EXHIBIT 10.19
EXECUTION COPY
NEITHER THIS NOTE NOR THE SECURITIES ISSUABLE PURSUANT HERETO HAVE BEEN
REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE FOREIGN OR STATE SECURITIES LAWS. THIS NOTE AND SUCH SECURITIES
MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN SO
REGISTERED AND QUALIFIED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY TO THE EFFECT THAT SUCH REGISTRATION AND QUALIFICATION IS NOT
REQUIRED HAS BEEN DELIVERED TO THE COMPANY.
8% SENIOR NOTE DUE 2006
No. 1 March 3, 2005
$
FOR VALUE RECEIVED, EpiCept Corporation, a Delaware corporation (the
"COMPANY"), hereby promises to pay to the order of and its successors and
assigns (the "Holder"), the principal sum of ($ ) (the "PRINCIPAL
AMOUNT"), on the terms and conditions set forth in the Note Purchase Agreement,
dated as of March 3, 2005 (the "PURCHASE AGREEMENT"), among the Company and the
Purchasers identified on Annex A and Annex B thereto (the "Purchasers"). Subject
to the conversion, prepayment and default provisions set forth in this Note and
the Purchase Agreement, all outstanding principal and accrued and unpaid
interest under this Note shall become due and payable on October 30, 2006.
Payments of principal of, interest on and any premium with respect to this
Note are to be made in lawful money of the United States of America by check
mailed and addressed to the registered Holder hereof at the address shown in the
register maintained by the Company for such purpose, or, at the option of the
Holder, in such manner and at such other place in the United States of America
as the Holder hereof shall have designated to the Company in writing.
Notwithstanding any provision to the contrary in this Note, the Purchase
Agreement or any other agreement, the Company shall not be required to pay, and
the Holder shall not be permitted to contract for, take, reserve, charge or
receive, any compensation which constitutes interest under applicable law in
excess of the maximum amount of interest permitted by law.
This Note is one of a series of 8% Senior Notes Due 2006 (herein called
the "NOTES") issued pursuant to the Purchase Agreement and is entitled to the
benefits thereof. All capitalized terms used herein but not otherwise defined
shall have the meanings ascribed to them in the Purchase Agreement. Each Holder
of this Note will be deemed, by its acceptance hereof, to have agreed to the
provisions and to have made the representations and warranties set forth in
Article 6 of the Purchase Agreement.
This Note is transferable only by surrender hereof in accordance with
Article 7 of the Purchase Agreement, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered Holder of this Note.
This Note is also subject to optional prepayment, in whole or in part, at
the times and on the terms specified in the Purchase Agreement.
This Note is also subject to mandatory prepayment on the terms specified
in the Purchase Agreement.
If the Company fails to consummate an initial public offering (the
"INITIAL PUBLIC OFFERING") and thereafter consummates a debt or equity financing
with gross proceeds to the Company of at least $15,000,000 (a "QUALIFYING
FINANCING"), then, simultaneously with the closing of such Qualifying Financing,
the outstanding principal and accrued and unpaid interest on this Note shall, at
the Holder's option, be converted into the number of securities determined by
dividing the principal amount, plus accrued and unpaid interest, outstanding at
the conversion date by the purchase or issue price of the securities sold or
issued in the Qualifying Financing. Such conversion shall occur at the lowest
price paid by any purchaser in the Qualifying Financing. To effect such
conversion, the Payee shall on or before the closing of the Qualifying Financing
become a party to all agreements between the Company and the purchasers in the
Qualifying Financing which set forth the terms and conditions of such purchase
and the Payee shall be entitled to all the rights granted to the purchasers
thereunder and subject to any restrictions or obligations imposed generally on
such purchasers. The Company will mail or cause to be mailed to the Payee a
notice specifying the date on which such Qualifying Financing is scheduled to
close. Such notice will be mailed at least twenty (20) days prior to the date of
such closing.
If an Event of Default as defined in the Purchase Agreement occurs and is
continuing, the unpaid principal and accrued and unpaid interest on this Note
may be declared or otherwise become due and payable in the manner, at the price
(including any applicable premium) and with the effect provided in the Purchase
Agreement.
Time is of the essence of this Note. To the fullest extent permitted by
applicable law, the Company, for itself and its legal representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of maturity, notice of non-payment, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
and any exemption, each in respect of this Note.
In no event, whether by reason of acceleration of the maturity of the
amounts due under the Note or otherwise, shall interest and fees contracted for,
charged, received, paid or agreed to be paid to the Holder exceed the maximum
amount permissible under applicable Law. If, from any circumstance whatsoever,
interest and fees would otherwise be payable to the Holder in excess of the
maximum amount permissible under applicable Law, the interest and fees shall be
reduced to the maximum amount permitted under such Law. If from any
circumstance, the Holder shall have received anything of value deemed interest
by applicable Law in excess of the maximum lawful amount, an amount equal to any
excess of interest shall be applied to the reduction of the principal amount of
the Notes, in such manner as may be determined by the
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Holder, and not to the payment of fees or interest, or if such excess interest
exceeds the unpaid balance of the principal amount of the Notes, such excess
shall be refunded to the Company.
Whenever possible, each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable Law, but if any
provision of this Note is held to be prohibited by or invalid under applicable
Law in any jurisdiction, such provision shall be ineffective only to the extent
of such prohibition or invalidity, without invalidating any other provision of
this Note.
This Note and the rights and obligations of the parties hereto shall be
deemed to be contracts under the laws of the State of Delaware and for all
purposes shall be governed by and construed and enforced in accordance with the
laws of said State, except for its rules relating to the conflict of laws.
* * *
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IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered by its respective duly authorized officer as of the day and year and
at the place set forth above.
EPICEPT CORPORATION
By:_______________________
Name:
Title:
SIGNATURE PAGE TO NOTE