Exhibit 10.21
SECURITY AND LOAN AGREEMENT
This Security and Loan Agreement is made on April ___, 2003 by and
between InforMedix Acquisition Corp., a Delaware Corporation ("IMAC"), its
wholly-owned subsidiary, InforMedix, Inc., a Delaware Corporation ("IMI"),
duly-authorized as a foreign corporation to transact business in the State of
Maryland and each having a business address in said State at 0000 Xxxxxxx Xxxxx,
Xxxxxxxxx, XX 00000 (IMAC and IMI are collectively referred to herein as the
"Debtor") and Xxxxxx X. Xxxxxx, Xx. ("Secured Party").
RECITALS:
Debtor and Secured Party have entered into a Term Sheet, dated March
24, 2003 whereby Secured Party has agreed to fund unto Debtor the Loan. The Loan
was funded by Secured Party and is evidenced by the Convertible Promissory Note
("Note"), which instrument is secured by this Security and Loan Agreement and
public notice thereof is made by the filing of one or more financing statements
pursuant to the laws of the Jurisdiction. In consideration of Ten Dollars
($10.00) in hand paid and in consideration of the Loan, the parties have entered
into this instrument.
WITNESSETH:
1. Grant of Security Interest. For value received and to secure payment
and performance of the Obligations of Debtor to Secured Party, Debtor hereby
grants to Secured Party a continuing security interest in and lien upon the
following described property, whether now owned or hereafter acquired, and any
additions, replacements, accessions, or substitutions thereof and all cash and
non-cash proceeds and products thereof and called the "Collateral" and described
on Exhibit "A" appended hereto and made a part hereof.
2. Debtor's Representations and Warranties - Covenants and Agreements.
If a representation and warranty, Debtor hereby represents, warrants and agrees
each of the following statements are true, valid, complete and correct, if an
affirmative covenant, Debtor represents, warrants and covenants to abide thereby
and if a negative covenant, Debtor represents, warrants and covenants not to
breach the same, to wit:
A. Ownership of the Collateral. Debtor owns the Collateral
and, except with respect to the Senior Lienors, the Collateral is free and clear
of all liens, security interests, and claims except those previously reported in
writing to or approved by Secured Party and liens and security interests granted
to Senior Lienors and Debtor will keep the Collateral free and clear from all
liens, security interests and claims, other than those granted to or approved by
Secured Party. All income, dividends, earnings and profits with respect to the
Collateral shall be reported for state and federal income tax purposes as
attributable to Debtor and not Secured Party.
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B. Names and Offices; Jurisdiction of Organization; Alteration
of Articles of Incorporation and By-Laws - Reorganization - Spinoff; Shares of
Stock - Issued and Outstanding. (i) The name and address of Debtor appearing at
the beginning of this Agreement is Debtor's exact legal name and the address of
its chief executive office. There has been no change in the name of Debtor, or
the name under which Debtor conducts business, within the five (5) years
preceding the date hereof except as previously reported in writing to Secured
Party. Debtor has not moved its chief executive office within the five years
preceding the date hereof except as previously reported in writing to Secured
Party. Debtor is organized under the laws of the State of Delaware and has not
changed the jurisdiction of its organization within the five (5) years preceding
the date hereof except as previously reported in writing to Secured Party. The
parties executing all Loan Documents are duly-authorized to do so and have been
specifically granted such authority under resolutions duly given and approved by
the Board of Directors of Debtor. So long as any of the Obligations remain
outstanding, subject to Section 19 hereof, Debtor shall not except as provided
in subsection B(ii) of this Section 2, (x) amend its Articles of Incorporation,
its By-Laws or any of its agreements or documents regarding its corporate
governance, or (y) "spin-off" any of its assets to any subsidiary or affiliate
or otherwise having a direct or indirect affect as any reorganization,
recapitalization, subdivision or otherwise (events described in (x) and (y)
above are collectively referred to herein as "Material Events"). There are, as
of this date, shares of stock authorized and outstanding, fully-paid and
non-assessable of IMAC, as follows: Common Shares, 100,000,000 shares authorized
and 14,677,380 shares outstanding; there are, as of this date, shares of stock
authorized and outstanding, fully paid and nonassessable of IMI, as follows:
Common Shares, 5,000,000 shares authorized and 100 shares outstanding. (ii)
Subject to the other terms hereof, Debtor shall have the right, after securing
Secured Party's prior written consent, to undertake the actions provided in (x)
and (y) of the preceding paragraph. Secured Party agrees not to withhold its
consent so long as such action, in Secured Party's reasonable judgment, does not
have any material adverse effect upon the Collateral. Subject to the provisions
of the conditions of this sentence and the provisions of the conditions of the
sentence immediately following this sentence, Secured Party agrees to make its
determination within ten (10) business days after receiving Debtor's written
request ("Debtor Notice") and such reasonable supporting documentation regarding
the request as required by Secured Party; the Debtor Notice shall be accompanied
by any information, documents and materials which support Debtor's contention
that there is no material adverse effect upon the Collateral ("Supporting
Materials"). Should the Supporting Materials be insufficient for Secured Party's
review, Secured Party agrees to notify Debtor ("Secured Party Request") within
three (3) business days of receipt of the Debtor Notice and Debtor shall,
thereupon, use its best efforts to deliver all such supporting documents within
three (3) days of receipt of the Secured Party Request. As a precondition to
issuing its consent hereunder, Debtor shall pay the Secured Party's reasonable
costs and fees to review and underwrite Debtor's requests made relative thereto.
