Exhibit 10.3
FORM OF PROMISSORY NOTE
DATE OF ISSUANCE: __________ ___, 2005
No. _____ DUE: US $___,000
________ __ 2007
THIS PROMISSORY NOTE issued by SPO Medical Inc., a corporation organized
and existing under the laws of the State of Delaware (the "Maker"), relates to
the principal amount of the debt of US $___,000 (the "Principal Debt") owed by
the Maker to ______________________, a company incorporated in ___, USA
(hereinafter, along with all subsequent holders of this Note, the "Payee").
For value received, the Maker, hereby promises to pay to the order of the
Payee eighteen months from the date hereof (the "Maturity Date") at Payee's
principal place of business or at such other places as Payee may from time to
time specify, the Principal Debt plus Interest as set forth below.
1. Interest
In consideration of the providing of the Principal Debt, subject to
the provisions of this Note, the Maker agrees to pay to the Payee, at the time
of repayment of the Principal Debt, interest of 6% per annum beginning from the
date hereof until Maturity Date ("Interest"). If Maker does not make full
payment of all unpaid amounts owed pursuant to this Note on or prior to the
Maturity Date, interest will accrue thereafter at the rate of 1% per month,
compounded monthly, until all outstanding amounts owed pursuant to this Note are
paid.
2. Transfer
This Note has been issued subject to investment representations of the
original purchaser hereof and may be transferred or exchanged only in compliance
with the Securities Act of 1933, as amended (the "Act"), and other applicable
state securities laws. In the event of any proposed transfer of this Note, the
Maker may require, prior to issuance of a new Note in the name of such other
person, that it receive reasonable transfer documentation including legal
opinions that the issuance of the Note in such other name does not and will not
cause a violation of the Act or any applicable state securities laws. Prior to
due presentment for transfer of this Note, the Maker and any agent of the Maker
may treat the person in whose name this Note is duly registered on the Maker's
Note Register as the owner hereof for the purpose of receiving payment as herein
provided and for all other purposes, whether or not this Note be overdue, and
neither the Maker nor any such agent shall be affected by notice to the
contrary.
3. Payment Terms
3.1 Application. Payments hereunder shall be applied in order of priority, first
to Interest accrued, then to the principal and thereafter to other costs of
Payee payable hereunder. Payments shall be deemed made upon receipt by Payee.
3.2 Prepayment. This Note may be prepaid in whole or in part at any time
or times at the option of Maker without penalty or notice.
3.3 Business Days. If any payment shall become due on a Saturday, Sunday,
or a public holiday under the laws of the State of New York or the United
States, such payment shall be due and made on the next succeeding business day
and such extension of time shall be included in computing interest in connection
with such payment.
3.4 All payments contemplated hereby to be made "in cash" shall be made in
immediately available good funds in such coin or currency of the United States
as at the time of payment is legal tender for payment of public and private
debts.
4. No recourse shall be had for the payment of the principal of, or the
interest on, this Note, or for any claim based hereon, or otherwise in respect
hereof, against any incorporator, shareholder, officer or director, as such,
past, present or future, of the Maker or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
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5. The Payee, by acceptance hereof, agrees that this Note is being
acquired for investment and that Payee will not offer, sell or otherwise dispose
of this Note except under circumstances which will not result in a violation of
applicable securities laws including without limitation, the Act or any
applicable state Blue Sky or foreign laws or similar laws relating to the sale
of securities.
