CYTHW Cyclo Therapeutics Inc

Exhibit 10.1

 NOTE PURCHASE AGREEMENT

THIS NOTE PURCHASE AGREEMENT (this “Agreement”), dated as of June 11, 2024 (the “Effective Date”), is entered into by and among CYCLO THERAPEUTICS, INC., a Nevada corporation (the “Company”), and RAFAEL HOLDINGS, INC., a Delaware corporation (the “Investor”).

RECITALS

WHEREAS, the Company has agreed to issue and sell, and the Investor has agreed to purchase, a Convertible Promissory Note in the principal amount of TWO MILLION DOLLARS ($2,000,000.00), substantially in the form attached as Exhibit A hereto (the “Note”), subject to the conditions specified herein.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing, and the representations, warranties, covenants and conditions set forth below, the Company and the Investor, intending to be legally bound, hereby agree as follows:

1.           Authorization of Note. The Company has authorized (a) the sale and issuance to the Investor of the Note and (b) the issuance of shares of its common stock, par value $0.0001 per share (the “Common Stock”), to be issued upon conversion of the Note (the “Conversion Shares”).

2.           Closing of Sale of Note.

(a)         Closing. The closing of the sale and purchase of the Note (the “Closing”) shall be held on the Effective Date, or at such other time as the Company and the Investor may mutually agree (such date is hereinafter referred to as the “Closing Date”).

(b)         Delivery of Note. Subject to the terms and conditions hereof, at the Closing, the Company shall issue the Note to the Investor, and the Investor shall advance the Company a loan in the principal amount of $2,000,000.00 which shall be evidenced by the Note.

3.           Representations; Warranties and Covenants of the Company. The Company represents and warrants to the Investor as follows:

(a)    Organization, Good Standing and Qualification. The Company and each Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation. The Company has the requisite corporate power to own and operate its properties and assets and to carry on its business as now conducted and as proposed to be conducted. The Company is duly qualified and is authorized to do business as a foreign entity and is in good standing in each jurisdiction in which it does business, except where the failure to so qualify would not have a material adverse effect on the business, financial condition, results of operations, assets or liabilities of the Company. As used in this Agreement, the term “Subsidiary” shall mean, with respect to any Person, a corporation or other entity of which more than fifty percent (50%) of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Company.

(b)     Corporate Power. The Company has all requisite corporate power to execute and deliver this Agreement and the Note (collectively the “Note Documents”) and to carry out and perform its obligations under the terms of the Note Documents.

(c)    Authorization. All corporate action on the part of the Company, its directors and its stockholders necessary for the authorization, execution, delivery and performance of this Agreement by the Company and the performance of the Company’s issuance and issuance of the Conversion Shares issuable upon conversion of the Note, has been taken. The Note Documents, when executed and delivered by the Company, shall constitute valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar laws of general application relating to or affecting the enforcement of creditors’ rights generally and by general principles of equity and, with respect to rights to indemnity, subject to federal and state securities laws.

(d)     Non-Contravention. The execution, delivery and performance of this Agreement and the other Note Documents by the Company, and the consummation by the Company of the transactions contemplated hereby, do not (i) contravene or conflict with the certificate of incorporation or bylaws of the Company; (ii) assuming the accuracy of the representations and warranties made by the Investor in Section 4 hereof, constitute a violation in any respect of any provision of any federal, state, local or foreign law, rule, regulation, order, judgment or decree applicable to the Company; or (iii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) or require any consent under, give rise to any right of termination, amendment, cancellation or acceleration of, or to a loss of any material benefit to which the Company is entitled under, or result in the creation or imposition of any lien, claim or encumbrance on any assets of the Company or under, any contract to which the Company is a party or any permit, license or similar right relating to the Company or by which the Company may be bound or affected.

(e)     Governmental Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, or notice to, any federal, state or local governmental authority is required for the authorization, execution, delivery and performance of this Agreement.

(f)    SEC Filings. Since January 1, 2024, the Company has filed in a timely manner (giving effect, where applicable, to any deferral periods provided under Rule 12b-25 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) all reports, schedules, forms, statements and other documents required to be filed by it with the Securities and Exchange Commission (the “SEC”) pursuant to the reporting requirements of the Exchange Act and the rules and regulations promulgated thereunder. The Company has filed on the SEC’s EDGAR system, prior to the date hereof, its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 together with an amendment thereto (as so amended, the “Form 10-K”), its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024 (the “Q1 Form 10-Q”), and any Current Reports on Form 8-K (“Forms 8-K”) required to be filed by the Company with the SEC for events occurring since January 1, 2024 (the Form 10-K, Q1 Form 10-Q and Forms 8-K, together with all exhibits, schedules and other attachments that are filed with such documents, are collectively referred to herein as the “SEC Documents”). Each SEC Document, as of its date (or, if amended or superseded by a filing prior to the Closing Date, then on the date of such filing), did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. Each SEC Document, as it may have been subsequently amended by filings made by the Company with the SEC prior to the date hereof, complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to such SEC Document. As of their respective dates, any financial statements of the Company included in the SEC Documents complied as to form and substance in all material respects with applicable accounting requirements and published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied in the United States (“GAAP”), during the periods involved (except in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements), correspond to the books and records of the Company and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended. The Company is not required to file and will not be required to file any agreement, note, lease, mortgage, deed or other instrument entered into prior to the date of this Agreement and to which the Company is a party or by which the Company is bound which has not been previously filed or incorporated by reference as an exhibit to the SEC Documents. The Chief Executive Officer and the Chief Financial Officer of the Company have signed, and the Company has furnished to the SEC, all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 as of the date hereof. Such certifications contain no exceptions to the matters certified therein and have not been modified or withdrawn; and neither the Company nor any of its officers has received notice from any Governmental Entity questioning or challenging the accuracy of such certifications. The Company is otherwise in compliance with all applicable effective provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations issued thereunder by the SEC.

