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EXHIBIT 10.18
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED OR DISPOSED OF UNLESS AND UNTIL THIS NOTE
IS REGISTERED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
PROMISSORY NOTE
$500,000.00 August 2, 2001
FOR VALUE RECEIVED, the undersigned, CELL ROBOTICS INTERNATIONAL, INC.,
a Colorado corporation ("Maker"), promises to pay to the order of DIPL. ING.
OTON TISCH ("Payee"), at Apartado 76949, Caracas 1070 Venezuela (or such other
place as Payee may from time to time designate), the sum of Five Hundred
Thousand and No/100 Dollars ($500,000.00), or so much as may have been advanced
hereunder, together with interest on the unpaid principal balance from time to
time outstanding at a rate per annum equal to ten percent (calculated on the
basis of the actual number of days elapsed, but computed as if each calendar
year consisted of 365 days). This Note is the "Note" referred to in that certain
Loan Agreement, dated August 2, 2001 (the "Loan Agreement"), by and between
Payee and Maker. Capitalized terms used but not defined herein shall have the
meanings ascribed to those terms in the Loan Agreement. Notwithstanding anything
to the contrary contained herein, no provision of this Note shall require the
payment or permit the collection of interest in excess of the Maximum Legal
Rate.
Interest on this Note shall accrue from the date hereof. All principal
of and interest on this Note shall be paid on August 2, 2002.
All past due principal of and accrued interest on this Note shall bear
interest from maturity (stated, by acceleration, or otherwise) until
indefeasibly paid in full at the lesser of 12% and the Maximum Legal Rate.
1. Optional Prepayments. Maker, at any time and from time to time, may
prepay the unpaid principal amount of this Note in whole or in part without
premium; provided, however, that any such optional prepayment shall be applied
to accrued but unpaid interest and then to the unpaid principal amount of this
Note.
2. Events of Default and Remedies. Upon or at any time after the
occurrence of an Event of Default, the principal amount of this Note together
with all interest accrued thereon shall, at the option of Payee and without
notice or demand by Payee, become at once due and payable and Maker shall
forthwith pay to Payee, in addition to any and all sums and charges due, the
entire principal of and accrued and unpaid interest on this Note plus reasonable
attorneys' fees and expenses, if the same are collected by or through an
attorney at law. Upon or at any time after the occurrence of any Event of
Default, Payee shall have and may exercise, at its election, from time to time
any and all rights and remedies available to a secured party under the UCC (as
defined in the Loan Agreement), in addition to any and all other rights and
remedies
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afforded by this Note, at law, in equity or otherwise, including, without
limitation, (a) declaring the entire unpaid balance of this Note, or any part
thereof, immediately due and payable, whereupon it shall be due and payable; (b)
reducing any claim to judgment; and (c) bringing suit or other proceedings
before any appropriate court either for specific performance of any covenant or
condition contained in this Note or in aid of the exercise of any right granted
to Payee in this Note.
3. Optional Conversion. This Note shall be convertible at the option of
the Maker, in whole or in part, at any time or from time to time into the number
of fully paid and nonassessable shares of common stock ("Common Stock") of Maker
equal to the unpaid principal amount of this Note plus the accrued but unpaid
interest hereon divided by the Conversion Price (as defined below) in effect
from time to time. In the event of any such conversion, the amount due under
this Note shall be reduced by an amount equal to the number of shares of Common
Stock issued upon such conversion multiplied by the applicable Conversion Price,
with the amount of such reduction being first applied to accrued and unpaid
interest and then to principal.
(a) Conversion Procedures. If Maker desires to convert this
Note into Common Stock, Payee shall surrender this Note to Maker at its
principal executive offices, accompanied by proper instruments of transfer to
Maker or in blank, accompanied by irrevocable written notice to Maker of the
name or names (with address) in which a certificate or certificates for Common
Stock are to be issued. Maker shall, as soon as practicable after such written
notice and compliance with any other conditions herein contained, deliver at
such office to Payee, certificates for the number of full shares of Common Stock
or other securities to which it shall be entitled, adjusted by any fraction of a
share as hereinafter provided. Subject to the following provisions of this
paragraph, such conversion shall be deemed to have been made as of the date of
such surrender of this Note, and the person or persons entitled to receive the
Common Stock or other securities deliverable upon conversion shall be treated
for all purposes as the record holder or holders thereof on such date. Upon
partial conversion of this Note, a new Note containing the same date and
provisions of this Note shall be issued by the Payee to the Maker for the
principal balance of this Note and interest which shall not have been converted
or paid.