Notwithstanding any rule of law to the contrary but except for cases of bad
faith on the part of the Secured Party, in any action which seeks to adjudicate
or arbitrate any of Debtor's rights hereunder, Debtor's sole and absolute remedy
shall be one based in equity and no remedy in damages shall be assessed. (iii)
Notwithstanding anything herein to the contrary, in the event that any Material
Event would result in the Debtor raising sufficient funds to repay the
Obligations and the Obligations are repaid from the proceeds from such Material
Event, the Secured Party may not withhold its consent to such Material Event
provided that repayment of the Obligations are a condition to the closing of the
transactions contemplated by the Material Event.
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C. Title and Taxes - Maintenance, Protection and Impairment of
the Collateral. Debtor has good and marketable title to Collateral and will
warrant, protect and defend same against all claims. Debtor will not transfer,
sell, or lease Collateral, except in the ordinary course of business. Debtor
agrees to pay promptly all taxes and assessments upon or for the use of
Collateral and on this Security Agreement. At its option, Secured Party may
discharge taxes, liens, security interests or other encumbrances at any time
levied or placed on Collateral. Debtor agrees to reimburse Secured Party, on
demand, for any such payment made by Secured Party. Any amounts so paid shall be
added to the Obligations. Debtor shall take all need actions necessary to insure
that the security for the Loan is not impaired. Should there result impairment
of the Collateral, Debtor shall promptly notify Secured Party and Debtor, at its
sole cost and expense, promptly restore the Collateral. Should Debtor elect to
sell or transfer any of the Collateral, no transfer or sale may be made unless
conducted in a commercially reasonable manner with a bona fide effort to obtain
a sale price of at least market value as determined by Secured Party.
D. Waivers. Debtor agrees not to assert against Secured Party
as a defense (legal or equitable), as a set-off, as a counterclaim, or
otherwise, any claims Debtor may have against Secured Party. Debtor waives all
exemptions and homestead rights with regard to the Collateral. Debtor waives any
and all rights to any bond or security, which might be required by applicable
law prior to the exercise of any of Secured Party's remedies against any
Collateral. All rights of Secured Party and security interests hereunder, and
all obligations of Debtor hereunder, shall be absolute and unconditional, not
discharged or impaired irrespective of (and regardless of whether Debtor
receives any notice of) any lack of validity or enforceability of any of the
Loan Documents; any change in the time, manner or place of payment or
performance, or in any term, of all or any of the Obligations or the Loan
Documents or any other amendment or waiver of or any consent to any departure
from any of the Loan Documents; any exchange, release or non-perfection of any
collateral, or any release of or modifications of the obligations of any
guarantor or other obligor and any amendment or waiver of or consent to
departure from any Loan Document or other agreement. To the extent permitted by
law, Debtor hereby waives any rights under any valuation, stay, appraisement,
extension or redemption laws now existing or which may hereafter exist and
which, but for this provision, might be applicable to any sale or disposition of
the Collateral by Secured Party; and any other circumstance which might
otherwise constitute a defense available to, or a discharge of any party with
respect to the Obligations.
E. Change of Name and Place of Business. Debtor will notify
Secured Party in writing at least thirty (30) days prior to any change in:
Debtor's chief place of business; Debtor's name or identity; Debtor's
corporate/organizational structure or the jurisdiction in which Debtor is
organized. In addition, Debtor shall promptly notify Secured Party of any claims
or alleged claims of any other person or entity to the Collateral or the
institution of any litigation, arbitration, governmental investigation or
administrative proceedings against or affecting the Collateral. Debtor will
bear, on demand, the actual costs of preparing and filing any documents
necessary to protect Secured Party's liens, whether now or hereafter required by
Secured Party.