(g)    Capitalization. The authorized capital stock of the Company consists of 250,000,000 shares of Common Stock, 28,614,384 of which are issued and outstanding, and 5,000,000 shares of preferred stock, par value $.0001 per share, none of which are outstanding or have been designated. The issued and outstanding shares of Common Stock have been duly authorized and validly issued, are fully paid and nonassessable and have not been issued in violation of and are not otherwise subject to preemptive or other similar rights. Except as set forth in its SEC Documents, there are no outstanding subscriptions, options, warrants, convertible or exchangeable securities or other rights granted to or by the Company to purchase shares of Common Stock or other securities of the Company and there are no commitments, plans or arrangements to issue any shares of Common Stock or any security convertible into or exchangeable for Common Stock. Except as set forth in the SEC Documents, there are no outstanding securities or instruments of the Company which contain any redemption or similar provisions; there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Conversion Shares; and none of the Company’s capital stock is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company. Except as set forth in the SEC Documents, there are no stockholder agreements, voting agreements, or other similar arrangements, with respect to the Company’s capital stock to which the Company is a party or, to the Company’s knowledge, between or among any of the Company’s stockholders. The Company has reserved sufficient shares of its Common Stock for issuance upon conversion of the Note in accordance with its terms.

(h)    Issuance of Conversion Shares. The issuance of the Conversion Shares has been duly authorized and, upon issuance in accordance with the terms of the Note, the Conversion Shares will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights.

(i)    Litigation. Except as set forth in its SEC Documents, no actions, suits, proceedings or investigations are pending or, to the knowledge of the Company, threatened in writing against the Company at law or in equity in any court or before any other governmental authority. There is no action, suit, proceeding, claim, arbitration or investigation pending or, to the Company’s knowledge, threatened that seeks to prevent, enjoin, alter, challenge or delay the transactions contemplated by this Agreement.

(j)    Intellectual Property. The Company has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Documents and which the failure to so have could have a material adverse effect (collectively, the “Intellectual Property Rights”). The Company has not received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement, except where such expiration, termination or abandonment would not reasonably be expected to, individually or in the aggregate, have a material adverse effect. The Company has not received, since the date of the latest audited financial statements included within the SEC Documents, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any person, except as could not have or reasonably be expected to not have a material adverse effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another person of any of the Intellectual Property Rights. The Company has taken reasonable security measures to protect the secrecy, confidentiality and value of all of its intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a material adverse effect.

(k)    Offering. Assuming the accuracy of the representations and warranties of the Investor contained in Section 4 hereof, the offer, issue, and sale of the Note are and will be exempt from the registration and prospectus delivery requirements of the Securities Act of 1933, as amended (the “Act”), and have been registered or qualified (or are exempt from registration and qualification) under the registration, permit, or qualification requirements of all applicable state securities law.

(l)    Compliance with Laws and Charter Documents; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation or default of any provisions of its articles of incorporation, bylaws or similar organizational document, as applicable. The Company and its Subsidiaries have materially complied and are currently in material compliance with all applicable judgments, decrees, statutes, laws, rules, regulations and orders of the United States of America and all states thereof, foreign countries and other governmental bodies and agencies having jurisdiction over the Company’s and its Subsidiaries’ business or properties, and neither the Company nor any of its Subsidiaries has received notice that it is in material violation of any statute, rule or regulation of any governmental authority applicable to it. Except as set forth in the SEC Documents, neither the Company nor any of its Subsidiaries is in default (and there exists no condition which, with or without the passage of time or giving of notice or both, would constitute a default) in any material respect in the performance of any bond, debenture, note or any other evidence of indebtedness in any indenture, mortgage, deed of trust or any other material agreement or instrument to which the Company or any of its Subsidiaries is a party or by which any of them are bound or by which the properties of any of them are bound. The Company and its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their business as described in the SEC Documents, except where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a material adverse effect, and the Company has not received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit.

(m)    Taxes. The Company and its Subsidiaries have filed or have obtained currently effective extensions with respect to all federal, state, county, local and foreign tax returns which are required to be filed by them, such returns are complete and accurate in all material respects and all taxes shown thereon to be due have been timely paid with exceptions not material to the Company and its Subsidiaries, taken as a whole. No material controversy with respect to taxes of any type with respect to the Company or any of its Subsidiaries is pending or, to the Company’s knowledge, threatened. The Company and its Subsidiaries have withheld or collected from each payment made to their employees the amount of all taxes required to be withheld or collected therefrom and have paid all such amounts to the appropriate taxing authorities when due (including, but not limited to, federal income taxes, Federal Insurance Contribution Act taxes and Federal Unemployment Tax Act taxes). Neither the Company nor any of its Subsidiaries has any material tax liability relating to income, properties or assets as of the Closing that is not adequately provided for.

(n)    Absence of Certain Changes or Events. Except as set forth in the SEC Documents, since December 31, 2023, the business and operations of the Company and its Subsidiaries have been conducted in the ordinary course consistent with past practice, and there has not been:

(i)    Any declaration, setting aside or payment of any dividend or other distribution of the assets of the Company with respect to any shares of capital stock of the Company;

(ii)    any repurchase, redemption or other acquisition by the Company of any outstanding shares of the Company’s capital stock;

(iii)    any damage, destruction or loss to the Company’s or its Subsidiaries’ properties or assets, whether or not covered by insurance, except for such occurrences, individually and collectively, that have not had, and would not reasonably be expected to have, a material adverse effect;

(iv)    any waiver by the Company or any of its Subsidiaries of a valuable right or of a material debt owed to it, except for such waivers, individually and collectively, that have not had, and would not reasonably be expected to have, a material adverse effect;

(v)    any material change by the Company in its accounting principles, methods or practices or in the manner in which it keeps its accounting books and records, except any such change required by a change in GAAP or by the SEC;

(vi)    any material change or amendment to, or any waiver of any material right under a material contract or arrangement by which the Company, any of its Subsidiaries or any of their assets or properties is bound or subject that could be expected to have a material adverse effect;

(vii)    any other event or condition of any character, except for such events and conditions that have not resulted, and are not reasonably expected to result either individually or collectively, in a material adverse effect;

(viii)    any sale of any assets, individually or in the aggregate, in excess of $50,000 outside of the ordinary course of business, other than the sale of inventory; or

(ix)    any capital expenditures, individually or in the aggregate, in excess of $50,000 outside of the ordinary course of business.

