Document:

exh10-24_16709.htm

EXHIBIT 10.24

 

[ * ] =Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

 

EXCLUSIVE LICENSE AGREEMENT

 

This License Agreement (“Agreement”) is entered into as of this 21 day of Dec, 1999, between Arthur Keigler, an individual residing at [*] (“Inventor”) and All Wet Technology, Inc., a Delaware Corporate with its principal office at [*] (Licensee).

 

RECITAL

 

WHEREAS, Inventor has developed certain technology in Active Wafer Technology disclosed in the United States Patent Application, Serial No. 09/291,668, titled “METHOD OF AND APPARATUS FOR HANDLING THIN AND FLAT WORKPIECES AND THE LIKE”, filed April 14, 1999 (“Licensed Technology”);

 

WHEREAS, Licensee desires to become the exclusive licensee of the Licensed Technology” world-wide;

 

NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants contained herein, the parties hereto agree as follows:

 

 

DEFINITION

 

	
1. 

	
Patent Interests: Patent Interests mean all Inventor’s United States and other patents now pending, later filed or issued relating to the Licensed Technology, including the United States Patent Application, Serial No. 09/291,668, titled “METHOD OF AND APPARATUS FOR HANDLING THIN AND FLAT WORKPIECES AND THE LIKE”, filed April 14, 1999 (“Patent Application”).

 

	
2. 

	
Licensed Products: Licensed Products include any product manufactured and distributed using the said Patent Interests.

 

	
3. 

	
Confidential Information: Confidential Information includes any information, including the contents in a patent application and file wrapper, Inventor provides to Licensee under this Agreement in confidence. The terms and conditions of this Agreement shall also be considered Confidential Information.

 

	
4. 

	
Intellectual Property Rights: Inventor owns the Patent Interests and Confidential Information.

 

	
5.

	
Effective Date: Effective Date means the date this Agreement is executed by both parties.

  

  

  

 [ * ] =Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

 

EXCLUSIVE RIGHTS & TERMS

 

	
6. 

	
Exclusive Rights: Subject to all the terms and conditions of this Agreement,

 

Inventor hereby confers upon Licensee the word-wide exclusive license with the rights

 

	
a)  

	
to sublicense the Patent Interests;

 

	
b)  

	
to make, have made, use and sell the Licensed Products and the apparatus and equipment necessary therefor using the Patent Interests and Confidential Information; and

 

	
c)  

	
to prevent or enforce infringement of and unauthorized disclosure and use of the Patent Interests and Confidential Information.

 

	
7. 

	
Terms: As long as the Patent Application identified in the Patent Interests remains pending, valid, enforceable and unexpired.

 

	
8. 

	
Reservation: Nothing in this Agreement shall be construed as conveying to Licensee either expressly or by implication, any rights that are not expressly granted to Licensee.

 

 

ROYALTY & PAYMENTS

 

Royalty: So long as the Patent Application remains valid, enforceable and unexpired, and until this Agreement is terminated, Licensee shall

 

	
a)  

	
Pay to Inventor one-time non-refundable royalty in the amount of $0.00 upon execution of this Agreement; and

 

	
b)  

	
Pay to inventor annual running royalty in the amount of [*] for each Licensed Product sold, less any adjustments for returns and credits;

 

	
c)  

	
Submit an annual report to Inventor regarding Licensee’s gross and net revenues arising from and in connection with the Patent Interests, Confidential Information, and Licensed Products.

 

	
10.

	
Late Charge: Licensee shall make [*] late charge for any amount unpaid or withheld, in part or in whole, for each [*] that payment is overdue. The payment of any Late Charge shall not alter or limit any of Inventor’s other rights or claims under this Agreement resulting from Licensee’s default of the terms of this Agreement.

 

  

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11. 

	
Notice of Default and Cure Period: Non-Defaulting Party shall provide a written notice of default to the Defaulting Party by telecopy and by overnight express mail, e.g. Federal Express or DHL. Defaulting Party shall have [*] from the date of the notice to cure the default and to notify Inventor of such cure in writing.

 

 

RIGHTS & DUTIES

 

	
12. 

	
Inventor’s Rights:

 

	
a)  

	
Record Inspection: Inventor or his agent may inspect and copy Licensee’s company records concerning Licensee’s revenues relating to the Patent Interests. Any information disclosed or obtained from Licensee under the terms of this Agreement shall remain confidential, except as ordered by government agencies and/or competent court having jurisdiction over the subject matter of such information.