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F. Financing Statements - Power of Attorney. Except for any of
the Senior Lienors' financing statements of record as of the date hereof
disclosed in an exhibit appended hereto relating to the Collateral and except
for any financing statements filed for the benefit of Private Investors Equity,
LLC (which financing statements will be terminated upon the repayment of the
debt owed to Private Investors Equity, LLC from the proceeds of the Loan), no
financing statement (other than any filed or approved by Secured Party in
writing or filed or generated in connection with the Other Obligations) covering
any Collateral is on file in any public filing office. On request of Secured
Party, Debtor authorizes Secured Party to execute one or more financing
statements in form satisfactory to Secured Party and will pay all reasonable
costs and expenses of filing the same or of filing relative to this Security
Agreement in the appropriate public filing offices in the jurisdiction of the
Debtor's organization or elsewhere and with the United States Patent and
Trademark Office or any other office required by Secured Party and Secured Party
is authorized to file financing statements relating to Collateral without
Debtor's signature. In order to protect its rights under this Agreement, subject
to the Senior Lienors' rights in and to the Collateral and subject to the terms
of the escrow agreement of even date herewith by and between Debtor, Secured
Party and Xxxxxxx X. Xxxxxxxxxx, Esq., a licensed attorney and licensed and
bonded title agent in Maryland, Debtor hereby constitutes and appoints Secured
Party the true and lawful attorney of Debtor with full power of substitution to
take any and all appropriate action and to execute any and all documents or
instruments that may be necessary or desirable to accomplish the purpose and
carry out the terms of this Security Agreement, including, without limitation,
to complete, execute, and deliver any further or other documentation request by
Secured Party, Debtor and third party(ies) required in connection herewith (a
"Further Agreement"), instructions to third party(ies) regarding, among other
things, control and disposition of any Collateral, and endorsements desirable
for transfer or delivery of any Collateral, registration of any Collateral under
applicable laws, retitling any Collateral, receipt, endorsement and/or
collection of all checks and other orders for payment of money payable to Debtor
with respect to Collateral. The foregoing power of attorney is coupled with an
interest and shall be irrevocable until all of the Obligations have been paid in
full. Neither Secured Party nor anyone acting on its behalf shall be liable for
acts, omissions, errors in judgment, or mistakes in fact in such capacity as
attorney-in-fact except in the event of willful misconduct. Debtor ratifies all
acts of Secured Party consistent with this paragraph as attorney-in-fact. Debtor
agrees to take such other actions, at Debtor's sole and absolute expense, as
might be requested for the perfection, continuation and assignment, in whole or
in part, of the security interests granted herein and to assure Secured Party's
intended priority position subject to the rights of the Senior Lienors. Upon
Secured Party's request, Debtor will, at its own expense do all things
reasonably determined by Secured Party to be desirable to make the sale of the
Collateral in accordance with this Agreement valid, binding and in compliance
with applicable law.
G. Representations and Warranties Heretofore Given. All
representations and warranties heretofore given, including but not limited to
the description of the Collateral, whether oral or written and whether they
might be in the form of documents, instruments, materials, pro formas, business
plans, financial statements, income statements, contracts, cash flow forecasts,
materials and otherwise, upon which credit underwriting for the credit facility
are based are true, complete, valid and correct on the date made and on the date
hereof.
H. Business Purposes. The Loan evidenced by the Note and
otherwise with respect to the Loan Documents was transacted solely for the
purpose of carrying on or acquiring a business, mercantile purposes and for
engaging in a commercial enterprise and not for any personal or consumer needs.
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I. Compliance with Laws. Debtor shall comply with all Federal,
State and local laws a breach of which would materially and adversely affect the
financial condition of Debtor, its ability to operate its business affairs and
own and use the Collateral, the value or status of the Collateral or the value
or status of Debtor's interest or ownership in the Collateral.
J. Transfer of Collateral. Except in the event of a Permitted
Reorganization, Debtor shall not permit the Collateral, or any part or portion
thereof of or any interest therein whether directly or indirectly or otherwise,
to be transferred (whether by voluntary or involuntary conveyance, merger,
operation of law, or otherwise) without the prior written consent of Secured
Party. Any transferee of the Collateral or any part or portion thereof or any
interest therein, by virtue of its acceptance of the transfer, shall (without in
any way affecting Debtor's liability under the Loan Documents) be conclusively
deemed to have agreed to assume primary personal liability for the performance
of Debtor's obligations under the Loan Documents.