(x)    Broker’s, Finder’s or Similar Fees. There are no brokerage commissions, finder’s fees or similar fees or commissions payable by the Company or its Subsidiaries in connection with the Transactions based on any agreement, arrangement or understanding with the Company or any action taken by the Company or its Subsidiaries. Notwithstanding the foregoing or any other provision herein, the Investor shall not be liable for any brokerage commission, finder’s fees or similar fees or commissions.

(xi)    Transactions with Affiliates. Except as set forth in the SEC Documents, none of the officers, directors or employees of the Company or any of its Subsidiaries has entered into any transaction with the Company or any of its Subsidiaries that would be or will be required to be disclosed pursuant to Item 404(a) of Regulation S-K of the SEC.

(xii)    OFAC; Anti-Terrorism; Patriot Act. Neither the Company nor any Subsidiary nor any Affiliate of Company: (a) is a Sanctioned Person, (b) has any assets in Sanctioned Entities, or (c) derives any operating income from Investments in, or transactions with Sanctioned Persons or Sanctioned Entities. The proceeds of the Note will not be used to fund any operations in, finance any Investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity. The Company and its Subsidiaries are in compliance with any United States Requirements of Law relating to terrorism, sanctions or money laundering (the “Anti-Terrorism Laws”), including the United States Executive Order No. 13224 on Terrorist Financing (the “Anti-Terrorism Order”) and the Patriot Act. No part of the proceeds of the Note will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, or any other Anti-Terrorism Law. Neither the Company nor any Subsidiary nor any Affiliate of the Company (i) is listed in the annex to, or is otherwise subject to the provisions of, the Anti-Terrorism Order, (ii) is owned or controlled by, or acting for or on behalf of, any person listed in the annex to, or is otherwise subject to the provisions of, the Anti-Terrorism Order or (iii) commits, threatens or conspires to commit or supports “terrorism” as defined in the Anti-Terrorism Order.

(xiii)    Foreign Corrupt Practices Act; Etc. Each of the Company, its Subsidiaries and their respective officers, directors, employees, agents and other persons acting on behalf of the Company or its Subsidiaries are in compliance with and have not violated the Foreign Corrupt Practices Act of 1977, as amended, or any rules and regulations thereunder, or any similar laws of any foreign jurisdiction. To the Company's knowledge, no governmental or political official in any country is or has been employed by, or acted as a consultant to or held any beneficial ownership interest in the Company or any of its Subsidiaries. The Company, its Subsidiaries and their respective officers, directors, employees and agents are in compliance with and have not violated the U.S. money laundering laws or regulations, the U.S. Bank Secrecy Act, as amended by the USA Patriot Act of 2001 (including any recordkeeping or reporting requirements thereunder), or the anti-money laundering laws or regulations of any jurisdiction.

As used in this Section 3, the following terms shall have the following meaning:

“Affiliate” of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. A Person shall be deemed to control another Person if the controlling Person owns 10% or more of any class of voting securities (or other ownership interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of Capital Stock, by contract or otherwise; provided that in no event shall the Investor, or any of its Affiliates, on the one hand, and the Company, on the other hand, be deemed to be “Affiliates” of one another.

“Capital Stock” means (a) any capital stock, partnership, membership, limited liability company, joint venture or other ownership or equity interest or other equivalent, participation or securities (whether voting or non-voting, whether preferred, common or otherwise, whether certificated or uncertificated, and however designated), and (b) any option, warrant, security, appreciation right, profits interests or other right (including Indebtedness securities or other evidence of indebtedness) directly or indirectly convertible into or exercisable or exchangeable for, or otherwise to acquire directly or indirectly, any capital stock, partnership, membership, limited liability company, joint venture or other ownership or equity interest, participation or security described in clause (a) above.

“Investment” means any direct or indirect purchase, acquisition or other investment (including, without limitation, any loan or advance or capital contribution) in or to any Person, whether payment therefor is made in cash or Capital Stock or otherwise, and whether such investment is by acquisition of Capital Stock or Indebtedness, or by loan, advance, transfer of property out of the ordinary course of business, capital contribution (excluding (a) commission, travel, and similar advances to officers and employees of such Person made in the ordinary course of business, and (b) bona fide accounts arising in the ordinary course of business consistent with past practice), equity or profit sharing interest, extension of credit on terms other than those normal in the ordinary course of business or otherwise. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for decreases in value, or write downs or write offs with respect to such Investment.

“Sanctioned Entity” means (a) an agency of the government of, (b) an organization directly or indirectly controlled by, or (c) a person resident in a country that is subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/programs, or as otherwise published from time to time as such program may be applicable to such agency, organization or person.

“Sanctioned Person” means a person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise published from time to time.

4.           Representations and Warranties of the Investor to the Company. The Investor represents and warrants to the Company that:

(a)         Purchase for Own Account. The Investor is acquiring the Note solely for its own account and beneficial interest for investment and not for sale or with a view to distribution of the Note or the Conversion Shares or any part thereof, has no present intention of selling (in connection with a distribution or otherwise), granting any participation in, or otherwise distributing the same, and does not presently have reason to anticipate a change in such intention.

(b)         Information and Sophistication. Without lessening or obviating the representations and warranties of the Company set forth in Section 3, the Investor hereby: (i) acknowledges that it has received all the information it has requested from the Company and it considers necessary or appropriate for deciding whether to acquire the Note and the Conversion Shares, (ii) represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Note and the Conversion Shares and to obtain any additional information necessary to verify the accuracy of the information given to the Investor and (iii) further represents that it has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risk of this investment.

(c)         Ability to Bear Economic Risk. The Investor acknowledges that investment in the Note and the Securities involves a high degree of risk, and represents that it is able, without materially impairing its financial condition, to hold the Note and the Securities for an indefinite period of time and to suffer a complete loss of its investment.