 

	
b)  

	
Discrepancy Report: If Inventor’s agent discovers any irregularities in Licensee’s company records, Inventor will provide a written notice of the finding, and Licensee shall provide an explanation to Inventor within [*] from the date of the Notice. If Inventor fails to receive a satisfactory response from Licensee, Licensee shall [*]

 

	
c)  

	
Notice and Inspection: Inventor shall provide Licensee with a [*] written advance notice of inspection. All inspections shall be conducted during normal business hours in such manner that is least disruptive to Licensee’s business and operation.

 

	
13. 

	
Licensee’s Duties:

 

	
a)  

	
Compliance: Licensee will comply with all applicable national, regional, provincial, and local government laws, regulations and ordinances of the United States, including those governing corporate, employment, safety, environmental, tax, import, transportation, work place related matters.

 

	
b)  

	
Intellectual Property Protection: If Inventor decides to file for or obtain a patent protection in one or more foreign countries, Licensee shall assist

  

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Inventor in all legal and regulatory requirements to the best of Licensee’s ability in securing Inventor’s patent, or other intellectual property rights, in the applicable countries. Licensee shall be responsible for all filing fees, and out of pocket expenses and costs in connection with the efforts described in this provision, in exchange for the exclusive license agreement.

 

	
c)  

	
Records: Licensee will maintain accurate records of all processing and transactions in connection with the installation, distribution and sale of the Licensed Products.

 

	
d)  

	
Corporate Changes. Licensee shall inform Inventor as soon as it is reasonably practicable of any changes in Licensee’s management, ownership, legal and financial interest, which may affect Licensee’s obligation to perform its duties in accordance with the terms and conditions of the Agreement.

 

	
e)  

	
Duty of Prosecution and Seeking Injunctive Relief: If there is any breach of Confidentiality Information or infringement of the Patent Interests, Licensee shall take prompt and all legal and management actions, at its own expenses, to protect Inventor’s Intellectual Property Rights. If Licensee is subject to or receiving a demand by a government agency or in a civil action, to disclose Confidential Information, in part or in whole, Licensee shall notify Inventor of such demand immediately and shall seek proper and timely protective relief. If Licensee fails to take an appropriate action to protect Inventor’s Intellectual Property Rights, Inventor may take any necessary steps to protect his Intellectual Property Rights in which event [*]

 

 

TECHNICAL ASSISTANCE

 

	
14. 

	
Consulting Service: Inventor shall, upon Licensee’s written request and at mutually acceptable schedule and terms, provide technical services to Licensee in connection with the Patent Interests and Confidential Information.

 

 

INTELLECTUAL PROPERTY PROTECTION

 

	
15. 

	
Intellectual Property Rights Protection: Licensee agrees

  

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 [ * ] =Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

	
a)  

	
not to challenge Inventor’s Intellectual Property Rights described herein;

 

	
b)  

	
to cooperate with Inventor in prosecuting, protecting, defending and registering the Intellectual Property Rights, if and when requested;

 

	
c)  

	
to monitor and immediately advise Inventor of any infringement or breach of Inventor’s Intellectual Property Rights; and to undertake the prompt enforcement and defense of Inventor’s Intellectual Property Rights;

 

	
d)  

	
to take full responsibility for all costs and expenses associated with the enforcement and defense of such violations, including but not limited to attorneys’ fees, investigative and court costs. [*]

 

 

CONFIDENTIALITY

 

	
16. 

	
Confidential Information Protection:

 

	
a)  

	
Handling: Licensee will hold Confidential Information in trust and confidence and will not, directly or indirectly, disclose, report, publish, license, transfer or otherwise use Confidential Information without the written consent and authorization from Inventor. No Confidential Information shall in any event be transmitted, communicated, delivered, directly or indirectly, to any third party not explicitly authorized to receive Confidential Information.

 

	
b)  

	
Disclosure to Employees: Licensee shall limit further disclosure of Confidential Information, in part or in whole, to its employees on need-to­know basis who are subject to confidentiality agreement or policy with Licensee sufficient to protect Inventor’s interest in maintaining the disclosed information as Confidential Information.

 

	
c)  

	
Patent and Confidentiality: The disclosure of certain information in a publication such as a United States or other foreign patent will not relieve Licensee of its obligation to maintain in confidence any Information not specifically disclosed in or fairly ascertainable from the publication or other disclosure.

  

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 [ * ] =Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

	
17. 

