AGREEMENT
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AGREEMENT dated as of March 31, 2003 by and among Gryphon Opportunities
Fund I, LLC, a Delaware limited liability company, with offices at 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Gryphon"), York Avenue Holding Corp., with
offices at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("York"), and eClickMD,
Inc., a Nevada corporation, with offices at 0000 Xxx Xxxxx Xxxx (Xxxxx 000),
Xxxxxx, Xxxxx 00000 (the "Company"),.
W I T N E S S E T H:
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WHEREAS, the Company is a development stage entity with an unaudited
accumulated deficit of $11,283,580 as of December 31, 2002, limited revenues, no
income and/or assets;
WHEREAS, York made, among other loans, loans as demand loans to the
Company (excluding accrued but unpaid interest), in the aggregate principal
amount of One Hundred Forty Three Thousand Two Hundred ($143,200) Dollars, as
follows:
(i) January 29, 2003 - $90,000 (including $10,000 paid by
York to legal counsel, which obligation was for the
Company's legal fees);
(ii) February 20, 2003 - $26,000; and
(iii) March 6, 2003 - $27,200 (collectively, the "$143,200
York Debt");
WHEREAS, following demand by York for the repayment of the $143,200
York Debt, the Company informed York that it was unable to repay the $143,200
York Debt;
WHEREAS, York is an affiliate of Gryphon;
WHEREAS, as of March 31, 2003, Gryphon has loaned to the Company an
aggregate principal amount of $1,403,403.38, all as provided on Schedule 1
annexed hereto (the $1,403,403.38 aggregate principal amount plus all accrued
but unpaid interest on such loans shall hereinafter collectively be referred to
as the "Gryphon Debt");
WHEREAS, following demand by Gryphon for the repayment of the Gryphon
Debt, the Company informed Gryphon that it was, currently is and in the future
will not be able to repay the Gryphon Debt;
WHEREAS, the Company has informed Gryphon that it has no remaining
funds to continue its operations and unless it receives an immediate infusion of
capital, it will be required to cease operations;
WHEREAS, the Company has attempted to raise funds from a number of
different sources but is unable to obtain any debt, equity and/or other
financing; and
WHEREAS, the Company, York and the Debt Holder have agreed that in
consideration for (i) York converting the $143,200 York Debt into 1.43 units
(the "Units") of the Company, each Unit consisting of ten (10) shares of the
Company's Series A Convertible Preferred Stock (the "A Preferred Shares"),
convertible into shares of the Company's common stock, par value $.001 per share
(the "Common Stock") and a five (5) year warrant (a "Warrant") to purchase
thirty-three and one-third (33.33%) percent of the number of shares of Common
Stock initially issuable upon conversion of the A Preferred Shares included in
the Units at an initial exercise price of $1.00 per share (the "Units, the A
Preferred Shares and the Warrants shall hereinafter collectively be referred to
as the "Securities"), and (ii) Gryphon making a secured demand loan in the
aggregate principal amount of Fifty Thousand ($50,000) Dollars bearing interest
at the rate of five (5%) percent per annum to the Company evidenced by the form
of 5% promissory demand note (the "Demand Note") annexed hereto as Exhibit 1
(the "$50,000 Demand Loan"), the Company shall secure the $50,000 Demand Loan
and the Gryphon Debt by all of the Company's assets by granting to Gryphon a
priority first lien security interest in and to any and all of the Company's
assets by, among other things, entering into the Security Agreement (as defined
below).
NOW, THEREFORE, in consideration of the mutual premises and covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby covenant and agree, as follows:
1. Agreement Between the Parties. In consideration of (i) York
converting the $143,200 York Debt into the Securities, and (ii) Gryphon making
the $50,000 Demand Loan to the Company, the Company shall issue to Gryphon the
Demand Note and enter into the Security Agreement annexed to this Agreement (the
"Security Agreement") as Exhibit 2.
