EXHIBIT 10.59
CONVERTIBLE PROMISSORY NOTE
$50,000.00 JUNE 9, 2000
1. AMOUNT; MATURITY. FOR VALUE RECEIVED, the undersigned, GENETIC VECTORS,
INC., a Florida corporation (the "MAKER"), promises to pay to MICHAEL AND LOIS
HALBERT (the "HOLDER"), the principal sum of FIFTY THOUSAND DOLLARS ($50,000)
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 of 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) Three Dollars (US $3.00) 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 its 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
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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 "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) From and after the date hereof, until thirty (30) days after 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 the right by providing written notice to the Maker to exercise its
conversion privilege. In the event the Holder does not make its election in
accordance with the provisions in this Section 5(c), the Holder shall receive
the warrants as set forth in Section 5(f) hereof. In the event the Holder makes
its election in accordance with the provisions in this Section 5(c), the Holder
shall receive the warrants as set forth in Section 5(e) hereof.
(d) In the event that the Maker shall (1) pay a stock dividend in
and on shares of its Common Stock, (2) subdivide its outstanding shares of
Common Stock into a greater number of shares, (3) combine its outstanding shares
of Common Stock into a smaller number of shares, or (4) 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
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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.
(e) In the event that the Holder shall elect to exercise its
conversion privilege as set forth in Section 5 hereof, the Holder shall receive
(1) a warrant from the Maker that entitles such Holder to purchase from the
Maker 16,665 shares of Common Stock of the Maker at a purchase price per share
of Six Dollars (U.S. $6.00) (as adjusted in accordance with Section 5(d) hereof)
and (2) a warrant from the Maker that entitles such Holder to purchase from the
Maker 16,665 shares of Common Stock of the Maker at a purchase price per share
of Seven Dollars and 10/100 (U.S. $7.10) (as adjusted in accordance with Section
5(d) hereof).
(f) In the event that the Holder does not elect to exercise its
conversion privilege as set forth in Section 5 hereof, the Holder shall receive
(1) a warrant from the Maker that entitles such Holder to purchase from the
Maker 10,000 shares of Common Stock of the Maker at a purchase price per share
of Six Dollars and 60/100 (U.S. $6.60) (as adjusted in accordance with Section
5(d) hereof) and (2) a warrant from the Maker that entitles such Holder to
purchase from the Maker 10,000 shares of Common Stock of the Maker at a purchase
price per share of Eight Dollars (U.S. $8.00) (as adjusted in accordance with
Section 5(d) hereof).
6. REGISTRATION RIGHTS
(a) In the event that the Holder shall elect to exercise its
conversion rights pursuant to Section 5 hereof and the Maker shall receive a
written request, not earlier than one hundred twenty (120) days from the receipt
by the Maker of a minimum amount of gross proceeds equal to $5,000,000 in such
offering, from such Holder that the Maker file a registration statement under
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the Securities Act of 1933, as amended (the "SECURITIES ACT") covering the
registration of the shares the Conversion Shares, then the Maker shall effect,
as expeditiously as reasonably possible, the registration under the Securities
Act of such Conversion Shares that such Holder requests to be registered. The
Maker shall not be required to effect a registration pursuant to this Section
6(a) after the Maker has effected one (1) registration pursuant to this Section
6(a), and such registration has been declared or ordered effective.
(b) The Maker shall notify the Holder of the Conversion Shares in
writing at least thirty (30) days prior to the filing of any registration
statement under the Securities Act for purposes of a public offering of
securities of the Maker (including, but not limited to, registration statements
relating to secondary offerings of securities of the Company and will afford
such Holder an opportunity to include in such registration statement all or part
the Conversion Shares held by such Holder. In the event that the Holder desires
to include in any such registration statement all or any part of the Conversion
Shares held by it, the Holder shall so notify the Maker in wirting within ten
(10) days after the above-described notice from the Maker. Such notice shall
state the intended method of disposition of such Conversion Shares by such
Holder. If the Holder decides not to include all of the Conversion Shares in any
registration statement thereafter filed by the Maker, such Holder shall
nevertheless continue to have the right to include such Conversion Shares in any
subsequent registration statement or registration statements as may be filed by
the Maker with respect to offerings of its securities, all upon the terms and
conditions set forth herein.
7. EVENT OF DEFAULT. Upon the occurrence of any event of default as
described below, the Holder shall have the remedies set forth in Section 8
hereof, which remedies shall be exclusive:
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(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 7(b) hereof, or any receiver, trustee, assignee,
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.
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8. EXCLUSIVE REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of an
event of default as described in Section 7 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 occurrence of an event of default as described in Section 7
hereof and upon the expiration of any notice or cure period described herein:
(a) The Holder of this Note shall have the right to convert 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 8(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 by (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 the Maker Ten Thousand (10,000) shares of Common Stock of the
Maker 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
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to this Section 8(b) shall be issued to the Holder on the last business day of
each month each such warrant is due.
9. 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.
10. WAIVER OF PRESENTMENT. The Maker hereby waives presentment for
payment, dishonor, protest, notice of protest and any demand whatsoever with
respect to this Note.
11. 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 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.
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12. 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.
13. AMENDMENT. This Note shall not be amended without the prior written
consent of the Holder and the Maker.
GENETIC VECTORS, INC.
By:
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Its:
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