	
Non-Disclosure: Licensee hereby agrees not to disclose during the period of this Agreement any and all Confidential Information Licensee receives or receives access to, or obtains from Licensor. Licensee also agrees not to register this Agreement or any subsequent amendments or supplement agreements between the parties, with any government agency if it is likely to and/or would compromise the full confidentiality of Confidential Information.

 

 

WARRANTIES

 

	
18. 

	
Inventor’s Warranty to Licensee: LICENSOR DISCLAIMS ANY AND ALL WARRANTY OF FITNESS, MERCHANTABILITY, AND PATENTABILITY.

 

 

REPRESENTATIONS

 

	
19. 

	
Organization: Licensee represents to Inventor that it is a duly constituted corporation and is in and shall remain in good standing under the laws of the State or the country where it is incorporated.

 

	
20. 

	
Noninfringement: Inventor represents that to the best of its knowledge it is unaware of any patent or any other infringements arising out of the manufacture, use, sale, distribution, promotion or license of the Patent Interests and Licensed Products.

  

	
21. 

	
Inventor’s Representation: Inventor has not induced Licensee to enter into this Agreement, and has not provided warranty, express or implied, regarding infringement non-infringement of patent or other proprietary rights of third parties. Inventor shall not be liable and does not in any way undertake to indemnify Licensee for any infringement of any patent or other proprietary rights of third parties.

 

	
22. 

	
Licensee’s Representation: Licensee represents that all information provided or disclosed to Inventor under the terms of this Agreement or subsequent dealings in connection with the subject matter of this Agreement will be truthful and accurate.

 

 

TERMINATION

 

	
23. 

	
Termination of Agreement: This Agreement may be terminated by Inventor upon any of the following events:

 

	
a)   

	
any default or violation of the terms of this Agreement, unless such defaultor violation is cured as provided in the Agreement;

  

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b)  

	
in the event of Licensee’s voluntary or involuntary dissolution, receivership or bankruptcy, in which event Licensee shall give Inventor thirty (30) days written notice of such action;

 

	
c)  

	
in the event Licensee, any third party, or any government agencies file for or requests that the Inventor’s Patent Interests to be subject to a compulsory license;

 

	
d)  

	
as permitted under the terms of the Agreement; or

 

	
e)  

	
Unless otherwise specifically provided, all rights and obligations of Inventor and Licensee hereunder shall remain in effect throughout the term of this Agreement. Cancellation, expiration or other termination of this Agreement shall not relieve either party of any obligation arising under this Agreement which shall have accrued prior to such cancellation, expiration or other termination, but the right and license granted to Licensee under this Agreement shall thereby be revoked.

 

	
24.

	
Termination Obligations: Upon termination,

 

	
a)  

	
Licensee will immediately stop accepting new sublicensees;

 

	
b)  

	
Licensee shall return to Inventor any and all documents and records containing the Intellectual Property;

 

	
c)  

	
Licensee shall destroy any documents and records containing the Intellectual Property that are impractical to return to Licensor;

 

	
d)  

	
Licensee shall not disclose Confidential Information to a third party so long as Inventor maintains and has not disclosed Confidential Information to the public;

 

	
e)  

	
Licensee will be allowed Licensee to complete its obligations under its sublicense agreements within six (6) months after the notice of termination, unless extended in writing, provided that the Licensee complies with the applicable terms and conditions of this Agreement.

 

 

DAMAGES

 

	
25.

	
Liquidated Damages: The Parties have agreed that the reasonable value of Confidential Information disclosed by Inventor to Licensee is difficult to calculate.

  

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 [ * ] =Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

The Parties acknowledge and accept that the commercial advantage Confidential Information gives Licensor, however, is significant. Therefore, the Parties acknowledge that a reasonable value of Confidential Information as liquidated damages in the event Licensee discloses Confidential Information to the public or to a third party in violation of the terms of this Agreement shall be [*]

 

	
26. 

	
Damages: In the event the Liquidated Damages provision is deemed unenforceable by any court with a proper jurisdiction over the dispute arising out of and in connection with this Agreement, Inventor shall be entitled to [*] Inventor may further pursue any third parties for any breach arising out of or in connection with breach of the terms and conditions of this Agreement.

 

 

MISCELLANEOUS

 

	
27. 

	
Documents and Language: All documents and information disclosed under the terms of this Agreement by Inventor to Licensee shall be in the English language, and Inventor shall not be required to translate the information or documents to another language or to other units of measurement.

 

	
28. 