(d)         Accredited Investor Status. The Investor is an “accredited investor” as such term is defined in Rule 501(a) under the Act. The Investor is Delaware corporation with its principal office in the state indicated on the signature page hereof.

(e)         Organization, Good Standing and Qualification. The Investor is duly organized, validly existing and in good standing under the laws of the State of Delaware. The Investor has all power and authority required to enter into this Agreement and consummate the transactions contemplated by this Agreement and the Note.

(f)         Authorization. The execution of this Agreement and the performance by the Investor of the transactions contemplated by this Agreement and the Note and each of the Note Documents have been duly authorized by all necessary action on the part of the Investor. This Agreement has been duly executed by the Investor and constitutes the Investor’s legal, valid and binding obligation, enforceable in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar laws of general application relating to or affecting the enforcement of creditors’ rights generally and by general principles of equity.

(g)         Restricted Securities and Legend. The Investor understand that neither the Note nor any of the Conversion Shares have been registered under the Act or the securities laws of any State and that the Note and the certificates for the Conversion Shares shall be a legend substantially similar to the one found on the Note attached hereto as Exhibit A. Certificates evidencing the Conversion Shares need not contain any legend (i) while a registration statement covering the resale of such security is effective under the Act, (ii) following any sale of such Conversion Shares pursuant to Rule 144, or (iii) if such Conversion Shares are eligible for sale under Rule 144(b)(1) without reliance on the conditions set forth in Rule 144(c)(1) relating to the availability of current public information.

5.           Miscellaneous.

(a)    Binding Agreement. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, expressed or implied, is intended to confer upon any third party any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

(b)    Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflicts of laws principles.

(c)    Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which taken together shall constitute one and the same instrument.

(d)    Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

(e)    Modification; Waiver. No modification or waiver of any provision of this Agreement or consent to departure therefrom shall be effective unless in writing and approved by the Company and the Investor.

(f)    Expenses. Each party shall be responsible for all of its own legal fees incurred with respect to the negotiation, execution and delivery of this Agreement and the other Note Documents and the transactions contemplated herein.

(g)    Entire Agreement. Agreement and the Exhibits hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties have executed this Note Purchase Agreement as of the date first written above.

Signature Page to Note Purchase Agreement

Exhibit A

Form of Convertible Promissory Note

Exhibit 10.2

THIS CONVERTIBLE PROMISSORY NOTE AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.

CONVERTIBLE PROMISSORY NOTE

For value received CYCLO THERAPEUTICS INC., a Nevada corporation (the “Company”) promises to pay to the order of RAFAEL HOLDINGS INC., a Delaware corporation (“Holder”), the principal sum of TWO MILLION DOLLARS ($2,000,000.00), with interest on the outstanding principal amount at the rate of five percent (5%) per annum (the “Interest Rate”), on November 11, 2024 (the “Maturity Date”), or such earlier date as this Note requires or is permitted to be repaid as provided hereunder. Interest shall commence with the date hereof and shall accrue on the outstanding principal amount until paid in full or this Convertible Promissory Note (this “Note”) has been converted as provided below. Interest shall be computed on the basis of a year of 365 days for the actual number of days elapsed. From and after the occurrence and during the continuance of any Event of Default (as defined below), the Interest Rate shall automatically be increased to twelve percent (12.0%) per annum. In the event that such Event of Default is subsequently cured or waived by the Holder, the adjustment referred to in the preceding sentence shall cease to be effective as of the date of such cure or waiver; provided that the interest as calculated and unpaid at such increased rate during the continuance of such Event of Default shall apply beginning on the day of the occurrence of such Event of Default and to, but not including, the date of such cure or waiver of such Event of Default.

This Note has been issued to Holder pursuant to a Note Purchase Agreement (the “Note Purchase Agreement”) entered into between the Company and the Holder dated as of the date hereof,

1.         All payments of interest and principal shall be in lawful money of the United States of America. All payments shall be applied first to accrued interest, and thereafter to principal.

2.         (a)         In the event that the Company consummates any public or private offering of its Equity Securities (as defined below) resulting in gross proceeds of at least $8,000,000 (excluding this Note) (a “Qualified Financing”) at any time prior to the earlier of the Maturity Date and the repayment in full of this Note, then the outstanding principal balance of this Note, together with any accrued and unpaid interest thereon, will automatically convert into shares of the Company’s common stock, par value $.0001 per share (the “Common Stock”), at a conversion price equal to the lesser of (i) $.95 (the “Base Price”), and (ii) eighty percent (80%) of the purchase price paid by the investors purchasing the Equity Securities in the Qualified Financing. For purposes of this Note, the term “Equity Securities” shall mean (1) any shares of Common Stock or preferred stock of the Company, (2) any security convertible or exchangeable for Common Stock or preferred stock of the Company, and (3) any other rights to purchase or otherwise acquire Common Stock or preferred stock of the Company, in each case issued in a Qualified Financing following the date hereof.

(b)         In the event the Company consummates a Sale Transaction (as defined below) with (i) the Holder or an affiliate of the Holder, this Note shall be treated as provided for in the terms of the definitive agreements relating to such Sale Transaction between the parties, or (ii) a third party other than the Holder or an affiliate of the Holder, at the election of the Holder, either (x) the outstanding principal balance of this Note, together with any accrued and unpaid interest thereon, shall convert into that number of shares of Common Stock at a conversion price equal to the lesser of (1) the Base Price and (ii) eighty percent (80%) of the implied value of the Company in the Sale Transaction (the “Conversion Shares”), or (y) the Company will pay to the Holder an amount equal to the outstanding principal balance of this Note, together with any accrued and unpaid interest thereon, in full satisfaction of the Company’s obligations under this Note. For purposes of this Note, the term “Sale Transaction” shall mean (A) the sale of all or substantially all of the Company’s assets, (B) the consolidation or merger of the Company or any of its subsidiaries with or into any other corporation or other entity or person or other similar transaction, or (C) any other transaction or series of related transactions to which the Company is a party in which in excess of fifty percent (50%) of the Company’s voting securities are transferred.

