Exhibit
10.1
THE
NOTE
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS
AMENDED (THE “1933 ACT”), OR UNDER THE NOTE LAWS OF CERTAIN STATES. THIS
NOTE IS SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE 1933 ACT AND APPLICABLE
STATE NOTE LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS
OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THIS
NOTE MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO
THE
ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE
WITH
THE 1933 ACT AND ANY APPLICABLE STATE NOTE LAWS.
PROMISSORY
NOTE
Foster
City, California
$200,000.00
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March
10, 2006
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1.
Obligation.
The undersigned, OXIS International, Inc., a Delaware corporation (“Borrower”)
hereby
promises to pay to the order of Steven T. Guillen, (“Lender”
or “Holder”)
on the
earlier of September 10, 2006 or, at the option of the Lender, the date when
the
Borrower receives net proceeds in the amount of $500,000 or more from a debt
or
equity financing (“Maturity
Date”),
the
principal sum of Two Hundred Thousand Dollars ($200,000.00) together with all
simple interest accrued on unpaid principal, at a rate equal to seven percent
(7.0%) per annum, computed on the basis of a year of 365 days from the date
of
this Note until the unpaid principal and all interest accrued thereon are paid
or converted, as provided in Section 5 hereof. As used herein, the
term “Holder”
shall
initially mean Lender, and shall subsequently mean each person or entity to
whom
this Note is duly assigned.
2.
Prepayment.
Prepayment of unpaid principal and/or interest due under this Note may be made
at any time without penalty. Unless otherwise agreed in writing by Holder,
all payments will be made in lawful tender of the United States and will be
applied (a) first, to the payment of accrued interest, and (b) second, (to
the
extent that the amount of such prepayment exceeds the amount of all such accrued
interest), to the payment of principal.
3.
Default;
Acceleration of Obligation.
Borrower will be deemed to be in default under this Note and the outstanding
unpaid principal balance of this Note, together with all interest accrued
thereon, will immediately become due and payable in full, without the need
for
any further action on the part of Holder, upon the occurrence of any of the
following events (each an “Event
of Default”):
(a) upon Borrower’s failure to make any payment when due under this Note;
(b) upon the filing by or against Borrower of any voluntary or involuntary
petition in bankruptcy or any petition for relief under the federal bankruptcy
code or any other state or federal law for the relief of debtors; provided,
however,
with
respect to an involuntary petition in bankruptcy, such petition has not been
dismissed within sixty (60) days after the filing of such petition; or (c)
upon
the execution by Borrower of an assignment for the benefit of creditors or
the
appointment of a receiver, custodian, trustee or similar party to take
possession of Borrower’s assets or property.
4.
Remedies
On Default; Acceleration.
Upon any Event of Default, Holder will have, in addition to its rights and
remedies under this Note, full recourse against any real, personal, tangible
or
intangible assets of Borrower, and may pursue any legal or equitable remedies
that are available to Holder, and may declare the entire unpaid principal amount
of this Note and all unpaid accrued interest under this Note to be immediately
due and payable in full.
5.
Rollover
Right.
At any
time on or before the Maturity Date, if Borrower enters into an agreement to
incur debt, Holder may, at Holder’s sole option and discretion, rollover this
Note into such debt arrangement, on the same terms and conditions offered to
such future lenders.
6.
Waiver and Amendment.
Any provision of this Note may be amended or modified only by a writing signed
by both Borrower and Holder. Except as provided below with respect to
waivers by Borrower, no waiver or consent with respect to this Note will be
binding or effective unless it is set forth in writing and signed by the party
against whom such waiver is asserted. No course of dealing between
Borrower and Holder will operate as a waiver or modification of any party’s
rights or obligations under this Note. No delay or failure on the part of
either party in exercising any right or remedy under this Note will operate
as a
waiver of such right or any other right. A waiver given on one occasion
will not be construed as a bar to, or as a waiver of, any right or remedy on
any
future occasion.
7.
Waivers
of Borrower.
Borrower hereby waives presentment, notice of non-payment, notice of dishonor,
protest, demand and diligence. This Note may be amended only by a writing
executed by Borrower and Holder.
8.
Representations
and Warranty of Holder.
Holder hereby represents and warrants to, and agrees with, the Company,
that:
8.1
Authorization.
This
Note
constitutes Holder’s valid and legally binding obligation, enforceable in
accordance with its terms except as may be limited by (i) applicable
bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting the enforcement of creditors’ rights generally and
(ii) the effect of rules of law governing the availability of equitable
remedies. Holder represents that Holder has full power and authority to
enter into this Note.
8.2
Purchase
for Own Account. Holder
is being acquired for investment for Holder’s own account, not as a nominee or
agent, and not with a view to the public resale or distribution thereof within
the meaning of the 1933 Act, and Holder has no present intention of selling,
granting any participation in, or otherwise distributing the same.
8.3
Disclosure
of Information.