6. The following shall constitute an "Event of Default":
a. The Maker shall default in the payment of principal or
interest or other amount hereunder; or
b. Any of the representations or warranties made by the Maker
herein or in any certificate or financial or other written
statements heretofore or hereafter furnished by the Maker in
connection with the execution and delivery of this Note shall
be false or misleading in any material respect at the time
made; or
c. The Maker shall fail to perform or observe, in any material
respect, any other covenant, term, provision, condition,
agreement or obligation of the Note and such failure shall
continue uncured for a period of five (5) business days after
written notice from the Payee of such failure; or
d. The Maker shall (1) make an assignment for the benefit of
creditors or commence proceedings for its dissolution; or (2)
apply for or consent to the appointment of a trustee,
liquidator or receiver for its or for a substantial part of
its property or business; or
e. A trustee, liquidator or receiver shall be appointed for the
Maker or for a substantial part of its property or business
without its consent and shall not be discharged within sixty
(60) days after such appointment; or
f. Any governmental agency or any court of competent jurisdiction
at the instance of any governmental agency shall assume
custody or control of the whole or any substantial portion of
the properties or assets of the Maker and shall not be
dismissed within sixty (60) days thereafter; or
g. Any money judgment, writ or warrant of attachment, or similar
process in excess of Two Hundred Thousand ($200,000) US
Dollars in the aggregate shall be entered or filed against the
Maker or any of its properties or other assets and shall
remain unpaid, unvacated, unbonded or unstayed for a period of
thirty (30) days or in any event later than five (5) days
prior to the date of any proposed sale thereunder; or
h. Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any
bankruptcy law or any law for the relief of debtors shall be
instituted by or against the Maker and, if instituted against
the Maker, shall not be dismissed within thirty (30) days
after such institution or the Maker shall by any action or
answer approve of, consent to, or acquiesce in any such
proceedings or admit the material allegations of, or default
in answering a petition filed in any such proceeding; or
Then, or at any time thereafter, and in each and every such case, unless such
Event of Default shall have been waived in writing by the Payee (which waiver
shall not be deemed to be a waiver of any subsequent default) at the option of
the Payee and in the Payee's sole discretion, the Payee may consider this Note
immediately due and payable, without presentment, demand, protest or notice of
any kinds, all of which are hereby expressly waived, anything herein or in any
note or other instruments contained to the contrary notwithstanding, and the
Payee may immediately enforce any and all of the Payee's rights and remedies
provided herein or any other rights or remedies afforded by law.
7. Waivers and Consents.
Maker hereby waives diligence, demand, presentment for payment,
notice of non-payment, protest and notice of protest, and specifically consents
to and waives notice of any renewals or extensions of this Note, whether made to
or in favor of Maker or any other person or persons. The pleading of any statute
of limitations as a defense to any demand against Maker is expressly waived by
each and all of said parties to the fullest extent permitted by law. The waiver
by Payee of any breach or violation of, or default under, any provision of this
Note shall not be a waiver by such party of any other provision or of any
subsequent breach or violation of this Note or default hereunder.
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8. Governing Law and Venue.
This Note is governed by and is to be construed and enforced in accordance
with the laws of the State of New York. Any litigation or arbitration between
the parties, which arises out of this Note, shall be instituted and prosecuted
only in the appropriate court situated in New York. Notwithstanding the
foregoing, the Payee may take such actions in a foreign jurisdiction which the
Payee deems necessary and appropriate to enforce or collect any court judgment
in any dispute arising out of this Note or to seek and obtain other relief as is
necessary to enforce the terms of this Note.
9. Payee's Rights and Remedies.
The rights, powers and remedies of Payee under this Note shall be in
addition to all rights, powers and remedies given to Payee by virtue of any
statute or rule of law. All such rights, powers and remedies shall be cumulative
and may be exercised successively or concurrently in Payee's sole discretion.
Any forbearance, failure or delay by Payee in exercising any right, power or
remedy of Payee shall continue in full force and effect until such right, power
or remedy is specifically waived in writing executed by Payee.
10. Costs; Attorneys' Fees.
Maker agrees to pay the following costs, expenses, and attorneys' fees
paid or incurred by any holder of this Note, or adjudged by a Court: (a) all
costs of collection, costs, expenses, and attorneys' fees paid or incurred in
connection with the collection or enforcement of this Note if Payee is the
prevailing party, whether or not suit is filed; and (b) costs of suit and such
other sum as the Court may adjudge as attorneys' fees in an action to enforce
payment of this Note or any part of it, if the Payee is the prevailing party.
11. This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto.
IN WITNESS WHREOF, this Note has been executed and delivered as of the
date first above written by the duly authorized representative of Maker.
SPO Medical Inc.
By:
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Name: Michael Braunold
Title: CEO
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