(c)         This Note shall be convertible, in whole or in part, and form time to time, at the Holder’s sole discretion into validly issued, fully paid and non-assessable shares of Common Stock at a conversion price equal to the Base Price.

(d)         The Company shall, as soon as practicable and in no event later than three (3) Business Days prior to the consummation of a Qualified Financing or a Sale Transaction, deliver to Holder notice of such proposed transaction.

(e)         Before the Holder shall be entitled to convert this Note into Common Stock pursuant to Section 2(c), the Holder shall give written notice to the Company at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the shares of Common Stock are to be issued. The Company shall, as soon as practicable thereafter, issue and deliver to Holder or to the nominee or nominees of Holder, a certificate or certificates for the Common Stock to which the Holder shall be entitled as aforesaid. Conversion shall be deemed to have been effected on the date when delivery of notice of an election to convert and surrender of the Note to be converted is made. All Common Stock which may be issued upon conversion of the Note will, upon issuance, be duly issued, fully paid and non-assessable and free from all taxes, liens, and charges with respect to the issuance thereof.

3.         If any of the following events shall occur for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation by law or otherwise) (each, an “Event of Default”):

(a)    Failure of the Company to pay the principal of this Note) as and when due (whether at scheduled maturity, upon acceleration or otherwise), or failure of the Company to pay within three (3) Business Days after the same shall become due (1) any interest upon this Note, or (2) any other Indebtedness or Obligations to the Holder or (3) any other payment obligations under any of the Note Documents;

(b)    Any representation or warranty made or deemed made by or on behalf of the Company to Holder under or in connection with this Note, the Note Purchase Agreement, or any other Note Document or any certificate or information delivered in connection with any of the foregoing shall be materially false when made;

(c)    Failure of the Company to comply with any term, covenant, or provision contained in the Note Purchase Agreement;

(d)    The Company or a Subsidiary shall (1) file or consent to the entry of an order for relief with respect to it under any federal, state or foreign bankruptcy, insolvency, receivership, liquidation or similar law as now or hereafter in effect, (2) make an assignment for the benefit of creditors, (3) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its property, (4) institute any proceeding seeking an order for relief under any federal, state or foreign bankruptcy, insolvency, receivership, liquidation or similar law as now or hereafter in effect seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any such law relating to bankruptcy, insolvency or reorganization or relief of debtors, fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it or file an answer admitting the material allegations of a petition filed against it in any such proceeding, or (5) dissolve, wind up or liquidate;

(e)    Without the application, approval or consent of the Company or a Subsidiary a receiver, trustee, examiner, liquidator or similar official shall be appointed for the Company, or a Subsidiary or any substantial part of its property;

(f)    The Company shall fail within 30 days to pay, bond or otherwise discharge one or more (1) judgments or orders for the payment of money aggregating in excess of $50,000 in the aggregate, or (2) nonmonetary final judgments or orders which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, which judgment(s), in any such case, is/are not stayed on appeal or otherwise being appropriately contested in good faith;

(g)    The occurrence of a Material Adverse Effect;

(h)    The Company shall be enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business;

(i)    The Company or any member of its Senior Management thereof shall be indicted for, convicted of or found culpable of a felony under applicable Law or any violation of applicable Law involving fraud, financial misconduct, theft, dishonesty, embezzlement, breach of fiduciary duty or other conduct that would be subject of any “Bad Actor” disqualifying event under Regulation D, as described in Rule 506(d) thereunder; and

(j)    Except as otherwise expressly permitted hereunder, the Company shall (1) take any action, or shall make a determination, whether or not yet formally approved by its management or board of directors (or equivalent governing body), to (A) suspend the operation of all or a portion of its business, (B) suspend the payment of any material obligations outside of the ordinary course of business or suspend the performance of any material obligations outside of the ordinary course of business or suspend the performance under the Material Contracts outside of the ordinary course of business, or (C) solicit proposals for the employment of, or employ, an agent or other third party to conduct a wind-down of any material portion of its business or (2) be enjoined, restrained or in any way prevented by the order of any Governmental Authority from conducting any part of its business unless such order would not have a Material Adverse Effect;

then, and in any such event, the Holder shall, by notice to the Company, take or cause to be taken any or all of the following actions, without prejudice to the rights of the Holder to enforce its claims against the Company: (1) extend the Maturity Date of this Note on the same terms contained in this Note, (2) declare the principal of and any accrued interest and all other amounts payable under this Note to be due and payable, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company, and (3) exercise any remedies available at law or in equity, either by suit in equity or by action at law, or both, whether for specific performance of any covenant or other agreement contained in this Note; provided, that upon the occurrence of any Event of Default referred to in Section 3(b) then (without prejudice to the rights and remedies specified in clause (3) above) automatically, without notice, demand or any other act by any Holder, the principal of and any accrued interest and all other amounts payable under this Note shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Company, anything contained in this Note to the contrary notwithstanding. No remedy conferred in this Note upon any Holder is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or now or hereinafter existing at law or in equity or by statute or otherwise.

4.         Affirmative Covenants. Until the indefeasible payment in full of all Obligations under the Note in cash or by conversion into Conversion Shares or such later date as set forth below, the Company hereby covenants and agrees with the Holder as follows:

(a)         Notice of Default or Material Adverse Effect. The Company will give prompt notice in writing to the Holder upon becoming aware of: (a) the occurrence of any Event of Default under this Note (such notice to specify the nature and period of existence thereof and what action the Company is taking (and proposes to take) with respect thereto), or (b) the occurrence of any event which constitutes or which with the passage of time or giving of notice or both would, absent other developments in the reasonable control of the Company, would reasonably be expected to have a Material Adverse Effect or constitute an Event of Default.

(b)         Conduct of Business. The Company will, and will cause each Subsidiary to, carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted or those reasonably related or ancillary thereto (the “Business”) and do all things necessary to remain duly incorporated validly existing and in good standing as a domestic corporation in its jurisdiction of incorporation and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted except to the extent the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect.