Holder has received or has had full access to all the information he considers
necessary or appropriate to make an informed investment decision with respect
to
the Note. Holder further has had an opportunity to ask questions and
receive answers from the Borrower regarding the terms and conditions of the
offering of the Note and to obtain additional information (to the extent the
Borrower possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify any information furnished to Holder
or to
which Holder had access.
8.4
Investment
Experience.
Holder understands that the purchase of the Note involves substantial
risk. Holder (i) has experience as an investor in securities of
companies and acknowledges that Holder is able to fend for itself, can bear
the
economic risk of Holder’s investment in the Note and has such knowledge and
experience in financial or business matters that Holder is capable of evaluating
the merits and risks of this investment in the Note and protecting his own
interests in connection with this investment and/or (ii) has a preexisting
personal or business relationship with the Borrower and certain of its officers,
directors or controlling persons of a nature and duration that enables Holder
to
be aware of the character, business acumen and financial circumstances of such
persons.
8.5
Accredited
Investor Status.
Holder is an “accredited investor” within the meaning of Regulation D
promulgated under the 1933 Act.
8.6
Restricted
Security. Holder
understands that the Note is characterized as a “restricted security” under the
1933 Act and Rule 144 promulgated thereunder inasmuch as they are being
acquired from the Borrower in a transaction not involving a public offering,
and
that under the 1933 Act and applicable regulations thereunder such Note may
be
resold without registration under the 1933 Act only in certain limited
circumstances. In this connection, Holder is familiar with Rule 144,
as presently in effect, and understands the resale limitations imposed thereby
and by the 1933 Act. Holder understands that the Borrower is under no
obligation to register the Note.
8.7
No
Solicitation. At
no
time was Holder presented with or solicited by any publicly issued or circulated
newspaper, mail, radio, television or other form of general advertising or
solicitation in connection with the offer, sale and purchase of the
Note.
8.8
Further
Limitations on Disposition.
Without in any way limiting the representations set forth above, Holder further
agrees not to make any disposition of the Note unless and until:
(a)
there
is
then in effect a registration statement under the 1933 Act covering such
proposed disposition and such disposition is made in accordance with such
registration statement; or
(b)
Holder
shall have notified the Borrower of the proposed disposition, and shall have
furnished the Borrower with a statement of the circumstances surrounding the
proposed disposition, and, at the expense of Holder or its transferee, with
an
opinion of counsel, reasonably satisfactory to the Borrower, that such
disposition will not require registration of such Note under the 1933
Act.
Notwithstanding
the provisions of paragraphs (a) and (b) above, no such registration statement
or opinion of counsel shall be required: (i) for any transfer of the
Note in compliance with Rule 144 or Rule 144A; (ii) for any
transfer of any Note by a Holder that is a partnership or a corporation to
(A) a partner of such partnership or shareholder of such corporation,
(B) a controlled affiliate of such partnership or corporation, (C) a
retired partner of such partnership who retires after the date hereof,
(D) the estate of any such partner or shareholder; or (iii) for the
transfer by gift, will or in testate succession by any Holder to his or her
spouse or lineal descendants or ancestors or any trust for any of the foregoing;
provided that in each of the foregoing cases the transferee agrees in writing
to
be subject to the terms of this Section 8 to the same extent as if the
transferee were an original Holder hereunder.
9.
Governing
Law. This
Note will be governed by and construed in accordance with the internal laws
of
the State of California as applied to agreements between residents thereof
to be
performed entirely within such State, without reference to that body of law
relating to conflict of laws or choice of law.
10.
Severability; Headings.
The invalidity or unenforceability of any term or provision of this Note will
not affect the validity or enforceability of any other term or provision
hereof. The headings in this Note are for convenience of reference only
and will not alter or otherwise affect the meaning of this Note.
11.
Jurisdiction;
Venue.
Borrower, by its execution of this Note, hereby irrevocably submits to the
in personam
jurisdiction of the state courts of the State of California for the purpose
of
any suit, action or other proceeding arising out of or based upon this
Note.
12.
Attorneys’
Fees.
If
suit is brought for collection of this Note, Borrower agrees to pay all
reasonable expenses, including attorneys’ fees, incurred by Holder in connection
therewith whether or not such suit is prosecuted to judgment.
13.
Assignment.
This Note is freely transferable and assignable by Holder, provided that such
transfer is made in compliance with all applicable state and federal Note
laws. Any reference to Holder herein will be deemed to refer to any
subsequent transferee of this Note at such time as such transferee holds this
Note. This Note may not be assigned or delegated by Borrower,
whether by voluntary assignment or transfer, operation of law, merger or
otherwise.
IN
WITNESS WHEREOF, Borrower has executed this Note as of the date and year first
above written.
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BORROWER:
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Agreed
to and Acknowledged by:
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OXIS
International, Inc.
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a
Delaware corporation
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LENDER:
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/s/
Steven T. Guillen
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By:
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/s/
Michael D. Centron
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Name:
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Steven
T. Guillen
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Name:
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Michael
D. Centron
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Title:
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President
and Chief Executive Officer
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Title:
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Vice
President, Chief Financial
Officer
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