EXHIBIT 4.20
AMENDMENT NO. 2 TO CONVERTIBLE PROMISSORY NOTE
THIS AMENDMENT NO. 2 TO CONVERTIBLE PROMISSORY NOTE (this "Amendment"),
effective as of August 29, 2002 (the "Effective Date") is entered into by and
between ROYCAP INC., a corporation organized under the laws of Ontario, Canada
(the "Holder") and TRINITY MEDICAL GROUP USA, INC., a Florida corporation (the
"Maker"), with respect to the following facts.
RECITALS
A. The Holder and the Maker entered into the Convertible Promissory
Note (the "Agreement") dated as of June 29, 2001, which had an original Maturity
Date of June 29, 2002 and had an outstanding principal balance of $300,000 USD
as of June 29, 2002 and as of the Effective Date.
B. The Holder and the Maker entered into Amendment No. 1 to Convertible
Promissory Note dated as of July 11, 2002, which provided for an extension of
the original Maturity Date to July 21, 2002.
C. The parties now desire to amend the Agreement on the terms and
conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants set forth below, the parties amend the Agreement and otherwise
agree as follows:
ARTICLE 1
EXTENSION OF MATURITY DATE
1.1 Section 2 of the Agreement shall be restated in its entirety to
read as follows:
2. Payment of Principal. At the Maturity Date, the outstanding
principal amount of this Note plus all accrued and unpaid interest
herein shall be due and payable in cash or, at the option of the
Holder, converted into the Maker's Common Stock at the conversion price
per share of Common Stock set forth in Section 7 hereof. Upon the
conversion of this Note as provided in Section 7(a) hereof, the
outstanding principal amount of this Note, together with accrued
interest hereon, shall be deemed to be the consideration for the
Holder's interest in the Common Stock on the Maturity Date. For
purposes of this Note, the term "Maturity Date" shall mean the earlier
of (i) February 28, 2003; or (ii) the date on which the Note becomes
immediately due and payable pursuant to Section 6 hereof.
ARTICLE 2
ADDITIONAL CONVERTIBLE PROMISSORY NOTE
For value received, the undersigned, TRINITY MEDICAL GROUP USA, INC., a
Florida corporation (the "Maker"), hereby unconditionally promises to pay to the
order of ROYCAP INC., a corporation organized under the laws of Ontario, Canada
(the "Holder"), at such place as the Holder may designate, the principal sum of
FIFTY THOUSAND DOLLARS ($50,000 USD) on the Maturity Date (as such term is
hereinafter defined), and to pay interest on the unpaid principal amount of this
Note, commencing from the date hereof, before and after the Maturity Date and
after any judgment until paid in full, at the rate of eight percent (8%) per
annum (computed on the basis of a year of 360 days for the actual number of days
elapsed) until paid in full, in accordance with this Note. All payments
hereunder shall be in lawful money of the United States and in immediately
available funds.
Payment of Principal. At the Maturity Date, the outstanding principal
amount of this Note plus all accrued and unpaid interest herein shall be due and
payable in cash or, at the option of the Holder, converted into the Maker's
Common Stock at the conversion price per share of Common Stock set forth in
Section 7 of the Agreement. Upon the conversion of this Note as provided in
Section 7(a) of the Agreement, the outstanding principal amount of this Note,
together with accrued interest hereon, shall be deemed to be the consideration
for the Holder's interest in the Common Stock on the Maturity Date. For purposes
of this Note, the term "Maturity Date" shall mean the earlier of (i) February
28, 2003; or (ii) the date on which the Note becomes immediately due and payable
pursuant to Section 6 of the Agreement.
Interest. Interest on the outstanding principal amount under this
Additional Convertible Promissory Note shall accrue, in arrears, at the rate set
forth herein, commencing from the date hereof and continuing until the earlier
of (i) the conversion of this Note in accordance with Section 7 of the Agreement
and (ii) the payment in full of the outstanding principal amount of this
Additional Convertible Promissory Note. Accrued interest shall be due and
payable on February 28, 2003 in cash or, at the option of the Maker, converted
into shares of the Maker's common stock, par value $.001 per share (the "Common
Stock") at the conversion price set forth in Section 7 of the Agreement.