K. Compliance with Agreements with Third Parties. Debtor shall
comply with all obligations it has with third parties, whether or not related to
the Collateral.
L. Maintenance of the Collateral - Inspection Rights. Debtor
shall keep and maintain the Collateral to insure that the security for the Loan
is not impaired and shall not commit or suffer any waste of the Collateral.
Should the Collateral be adversely affected or impaired by anyone, including
Debtor, Debtor shall promptly notify Secured Party. Debtor shall permit Secured
Party or its designee to inspect its documentation regarding the Collateral as
provided in this Agreement.
3. Rights and Obligations Subject to Senior Lienors. All rights and
obligations of the parties hereto shall be subject to consents having been
received from the Senior Lienors, in such form as the Secured Party and Senior
Lienors may require.
4. Collateral Duties. Secured Party shall have no custodial or
ministerial duties to perform with respect to Collateral pledged except as set
forth herein; and by way of explanation and not by way of limitation, Secured
Party shall incur no liability for any of the following: the loss or
depreciation of Collateral (unless caused by its willful misconduct or gross
negligence); a failure to present any paper for payment or protest, to protest
or give notice of nonpayment, or any other notice with respect to any paper or
Collateral, a failure to ascertain, notify Debtor of, or take any action in
connection with any conversion, call, redemption, retirement or any other event
relating to any of the Collateral or the failure to notify any party hereto that
Collateral should be presented or surrendered for any such reason. Debtor
acknowledges that Secured Party is not an investment advisor or insurer with
respect to the Collateral; and Secured Party has no duty to advise Debtor of any
actual or anticipated changes in the value of the Collateral.
5. Transfer of Collateral. Secured Party may assign its rights in
Collateral or any part thereof to any assignee who shall thereupon become vested
with all the powers and rights herein given to Secured Party with respect to the
property so transferred and delivered, and Secured Party shall thereafter be
forever relieved and fully discharged from any liability with respect to such
property so transferred, but with respect to any property not so transferred,
Secured Party shall retain all rights and powers hereby given.
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6. Inspection of Books and Records. Debtor will upon demand and, at its
sole cost and expense, at all times keep accurate and complete records covering
each item of Collateral, including the proceeds therefrom. Secured Party, or any
of its agents, shall have the right, at intervals to be determined by Secured
Party and without hindrance or delay, at Debtor's sole cost and expense, to
inspect, audit, and examine the Collateral and to make copies of and extracts
from the books, records, journals, orders, receipts, correspondence and other
data relating to Collateral, Debtor's business or any other transaction between
the parties hereto. Debtor will at its expense furnish Secured Party copies
thereof upon request. Further, Debtor shall, without any advance request made by
Secured Party, and at all times promptly notify Secured Party of all changes in
the ownership of the stock of Debtor to the extent that any one individual,
entity or affiliated entities acquires more than five percent (5%) or more of
any of the stock of Debtor. At any time Secured Party may request, Debtor shall
furnish a complete statement, sworn to under penalty of perjury by an officer of
Debtor, setting forth all of the stockholders, officers, directors and Debtor
and the extent of their respective stock ownership or control. In the event
Debtor is aware of any other person having a beneficial interest in such stock,
the statement shall also set forth the name of such person and the extent of
their interest.
7. Attorney's Fees and Costs of Collection. Debtor shall pay all of
Secured Party's actual Costs and Expenses relative to this Agreement, including
but not limited to all costs and expenses incurred in enforcing this Security
Agreement and in preserving and liquidating Collateral, any arbitration, the
costs of attorneys, paralegals, assistants, consultants and experts, whether
incurred with or without the commencement of a suit, trial, arbitration or
administrative proceeding, or in any appellate or bankruptcy proceeding.
