Exhibit 4.3
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "1933 ACT"), OR UNDER THE PROVISIONS OF ANY APPLICABLE STATE SECURITIES
LAWS, BUT HAS BEEN ACQUIRED BY THE REGISTERED HOLDER HEREOF FOR PURPOSES OF
INVESTMENT AND IN RELIANCE ON STATUTORY EXEMPTIONS UNDER THE 1933 ACT, AND UNDER
ANY APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, PLEDGED,
TRANSFERRED OR ASSIGNED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER PROVISIONS
OF THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT; AND IN THE CASE OF AN EXEMPTION, ONLY IF THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
TRANSACTION DOES NOT REQUIRE REGISTRATION OF THIS NOTE.
IN VIVO MEDICAL DIAGNOSTICS, INC.
December 22, 2004 North Inverness, Scotland
$250,000.00
8% PROMISSORY NOTE
Pursuant to the terms of this 8% Promissory Note (the "Note"), In Vivo
Medical Diagnostics, Inc., a Colorado corporation (the "Company"), for value
received, hereby promises to pay to Nite Capital, L.P. or its registered assigns
(the "Holder") on the earlier of (i) June 22, 2005 or (ii) the date subsequent
to the date of this Note that the Company enters into any financing or
financings of any type aggregating $1,500,000 or more (the "Maturity Date"), at
the principal offices of the Company, the principal sum Two Hundred Fifty
Thousand Dollars ($250,000) in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and interest on the outstanding principal sum, such
interest to be computed at the rate of eight percent (8%) per annum. Principal
and accrued interest shall be payable on the Maturity Date in like coin or
currency to the Holder hereof at the office of the Company as hereinafter set
forth, provided that any payment otherwise due on a Saturday, Sunday or legal
Bank holiday may be paid on the following business day. In the event that for
any reason whatsoever any interest or other consideration payable with respect
to this Note shall be deemed to be usurious by a court of competent jurisdiction
under the laws of the State of New York or the laws of any other state governing
the repayment hereof, then so much of such interest or other consideration as
shall be deemed to be usurious shall be held by the holder as security for the
repayment of the principal amount hereof and shall otherwise be waived.
1. Transfers of Note to Comply with the 1933 Act
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The Holder agrees that this Note may not be sold, transferred, pledged,
hypothecated or otherwise disposed of except as follows: (1) to a person whom
the Note may legally be transferred without registration and without delivery of
a current prospectus under the 1933 Act with respect thereto and then only
against receipt of an agreement of such person to comply with the provisions of
this Section 1 with respect to any resale or other disposition of the Note; or
(2) to any person upon delivery of a prospectus then meeting the requirements of
the 1933 Act relating to such securities and the offering thereof for such sale
or disposition, and thereafter to all successive assignees.
2. Prepayment; Conversion
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(a) The principal amount of this Note may be prepaid by the Company, in
whole or in part without premium or penalty, at any time. In the event
the Company intends to prepay any or all of the outstanding principal
or interest on this Note, the Company must provide written notice to
the Holder at least 10 days prior to the proposed prepayment date
("Prepayment Date").
(b) In the event that the Company, subsequent to the date of this Note,
enters into any financing or financings of any type aggregating
$1,000,000, then and in such event the Company shall be required to
make a partial prepayment (a "Partial Prepayment") of $175,000 of the
principal amount of this Note and the pro rata share of interest
accrued to date on such portion the Note. In addition, in the event
that the Company, subsequent to the date of this Note, enters into any
financing or financings of any type aggregating more than $1,000,000
but less than $1,500,000, then and in such event the amount of the
Partial Prepayment shall be increased on a pro-rata basis (up to the
full principal amount of this Note and the pro rata share of interest
accrued to date on the Note in the case of a financing totaling at
least $1,500,000). The Company shall be required to notify the Holder
in writing of any financing which results in the Company being
required to prepay the Note, in whole or in part, prior to June 22,
2005, and to make such payment within three business days after the
Company receives the proceeds of such financing.
