company or any of its subsidiaries, or their officers or directors in their capacity as such, that could have a material adverse effect. Schedule 3(f) contains a complete list and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its subsidiaries, without regard to whether it would have a material adverse effect. The Company and its subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

g.           Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents to the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.

h.           No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers  or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.

i.           Title to Property. The Company and its subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal

  

Exhibit 10.3, 6

  

 

 

property owned by them which is material to the business of the Company and its subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in Schedule 3(i) or such as would not have a material adverse effect. Any real  property and facilities held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as would not have a material adverse effect.

j.           Breach of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default under the Note.

	
  

	
4.

	
COVENANTS.

 

a.           Expenses. At the Closing, the Company shall reimburse Buyer for expenses incurred by them in connection with the negotiation, preparation, execution, delivery and performance of this Agreement and the other agreements to be executed in connection herewith (“Documents”), including, without limitation, reasonable attorneys’ and consultants’ fees and expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Documents or any consents or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions contemplated by the Documents. When possible, the Company must pay these fees directly, otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice by the Buyer or the submission of an invoice by the Buyer.

b.           Listing. The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Conversion Shares from time to time  issuable upon conversion of the Note. The Company will obtain and, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCBB, OTC PINK or any equivalent replacement exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York Stock Exchange (“NYSE”), or the American Stock Exchange (“AMEX”) and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any notices it receives from the OTCBB, OTC PINK and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges and quotation systems.

c.           Corporate Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale of all or

  

Exhibit 10.3, 7

  

 

substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTCBB, OTC PINK, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

d.           No Integration. The Company shall not make any offers or sales  of any security (other than the Securities) under circumstances that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable to the Company or its securities.

e.           Breach of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an event of default under the Note.

	
  

	
5.

	
Governing Law; Miscellaneous.

 

a.           Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the  transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state and county of New York. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

b.           Counterparts; Signatures by Facsimile. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

  

Exhibit 10.3, 8

  

 

 

c.           Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

d.           Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

e.           Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than  by an instrument in writing signed by the majority in interest of the Buyer.

f.           Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to  such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

	
  

	
If to the Company, to: Q BioMed, Inc.

501 Madison Ave 14th Floor

New York, NY 10022

Attn: Denis Corin, President.

If to the Buyer:

 

Attn:

  

Exhibit 10.3, 9

  

Each party shall provide notice to the other party of any change in address.

g.           Successors and Assigns. This Agreement shall be binding upon  and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, the Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.

 

h.           Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

i.           Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

j.           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 carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

k.           No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

l.           Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or  in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

  

Exhibit 10.3, 10

  

 

 

IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

 

 

QBioMed, Inc.

 

By:___________________________

 

 

Name:_________________________  

 

 

Title: Denis Corin, President

 

By:________________________ 

 

 

Name:______________________

 

 

Title:_______________________

Exhibit 10.3, 11exhibit10-4.htm

 

 

Exhibit 10.4

 

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS NOTE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO AN EXEMPTION UNDER, OR IN A TRANSACTION NOT SUBJECT TO, SAID ACT.

 

Q BIOMED, INC.

 

CONVERTIBLE NOTE

 

ORIGINAL ISSUE DATE: __________, 2016                                                                                                                      U.S. $_______

 

THIS CONVERTIBLE NOTE, (this “Note”) provided, dated and made effective as of _____________ (the “Effective Date”).

 

	
FROM:

	
Q BIOMED, INC., a company incorporated under the laws of the State of Nevada, U.S.A., and having an address for notice and delivery located at c/o SOVR Law, 501 Madison Avenue – 14th Floor, New York, NY 10022 (the “Borrower”);

 

	
TO

	
___________________, having an address for notice and for delivery located at, _______________________________including its successors or assigns, the “Lender”);

 

(the Borrower and the Lender being hereinafter singularly also referred to as a “Party” and collectively referred to as the “Parties” as the context so requires).

 

FOR VALUE RECEIVED, and subject to the other terms and conditions hereof, the Borrower hereby promises to pay to the Lender the aggregate sum of _______________________ (U.S.$____________), in lawful money of the United States (hereinafter referred to as the “Principal Sum”) or in Shares (as defined in Section 1(a) of this Note) or a combination thereof on or prior to the 18-month anniversary of the Effective Date (“Maturity Date”).

 

1. Material Terms.

 

(a)           Conversion. Subject to subparagraph (1)(a)(3) hereof, until the Maturity Date, the Lender has the exclusive right to elect conversion of any amount due under this Note, including the entire Principal Sum and Interest (each, a “Conversion”), into shares of the Borrower’s common stock (“Shares”) at a conversion price per share equal to:

 

(1)           the lesser of: (A) a forty percent (40%) discount to the average closing price for the ten (10) consecutive trading days immediately preceding the date a notice of Conversion (Exhibit A) is delivered via email or (B) one dollar fifty-five cents ($1.55) per share, but in no event shall the Conversion ever be lower than one dollar twenty-five cents ($1.25) per share (“Floor Price”); or

 

  

Exhibit 10.4, 1

  

(2)           five dollars ($5.00) per share if the average VWAP (as defined below) as calculated using the arithmetic average of the VWAPs for the ten (10) Trading Days immediately preceding the Maturity Date and shall automatically convert into such Shares on the Maturity Date.