All other terms and conditions provided for in the Agreement, apply to
this Additional Convertible Promissory Note except for as explicitly excluded or
amended herein.
ARTICLE 3
COLLATERAL
Both the Promissory Note dated June 29, 2001 and the Additional
Convertible Promissory Note referenced herein, shall be collateralized and
secured by ONE MILLION AND TWO HUNDRED THOUSAND (1,200,000) shares of restricted
common stock of The Immune Response Corporation, which his held and fully owned
by the Maker.
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ARTICLE 4
EVENTS OF DEFAULT
Section 5 of the Agreement shall apply to the Additional Convertible
Promissory Note referenced in Article 2 above. In addition, both the Promissory
Note dated June 29, 2001 and the Additional Convertible Promissory Note
referenced herein, shall be declared immediately in default if at any time
during the term of the Notes the closing price of The Immune Response
Corporation's common stock is below $.30 for five (5) consecutive trading days.
ARTICLE 5
WARRANTS
Section 3 of the Agreement shall be supplemented as follows:
On the date of conversion of the remaining principal balance ($300,000)
of the Promissory Note dated June 29, 2001 and the Additional Convertible
Promissory Note referenced herein, the Maker shall have issued to the Holder a
warrant, substantially in the form attached as Attachment A to the Agreement
(the "Warrant") to purchase such number of shares of the Maker's Common Stock
equal to aggregate number of shares of Common Stock issued upon conversion of
the outstanding Notes. The Warrant shall have an exercise price equal to $.10
per share of the Maker's Common Stock and shall have a term of five (5) years
from its date of issuance.
Additionally, the Maker immediately grants to the Holder a Transaction
Warrant to purchase ONE MILLION (1,000,000) shares of the Maker's Common Stock.
The Transaction Warrant shall have an exercise price equal to $.10 per share of
the Maker's Common Stock and shall have a term of five (5) years from the
Effective Date.
ARTICLE 6
REGISTRATION OF CONVERSION SHARES AND WARRANTS
The Maker is required to file a registration statement covering the
estimated number of shares upon conversion of the Promissory Note dated June 29,
2001 (including any shortfall shares), the Additional Convertible Promissory
Note referenced herein and the related Warrant shares and Transaction Warrant
shares as soon as possible, but in any event not later than 45 days following
the Effective Date.
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ARTICLE 7
MISCELLANEOUS
7.1 All terms used, but not defined, in this Amendment shall have the
respective meanings set forth in the Agreement.
7.2 This Amendment shall be effective for all purposes as of the
Effective Date. Except as otherwise expressly modified by this Amendment, the
Agreement shall remain in full force and effect in accordance with its terms.
7.3 This Amendment shall be governed by, interpreted and construed in
accordance with the laws of the State of New York, without regard to conflict of
law principles.
7.4 This Amendment may be executed in counterparts, each of which shall
be deemed to be an original and together shall be deemed to be one and the same
document.
7.5 In the event of default as defined in Section 5 of the Agreement or
Article 4 herein, The Maker will deliver the collateral to the Holder with all
the necessary powers of attorney or other such documentation as required to
transfer the collateral to the holder. In the event of default, the Holder may
convert the Promissory Note dated June 29, 2001 and the Additional Convertible
Promissory Note into the collateral shares. The value of the collateral shares
will be valued using 80% of the average closing price for the three days
preceding the conversion date(s). Any residual shares after the notes have been
paid off including interest and penalties, if any, will be promptly returned to
the Maker. In the event that the collateral is not sufficient to pay down the
notes the Maker will be liable for any balances outstanding.
7.6 Holder hereby agrees to accept the collateral as specified in
Article 3 herein and to pursue no other legal remedies or actions against the
Maker.
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IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Amendment effective as of the Effective Date.
ROYCAP INC.
By /S/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
Chief Executive Officer and President
TRINITY MEDICAL GROUP USA, INC.
By /S/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Chief Financial Officer
By /S/ Xxxxx X. Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxx
Chief Executive Officer
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