	
Relationship: Licensee is an independent licensee, not an agent, employee, subsidiary or affiliated company of Inventor. This is not a franchise agreement and does not create a partnership or joint venture. Each party shall not be liable to a third party for the other’s acts or omissions.

 

	
29. 

	
Indemnification:

 

	
a)  

	
Inventor is not responsible for any incidental and consequential damages or liabilities in connection with the Patent Interests, Confidential Information, and License Products, except as provided under the Agreement; and

 

	
b)  

	
Each party mutually agrees to hold the other harmless for any damages, injuries, or losses arising out of his or its [*]

  

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30. 

	
Injunctive Relief: In the event of a breach, the parties agree that the injured party shall be entitled to obtain preliminary, interlocutory and/or permanent injunctive relief to enforce the terms hereof or to prevent the other party from any threatened disclosure or unauthorized use of the Intellectual Property Rights.

 

	
31. 

	
Attorneys’ Fees and Costs: The prevailing party shall be entitled to recover reasonable attorneys’ fees, expert fees and other costs in the enforcement of this Agreement.

 

	
32. 

	
Severability: If any part of this Agreement is held void, the remaining parts will not be affected.

 

	
33. 

	
Modification: This Agreement may be changed only by writing signed by both parties.

 

	
34. 

	
Wavier: Any waiver of a breach by either party shall not be a waiver of any subsequent or other breach.

 

	
35. 

	
Force Majeure: Neither party shall be liable for any failure of or delay in performance of the parties’ obligations or responsibilities under the Agreement, if such failure or delay is due to any acts of God, strikes or labor disputes, or any other cause beyond the parties’ reasonable control. Each party agrees to notify the other party promptly of the occurrence of any such cause and to carry out its obligations and responsibilities as promptly as practicable after such cause is terminated.

 

	
36. 

	
Jurisdiction and Venue: The jurisdiction for all legal actions or proceedings arising out of this Agreement shall be governed by the laws of the State of Maryland and the United States of America, and the venue shall be in the courts of the United States District Court for the District of Maryland. The Parties agree to the personal jurisdiction of the United States and State of Maryland. If the parties are engaged in a litigation or in any other dispute form, the parties agree to seek protective order or to seal any information and records related to Confidential Information.

 

	
37. 

	
Notices: Notices shall be made mailed by overnight express mail, e.g. Federal Express or DFIL, and by telecopy to the representatives identified in this Agreement.

 

	
38. 

	
Interpretation and Conflicts: The parties acknowledge that they have negotiated the

  

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terms of the Agreement, have accepted the terms and conditions. The parties further acknowledge and included by reference the principles of freedom of contract in that to the extent there are conflicts between certain terms of   the Agreement and the laws of the applicable countries or the laws of the European Communities, the conflict shall be best resolved under the principle of freedom of contract. Furthermore, to the extent there are conflicts between the laws of the foreign countries and the laws of the United States, the laws of the United States shall apply.

 

	
39. 

	
Completeness: This Agreement contains the entire understanding between the parties.

 

	
40. 

	
Authorization: Those signing are authorized to bind Inventor and Licensee to the terms of this agreement.

 

 

 

	Inventor 	Licensee  	 
	 	 	 
	By: /s/ Arthur Keigler	By: /s/ Arthur Keigler	 
	 	 	 
	Name: Arthur Keigler 	Name: Arthur Keigler 	 
	Date: Dec. 21, 1999 	Title: President 	 
	Address:  [*] 	Date: Dec. 21, 1999 	 
	Tel:  [*] 	Address:  [*] 	 
	Fax:  [*] 	Tel:  [*] 	 
	Email:  [*] 	Fax:  [*] 	 
	 	Email:  [*]	 
	 	 	 

 

 

 

 

10ex10_1.htm

                                    EXHIBIT 10.1

 

                   $1,053,000.00                                                                                                                                                                                                                                                               March 31, 2010

QUICK-MED TECHNOLOGIES, INC.