(c) Upon any prepayment of the entire principal amount of this Note, all
accrued, but unpaid interest shall be paid to the Holder on the date
of prepayment. In the event the Company prepays any portion of the
principal or interest on this Note, the Holder shall deliver this Note
to the Company and the Company shall issue a new Note to the Holder
evidencing the reduction of principal or interest.
3. Covenants of Company
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The Company covenants and agrees that, so long as any principal of, or
interest on, this Note shall remain unpaid, unless the Holder shall otherwise
consent in writing, it will comply with the following terms:
(a) Reporting Requirements. The Company will furnish to the Holder:
(i) as soon as possible, and in any event within five (5) days after
obtaining knowledge of the occurrence of (A) an "Event of
Default," as hereinafter defined, (B) an event which, with the
giving of notice or the lapse of time or both, would constitute
an Event of Default, or (C) a material adverse change in the
condition or operations, financial or otherwise, of the Company,
taken as whole, the written statement of the Chief Executive
Officer or the Chief Financial Officer of the Company, setting
forth the details of such Event of Default, event or material
adverse change and the action which the Company proposes to take
with respect thereto;
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(ii) promptly after the sending or filing thereof, copies of all
financial statements, reports, certificates of its Chief
Executive Officer, Chief Financial Officer or accountants and
other information which the Company or any subsidiary sends to
any holders (other than the Notes) of its securities;
(iii) promptly after the commencement thereof, notice of each action,
suit or proceeding before any court or other governmental
authority or other regulatory body or any arbitrator as to which
there is a reasonable possibility of a determination that would
(A) materially impact the ability of the Company or any
subsidiary to conduct its business, (B) materially and adversely
affect the business, operations or financial condition of the
Company taken as a whole, or (C) impair the validity or
enforceability of the Notes or the ability of the Company to
perform its obligations under the Notes;
(iv) in accordance with the provisions of Section 2(b) of this Note,
of any subsequent financing which will trigger a mandatory
prepayment obligation of the Company. . (b) Compliance with Laws.
The Company will comply, in all material respects with all
applicable laws, rules, regulations and orders, except to the
extent that noncompliance would not have a material adverse
effect upon the business, operations or financial condition of
the Company taken as a whole.
(c) Preservation of Existence. The Company will maintain and preserve, and
cause each subsidiary, if any, to maintain and preserve, its
existence, and become or remain duly qualified and in good standing in
each jurisdiction in which the failure to be so qualified would have a
material adverse effect on the business, operations or financial
condition of the Company, taken as a whole.
(d) Maintenance of Properties. The Company will maintain and preserve, all
of its properties which are necessary in the proper conduct of its
business in good working order and condition, ordinary wear and tear
excepted, and comply, at all times with the provisions of all leases
to which it is a party as lessee or under which it occupies property,
so as to prevent any forfeiture or material loss thereof or
thereunder.
(e) Maintenance of Insurance. The Company will maintain, with responsible
and reputable insurers, insurance with respect to its properties and
business, in such amounts and covering such risks, as is carried
generally in accordance with sound business practice by companies in
similar businesses in the same localities in which the Company is
situated.
(f) Keeping of Records and Books of Account. The Company will keep
adequate records and books of account, with complete entries made in
accordance with generally accepted accounting principles, reflecting
all of its financial and other business transactions.
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(g) Compliance with the Securities Exchange Act of 1934. The Company shall
comply in all respects with the requirements of the Securities
Exchange Act of 1934, including the filing of all reports due
thereunder.
(h) Reservation of Common Stock. The Company further covenants and agrees
that the Company will use its best efforts to at all times have
authorized and reserved, free from preemptive rights, a sufficient
number of shares of its common stock to provide for the conversion of
this Note in full. As of the date hereof, the Company does not have
any shares reserved or available for reservation for the conversion of
this Note.