(b) Conversion Price; Certain Adjustments. The conversion
price for determining the number of shares of Common Stock deliverable upon
conversion (the "Conversion Price") shall be the lesser of (i) $0.5994 per share
of Common Stock (the "Initial Conversion Price") or (ii) ninety percent (90%) of
the average closing price per share of the Common Stock for the fifteen (15)
trading days ending on the trading day immediately prior to the date of
conversion. Notwithstanding the foregoing, in no event shall the Conversion
Price be less than $.30 per share of Common Stock (the "Conversion Price
Floor"). The Initial Conversion Price and the Conversion Price Floor and the
number of securities issuable upon conversion of this Note shall be subject to
adjustment from time to time as follows:
(i) In the event of any change in the Common Stock by
reason of any combination, subdivision, split, reclassification, stock
dividend or any similar change affecting the Common Stock, then in any
such event the Initial Conversion Price and the Floor Conversion Price
shall be adjusted, in such manner as the Board of Directors deems
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equitable to prevent substantial dilution or enlargement of the rights
granted to the Payee. The adjustment shall become effective immediately
after the record date in the case of a dividend or distribution and
immediately after the effective date in the case of a subdivision,
combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur.
(ii) In the event that at any time, as a result of
any adjustment made pursuant to these provisions, Payee shall become
entitled to receive any shares of Maker other than shares of Common
Stock or to receive any other securities, the number of such other
shares or securities so receivable upon conversion of this Note shall
be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions contained in these
provisions with respect to the Common Stock.
(c) Reclassification, Consolidation, Merger or Sale of Assets.
If at any time while this Note is outstanding and unexpired there shall be (i) a
reorganization of the Maker, (ii) a merger or consolidation of the Maker with or
into another entity in which the Maker is not the surviving entity, or a reverse
triangular merger in which the Maker is the surviving entity but the shares of
the Maker's capital stock outstanding immediately prior to the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise, or (iii) a sale or transfer of the Maker's
properties and assets as, or substantially as, an entirety to any other Person,
then lawful and adequate provision will be made whereby the Payee will
thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions specified in this Note and in lieu of the shares of Common
Stock of the Maker immediately theretofore purchasable and receivable upon the
conversion of this Note, the kind and amount of stock and other securities and
assets (including, without limitation, cash) receivable upon such merger,
consolidation or sale by a holder of the number of shares of Common Stock
deliverable upon the conversion of this Note immediately prior to such merger,
consolidation or sale. In any such case, appropriate provisions will be made
with respect to the rights and interests of the Payee to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Conversion Price and of the number of shares of Common Stock purchasable
upon the conversion of this Note) will thereafter be applicable, as nearly as
may be, in relation to any shares of stock, securities or assets thereafter
deliverable upon the conversion hereof. The foregoing provisions of this Section
shall similarly apply to successive reorganizations, mergers, consolidations and
sales and to the stock or securities of any other corporation that are at the
time receivable upon the conversion of this Note. If this Section applies to a
transaction, Section 3(b)(i) and (ii) shall not apply to such transaction.
(d) Notice of Adjustment. Whenever the Conversion Price is
adjusted, the Maker shall promptly mail to the Payee a notice setting forth the
Conversion Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. Such certificate prepared in good faith
shall be conclusive evidence of the correctness of such adjustment absent
manifest error.
(e) Maker Determination Final. Any determination that the
Maker or the Board of Directors must make pursuant to this Note is conclusive
absent manifest error.
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(f) When No Adjustment Required. No adjustment need be made
for any transaction referred to in Section 3(b)(i) and Section 3(c) if the Payee
is entitled to participate in the transaction on a basis and with notice that
the Board of Directors determines to be fair and appropriate in light of the
basis and notice on which holders of Common Stock participate in the
transaction. No adjustment need be made for a change in the par value or no par
value of the Common Stock.
