AMENDMENT AND EARLY CONVERSION OF SECURED CONVERTIBLE PROMISSORY NOTE
EXHIBIT
4.12
AMENDMENT AND EARLY
CONVERSION OF
This AMENDMENT AND EARLY CONVERSION OF
SECURED CONVERTIBLE PROMISSORY NOTE (this “Agreement”), dated as of September 5,
2008, is executed by and between Patient Safety Technologies, Inc., a Delaware
corporation (the “Borrower”), and Xxxx Xxxxxx Capital Partners, LLC, a Delaware
limited liability company (the “Lender”), and amends that certain Secured
Convertible Promissory Note in favor of the Lender, dated August 10, 2007, in
the original principal amount of $2,530,558.40 (the “Note”).
W I T N E S S E T
H:
WHEREAS,
the parties desire that the Note be amended to provide for conversion, prior to
the Maturity Date, of the outstanding principal balance of the Note into
1,300,000 shares of common stock of Borrower;
WHEREAS,
the parties desire that such conversion shall be effected following the
satisfaction of certain conditions agreed to by the parties; and
WHEREAS,
the parties desire to enter into other agreements relating to the shares of
Borrower to be received upon such conversion.
NOW,
THEREFORE, in consideration of the premises and the mutual representations,
warranties and covenants contained herein, the parties hereto agree as
follows:
DEFINITIONS.
Capitalized terms used and not
otherwise defined herein shall have their respective meanings as defined in the
Note.
AMENDMENT
OF NOTE.
The
parties hereby amend the Note, effective immediately, by adding a new Section
7(a)(iii) of the Note to read in its entirety as follows:
“(iii) Upon
the completion by Borrower of principal prepayments of $100,000 on August 8,
2008, $100,000 on August 25, 2008 and $250,000 on September 5, 2008, the
remaining outstanding principal balance of $2,080,558.40 may be converted in its
entirety into 1,300,000 shares of Common Stock (the “Early Conversion
Shares”) upon satisfaction of any additional conditions to such
conversion that may be agreed to by the parties (the “Early
Conversion”). Upon such Early Conversion and payment in full
of any accrued and unpaid interest to Noteholder (either in cash or in Interest
Shares pursuant to Section 7(b) below), (A) the Noteholder shall promptly file a
UCC-3 Termination Statement and fully and unconditionally release its security
interest created by the Security Agreement, and (B) the Guaranty of Payment
executed by Surgicount Medical, Inc. in favor of the Noteholder shall terminate
and be of no further force or effect.”
EARLY
CONVERSION OF NOTE.
Upon
satisfaction of all of the conditions set forth in Section 3.2, the parties
shall effect an Early Conversion of the outstanding principal balance of the
Note, which shall be converted in its entirety into the Early Conversion Shares
(1,300,000 shares of Common Stock) at the Closing.
The
completion of the Early Conversion and issuance of the Early Conversion Shares
to the Lender (the “Closing”) shall occur
upon the satisfaction of each of the following conditions:
Lender
shall execute such instruments and agreements as are reasonably acceptable to
Borrower and its counsel under which all of the leases identified on Schedule A attached
hereto shall be assigned to Lender (or another company designated by Lender) and
Borrower shall have no further financial responsibility under any of such
leases.
Lender
shall cause the security deposit of approximately $91,524.09 currently being
held in the name of
Borrower at First Tennessee Bank as security for the building lease in the name
of Xxxx Xxxxxx Bodnar& Co. Inc. at 000 Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, XX
to be returned or released to Borrower in full, along with any accrued interest
which may be payable thereon under the terms of such lease.
Borrower
shall have received in writing all waivers or consents from its other security
holders or debt holders which may be necessary or required for Borrower to
complete the Early Conversion under other instruments or agreements to which it
is a party.
Following
the Closing, the Lender may only sell or transfer the Early Conversion Shares
(other than sales or transfers to affiliates of Lender who agree in writing to
be bound by the provisions of this Section 3.3) according to the following
schedule:
|
|
Up
to 400,000 shares may be sold or transferred within the first 90 days
after Closing; and
|
|
|
Up
to 125,000 shares may be sold or transferred during each calendar month
beginning 90 days after Closing.
|
None of
Lender or its affiliates shall issue or make (or cause to be issued or made) any
press release or other public statement or announcement of any kind which states
or implies that Borrower or any of its subsidiaries or any of their respective
officers, directors or employees have any relationship, involvement or
affiliation with Adult Entertainment Capital, Inc. or any other company or
business involved in the adult entertainment or similar business.
Representations,
Warranties and Covenants.
The
Borrower represents, warrants and covenants with and to the Lender as follows,
which representations, warranties and covenants are continuing and shall survive
the execution and delivery hereof:
This
Agreement has been duly authorized, executed and delivered by all necessary
action of the Borrower and is in full force and effect, and the agreements and
obligations of the Borrower contained herein constitute legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their terms.
After
giving effect to the provisions of this Agreement, no Default or Event of
Default exists or has occurred and is continuing.
The
Lender represents, warrants and covenants with and to the Borrower as follows,
which representations, warranties and covenants are continuing and shall survive
the execution and delivery hereof:
This
Agreement has been duly authorized, executed and delivered by all necessary
action of the Lender and is in full force and effect, and the agreements and
obligations of the Lender contained herein constitute legal, valid and binding
obligations of the Lender enforceable against the Lender in accordance with
their terms.
Lender
waives any Default or Event of Default which may have occurred prior to the date
hereof under the Note, along with accrual of interest at the default interest
rate which may have occurred due to any Default or Event of Default prior to the
date hereof.
Effect of
this Agreement. Except as
modified pursuant hereto, no other changes or modifications to the Note are
intended or implied. To the extent of any conflict between the terms
of this Agreement and the Note, the terms of this Agreement shall control. The
Note, as amended hereby, and this Agreement shall be read and be construed as
one agreement. The waivers, consents and modifications herein are
limited to the specifics hereof, shall not apply with respect to any facts or
occurrences other than those on which the same are based.
Further
Assurances. The
parties hereto shall execute and deliver such additional documents and take such
additional actions as may be necessary or desirable to effectuate the provisions
and purposes of this Agreement.
GOVERNING
LAW. THE
VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT AND ANY DISPUTE
ARISING OUT OF THE RELATIONSHIP BETWEEN THE PARTIES HERETO, WHETHER IN CONTRACT,
TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE
OF DELAWARE (WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
LAW).
Binding
Effect. This
Agreement shall be binding upon and inure to the benefit of each of the parties
hereto and their respective successors and assigns.
Counterparts.
This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “pdf” signature page were an original thereof.
[Remainder
of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have
caused this Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the date and year first written above.
|
BORROWER:
a
Delaware corporation
|
|
By:
/s/ Xxxxxxx Xxxxx
|
|
Name: Xxxxxxx
Xxxxx
Title: Chief
Executive Officer
|
|
LENDER:
XXXX
XXXXXX CAPITAL PARTNERS, LLC,
a
Delaware limited liability company
|
|
By:
/s/ Xxxxxx X. Xxxx III
|
|
Name: Xxxxxx
X. Xxxx III
Title: Managing
Member
|
Schedule
A
LEASES
TO BE ASSIGNED TO LENDER
1. Dell
Financial Services Leases
2. Cit
Technologies Financial Services (Ricoh copier) – Lease
3. Paetec
(Telephone equipment lease)
4. Internap
(Telephone & Internet Connectivity agreement)
5. Pitney
Xxxxx equipment lease