SENIOR CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE RECEIVED, the undersigned, QUICK-MED TECHNOLOGIES, INC. (the “Borrower”), promises unconditionally to pay to the order of PHRONESIS PARTNERS, L.P., its successors or assigns (the “Lender”), at the Lender’s office at 130 E. Chestnut Street, Suite 403, Columbus, Ohio 43215, or at such other place as the Lender may from time to time designate, the principal amount of ONE MILLION FIFTY-THREE THOUSAND DOLLARS ($1,053,000.00) (the “Principal Amount”), together with interest on the unpaid Principal Amount outstanding from time to time at the rate or rates hereafter specified and any and all other sums which may be owing to the Lender by the Borrower pursuant to this Senior Convertible Promissory Note (the “Note”).  This Note evidences (i) the Borrower’s obligations under the Prior Note (defined below) in the principal amount of Three Hundred Seventy-Five Thousand Dollars ($375,000.00), together with unpaid accrued interest thereon of Seventy-Seven Thousand Eight Hundred Thirty Six Dollars ($77,836.00), and (ii) an additional loan made by the Lender to the Borrower on the date hereof in the principal amount of Six Hundred Thousand One Hundred Sixty-Four Dollars ($600,164.00).  The following terms shall apply to this Note:

1. Amendment of Prior Note.  This Note amends, restates and replaces the promissory note previously issued by the Borrower to the Lender on June 27, 2007, in the principal amount of Three Hundred Seventy-Five Thousand Dollars ($375,000.00) (the "Prior Note").  Accordingly, the terms of the Prior Note are superseded in their entirety by the terms of this Note.

 

2. Interest Rate.  Interest shall accrue on the outstanding Principal Amount at the rate of eight percent (8%) per annum.  Interest shall be calculated on the basis of a year of three hundred sixty-five (365) days applied to the actual days on which there exists an unpaid balance under this Note.

 

3. Interest Payments.  The Borrower shall pay accrued and unpaid interest on the Maturity Date, as the case may be and as hereinafter defined, and thereafter on demand until all sums due under this Note, whether principal, interest, or other sums, have been paid in full.

 

4. Principal.  Unless sooner paid or converted, the entire outstanding Principal Amount as well as all other sums under this Note that remain unpaid shall be due and payable on December 31, 2013 (the “Maturity Date”); provided that, the Borrower shall make amortized payments on the outstanding principal plus interest during the term of this Note depending on the free cash flow from operations in excess of anticipated cost from operations as determined in the discretion of the Borrower’s Board of Directors.

 

5. Prepayment.  Borrower may prepay any portion of the outstanding principal amount of this Promissory Note with 30 days’ prior written notice.

 

 

  

  

  

 

6. Conversion.  This Note shall be convertible into shares of Common Stock of the Borrower, on the terms and conditions set forth in this Section 6.

 

(a) Conversion Right.  Subject to the provisions of Section 6(c), at any time or times on or after the first date of this Note, the Lender shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into validly issued, fully-paid and nonassessable shares of Common Stock in accordance with Section 6(c), at the Conversion Rate (as defined below).

 

(b) Conversion Rate.  The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to Section 6(a) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).

 

(i) “Conversion Amount” means the portion of the Principal and interest to be converted, redeemed or otherwise with respect to which this determination is being made.

 

(ii) “Conversion Price” means  $0.60  per share of Common Stock.

 

(c) Mechanics of Conversion.

 

(i) Optional Conversion.  To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”), the Lender shall (A) transmit by facsimile (or otherwise deliver), for receipt on or prior to 5:00 p.m., Eastern Time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit B (the “Conversion Notice”) to the Borrower and (B) if required by Section 6(c)(iii), surrender this Note to a common carrier for delivery to the Borrower as soon as practicable on or following such date (or an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction).  The Borrower shall transmit by facsimile a confirmation of receipt of such Conversion Notice to the Lender and the Borrower’s transfer agent (the “Transfer Agent”).  The Transfer Agent shall issue and deliver to the address as specified in the Conversion Notice, a certificate or certificates, registered in the name of the Lender or its designee, for the number of shares of Common Stock to which the Lender shall be entitled.  If this Note is physically surrendered for conversion as required by Section 6(c)(iii) and the outstanding Principal of this Note is greater than the principal portion of the Conversion Amount being converted, then the Borrower shall as soon as practicable and in no event later than ten (10) Business Days after receipt of this Note and at its own expense, issue and deliver to the holder a new Note in accordance with Section 6(c)(ii) representing the outstanding Principal not converted.  The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.

 

(ii) Book-Entry.  Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Note in accordance with the terms hereof, the Lender shall not be required to physically surrender this Note to the Borrower unless (A) the full Conversion Amount represented by this Note is being converted or (B) the Lender has provided the Borrower with prior written notice (which notice may be included in a Conversion Notice) requesting physical surrender and reissue of this Note.  The Lender and the Borrower shall maintain records showing the Principal converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Lender and the Borrower, so as not to require physical surrender of this Note upon conversion.