(g) No Fractional Shares. The Maker shall not be required to
issue fractions of shares of Common Stock upon conversion of this Note or to
distribute certificates which evidence fractional shares of Common Stock. If the
conversion of this Note would result in a fractional share of Common Stock or
the right to acquire a fractional share of Common Stock, such fractional share
shall be disregarded and the number of shares of Common Stock issuable upon the
conversion of this Note shall be rounded up or down to the nearest whole share.
The Payee expressly waives his right to receive any fractional shares upon
conversion of this Note.
(h) Reservation of Shares; Etc. Subject to the terms and
conditions of the immediately following sentence, Maker shall at all times
reserve and keep available, out of its authorized and unissued stock, solely for
the purpose of effecting the conversion of this Note, such number of shares of
its Common Stock and other securities free of preemptive rights as shall from
time to time be sufficient to effect the conversion of this Note. Maker shall
from time to time, in accordance with the laws of the state of its
incorporation, use its reasonable best efforts to increase the authorized number
of shares of Common Stock if at any time the number of shares of Common Stock
not outstanding shall not be sufficient to permit the conversion of this Note.
If any shares of Common Stock required to be reserved for purposes of conversion
of this Note require registration with or approval of any governmental authority
under any Federal or State law before such shares may be issued upon conversion,
Maker will in good faith endeavor to cause such shares to be duly registered or
approved, as the case may be. If the Common Stock is listed on the New York
Stock Exchange, the Nasdaq National Market, or any other national securities
exchange, Maker will, if permitted by the rules of such exchange, list and keep
listed on such exchange, upon official notice of issuance, all shares of Common
Stock issuable upon conversion of this Note.
(i) Payment of Taxes. The issuance of a certificate or
certificates for shares of Common Stock upon conversion of this Note shall be
made without charge for any stamp or other similar tax in respect of such
issuance. However, if any such certificate is to be issued in a name other than
that of the Payee, the Person or Persons requesting the issuance thereof shall
pay to the Maker the amount of any tax which may be payable in respect of any
transfer involved in such issuance or shall establish to the satisfaction of the
Maker that such tax has been paid.
4. Cumulative Rights. No failure on the part of Payee to exercise, and
no delay by Payee in exercising, any right or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any right or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other right or remedy. The rights and remedies herein provided are
cumulative and are in addition to any other rights and remedies provided by
Applicable Law or otherwise.
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5. Waiver. Maker, and each surety, endorser, guarantor and other party
ever liable for the payment of any sum of money payable on this Note, jointly
and severally waive demand, presentment, protest, notice of nonpayment, notice
of intention to accelerate, notice of acceleration, notice of protest and any
and all lack of diligence or delay in the collection or filing of suit hereon
which may occur; agree that their liability on this Note shall not be affected
by any renewal or extension in the time of payment hereof, by any indulgences,
or by any release or change in any security for the payment of this Note; and
hereby consent to any and all renewals, extensions, indulgences, releases or
changes hereof or hereto, regardless of the number of such renewals, extensions,
indulgences, releases or changes.
6. NO ORAL AGREEMENTS. THIS NOTE (ALONG WITH THE OTHER LOAN DOCUMENTS)
REPRESENTS THE FINAL AGREEMENT BETWEEN MAKER AND PAYEE AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF MAKER AND PAYEE. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN MAKER AND
PAYEE.
7. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW MEXICO WITHOUT GIVING
EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE
OF NEW MEXICO OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW MEXICO. Any legal action or
proceeding with respect to this Note shall be brought in any New Mexico state or
federal court sitting in Bernalillo County, New Mexico, and, by execution and
delivery of this Note, Maker hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Maker hereby irrevocably waives any objection, including, without
limitation, any objection to the laying of venue or based on the grounds of
forum non conveniens, which it may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions.
8. Severability. Any term or provision of this Note that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.
9. Succession and Assignment. This Note shall be binding upon and inure
to the benefit of Maker and Payee and their respective successors and permitted
assigns. Payee may not assign either this Note or any of its rights, interests
or obligations hereunder without the prior written approval of the Maker.
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IN WITNESS WHEREOF, the undersigned has executed this Note as of the
day and year first above written.
CELL ROBOTICS INTERNATIONAL, INC.
By: /s/ Ronald K. Lohrding, Ph.D.
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Ronald K. Lohrding, Ph.D.
President and CEO
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