(c)         Taxes and Claims. The Company will, and will cause each of its Subsidiaries to:

(i)    Timely file complete and correct United States federal and state income and applicable foreign, state and local Tax Returns required by law, in each case with due regard for any extension of time within which to file such Tax Return, and pay when due all Taxes, except those which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been set aside in accordance with generally accepted accounting principles, consistently applied in the United States (“GAAP”), which deferment of payment is permissible so long as no Lien, other than a Permitted Lien has been entered and the Company’s and each Subsidiaries’ title to, and its/their right to use, its properties are not materially adversely affected thereby; and

(ii)    Pay and perform (x) all Obligations under this Note and the other Note Documents and (y) all other Indebtedness, and other obligations and liabilities under material agreements, in accordance with customary trade practices; provided that the Company or such Subsidiary may contest any item described in clause (ii) above in good faith so long as adequate reserves are maintained with respect thereto in accordance with GAAP.

(d)    Insurance. The Company will, and will cause each Subsidiary to, maintain with reputable insurance companies insurance in such amounts and covering such risks consistent with sound business practice.

(e)    Compliance with Laws and Material Assessments. The Company will, and will cause each of its Subsidiaries to, comply with any and all Requirements of Law to which it may be subject including, without limitation, all Environmental Laws, and obtain any and all Licenses necessary to the ownership of its Property or to the conduct of its businesses. The Company will and will cause each of its Subsidiaries to, timely satisfy all material assessments, fines, costs and penalties imposed by any Governmental Authority against it or its property except to the extent such assessments, fines, costs, or penalties are being contested in good faith by appropriate proceedings and for which the Company or such Subsidiaries has set aside on its books adequate reserves in accordance with GAAP.

(f)         Audits and Inspection. The Company will, and will cause each of its Subsidiaries to, permit the Holder, and any of its representatives or designees, to visit and inspect any of its property, books of account, records and reports to examine, audit and make copies thereof, and to discuss its affairs, finances and accounts with, and to be advised as to the same by, its officers, managers, employees and independent certified public accountants at such times and intervals as the Holder may designate upon advance notice to the Company (except following the occurrence and during the continuance of an Event of Default in which case no advance notice shall be required); provided, however, that the Company and its Subsidiaries shall not be obligated under this Section 4(f) to provide the Holder or its representatives or designees with (i) any material non-public information either in its capacity as the Holder or as a shareholder of the Company and (ii) information that the Company reasonably determines in good faith to be trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in a form acceptable to the Company).

(g)         Information Rights. Should the Company no longer be obligated to file periodic reports with the Securities and Exchange Commission under the Securities Exchange Act of 1934, the Company shall deliver to the Holder: as soon as practicable, but in any event within one hundred twenty (120) days after the end of each fiscal year of the Company and audited (A) balance sheets as of the end of such year and (B) statements of income and of cash flows for such year, all in accordance with GAAP; as soon as practicable, but in any event within forty-five (45) days after the end of each quarter of each fiscal year of the Company, unaudited statements of income and cash flows for such fiscal quarter and an unaudited balance sheet as of the end of such fiscal quarter, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end adjustments; and (ii) not contain all notes thereto that may be required in accordance with GAAP); such other information relating to the financial condition, business, prospects, or corporate affairs of the Company as the Holder may from time to time reasonably request; provided, however, that the Company shall not be obligated under this Section 4(g) to provide information (i) that the Company reasonably determines in good faith to be trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in a form acceptable to the Company); or (ii) the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

(h)         Delivery of Certificates. Upon any conversion pursuant to Section 2, the Company shall deliver such certificates representing the Conversion Shares obtained by Holder in the conversion, or credit such Conversion Shares by book entry within two (2) Trading Days (such second Trading Day, a “Share Delivery Date”) of the date of the conversion.

(i)         Reservation of Shares. The Company hereby represents and warrants that there have been reserved, and the Company shall at all times keep reserved and available, solely for issuance and delivery upon conversion of this Note, out of the authorized and unissued shares of its Common Stock, such number of shares of Common Stock as is equal, from time to time, to the number of shares as shall be issuable upon the conversion of this Note. If, at any time while this Note is outstanding, the Company has a transfer agent for its shares of Common Stock, the Company will provide irrevocable written instructions to such transfer agent to reserve the number of shares contemplated to be reserved pursuant to and for the purposes of contemplated by the immediately preceding sentence. The Company agrees that all Conversion Shares issued upon conversion of this Note shall be, at the time of delivery of the certificates for such Conversion Shares, duly authorized, validly issued, fully paid and non-assessable shares of Common Stock of the Company.

5.         Negative Covenants. Until the indefeasible payment in full of all Obligations under this Note in cash or by conversion into Conversion Shares or such later date as set forth below, the Company hereby covenants and agrees with the Holder as follows:

(a)    Distributions. The Company will not make or declare or incur any liability to make any Distributions in respect of the Capital Stock of the Company or any other Indebtedness of the Company or any of its Subsidiaries, except that the Company may declare and pay dividends with respect to its Preferred and Common Stock payable solely in additional shares of its Capital Stock.

(b)    Indebtedness. The Company will not, and will not cause or permit any of its Subsidiaries to, incur or suffer to exist any Indebtedness (directly or indirectly) without the consent of the Holder (which may be withheld in the Holder’s sole discretion), except:

(i)    unsecured trade payables incurred in the ordinary course of Company’s and its Subsidiaries business;

(ii)    Indebtedness existing on the date hereof and as set forth in the SEC Documents;

(iii)    the Obligations;

(iv)    endorsement of items for deposit or collection of commercial paper received in the ordinary course of business;

(v)    Indebtedness with respect to surety and appeal bonds, performance bonds, bid bonds, completion guarantees and similar obligations incurred in the ordinary course of business;

(vi)    accrual of interest, accretion or amortization of original issue discount, in each case, on Indebtedness permitted hereunder;

(vii)    Indebtedness in respect of bid, performance or surety bonds, workers’ compensation claims, self-insurance obligations and bankers acceptances issued for the account of the Company or any Subsidiary in the ordinary course of business, including guarantees or obligations of the Company or any Subsidiary with respect to letters of credit supporting such bid, performance or surety bonds, workers’ compensation claims, self-insurance obligations and bankers acceptances (in each case other than for an obligation for money borrowed);

(viii)    Permitted Indebtedness not to exceed $50,000.00 in outstanding principal amounts owing in amount at any time (with Permitted Indebtedness not included for purposes of such amount).

