EXHIBIT 10.57
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CONVERTIBLE PROMISSORY NOTE
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$100,000 April 4, 2000
1. AMOUNT; MATURITY. FOR VALUE RECEIVED, the undersigned, GENETIC
VECTORS, INC., a Florida corporation (the "MAKER"), promises to pay to MR.
DONALD K. HEAP (the "HOLDER"), the principal sum of one hundred thousand
dollars ($100,000), which principal sum shall mature on the day that is one
hundred and eighty (180) days from the date hereof (the "MATURITY DATE") and
shall bear simple interest at the rate set forth herein.
2. INTEREST. Interest shall accrue as of the date of this Note at the
simple interest rate of twelve percent (12%) per annum. All accrued but
unpaid interest shall be due and payable on the Maturity Date.
3. MODE OF PAYMENT. All payments of principal and interest due under this
Note shall be made in legal tender in the United States of America and delivered
to the Holder at or, at the option of the Holder, in such other manner and at
such other place as the Holder shall have designated to the Maker in writing.
4. PREPAYMENT.
(a) This Note may be voluntarily prepaid, without penalty or premium, in
whole or in part, at any time and from time to time. Any prepayment must include
all accrued interest on the principal being prepaid, through the date of
prepayment.
(b) Subject to Section 5 hereof, this Note shall be mandatorily prepaid in
the event that the Maker closes an offering of its securities, whether through
one or more private placements or secondary public offerings, in which the Maker
raises gross proceeds from such transaction or transactions of at least
$5,000,000. The Maker shall have fifteen (15) business days to make a mandatory
prepayment to the Holder of this Note pursuant to this Section 4(b).
5. The Holder hereof shall have the following conversion rights:
(a) Any Holder of this Note shall have the right at any time prior to the
payment in full of the principal balance of this Note to convert all (but
not less than all) amounts due under this Note into fully paid and
non-assessable shares of the Maker's common stock, $0.001 par value per share
(the "COMMON STOCK"). The number of shares of Common Stock (the "CONVERSION
SHARES") into which this Note may be converted shall be determined by dividing
(a) the sum of all amounts due under this Note (including, without limitation,
all principal and accrued but unpaid interest) up to and including the
Conversion Date (as defined below) by (b) Five Dollars (US $5.00) per share (as
adjusted in accordance with Section 5(d) hereof) (the "CONVERSION PRICE"). No
fractional shares of Common Stock or scrip representing fractional shares shall
be issued upon conversion of this Note. Instead of any fractional shares of
Common Stock which would otherwise be issuable upon conversion of the Note, the
Maker shall pay to the Holder a cash adjustment in respect of such fraction.
(b) To exercise his conversion privilege, the Holder of this Note shall
surrender the original Note representing the debt obligation being converted to
the Maker at its principal office, and shall give written notice to the Maker at
the office that the Holder elects to convert such Note. The Note surrendered
shall be accompanied by proper notice of waiver of the debt obligation in the
form required by the Maker. The date when such written notice is received by the
Maker, together with the original Note representing the debt obligation being
converted and all other instruments required by the Maker, shall be the
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"CONVERSION DATE." As promptly as practicable after the Conversion Date, the
Maker shall issue and deliver to and in the name of the Holder a certificate or
certificates for the Conversion Shares. Such conversion shall be deemed to have
been effective on the Conversion Date and Holder shall be deemed to have become
the Holder of record of the Conversion Shares at such time.
(c) Upon the effective date of a registration statement filed by the Maker
in connection with the registration of its securities with the Securities and
Exchange Commission, including, without limitation, a Form SB-2 Registration
Statement, the Holder shall have fifteen (15) business days after such effective
date to provide written notice to the Maker electing to have this Note paid in
full in cash upon the receipt by the Maker of a minimum amount of gross proceeds
equal to $5,000,000 in such offering. In the event the Holder does not make its
election with the provisions in this Section 5(c), all amounts due under this
Note shall automatically convert into Common Stock as provided in Section 5(a).
(d) In the event that the Maker shall (A) pay a stock dividend in and on
shares of its Common Stock; (B) subdivide its outstanding shares of Common Stock
into a greater number of shares; (C) combine its outstanding shares of Common
Stock into a smaller number of shares, or (D) issue by reclassification of its
shares of Common Stock any shares of its capital stock, then the Conversion
Price in effect immediately prior thereto shall be adjusted so that the Holder
of this Note surrendered for conversion after the record date fixing
shareholders to be affected by such event shall be entitled to receive upon
conversion the number of such shares of Common Stock which the Holder would have
been entitled to receive after the happening of such event had this Note been
converted immediately prior to such record date. Such adjustment, if applicable,
shall be made on the effective date of such event and shall also be effective
retroactively as to the principal amount of this Note converted between such
record date and the effective date of the event.