8. Default. Upon the occurrence of any of the following, a "Default"
under this Security Agreement shall exist: (a) a default under this Security
Agreement or under any of the other Loan Documents; any breach of any of the
covenants, agreements, representations or warranties under this Security
Agreement or under any of the other Loan Documents which shall continue for a
period of thirty (30) days after notice thereof has been sent by Secured Party
to Debtor, (b) any misrepresentation of any kind thereunder which shall continue
for a period of thirty (30) days after notice thereof has been sent by Secured
Party to Debtor, (c) any loss with respect to the Collateral or any devaluation
thereof which shall continue for a period of thirty (30) days after notice
thereof has been sent by Secured Party to Debtor, (d) any sale, lease or
transfer or encumbrance of any Collateral not specifically permitted herein
without prior written consent of Secured Party which shall continue for a period
of thirty (30) days after notice thereof has been sent by Secured Party to
Debtor, (e) the making of any levy, seizure, or attachment on or of Collateral
or any of the other properties of Debtor not set aside, discharged, or stayed
within thirty (30) days after the same was levied or within ten (10) days after
the expiration of any stay thereof which shall continue for a period of thirty
(30) days after notice thereof has been sent by Secured Party to Debtor, (f)
should Debtor consent in writing to, the appointment of a receiver, trustee, or
liquidator for it, the Collateral or of all or substantially all of its assets
or files a voluntary petition in bankruptcy or makes an assignment for the
benefit of creditors, files a petition or an answer seeking a reorganization,
composition, adjustment, arrangement with creditors, or takes advantage of any
insolvency law, files an answer admitting the material allegations of a petition
filed against it in any, bankruptcy, reorganization, composition, adjustment,
arrangement, or insolvency proceeding, or is dissolved as a result of an
adversary suit or proceeding, which shall continue for a period of thirty (30)
days after notice thereof has been sent by Secured Party to Debtor, (g) any
execution or attachment levied against the assets of Debtor not set aside,
discharged, or stayed within thirty (30) days after the same was levied or
within ten (10) days after the expiration of any stay thereof, an order,
judgment, or decree is entered by any court of competent jurisdiction on the
application of a creditor, adjudicating Debtor a bankrupt or insolvent, or
appointing a receiver, trustee, or liquidator for Debtor, or of all or
substantially all of its assets, or an order of relief is entered against Debtor
pursuant to any bankruptcy statute or law and such order, judgment, or decree
continues unstayed and in effect for a period of thirty (30) days and is not
discharged within ten (10) days after the expiration of any stay thereof; any
attempt to terminate, revoke, rescind, modify, or violate the terms of this
Security Agreement or any of the other Loan Documents without the prior written
consent of Secured Party, (h) any material adverse change in the finances of
Debtor or a material change in the management of Debtor which shall continue for
a period of thirty (30) days after notice thereof has been sent by Secured Party
to Debtor, (i) any breach under any of the terms, conditions or provisions of
any of the "Other Obligations," beyond any applicable notice, grace and cure
period.
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9. Remedies Upon a Default. Upon any default hereunder, Liquidator
shall have the following rights and remedies, individually or cumulatively or
otherwise:
A. Secured Party may accelerate the Note and exercise any of
the remedies it has under any of the Loan Documents;
B. Secured Party may instruct the Liquidator the take
immediate possession of the books and records regarding the Collateral and
otherwise to take such action as it determines under this Agreement, without
notice or resort to legal process, and for such purposes, Liquidator may enter
upon any premises on which such books and records regarding the Collateral or
any part thereof may be situated and remove the same therefrom, or, at option of
the Liquidator, render such Collateral unusable or dispose of said Collateral on
Debtor's premises with respect thereto;
C. Appointment to act hereunder by the Liquidator may be made
without notice having been given to the immediate appointment of a receiver for
the Collateral for which it is entitled to act without regard to the value of
the Collateral or the solvency of any person liable for payment of the amounts
due under the Loan Documents;
D. Secured Party may require Debtor to assemble the books and
records regarding the Collateral and make them available to Liquidator, with
respect to such foregoing portions of the Collateral, at a place to be
designated by Liquidator and Secured Party;
E. Secured Party may notify any of the Senior Lienors of the
fact of the default and take any actions it deems appropriate under any
inter-creditor agreement without notice to the Debtor of doing so.
F. Secured Party may require Debtor to deliver to Secured
Party and Liquidator lists or copies of the Patent and License related Accounts
promptly after they arise and will deliver to Secured Party, promptly upon
receipt, all Proceeds received by Debtor, including all Proceeds of the
Accounts, in the exact form in which they are received;
G. Secured Party or Liquidator may require Debtor to assign or
endorse all of the Collateral and related proceeds to Liquidator and Liquidator
with regard to such Collateral shall have full power to collect, compromise,
endorse, sell, or otherwise deal therewith as agent for Debtor;
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H. Liquidator and Secured Party, in its discretion, may apply
cash proceeds to the payment of any Obligations secured hereby or may release
such cash proceeds to Debtor for use in the operation of Debtor's business;
I. Secured Party and Liquidator may, upon a default, notify
the Account debtors or other obligors with respect to the Collateral that it
controls that the Accounts have been assigned to such party and should be paid
to Secured Party;
J. Secured Party may notify any of the parties to whom Debtor
is owed money, accounts receivable, tangibles or intangibles, interests, whether
corporeal or incorporeal and take such action as is may lawfully take hereunder
and under applicable law;
K. Secured Party may require Debtor to notify all Account
debtors and indicate on all invoices to such Account debtors that the Accounts
are payable to Secured Party.