 

(iii) Legend.  The Converted Shares shall bear a legend that reads:

 

THE SECURITIES EVIDENCED BY THIS STOCK CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED 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, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

 

7. Adjustment.  If the Borrower at any time on or after the date of this Note subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced.  If the Borrower at any time on or after the Closing Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased.

 

 

  

  

  

 

8. Negative Covenants. During the term of this Promissory Note and until all obligations hereunder are satisfied,  Borrower shall not, without first obtaining the affirmative written consent of the Lender, which shall not be unreasonably withheld: (i) pay or declare any dividend or distribution on any common stock or preferred stock (“Capital Stock”), or apply any of its assets to the redemption, purchase or acquisition, directly or indirectly, through subsidiaries or otherwise, of any share capital or assets of another entity; (ii)  sell, transfer, lease, offer as collateral or otherwise dispose of any of its Capital Stock, assets or properties other than in the ordinary course of business transactions or as unanimously approved by the Board of Directors; (iii)  enter into any  joint venture, business combination, merger, consolidation, recapitalization or other reorganization or permit any subsidiary to enter into any merger, consolidation, recapitalization or other reorganization; (iv) enter into any agreement, or allow any subsidiary, to enter any agreement to issue or offer any security, including, without limitation, any equity security, convertible note, secured note or promissory note and (v)  amend or repeal any provision of, or add any provision to, the Borrower's certificate of incorporation or by-laws other than for subject matters not involving the items subject to Lender’s prior written consent listed above; provided however, Lender shall not be obligated to provide affirmative written consent, if in Lender’s reasonable opinion, consent to any of the foregoing actions would: (a) impair Lender’s ability to be repaid under this Note or (b) impair Borrower’s ability to perform its obligations under the Share Exchange Agreement.  Without the prior written consent of the Lender, the Borrower shall not amend any of the Other Senior Notes (defined below), and the Borrower shall treat the indebtedness evidenced thereby as if it were Senior Indebtedness (as defined in the Intercreditor Agreement) under the Intercreditor Agreement.

 

9. Repayment Extension.  If any payment of principal or interest shall be due on a Saturday, Sunday or any other day on which banking institutions in the State of Florida are required or permitted to be closed, such payment shall be made on the next succeeding business day and such extension of time shall be included in computing interest under this Note.

 

10. Manner and Application of Payments.  All payments due hereunder shall be paid in lawful money of the United States of America which shall be legal tender in payment of all debts and dues, public and private, in immediately available funds, without offset, deduction or recoupment. Any payment by check or draft shall be subject to the condition that any receipt issued therefore shall be ineffective unless the amount due is actually received by the Lender.

 

11. Collateral; Security Interest.  The Borrower hereby grants to the Lender as collateral security for its obligations hereunder a security interest in and to all right, title and interest of the Borrower in and to all of the Borrower’s personal property assets of each and every type more specifically identified in Article 9 of the Uniform Commercial Code as in effect in the State of Florida, whether now owned or hereafter acquired, wherever located.  The Lender is hereby authorized to file a financing statement naming the Borrower, as debtor, and the Lender, as secured party, in respect of all such collateral.  Lender’s interest in the collateral security shall be limited to the outstanding principal and interest under this Note.  Notwithstanding the foregoing, the Lender shall not unreasonably withhold the Borrower’s request to restructure the security interest in case of a future debt or equity financing.

 

12. No Other Outstanding Notes. The Borrower represents to the Lender that it has no outstanding obligations for borrowed monies except as previously disclosed to the Lender and that this Note shall rank senior to all outstanding obligations of the Borrower; provided, however, that (i) this Note shall rank pari passu with certain debt obligations owed to Michael Granito in accordance with the provisions of the Intercreditor Agreement dated as of September 27, 2007 among Michael Granito, the Lender and the Borrower, as amended (the “Intercreditor Agreement”), and (ii) this Note shall rank pari passu in right of payment with the $150,000 senior convertible note issued to 2849232 CANADA INC and the $100,000 senior convertible note issued to Peter L. Berry Holdings, Inc. (collectively, the “Other Senior Notes”) to the same extent as if the debt evidenced by such Other Senior Notes was included in the Senior Indebtedness (as defined in the Intercreditor Agreement) under the Intercreditor Agreement..

