Exhibit 99.1
CYTODYN, INC.
PROMISSORY NOTE
__________________, 2005 $______________
CYTODYN, INC., a Colorado corporation (the "Company"), for value
received, hereby promises to pay to the order of ____________ (the "Holder") or
the Holder's registered assigns, the sum of ___________________ ($_________), or
such lesser amount as shall then equal the outstanding principal amount hereof
and any unpaid accrued interest hereon, as set forth below, on the date which is
twelve (12) months from the date (the "Maturity Date") of issuance of this
Promissory Note (the "Note").
The following is a statement of the rights of the Holder and the
conditions to which this Note is subject, and to which the Holder hereof, by the
acceptance of this Note, agrees:
1. Interest.
(a) Interest Rate. The unpaid principal balance of this
Note shall bear simple interest at a rate equal to five percent (5%) per annum
from the date hereof until paid in full.
(b) Maximum Rate Permitted by Law. In the event that any
interest rate provided for in this Section 1 shall be determined to be unlawful,
such interest rate shall be computed at the highest rate permitted by applicable
law. Any payment by the Company of any interest amount in excess of that
permitted by law shall be considered a mistake, with the excess being applied to
the principal amount of this Note without prepayment premium or penalty.
2. Note Register. This Note is transferable only upon the books
of the Company which it shall cause to be maintained for such purpose. The
Company may treat the registered holder of this Note as he or it appears on the
Company's books at any time as the Holder for all purposes.
3. Defaults and Remedies.
(a) Events of Default. An "Event of Default" shall occur
if:
(i) the Company shall default in the payment of
the principal and interest of this Note, when and as the same shall become due
and payable;
(ii) the Company shall default in the due
observance or performance of any material covenant, condition or agreement on
the part of the Company to be observed or performed pursuant to the terms hereof
and such default shall continue for forty-five (45) days after the date of
written notice thereof, specifying such default and, if such default is capable
of being remedied, requesting that the same be remedied, shall have been given
to the Company by the Holder;
(iii) an involuntary proceeding shall be commenced
or an involuntary petition shall be filed in a court of competent jurisdiction
seeking (a) relief in respect of the Company, or of a substantial part of its
property or assets, under Title 11 of the United States Code, as now constituted
or hereafter amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law, (b) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Company, or for
a substantial part of its property or assets, or (c) the winding up or
liquidation of the Company; and such proceeding or petition shall continue
undismissed for ninety (90) days, or an order or decree approving or ordering
any of the foregoing shall be entered; or
(iv) the Company shall (a) voluntarily commence
any proceeding or file any petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal or
state bankruptcy, insolvency, receivership or similar law, (b) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in paragraph (iv) of this
Section 3(a), (c) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Company or any subsidiary, or for a substantial part of its property or assets,
(d) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (e) make a general assignment for the benefit
of creditors, or (f) take any action for the purpose of effecting any of the
foregoing.
(b) Acceleration. If an Event of Default occurs under
Section 3(a)(iii) or (iv), then, the outstanding principal of and all accrued
interest on this Note shall automatically become immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which are
expressly waived pursuant to Section 5 below. If any other Event of Default
occurs and is continuing, then the Holder, by written notice to the Company, may
declare the principal of and accrued interest on this Note to be immediately due
and payable.
4. Loss, Etc., of Note. Upon receipt of evidence satisfactory to
the Company of the loss, theft, destruction or mutilation of this Note, and of
indemnity reasonably satisfactory to the Company if lost, stolen or destroyed,
and upon surrender and cancellation of this Note if mutilated, and upon
reimbursement of the Company's reasonable incidental expenses, the Company shall
execute and deliver to the Holder a new Note of like date, tenor and
denomination.
5. Waiver. The Company hereby waives presentment, demand, notice
of nonpayment, protest and all other demands and notices in connection with the
delivery, acceptance, performance or enforcement of this Note. If an action is
brought for collection under this Note, the Holder shall be entitled to receive
all costs of collection, including, but not limited to, its reasonable
attorneys' fees.
6. Notice. Any notice, approval, request, authorization,
direction or other communication under this Note shall be given in writing and
shall be deemed to have been delivered and given for all purposes (i) on the
delivery date if delivered personally to the party to whom the same is directed
or transmitted by facsimile with confirmation of receipt, (ii) one (1) business
day after deposit with a commercial overnight carrier, with written verification
of receipt, or (iii) three (3) business days after the mailing date, whether or
not actually received, if sent by U.S. mail, return receipt requested, postage
and charges prepaid, at the address of the party set forth on the signature page
of this Note (or at such other address as may be communicated to the notifying
party in writing).
7. Transferability. This Note evidenced hereby may not be
pledged, sold, assigned or transferred except with the express written consent
of the Company, which may be withheld in its sole discretion. Any pledge, sale,
assignment or transfer in violation of the foregoing shall be null and void.
8. Headings; References. All headings used herein are used for
convenience only and shall not be used to construe or interpret this Note.
Except where otherwise indicated, all references herein to Sections refer to
Sections hereof.
9. Successors and Assigns. All of the covenants, stipulations,
promises, and agreements in this Note by or on behalf of the Company shall bind
its successors and assigns, whether so expressed or not.
10. Governing Law. This Note shall be governed by the laws of the
State of Colorado, and the laws of such state (other than conflicts of laws
principles) shall govern the construction, validity, enforcement and
interpretation hereof, except to the extent federal laws otherwise govern the
validity, construction, enforcement and interpretation hereof.
11. Arbitration. Any controversy or claim arising out of or
relating to this Note, or the breach thereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association by an arbitrator agreed upon in writing by the parties, and judgment
upon the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. In the event the parties fail to agree upon the choice of
an arbitrator, each party shall appoint one individual representative and the
two party representatives shall, between themselves, choose an arbitrator.
12. Payments and Pre-Payments. The Company shall be entitled at
any time to prepay any portion or all of the indebtedness owed hereunder without
penalty. Each prepayment hereunder shall be credited first to accrued, unpaid
interest and then to principal. Interest shall thereupon cease to accrue upon
the principal so paid. Each payment on this Note shall be due and payable in
lawful money of the United States of America, at the address of Holder as shown
on the books of the Company, in funds that are or will be available for next
business day use by ▇▇▇▇▇▇. In any case where the payment of principal and
interest hereon is due on a non-business Day, the Company shall be entitled to
delay such payment until the next succeeding business day, but interest shall
continue to accrue until the payment is, in fact, made.
[SIGNATURE PAGE]
CYTODYN, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇, President
The terms hereof are
Agreed and Accepted
HOLDER:
Signature:
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Print Name:
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Title (if applicable):
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