L. Secured Party shall be authorized to notify any third party
vendor or contracting party or any party under any agreement given as a part of
the Collateral and act consistent with its rights hereunder; transfer into
Secured Party's name or the name of its nominee, all or any part of the
Collateral;
M. Secured Party may receive all interest, dividends, and
other proceeds of the Collateral;
N. Liquidator may notify any person obligated on any such
Collateral to which it may act of the security interest of Secured Party therein
and require such person to make payment directly to Secured Party or Liquidator
on demand and also demand, xxx for, collect or receive any proceeds of the
collateral thereof, and/or make any settlement or compromise as Secured Party or
Liquidator deems desirable with respect to any such Collateral;
O. Otherwise, Secured Party and Liquidator may act with
respect to the power of attorney granted hereunder to protect its rights.
P. The proceeds of any Collateral obtained pursuant to the
exercise of any remedy set forth in this Security and Loan Agreement shall be
applied reasonably promptly by Secured Party and Liquidator: First, to the
payment of all costs and expenses, fees, commissions and taxes of such sale,
collection or other realization, including, without limitation, compensation to
the Liquidator and actual attorneys' fees of Liquidator and Secured Party,
together with interest on each such amount at the highest rate then in effect
under this Security and Loan Agreement; Second, to the indefeasible payment in
full in cash of the Obligations, ratably according to the unpaid amounts
thereof, without reference or priority of any kind among amounts so due and
payable and Third, to Debtor, or its successors or assigns, or to whomsoever may
be lawfully entitled to receive the same or as a court of competent jurisdiction
may direct, of any surplus then remaining from such proceeds.
With regard to all of the rights, prerogatives, entitlements and remedies of
Secured Party for itself or Liquidator, as agent for Secured Party hereunder,
Debtor agrees that such parties may exercise all rights under this Security
Agreement without regard for the actual or potential tax consequences to Debtor
under federal or state law, without regard to any other limitations imposed or
proscribed and without regard to any instructions or directives given Secured
Party or Liquidator by Debtor.
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10. Due Authority - Resolutions - Approval. Debtor further represents
and warrants as follows:
A. Negotiation and Execution. Both the negotiation of the
Letter of Intent and all of the Loan Documents, as well as the execution
thereof, has been duly authorized by the Board of Directors of Debtor as
evidenced by the Certified Board Resolution attached hereto as Exhibit "B".
B. True, Complete and Accurate Copies of Exhibits. True,
complete and accurate copies of the following exhibits, documents, certificates,
instruments and lists are attached hereto, to wit:
o Exhibit "A" - Description of Collateral
o Exhibit "B" - Resolutions
o Exhibit "C" - (Complete) Certified Copy of
Articles of Incorporation of Debtor from the
Secretary of State of the State of Delaware;
o Exhibit "D" - Good Standing Certificate from the
Secretary of State of Delaware;
o Exhibit "E" - Articles of Foreign Corporation from
the Maryland State Department of Assessments &
Taxation ("MD-SDAT");
o Exhibit "F" - Certificate of Good Standing from
MD-SDAT;
o Exhibit "G" - Debtor's By-Laws;
o Exhibit "H" - Sample Stock Certificates and
o Exhibit "I"- description of limitations and
prerogatives of all classes of stock;
o Exhibit "J" - current financial statement and
o Exhibit "K" - listing of all accounts payable and
debts, Payables, loans term, credit line and
otherwise
o Exhibit "L" - listing of all "Other Obligations"
of Debtor.
o Exhibit "M" - "Adverse Claims"
o Exhibit "N" - "Liquidators"
11. Special Notices to be Given. Any notice of sale, disposition or
other action by Secured Party required by law and sent to Debtor at Debtor's
address shown below at least five (5) days prior to such action, shall
constitute reasonable notice to Debtor. Notice shall be deemed given or sent
when mailed postage prepaid to Debtor's address as provided herein and
irrespective of whether delivery is accepted by certified mail, postage prepaid
or by hand delivery or by any nationally-recognized next-day delivery service or
otherwise as permitted by applicable law. Collateral that is subject to rapid
declines in value and is customarily sold in recognized markets may be disposed
of by Secured Party in a recognized market for such collateral without providing
notice of sale. Debtor waives any and all requirements that the Secured Party
sell or dispose of all or any part of the Collateral at any particular time,
regardless of whether Debtor has requested such sale or disposition.