 

13. Events of Default.  The occurrence of any one or more of the following events shall constitute an “Event of Default” under this Note:

 

(a) the failure of the Borrower to pay any sum due under this Note within three (3) days after such payment was first due, whether by demand or otherwise;

 

(b) the occurrence or commencement of a liquidation or bankruptcy or similar proceeding in respect of the Borrower or any of its assets; and

 

(c) the breach by Lender of any of the Negative Covenants set forth in Section 8 of this Note.

 

 

  

  

  

 

14. Rights and Remedies Upon Default.  Upon the occurrence of an Event of Default hereunder, the Lender, in the Lender’s sole discretion and without notice to the Borrower, may: (a) declare the entire outstanding Principal Amount, together with all accrued interest and all other sums due under this Note to be immediately due and payable, and the same shall thereupon become immediately due and payable without presentment, demand or notice which are hereby expressly waived; (b) exercise its right of setoff against any money, funds, credits or other property of any nature whatsoever of the Borrower now or at any time hereafter in the possession of, in transit to or from, under the control or custody of, or on deposit with, the Lender in any capacity whatsoever, including without limitation, any balance of any deposit account and any credits with the Lender; (c) terminate any outstanding commitments of the Lender to the Borrower; (d) exercise all rights and remedies of a secured party in respect of the collateral referred to above as provided under Article 9 of the Uniform Commercial Code as in effect on the date hereof in the State of Florida; and (e) exercise any or all rights, powers, and remedies now or hereafter existing at law, in equity, by statute or otherwise.

 

15. Remedies Cumulative.  Each right, power and remedy of the Lender hereunder, or now or hereafter existing at law, in equity, by statute or otherwise shall be cumulative and concurrent, and the exercise or beginning of the exercise of any one or more of them shall not preclude the simultaneous or later exercise by the Lender of any or all such other rights, powers or remedies. No failure or delay by the Lender to insist upon the strict performance of any one or more provisions of this Note or to exercise any right, power or remedy consequent upon a breach thereof or default hereunder shall constitute a waiver thereof or preclude the Lender from exercising any such right, power or remedy. By accepting full or partial payment after the due date of any amount of principal of or interest on this Note, or other amounts payable on demand, the Lender shall not be deemed to have waived the right either to require prompt payment when due and payable of all other amounts of principal of or interest on this Note or other amounts payable on demand, or to exercise any rights and remedies available to it in order to collect all such other amounts due and payable under this Note.

 

16. Maximum Rate of Interest.  Notwithstanding any provision of this Note to the contrary, the Borrower shall not be obligated to pay interest pursuant to this Note in excess of the maximum rate of interest permitted by the laws of any state determined to govern this Note or the laws of the United States applicable to loans in such state. If any provisions of this Note shall ever be construed to require the payment of any amount of interest in excess of that permitted by applicable law, then the interest to be paid pursuant to this Note shall be held subject to reduction to the amount allowed under applicable law and any sums paid in excess of the interest rate allowed by law shall be applied in reduction of the principal balance outstanding pursuant to this Note.  The Borrower acknowledges that it has been contemplated at all times by the Borrower that the laws of the State of Florida will govern the maximum rate of interest that it is permissible for the Lender to charge the Borrower pursuant to this Note.

 

17. Waiver of Presentment.  The Borrower waives demand, presentment, protest, and notice of demand, of non-payment, of dishonor, protest and all other demands in connection with the delivery, acceptance, performance or enforcement of this Note.

 

18. Choice of Law; Forum Selection; Consent to Jurisdiction.  This Note shall be governed by, construed and interpreted in accordance with the laws of the State of Florida. The Borrower hereby (a) agrees that all disputes and matters whatsoever arising under, in connection with, or incident to this Note shall be litigated, if at all, in and before a court located in the State of Florida to the exclusion of the courts of any other state or country and (b) irrevocably submits to the non-exclusive jurisdiction of any Florida court or federal court sitting in the State of Florida in any action or proceeding arising out of or relating to this Note, and hereby irrevocably waives any objection to the laying of venue of any such action or proceeding in any such court and any claim that any such action or proceeding has been brought in an inconvenient forum. A final judgment in any such action or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other manner provided by law.

 

 

  

  

  

 

19. Service of Process.  The Borrower hereby consents to process being served in any suit, action or proceeding instituted in connection with this Note by the mailing of a copy thereof to the Borrower by certified mail, postage prepaid, return receipt requested. The Borrower hereby irrevocably agrees that such service shall be deemed to be service of process upon the Borrower in any such suit, action or proceeding. Nothing in this Note shall affect the right of the Lender to serve process in any other manner otherwise permitted by law, and nothing in this Note will limit the right of the Lender otherwise to bring proceedings against the Borrower in the courts of any other jurisdiction or jurisdictions.