 

(3)           If the Borrower’s Shares are up-listed to senior exchange such as the AMEX or NASDAQ, all monies due under this Note, including Principal Sum and Interest, shall automatically convert into Shares pursuant to the applicable formula in sub-paragraph (1) or (2) above.

 

(4)           If the average VWAP (as defined below) as calculated using the arithmetic average of the VWAPs for the ten (10) Trading Days immediately preceding the Maturity Date is less than one dollar twenty-five cents ($1.25) per share, then the Lender has the right to demand repayment of all monies due under this Note, including Principal and Interest.

 

(b) Interest. The Principal shall accrue at an annual interest rate of 10% (“Interest”).

 

(c) Payment with Shares. If a payment is to be made in Shares by way of a Conversion, then the number of Shares paid shall be in an amount equal to the amount of the Principal Sum and/or any accrued interest thereon that Lender elects to have paid in Shares divided by the Conversion Price. Pursuant to the prior provisions regarding Conversion, all Shares shall be delivered to Lender or its designated broker within five Trading Days of the date on which the Lender notifies the Borrower of its election to convert all or a portion of this Note (the “Conversion Date”).

 

(d) Failure to deliver Shares.  If the Lender informs the Borrower that a payment is to be made in Shares by way of a Conversion and the Lender or its counsel provides the Borrower’s transfer agent with an opinion that such Shares may be delivered without transfer restrictions, but the Borrower fails to deliver the Shares in accordance herewith (a “Delivery Failure”) AND the Borrower fails to cure such Delivery Failure within 10 business days from the date of such Delivery Failure, then such shall constitute a default hereunder, and, in addition to delivering such Shares, the Borrower shall also deliver to Lender additional Shares equal to 1% of all the Shares that were to be delivered hereunder for each additional ten-Trading-Day period during which the Shares are not so delivered (collectively, the “Additional Shares).  If a Delivery Failure occurs, the Lender may rescind its decision to receive payment in Shares at any time prior to delivery of the Shares; provided that in such case, Borrower shall still be required to deliver all Additional Shares that accrued prior to such rescission. Delivery of any Additional Shares shall not reduce the outstanding balance of this Note and none of the remedies provided to the Lender in this subsection shall limit any other remedies of the Lender hereunder or under any other agreement.

 

(e)           Most Favored Nations. Regardless of the Floor Price, during the period from the date of this Note through the Maturity Date, the Borrower shall not enter into any additional, or modify any existing, agreements with any existing or future investors of the Borrower that establish rights or otherwise benefit such investor(s) resulting in material rights or benefits more favorable to such investor in relation to the Lender, unless, in any such case, the Lender has been provided with such rights and benefits. However, in no event shall the conversion of any promissory note issued with terms materially the same as this Note whether it be issued prior or subsequent to the issuance of this Note, trigger the protections afforded herein.

 

  

Exhibit 10.4, 2

  

2. Events of Default. Unless waived in writing by the Lender, the Borrower shall be in default of this Note, the Principal Sum and all other amounts outstanding hereunder will become immediately due and payable on demand by the Lender, and the Borrower shall become liable to the Lender for all of Lender’s reasonable legal expenses (as determined by the Borrower’s current auditor, in the event of a dispute) in enforcing the terms of this Note, in any of the following events:

 

(a) if an order is made or a resolution is passed or a petition is filed for the winding-up, dissolution, liquidation or amalgamation of the Borrower;

 

(b) if the Borrower makes an assignment or proposal or a bankruptcy petition is filed or presented against the Borrower or the Borrower otherwise becomes subject to the provisions of any legislation for the benefit of its creditors or otherwise acknowledges its insolvency;

 

(c) if any execution, sequestration, extent or any other process of any kind becomes enforceable against the Borrower and is not satisfied within 30 calendar days;

 

(d) if the Borrower ceases or demonstrates an intention to cease to carry on the Borrower’s business;

 

(e) if the Borrower carries on any business that it is restricted from carrying on by its charter documents or by law;

 

(f) if the Borrower fails to make any payment as set out in this Note, including without limitation failing to deliver Shares within the timeframe set forth therein;

 

(g) if the Borrower fails to comply with or perform under any other provision of this Note; or

 

(h) if the Borrower materially defaults on the terms of any other debt that is currently outstanding or that is subsequently issued to the Lender or any third party.

 

(i) The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

 

(j) Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $150,000, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld

 

(k) Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

 

  

Exhibit 10.4, 3

  

(l) The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC Markets (which shall include OTCPink, OTCQB and OTCQX)  or the equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.