4. Events of Default and Remedies
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(a) Any one or more of the following events which shall have occurred and
be continuing shall constitute an event of default ("Event of
Default"):
(i) Default in the payment of interest upon this Note, as and when
the same shall become due; or
(ii) Default in the payment of the principal of this Note, as and when
the same shall become due; or
(iii) The Company shall fail to perform or observe any affirmative
covenant contained in this Note or the subscription agreement
executed by the Company and the Holder as of the date hereof and
such Default, if capable of being remedied, shall not have been
remedied ten (10) days after written notice thereof shall have
been given by the Holder to the Company; or
(iv) The Company or any subsidiary (A) shall institute any proceeding
or voluntary case seeking to adjudicate it bankrupt or insolvent,
or seeking dissolution, liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of any
order for relief or the appointment of a receiver, trustee,
custodian or other similar official for such the Company or any
subsidiary or for any substantial part of its property, or shall
consent to the commencement against it of such a proceeding or
case, or shall file an answer in any such case or proceeding
commenced against it consenting to or acquiescing in the
commencement of such case or proceeding, or shall consent to or
acquiesce in the appointment of such a receiver, trustee,
custodian or similar official; (B) shall be unable to pay its
debts as such debts become due, or shall admit in writing its
inability to apply its debts generally; (C) shall make a general
assignment for the benefit of creditors; or (D) shall take any
action to authorize or effect any of the actions set forth above
in this subsection 3 (iv); or
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(v) Any proceeding shall be instituted against the Company seeking to
adjudicate it a bankrupt or insolvent, or seeking dissolution,
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief of debtors, or seeking the entry of an order
for relief or the appointment of a receiver, trustee, custodian
or other similar official for the Company or for any substantial
part of its property, and either such proceeding shall not have
been dismissed or shall not have been stayed for a period of
sixty (60) days or any of the actions sought in such proceeding
(including, without limitation, the entry of any order for relief
against it or the appointment of a receiver, trustee, custodian
or other similar official for it or for any substantial part of
its property) shall occur; or
(vi) One or more final judgments or orders for the payment of money in
excess of $100,000 in the aggregate shall be rendered against the
Company, and either (A) enforcement proceedings shall have been
commenced by any creditor upon any such judgment or order, or (B)
there shall be any period of thirty (30) days during which
enforcement of any such judgment or order shall not be
discharged, stayed or fully satisfied; or
(b) If an Event of Default described above has occurred, then the Holder
may either
(i) without further notice to the Company, declare the principal
amount of this Note at the time outstanding, together with
accrued unpaid interest thereon, and all other amounts payable
under this Note to be forthwith due and payable, whereupon such
principal, interest and all such amounts shall become and be
forthwith due and payable; or
(ii) in the case of an event of default described in Section 4(a)(i)
or (ii) hereof which continues for at least three business days,
elect to convert all of the principal and interest owing on this
Note into shares of the Company's common stock, subject to the
restrictions contained herein. The conversion price per share
shall be fifty percent (50%) of the average of the three lowest
closing prices for the Common Stock on the NASD OTC Bulletin
Board (or such other principal market or exchange where the
Common Stock is listed or traded at the time of conversion) for
the ten days immediately preceding the Maturity Date. Such
election to convert shall be evidenced by completion of the
conversion notice attached hereto and delivery of such notice to
the Company within five business days of (i) the Holder's receipt
of a notice from the Company pursuant to Section 2 that a
prepayment is due, or (ii) the Maturity Date. The Holder's right
to convert the obligations due under this Note to common stock
shall supercede the Company's right to repay such obligations in
cash, subject to the restrictions contained herein.