2. Representations and Warranties of Gryphon and York. Gryphon
and York hereby represent and warrant to the Company, as follows:
(a) They each have full power and authority to execute
and deliver this Agreement and to take any and all actions and perform any and
all of its obligations hereunder, and this Agreement is a legally binding
obligation of each enforceable in accordance with its terms;
(b) York is an "accredited investor," as such term is
defined in Regulation D of the Rules and Regulations promulgated under the
Securities Act of 1933, as amended (the "1933 Act"); York is acquiring the
Securities for himself and not with a review toward resale and/or distribution;
and
(c) York acknowledges that (a) the Securities have not
been and are not being registered under the 1933 Act or any state securities
laws; (b) the Securities may not be offered for sale, sold, assigned, pledged,
transferred or otherwise disposed of (each a "Disposition") unless, prior to
effecting any such Disposition (other than any transfer not involving a change
in beneficial ownership (i) there is in effect a registration statement under
the 1933 Act covering the Disposition and the Disposition is made in accordance
with such registration statement, or (ii) York gives written notice to the
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Company of its intention to effect a Disposition and such notice shall describe
the manner and circumstances of the proposed Disposition, and shall be
accompanied by either (A) a written opinion of a legal counsel that a
Disposition of the Securities may be made pursuant to an exemption from such
registration, or (B) any other evidence reasonably satisfactory to counsel to
the Company; and (C) the Company is under no obligation to register the
Securities under the 1933 Act or any state securities laws or to comply with the
terms and conditions of any registration exemption thereunder.
3. Representations and Warranties of the Company.
(a) The Company acknowledges that it is indebted to
Gryphon as of March 31, 2003 in the aggregate principal amount of $1,403,443.30
(plus accrued but unpaid interest thereon), all as set forth in Schedule 2
hereto;
(b) The Company acknowledges that it is indebted to York
in the amount of the $143,200 Debt (plus all accrued but unpaid interest
thereon);
(c) The Company has the requisite corporate power and
authority to enter into and perform its obligations under this Agreement and the
Security Agreement, as provided in such agreements including, but not limited
to, to issue the Securities and the Demand Note in accordance with the terms of
this Agreement, borrow the $50,000 Demand Loan from Gryphon represented by the
$50,000 Demand Note and secure the $50,000 Demand Loan and the Gryphon Debt as
provided in the Security Agreement. The execution and delivery of this Agreement
and the Security Agreement by the Company and the consummation by the Company of
the transactions contemplated by such agreements including, without limitation,
the issuance of the Securities, the borrowing of the $50,000 Demand Loan from
Gryphon represented by the Demand Note and the securing of the $50,000 Demand
Loan and the Gryphon Debt as provided in the Security Agreement, has been duly
authorized by the Company's Board of Directors and no further consent or
authorization is required by the Company, its Board of Directors or its
stockholders. This Agreement, the Note and the Security Agreement have been duly
executed and delivered by the Company, and constitute valid and binding
obligations of the Company enforceable against the Company in accordance with
their respective terms; and
(d) The issuance, sale and delivery of the Securities to
York pursuant to the terms of this Agreement has been duly authorized by all
requisite corporate action by the Company and, upon issuance, shall be (a) duly
authorized, validly issued, fully paid and non-assessable, (b) free from all
taxes, liens and charges with respect to the issue thereof except that may be
created by York, and (c) entitled to the rights and preferences set forth in the
Securities. Assuming that York is an "accredited investor," the offer and sale
of the Units to York pursuant to the terms of this Agreement are and will be
exempt from the registration requirements of the 1933 Act and the rules and
regulations promulgated thereunder. The Company is not disqualified from the
exemption under Regulation D by virtue of the disqualification contained in Rule
507 thereof or otherwise.
4. Closing. Simultaneously with the execution of this Agreement
by York, Gryphon and the Company, a closing (the "Closing") shall occur at such
place as the parties hereto mutually agree. At the Closing (i) the $143,200 York
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Debt shall automatically be cancelled in exchange for the Company issuing to
York the Securities; (ii) Gryphon shall make the $50,000 Demand Loan to the
Company; and (iii) in addition to issuing to York the Securities and to Gryphon
the Demand Note, the Company shall secure the repayment of the $50,000 Demand
Loan and the Gryphon Debt with a priority first lien on all of the Company's
assets by executing the Security Agreement and performing any and all of its
obligations thereunder.