(c)    Liens. The Company will not, and will not cause or permit any of its Subsidiaries to, create, incur or suffer to exist, any Lien in, of or on its or their Property (whether now owned or hereafter acquired, or upon any income, profits or proceeds therefrom), except the following (“Permitted Liens”):

(i)    Liens for Taxes, assessments or governmental charges or levies on its property if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books, so long as the Company’s or its Subsidiaries’ title to, and its right to use, its properties are not materially adversely affected thereby;

(ii)    Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ liens and other similar Liens arising in the ordinary course of business which secure payment of obligations not more than 30 days past due or which are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books, so long as the Company’s or its Subsidiaries’ title to, and its right to use, its Properties are not materially adversely affected thereby;

(iii)    Utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character, as arise in the ordinary course of business and that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary course of business of the Company or its Subsidiaries and (ii) minor defects in title, in each case, which do not materially interfere with the conduct of the Company’s or its Subsidiaries’ business or the utilization thereof in the business of the Company or its Subsidiaries; and

(iv)    Liens existing on the date hereof and described in the SEC Documents.

(d)    Affiliates. The Company will not, and will not cause or permit any of its Subsidiaries to, enter into any transaction or arrangement (including, without limitation, the purchase or sale of any property or service) with, or make any payment or transfer to, any Affiliate other than transactions with or among wholly-owned Subsidiaries.

6.         This Note is a general unsecured obligation of the Company.

7.         Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and the other Note Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Note. The issuance of Conversion Shares and certificates for Conversion Shares as contemplated hereby upon the conversion of this Note shall be made without charge to the Holder or such Conversion Shares for any issuance tax or other costs in respect thereof; provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.

8.         Payment of Collection, Enforcement and Other Costs. If (a) this Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note or to enforce the provisions of this Note or any other Note Document or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting Company creditors’ rights and involving a claim under this Note, and any of the outstanding balance under this Note is not paid in full, then the Company shall pay the reasonable costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, reasonable attorneys’ fees and disbursements.

9.         Non-circumvention. The Company hereby covenants and agrees that the Company will not, by amendment of its certificate of incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good faith carry out all the provisions of this Note and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company shall take all such actions as may be reasonably necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable Conversion Shares upon the conversion of this Note.

10.         Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective, unless it is in writing and signed by an authorized representative of the waiving party.

11.         Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with the Note Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefor.

12.         Payments. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding day which is a Business Day and interest or any other charges on such amounts shall accrue through the actual date of such payment.

13.         Transferability of Note. Other than to the extent permitted pursuant to Section 5(a), the Holder may not transfer or assign some or all of this Note, without the prior written consent of the Company.

14.         Amendment. Except as otherwise provided herein, the provisions of this Note may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder.

15.         Dispute Resolution. In the case of a dispute as to the determination of the arithmetic calculation of the Conversion Shares (as the case may be), the Company or the Holder (as the case may be) shall submit the disputed determinations via email or certified mail (a) within two (2) Business Days after receipt of the applicable notice giving rise to such dispute to the Company or the Holder (as the case may be) or (b) if no notice gave rise to such dispute, at any time after the Holder or the Company (as the case may be) learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to agree upon such determination or calculation (as the case may be) within ten (10) Business Days of such disputed determination or arithmetic calculation being submitted to the Company or the Holder (as the case may be), then the Company shall, within two (2) Business Days submit via facsimile or email the disputed arithmetic calculation of the Conversion Shares to the Company’s independent, outside accountant. The Company shall cause at its expense the accountant to perform the determinations or calculations (as the case may be) and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives such disputed determinations or calculations (as the case may be). Such accountant’s determination or calculation (as the case may be) shall be binding upon all parties hereto absent demonstrable error. The fees and expenses of such accountant shall be borne by the parties in the same proportion as the respective amounts by which the accountant’s determination differs from such party’s calculation.

16.         Indemnification. In addition to all other sums due hereunder or provided for in this Agreement, the Company shall indemnify and hold harmless the Holder, its Affiliates and their respective managers, officers, directors (which shall not include any director of the Company), agents, employees, Subsidiaries, partners, members, attorneys, accountants, and controlling persons (each, an “Indemnified Party”) to the fullest extent permitted by law from and against any and all reasonable and documented out-of-pocket losses, claims, damages, expenses (including, without limitation, fees, disbursements and other charges of outside counsel and costs of investigation incurred by an Indemnified Party in any action or proceeding between the Company and such Indemnified Party (or Indemnified Parties) or between an Indemnified Part (or Indemnified Parties) and any third party or otherwise) or other liabilities or losses (collectively, “Liabilities”), in each case resulting from or arising out of any breach of any representation or warranty, covenant or agreement of the Company in this Note or any other Note Document, including without limitation, the failure to make payment when due of amounts owning pursuant to this Note or any other Note Document, on the due date thereof (whether at the scheduled maturity, by acceleration or otherwise) or any legal, administrative or other actions (including, without limitation, derivative actions brought by any Person claiming through or in the Company’s name), relating to or arising out of the Note Documents, the transactions, or the gross negligence or willful misconduct of the Company or any of its Affiliates and its respective directors, officers and employees; provided, however, that the Company shall not be liable under this Section 16 to an Indemnified Party to the extent that it is finally judicially determined that such Liabilities resulted primarily from the willful misconduct or gross negligence of an Indemnified Party; provided, further, that if and to the extent that such indemnification is unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of such Liabilities which shall be permissible under applicable laws. In connection with the obligation of the Company to indemnify for expenses as set forth above, the Company further agrees, upon presentation of appropriate invoices, to reimburse each Indemnified Party for all such reasonable and documented out-of-pocket expenses (including, without limitation, reasonable fees, disbursements and other charges of outside counsel and costs of investigation incurred by an Indemnified Party in connection with any liabilities) incurred by such Indemnified Party. Unless this Note is otherwise converted pursuant to the terms hereof, the obligations of the Company under this Section 16 shall survive the payment in full of the other Obligations and the termination of this Note.