(c) The Company covenants that in case the principal of, and accrued
interest on, the Note becomes due and payable by declaration or
otherwise, then the Company will pay in cash, or in Common Stock of
the Company if required under this Agreement, to the Holder of this
Note, the whole amount that then shall have become due and payable on
this Note for principal or interest, as the case may be, and in
addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including reasonable fees and
disbursements of the Holder's legal counsel if no conversion of the
Note to Common Stock of the Company has been made. In case the Company
shall fail forthwith to pay such amount, the Holder may commence an
action or proceeding at law or in equity for the collection of the
sums so due and unpaid, and may prosecute any such action or
proceeding to judgment or final decree against Company or other
obligor upon this Note, wherever situated, the monies adjudicated or
decreed to be payable.
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5. Miscellaneous
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(a) This Note has been issued by the Company pursuant to authorization of
the Board of Directors of the Company.
(b) The Company may consider and treat the entity in whose name this Note
shall be registered as the absolute owner thereof for all purposes
whatsoever (whether or not this Note shall be overdue) and the Company
shall not be affected by any notice to the contrary. Subject to the
limitations herein stated, the registered owner of this Note shall
have the right to transfer this Note by assignment, and the transferee
thereof shall, upon his registration as owner of this Note, become
vested with all the powers and rights of the transferor. Registration
of any new owners shall take place upon presentation of this Note to
the Company at its principal offices, together with a duly
authenticated assignment. In case of transfer by operation of law, the
transferee agrees to notify the Company of such transfer and of his
address, and to submit appropriate evidence regarding the transfer so
that this Note may be registered in the name of the transferee. This
Note is transferable only on the books of the Company by the holder
hereof, in person or by attorney, on the surrender hereof, duly
endorsed. Communications sent to any registered owner shall be
effective as against all holders or transferees of the Note not
registered at the time of sending the communication.
(c) Payments of principal and interest shall be made as specified above to
the registered owner of this Note. No interest shall be due on this
Note for such period of time that may elapse between the maturity of
this Note and its presentation for payment.
(d) The Holder shall not, by virtue, hereof, be entitled to any rights of
a shareholder in the Company, whether at law or in equity, and the
rights of the Holder are limited to those expressed in this Note.
(e) Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Note, and (in
the case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Note, if
mutilated, the Company shall execute and deliver a new Note of like
tenor and date.
(f) This Note shall be construed and enforced in accordance with the laws
of the State of New York. The Company and the Holder hereby consent to
the jurisdiction of the Courts of the State of New York and the United
States District Courts situated therein in connection with any action
concerning the provisions of this Note instituted by the Holder
against the Company.
(g) All communications under this Agreement shall be in writing and shall
be mailed by first class mail, postage prepaid, or telegraphed or
telexed with confirmation of receipt or delivered by hand or by
overnight delivery service,
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If to the Company, at:
In Vivo Diagnostics, Inc.
The Green House
Beechwood Business Park,
North Inverness, Scotland IV2 3BL
or at such other address as it may have furnished in writing to the
Holder, or
If to the Holder, to the address of such Holder as it appears in the
stock ledger of the Company.
Any notice so addressed, when mailed by registered or certified mail
shall be deemed to be given three days after so mailed, when
telegraphed or telexed shall be deemed to be given when transmitted,
or when delivered by hand or overnight shall be deemed to be given
when delivered.
IN WITNESS WHEREOF, In Vivo Medical Diagnostics, Inc.caused this Note to be
signed in its name by its Chief Executive Officer.
IN VIVO MEDICAL DIAGNOSTICS, INC
By:
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NOTICE OF CONVERSION
(To be executed by the Registered Holder in order to convert the Note)
The undersigned hereby elects to convert all of the principal and interest
due on the Note issued by In Vivo Medical Diagnostics, Inc., into Shares of
Common Stock according to the conditions set forth in Section 4(b)(ii) of such
Note, as of the date written below. The undersigned further affirms that as of
the date hereof, the representations and warranties made by the undersigned in
the subscription agreement of even date with the promissory note being
converted, are true and correct as if such representations and warranties were
made as of the date hereof.
Date of Conversion:_____________________________________________________________
Conversion Price: $____________per share
Shares To Be Delivered:_________________________________________________________
Signature:______________________________________________________________________
Print Name:_____________________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________
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