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6. ACCELERATION UPON EVENT OF DEFAULT. Upon the occurrence of any event of
default as described below, the Holder shall have the remedies set forth in
Section 7 hereof, which remedies shall be exclusive:
(a) any default, whether in whole or in part, shall occur in the payment
to the Holder of principal, interest or other item comprising the Note as and
when due which shall continue for a period of fifteen business (15) days after
the receipt of written notice thereof by the Maker;
(b) the Maker shall (1) make a general assignment for the benefit of its
creditors, (2) apply for or consent to the appointment of a receiver, trustee,
assignee, custodian sequestrator, liquidator or similar official for itself or
any of its assets and properties, (3) commence a voluntary case for relief as a
debtor under the United States Bankruptcy Code, (4) file with or otherwise
submit to any governmental authority any petition, answer or other document
seeking (A) reorganization, (B) an arrangement with creditors or (C) to take
advantage of any other present or future applicable law respecting bankruptcy,
reorganization, insolvency, readjustment of debts, relief of debtors,
dissolution or liquidation, (5) file or otherwise submit any answer or other
document admitting or failing to contest the material allegations of a petition
or other document filed or otherwise submitted against it in any proceeding
under any such applicable law, or (6) be adjudicated bankrupt or insolvent by a
court of competent jurisdiction; or
(c) any case, proceeding or other action shall be commenced against the
Maker for the purpose of effecting, or an order, judgment or decree shall be
entered by any court of competent jurisdiction approving (in whole or in part)
anything specified in Section 5(b) hereof, or any receiver, trustee, assignee,
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custodian, sequestrator, liquidator or other official shall be appointed with
respect to the Maker, or shall be appointed to take or shall otherwise acquire
possession or control of all or a substantial part of the assets and properties
of the Maker, and any of the foregoing shall continue unstayed and in effect for
any period of ninety (90) days.
7. EXCLUSIVE REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of an
event of default as described in Section 6 hereof, any Holder of this Note may
exercise one of the following exclusive remedies by providing the Maker written
notice of the Holder's choice of remedies hereunder within fifteen (15) business
days after the occurence of an event of default as described in Section 6 hereof
and upon the expiration of any notice or cure period described herein:
(a) The Holder of this Note shall have the right to convent all (but not
less than all) amounts due under this Note into Common Stock in accordance with
the conversion procedures as set forth in Section 5(b) hereof. The number of
shares of Common Stock into which this Note may be converted pursuant to this
Section 7(a) shall be determined by dividing (i) the sum of all amounts due
under this Note (including, without limitation, all principal and accrued but
unpaid interest) up to and including the Conversion Date (ii) Three Dollars (US
$3.00) per share (as adjusted in accordance with Section 5(d) hereof). No
fractional shares of Common Stock or scrip representing fractional shares shall
be issued upon conversion of this Note. Instead of any fractional shares of
Common Stock which would otherwise be issuable upon conversion of the Note, the
Maker shall pay to the Holder a cash adjustment in respect of such fraction; or
(b) The Holder of this Note shall have the right to the repayment in cash
of all amounts due under this Note, in which case such Holder shall be entitled
to receive a warrant from the Maker that entitles such Holder to purchase from
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the Maker shares of Common Stock of the Maker in an amount equal to one percent
(1%) of the principal amount of this Note at a purchase price per share of Five
Dollars (US $5.00) (as adjusted in accordance with Section 5(d) hereof) for each
month that such principal balance remains unpaid up to a maximum of six (6)
months. Any warrants issuable pursuant to this Section 7(b) shall be issued to
the Holder on the last business day of each month each such warrant is due. By
way of example only, if the principal balance of this Note is $100,000, then the
Holder would be entitled to receive a warrant from the Maker to purchase 1,000
shares for $5.00 per share.
8. DELAY IN EXERCISE OF RIGHTS. No delay on the part of the Holder in
exercising any of its options, powers or rights nor any partial or single
exercise of its options, power or rights shall constitute a waiver thereof or of
any other option, power or right, and no waiver on the part of the Holder of any
of its options, powers or rights shall constitute a waiver of any other option,
power or right.
9. WAIVER OF PRESENTMENT. The Maker hereby waives presentment for payment,
dishonor, protest, notice of protest and any demand whatsoever with respect to
this Note.
10. GOVERNING LAW.
(a) This Note and the rights of the parties hereunder shall be governed by
and construed in accordance with the laws of the State of Florida, without
regard to its conflicts of law principles. All parties hereto (1) agree that any
legal suit, action or proceeding arising out of or relating to this note shall
be instituted only in a Federal or state court in Miami-Dade County, Florida,
(2) waive any objection which they may now or hereafter have to the laying of
the venue of any such suit, action or proceeding, including, without limitation,
any objection based on the assertion that such venue is an inconvenient forum
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and (3) irrevocably submit to the jurisdiction of such Federal or state court in
Miami-Dade County, Florida in any such suit, action or proceeding. All parties
hereto agree that the mailing of any process in any suit, action or proceeding.
in accordance with the notice provisions of this Note shall constitute personal
service thereof.
(b) THE MAKER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING RELATED IN ANY WAY TO THIS NOTE.
11. NOTICES. All notices or other communications required or permitted to
be given pursuant to this Note shall be in writing and shall be considered as
duly given on (a) the date of delivery, if delivered in person or by nationally
recognized overnight delivery service or (b) ten (10) days after mailing if
mailed by certified mail, return receipt requested to the party entitled to
receive the same, if to the Holder, at his or its address on the books and
records of the Maker, and if to the Maker, to Genetic Vectors, Inc., 5201 N.W.
77th Avenue, Suite 100, Miami, Florida 33166, Attention: Mead M. McCabe, Jr.,
with a copy to Kirkpatrick & Lockhart LLP, Miami Center - 20th Floor, 201 South
Biscayne Boulevard, Miami, Florida 33131, Attention: Clayton E. Parker, Esq. Any
party may change its address by giving notice to the other party stating its new
address. Commencing on the tenth (10th) day after the giving of such notice,
such newly designated address shall be such party's address for the purpose of
all notices or other communications required or permitted to be given pursuant
to this Note.
12. AMENDMENT. This Note shall not be amended without the prior written
consent of the Holder and the Maker. GENETIC VECTORS, INC.
By:____________________________________
Its:___________________________________
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