17.         This principal amount outstanding under this Note may be prepaid in full by the Company at any time upon not less than ten days prior written notice to the Holder, together with accrued interest thereon and any other amounts owing hereunder through the date of prepayment.

18.         The Company hereby waives demand, notice, presentment, protest and notice of dishonor.

19.         This Note shall be governed by and construed the laws of the State of New York without giving effect to conflicts of laws principles.

20.         Certain Defined Terms. For purposes of this Note, the following terms shall have the following meanings:

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York are authorized or required by law or executive order to close.

“Capital Stock” means preferred stock, common stock, and/or any other class or series of capital stock or other equity securities of the Company, whether authorized as of or after the date hereof.

“Charter Documents” means the articles or certificate of incorporation or formation (as applicable), the bylaws or operating or limited liability company agreement (as applicable), and other similar organizational and governing documents of any Person, as amended, restated, supplemented or otherwise modified from time to time.

“Distributions” by a Person means (a) the declaration or payment of dividends or other distributions (whether in cash, securities or other property or assets) on any now or hereafter outstanding Capital Stock of such Person; (b) any payment (whether in cash, securities or other property or assets) on account of the redemption, repurchase, defeasance, sinking fund or other retirement or acquisition of such Capital Stock or of warrants, rights or other options to purchase such Capital Stock made either directly or indirectly; (c) any loans or advances (other than salaries or advances to, or reimbursement of, directors or employees for travel, entertainment, relocation or other business expenses in the ordinary course of business), to any stockholder(s), partner(s) or member(s) of such Person; (d) any payment or prepayment of principal or premium, if any, or interest, fees or other charges on or with respect to, and any redemption, purchase, retirement, defeasance, sinking fund or similar payment; and (e) setting aside funds for any of the foregoing.

“Environmental Laws” means any and all federal, state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions, Licenses, concessions, grants, franchises, agreements and other governmental restrictions relating to (a) the protection of the environment, (b) the effect of the environment on human health, (c) emissions, discharges or releases of pollutants, contaminants, hazardous substances or wastes into surface water, ground water, air or land, or (d) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, hazardous substances or wastes or the clean-up or other remediation thereof.

“Governmental Authority” means the government of any nation, state, city, locality or other political subdivision of any thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, regulation or compliance, including, without limitation, any federal, state or local public utility commission, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

“Indebtedness” means, with respect to any Person, without duplication, such Person’s (a) obligations for borrowed money, (b) obligations representing the deferred purchase price of Property or services (other than accounts payable arising in the ordinary course of such Person’s business payable on terms customary in the trade and not outstanding more than 90 days past the date of invoice), (c) obligations, whether or not assumed, secured by Liens or payable out of the proceeds or production from Property now or hereafter owned or acquired by such Person, (d) obligations which are evidenced by bonds, debentures, notes, acceptances, or other similar instruments, (e) obligations of such Person to purchase securities or other Property arising out of or in connection with the sale of the same or substantially similar securities or Property, (f) Capital Lease Obligations and obligations created or arising under any conditional sale or other title retention agreement, (g) any obligation guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (f), and (h) any other obligation for borrowed money or other financial accommodation which, in accordance with GAAP, would be shown as a liability on the balance sheet of such Person.

“Licenses” means all licenses, permits, authorizations, determinations, and registrations issued by any Governmental Authority to the Company in connection with the conduct of its business.

“Lien” means any lien (statutory or otherwise), security interest, mortgage, pledge, hypothecation, deed of trust, assignment, deposit arrangement, encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, capital lease, or other title retention agreement (and any lease in the nature thereof)) and any agreement to give any of the foregoing.

“Material Adverse Effect” shall mean a material adverse condition, event, occurrence or development related to, or material adverse change or effect on (a) the transactions contemplated herein, (b) the business, asset, results of operations, cash flows, condition (financial or otherwise), or prospects of the Company and its Subsidiaries taken as a whole, (c) the legality, validity, binding effect or enforceability against the Company of any Note Document, or (d) the rights or remedies, taken as a whole, available to, or conferred upon, the Holder under any Note Document, or (e) a material adverse effect on the ability of the Company to perform its obligations under any Note Document.

“Note Documents” this Note, the Note Purchase Agreement, and each other agreement, document, form or certificate delivered pursuant to this Note or any other Note Document, in each case, as amended, restated, modified or supplemented from time to time.

“Obligations” means, in each case, whether now in existence or hereafter arising: (a) the principal of and interest on (including interest accruing after the filing of any bankruptcy or similar petition) this Note, and (b) all other fees and expenses (including reasonable attorneys’ fees), including interest and fees that accrue after the commencement by or against the Company or any Subsidiary thereof of any proceeding under any federal bankruptcy laws (as now or hereafter in effect) or under any other laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding up or adjustment of debts, naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“Person” means any individual, firm, corporation, limited liability company, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity.

“Property” of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased, or operated by such Person.

“Requirements of Law” means as to any Person, provisions of the Charter Documents of such Person, or any law, treaty, code, rule, regulation, right, privilege, qualification, License or franchise, or any determination of an arbitrator or a court or other Governmental Authority, in each case applicable to such Person or any of such Person’s property or to which such Person or any of such Person’s property is subject or pertaining to any or all of the transactions contemplated or referred to in the Note Documents.

“Senior Management” means with respect to the Company, its chairman, president, chief financial officer, chief operating officer or chief executive officer.

“Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

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Cyclo Therapeutics (NASDAQ:CYTHW)
過去 株価チャート
から 5 2024 まで 6 2024

Cyclo Therapeutics (NASDAQ:CYTHW)
過去 株価チャート
から 6 2023 まで 6 2024