 

20. Notice.  Any notice, demand, request or other communication which the Lender or the Borrower may be required to give hereunder shall be in writing and shall be effective when delivered and at the address provided below:

 

	
  

	
(a)

	
if to the Lender, to Phronesis Partners, L.P. at 130 E. Chestnut Street, Suite 403, Columbus, Ohio 43215; and

 

	
  

	
(b)

	
if to the Borrower, to it at Quick-Med Technologies, Inc., 902 N.W. 4th Street, Gainesville, Florida 32601, Attention: Chief Financial Officer.

 

Notwithstanding anything to the contrary, all notices and demands for payment from the Lender actually received in writing by the Borrower shall be considered to be effective upon the receipt thereof by the Borrower regardless of the procedure or method utilized to accomplish delivery thereof to the Borrower.

 

21. Miscellaneous.  Time is of the essence under this Note. The paragraph headings of this Note are for convenience only, and shall not limit or otherwise affect any of the terms hereof.  This Note and the Exhibits hereto, if any, constitute the entire agreement between the parties with respect to their subject matter and supersede all prior letters, representations, or agreements, oral or written, with respect thereto.  The Lender may, without notice to or consent of the Borrower, sell, assign, pledge or transfer this Note or sell, assign, transfer or grant participations in all or any part of the obligations evidenced by this Note to others at any time and from time to time, and the Lender may divulge to any potential assignee, transferee or participant all information, reports, financial statements and documents obtained in connection with this Note or otherwise.  No modification, release, or waiver of this Note shall be deemed to be made by the Lender unless in writing signed by the Lender, and each such waiver, if any, shall apply only with respect to the specific instance involved. No course of dealing or conduct shall be effective to modify, release or waive any provisions of this Note.  This Note shall inure to the benefit of and be enforceable by the Lender and the Lender’s successors and assigns and any other person to whom the Lender may grant an interest in the obligations evidenced by this Note and shall be binding upon and enforceable against the Borrower and the Borrower’s successors and assigns. Whenever used herein, the singular number shall include the plural, the plural the singular, and the use of the masculine, feminine, or neuter gender shall include all genders. This Note may be executed in any number of counterparts, all of which, when taken together shall constitute one Note.

 

[signature page follows]

 

 

  

  

 

 

 

IN WITNESS WHEREOF, the Borrower has duly executed this Note in Concord, Massachusetts as of the day and year first hereinabove set forth.

 

 

	
  

	
BORROWER:

 

 

	
  

	
QUICK-MED TECHNOLOGIES, INC.

 

	
  

	
By:__J Ladd Greeno___________________

	
  

	
Name: J Ladd Greeno

	
  

	
Title: CEO

	
  

	
LENDER:

	
  

	
PHRONESIS PARTNERS, L.P.

	
  

	
By:___James Wiggins___________________

	
  

	
Name:  James Wiggins

	
  

	
Title: General Partner

 

  

  

 

 

 

 

EXHIBIT A

QUICK-MED TECHNOLOGIES, INC.

CONVERSION NOTICE

 

Reference is made to the Senior Convertible Note (the “Note”) issued to the undersigned by Quick-Med Technologies, Inc. (the “Company”).  In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares of Common Stock (as defined in the Note), as of the date specified below.

 

	
Date of Conversion:

	  
	
Aggregate Conversion Amount to be converted:

	  
	
Please confirm the following information:

	
Conversion Price:

	  
	
Number of shares of Common Stock to be issued:

	  
	
Please issue the Common Stock into which the Note is being converted in the following name and to the following address:

	
Issue to:

	  
	  	  
	  	  
	
Facsimile Number:

	  
	
Authorization:

	  
	
By:

	  
	
Title:

	  
	
Dated:

	  
	
Account Number:

	  
	
  (if electronic book entry transfer)

	  
	
Transaction Code Number:

	  
	
  (if electronic book entry transfer)

	  
	  	  

 

 

 

  

  

  

 

ACKNOWLEDGMENT

 

The Company hereby acknowledges this Conversion Notice and hereby directs [Insert Name of Transfer Agent] to issue the above indicated number of shares of Common Stock from the Company and acknowledged and agreed to by [Insert Name of Transfer Agent].

 

	
QUICK-MED TECHNOLOGIES, INC.

	
By:                                                                

	
Name:

	
Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}]]