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12. Remedies Cumulative. No failure on the part of Secured Party to
exercise, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise by Secured
Party or any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any right, power or remedy. The remedies
herein provided are cumulative and are not exclusive of any remedies provided by
law, in equity, or in other Loan Documents.
13. Indemnification of Secured Party by Debtor. Debtor shall indemnify
and save harmless Secured Party and said party's agents, attorneys and
affiliates (including, but not limited to Xxxxxx & Xxxxx Investment Corporation
and its owners and affiliates and attorneys), singularly and jointly, from all
actual costs and expenses, including actual attorneys' fees, incurred by them or
any of them by reason of this Security Agreement, including any legal action to
which Secured Party shall or may become a party. Any money so paid or expended
by Secured Party shall be due and payable upon demand together with interest at
the Penalty Rate at the rate set forth in the Note from the date incurred and
shall be secured by this Security Agreement.
14. Enforcement and Interpretation. At the option of Secured Party,
matters of enforcement and interpretation of this instrument or any of the Loan
Documents, whether by claim, counterclaim or otherwise, may be interpreted
solely by arbitration conducted within fifty (50) miles of the office of the
Secured Party under the general commercial arbitration rules then-applicable of
the American Arbitration Association ("AAA"). Arbitration shall be conducted by
a panel of three (3) arbitrators, one of whom shall be selected from among a
panel suggested by the AAA by each party and the third of whom shall be selected
by the two (2) designees so selected. Any party failing to designate his
designee within fifteen (15) days of the date requested by the AAA shall forfeit
its right to designate his designee and the designee timely designated shall
appoint the recalcitrant party's designee. No arbitrator shall serve unless said
party is an attorney currently practicing law in the State of Maryland and
having experience in matters relative to secured banking transactions in which
intellectual property is pledged as security over a period of not less than ten
(10) years. Enforcement shall be under the laws of the Jurisdiction or any other
venue which shall have subject matter jurisdiction over the matter.
Notwithstanding any rule of law to the contrary, before Debtor may institute any
counterclaim to any action against Secured Party or any third party claim
against any third party, it shall have posted a bond reasonably acceptable to
Secured Party with the AAA to bond off and otherwise to protect Secured Party
hereunder. All costs of the arbitration shall be borne by the party deemed to be
the "non-prevailing party" but the cost, expense and fees to litigate shall be
allocated as otherwise provided hereunder. The panel of arbitrators shall
schedule the trial within thirty (30) days of their appointment and they shall
render their decision within thirty (30) days of the last day of such trial,
provided that, in the event a party petitions for an Emergency Arbitration, the
above-proscribed time periods shall be reduced as provided for the Schedule of
Emergency Arbitration.
15. Designation of Agent for Service of Process Purposes. Any matter
requiring service of process shall be served upon the Designated Agent; if said
Designated Agent shall refuse to accept service of process, the posting of the
service on the door of the Designated Agent's office shall be sufficient if
accompanied by an affidavit by the process server of compliance herewith.
10
16. Definitions. The following shall have the following meanings:
(a) "Loan Documents" refers to all documents, including this Security Agreement,
whether now or hereafter existing, executed in connection with or related to the
Obligations, and may include, without limitation and whether executed by Debtor
or others, commitment letters that survive closing, loan agreements, convertible
notes, other security agreements, security instruments, financing statements,
chattel mortgage instruments and any renewals or modifications, whenever any of
the foregoing are executed. (b) "UCC" means the Uniform Commercial Code as
presently and hereafter enacted in the Jurisdiction. Any term used in this
Agreement and in any financing statement filed in connection herewith which is
defined in the UCC and not otherwise defined in this Agreement or any other Loan
Document has the meaning given to the term in the UCC. (c) "Loan" means the loan
in the aggregate principal amount of Seven Hundred Fifty Thousand Dollars
($750,000) to be advanced under the Letter of Intent which was advanced and
closed by the parties this date as evidenced by the Note and which was made
pursuant to the Loan Documents. (d) "Obligations" means all obligations, funds
and impositions due and owing under any of the Loan Documents, including, but