5. Notices. Any notice required or permitted to be given under
this Agreement shall be sufficient if in writing, and delivered in person to an
Agent or sent by certified or registered mail to his residence (as specified
below or as later given by notice to the Company), or, in the case of notice to
the Company, sent by certified or registered mail to the Company's principal
office, as specified below, or, in the case of either an Agent or the Company,
to any subsequent address specified in writing and communicated to the other
party in accordance with the provisions of this Section 5.
If to the Company:
eClickMD, Inc.
3001 Bee Caves Road (Suite 250)
Xxxxxx, Xxxxx 00000
Attention: President
If to York:
York Avenue Holding Corp.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
If to Gryphon:
Gryphon Opportunities Fund I, LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
6. Alteration and Amendment. No change or modification of this
Agreement shall be valid unless the same is in writing and signed by all the
parties hereto. No waiver of any provision of this Agreement shall be valid
unless in writing and signed by the person against whom it is sought to be
enforced. The failure of any party at any time to insist upon strict performance
of any condition, promise, agreement or understanding set forth herein shall not
be construed as a waiver or relinquishment of the right to insist upon strict
performance of the same condition, promise, agreement or understanding at a
future time.
7. Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the validity or
enforceability of any other provision hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provision were
omitted.
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8. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York without
regard to the conflicts of laws principles thereof. The parties hereto hereby
agree that any suit or proceeding arising directly and/or indirectly pursuant to
or under this Agreement, shall be brought solely in a federal or state court
located in the City, County and State of New York. By its execution hereof, the
parties hereby covenant and irrevocably submit to the in personam jurisdiction
of the federal and state courts located in the City, County and State of New
York and agree that any process in any such action may be served upon any of
them personally, or by certified mail or registered mail upon them or their
agent, return receipt requested, with the same full force and effect as if
personally served upon them in New York City. The parties hereto waive any claim
that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense or lack of in personam jurisdiction with respect
thereto. In the event of any such action or proceeding, the party prevailing
therein shall be entitled to payment from the other party hereto of its
reasonable counsel fees and disbursements.
9. Entire Agreement. This Agreement, together with all exhibits
and schedules hereto, contains the entire agreement of the parties with respect
to the subject matter hereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties have hereunto affixed their hand and
seal as of the day and year first above written.
eCLICKMD, INC.
By: /s/ XXXX XXXXXX
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Name: Xxxx Xxxxxx
Title: Chief Financial Officer
GRYPHON OPPORTUNITIES FUND I, LLC
By: /s/ YOUNIS ZUBCHEVICH
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Name: Younis Zubchevich
Title: President
YORK AVENUE HOLDING CORP.
By: /s/ YOUNIS ZUBCHEVICH
-------------------------------------
Name:
Title:
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SCHEDULE 1
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OUTSTANDING LOANS (AND ACCRUED BUT UNPAID
INTEREST) MADE BY GRYPHON TO THE COMPANY
WILL BE SECURED PURSUANT TO THE SECURITY AGREEMENT
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Principal Amount of Accrued But Unpaid
Loan and Interest Interest as of
Date Loan Made Rate March 31, 2003 Maturity Date
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On Closing pursuant $50,000 --
to this Agreement 5% per annum On Demand
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$125,000
10/04/01 5% per annum $ 9,374.50 Matured
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$125,000
10/04/01 5% per annum $ 9,374.50 Matured
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$141,304
11/30/01 5% per annum $ 9,419.83 Matured
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$12,649.08
11/30/01 No interest Waived Matured
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$217,391.30
12/21/01 5% per annum $14,453.75 Matured
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$100,000
04/10/02 5% $ 5,834.00 Matured
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$100,000
05/07/02 6% per annum $ 5,383.33 Matured
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$60,000
06/07/02 7.5% per annum $ 3,662.50 Matured
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$148,000
06/17/02 7.5% per annum $ 8,664.17 Matured
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$100,000
07/02/02 7.5% per annum $ 5,604.17 Matured
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$86,599
07/18/02 7.5% per annum $ 4,562.38 Matured
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$101,900
08/08/02 7.5% per annum $ 4,925.17 Matured
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$85,600
08/28/02 7.5% per annum $ 3,780.67 Matured
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TOTALS: $1,453,443.30 $85,038.97 Matured
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EXHIBIT I
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$50,000 DEMAND NOTE
EXHIBIT 2
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SECURITY AGREEMENT