 

(m) The Borrower shall fail to comply in any material respect with the reporting requirements or obligations of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements or obligations of the Exchange Act.

 

(n) Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

(o) Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

 

(p) The failure by Borrower to maintain any material intellectual property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future).

 

(q) The restatement of any financial statements filed by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note.

 

(r) The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice to the Holder.

 

(s) In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to section 1.3 on the note (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower. Additionally, In the event that the Share Reserve has been depleted and Borrower Fails to cause the increase of the number of shares within 3 business days of the reserve being depleted.

 

  

Exhibit 10.4, 4

  

(t) Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

 

(u) the Borrower fails to remain current in its filings with the SEC for more than 30 days after the filing deadline.

 

(v) after 12 months following the date the Borrower no longer deems itself a shell as reflected in a ’34 Act filing on the Securities and Exchange’s Edgar filing system, the Lender is unable to convert this Note  into free trading shares for any reason, including, but not limited to, the Lender’s inability to sell the Borrower’s free trading shares on the market, and is not remedied within 30 days after such event arises.

 

(w) if, at any time, the Borrower fails to maintain the amount of Reserved shares, as specified in the Reserve Letter.

 

(x) Fundamental Change of Management.  In the event that Denis Corin is no longer a senior officer, director or “Affiliate” as defined in the Exchange Act of 1934, the Lender shall have the right to accelerate payment of all unpaid monies due under this Note.

 

The Lender may waive in writing any default by the Borrower in the observance or performance of any covenant, agreement or condition contained in this Note or any other event which without such waiver would cause the Principal Sum and Interest hereby to be immediately due and payable but no such waiver or other act or omission of the Lender will extend to or affect any subsequent default or event or the rights resulting therefrom.

 

  

Exhibit 10.4, 5

  

3. Covenants. The Borrower will at all times until payment in full of this Note and all interest due thereon:

 

(a) give to the Lender any information which it may reasonably require relating to the business of the Borrower, and upon request furnish access to its books and accounts and records at all reasonable times;

 

(b) maintain and preserve its charter and corporate organization in good standing and, subject to all the provisions herein contained, diligently preserve all the rights, powers, privileges and goodwill owned by the Borrower;

 

(c) conduct the Borrower’s business in a proper and businesslike manner; and

 

(d) take all action necessary to at all times have authorized, and reserved for the purpose of issuance, such number of Shares as shall be necessary to effect the full conversion of this Note.

 

4. Miscellaneous.

 

(a) The Lender agrees to pay for or reimburse any reasonable legal fees (as determined by the Borrower’s current auditor in the event of a dispute) incurred by the Borrower related to converting or collecting upon this Note.

 

5. Definitions.

 

For purposes of this Note:

 

“Trading Day” means any day on which the Borrower’s common stock is traded on the OTCQB, or, if the OTCQB is not the principal trading market for the common stock, then on the principal securities exchange or securities market on which the common stock is then traded, provided that “Trading Day” shall not include any day on which the common stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the common stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Lender.

 

“VWAP” means, for the common stock of the Borrower as of any date, the dollar volume-weighted average price for such security on the principal market (or, if the principal market is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC).

 

  

Exhibit 10.4, 6

  

5. Assignment. This Note and all its terms and conditions will enure to the benefit of the Lender and its successors and assigns, and will be binding upon the Borrower and the Borrower’s successors and assigns.  The Lender may not assign this Note without the written permission of the Borrower.

 

6. Governing Law. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Borrower hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

 

 

	
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed as of the Effective Date set out above.

Q BIOMED, INC.

 

	
By: _________________________________

	
Name: Denis Corin

	
Title: President

 

	
IN WITNESS WHEREOF, the Lender has caused this Note to be duly executed as of the Effective Date set out above.

Lender

 

	
By: _________________________________

	
Name:

	
Title:

 

  

Exhibit 10.4, 7

  

Exhibit A

NOTICE OF CONVERSION

 

The undersigned, the holder of the Promissory Note dated ___________, 2015 in the principal amount of $______________, hereby surrenders such Note for conversion into ___________ shares of the restricted Common Stock of Q BioMed Inc., in exchange of the principal balance of the Note and any and all unpaid and accrued interest thereon representing ____% of the total unpaid principal and interest amount of such Note, and requests that the certificates for such shares be issued in the name of, and delivered to:

 

Name: ________________________________

 

Delivery Address: ________________________________________________________________

 

Shareholder SSN or TIN: ________________________________

 

As a result, the outstanding balance including principal and interest is now $______________ and the note shall be amended and reissued as of the date of this notice.

 

Dated:

 

 

__________________________

Name:

(Signature must conform in all respects to name of Holder as specified on the face of the Note)

 

 

Agreed to and Accepted this ___________ day of ______, 20__

 

 

 

 

Q BIOMED INC.

 

 

By:_________________________

     Denis Corin, President

Exhibit 10.4, 8

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