not limited to principal under the Note, interests, Costs and Expenses,
impositions, fees, advances made pursuant to any of the Loan Documents by
Secured Party, resulting from any remedy or right or prerogative or otherwise
which arise under any of the Loan Documents, any charges and impositions and
otherwise due under any of the foregoing. (e) "Note" means the Note defined on
page one hereof and executed of even date herewith. (f) "Jurisdiction" means the
State of Maryland. (g) "Designated Agent" means the party whose name and address
appears on the signature page hereof. (h) The term "Costs and Expenses" means
all actual costs, expenses, fees and actual impositions that a party may accrue
or pay relative to this Agreement and the enforcement of any term, condition or
provision of this instrument or any of the Loan Documents. (i) "Other
Obligations" means any of the obligations listed to any party designated on
Exhibit "L". (j) "Adverse Claims" means any claim, public or private, whether of
public record or otherwise, which has any adverse impact upon the underwriting
and risk by Security Party with respect to the Loan, the Obligations or
otherwise with respect to the transactions made between the parties or otherwise
the risk of any loss to Secured Party. (k) "Liquidator" means any party selected
from among the list attached hereto as Exhibit "N." In the absence of a party to
agree at such time to be the designated "Liquidator," then the parties shall
agree upon the designated Liquidator within fifteen (15) days upon demand by
Secured Party to do so, time being of the essence, neither party unreasonably
withholding, delaying or denying its consent and after lapse of such period, the
matter shall be submitted to arbitration hereunder using the Expedited Schedule
of Arbitration. (l) "Collateral" means the item of Collateral described on
Exhibit "A". (m) INTENTIONALLY OMITTED. (n) INTENTIONALLY OMITTED. (o)
"Accounts" means as such term is defined in the UCC with respect to any of the
Collateral or other secured given hereunder. (p) "Schedule of Emergency
Arbitration" means that all time periods otherwise scheduled for arbitration
hereunder shall be reduced as follows: (i) with regard to any matter to acted
upon within fifteen (15) days, the time period shall be reduced to three (3)
days and (ii) with respect to any matter to be acted upon within thirty (30)
days, the time period shall be reduced to five (5) days. (q) "Emergency
Arbitration" shall mean any matter relative to either (i) Liquidator's or
Secured Party's rights hereunder as a result of an actual default having been
declared by Secured Party under this Agreement or under any of the other Loan
Documents or (ii) any other matter to which a party has certified, supported by
an opinion of its counsel, that the time periods otherwise proscribed hereunder
cannot wait for the periods otherwise provided due to an emergency, provided
however that with regard to any matter petitioned under clause (ii) hereof. (r )
"Senior Lienors" means United Bank or an equipment lessor, provided that, in
doing so, the value of the collateral is not impaired as the Secured Party shall
have determined. (s) "Senior Lien Instruments" means agreements entered into
between the Debtor and the Senior Lienors, and all collateral documentation of
such transactions.
11
17. Waiver of Trial By Jury and Confession of Judgment Provisions. THE
UNDERSIGNED PARTIES COVENANT AND AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
TRIABLE OF RIGHT BY A JURY WITH RESPECT TO THIS DOCUMENT AND ALL OF THE OTHER
LOAN DOCUMENTS, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT
ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY, BY EACH PARTY TO THIS
INSTRUMENT, AND THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT TO A JURY TRIAL WOULD OTHERWISE ACCRUE. THE
PARTY TO THIS INSTRUMENT IS HEREBY AUTHORIZED AND REQUESTED TO SUBMIT THIS
INSTRUMENT TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE
PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF THE WAIVER OF THE RIGHT
TO JURY TRIAL. FURTHER, EACH PARTY TO THIS INSTRUMENT HEREBY CERTIFIES THAT NO
REPRESENTATIVE OR AGENT OF THE OTHER PARTY (INCLUDING ITS COUNSEL) HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT IT WILL NOT SEEK TO ENFORCE THIS
WAIVER OF RIGHT TO JURY TRIAL PROVISION. Confession of Judgment Provisions. THE
MAKER HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS (WHICH APPOINTMENT SHALL BE
DEEMED TO BE COUPLED WITH AN INTEREST) XXXXX XXXX XXXXX OR HIS DESIGNEE, AN
ATTORNEY ADMITTED TO PRACTICE BEFORE THE COURTS OF THE STATE OF MARYLAND, AS THE
MAKER'S TRUE AND LAWFUL ATTORNEY IN FACT, TO APPEAR FOR THE MAKER BEFORE THE
CLERK OF THE CIRCUIT COURT OF XXXXXXXXXX COUNTY, MARYLAND OR THE TRIAL OR
SUPERIOR COURT OF ANY COUNTY IN SAID STATE OF MARYLAND OR THE STATE OF DELAWARE
OR ANY FEDERAL DISTRICT COURT (EACH, THE "CONFESSION JURISDICTION") AND AFTER
ONE OR MORE DECLARATIONS FILED, CONFESS JUDGMENT AGAINST THE MAKER AS OF ANY
TIME AFTER ANY SUM IS DUE HEREUNDER (WHETHER BY DEMAND, STATED MATURITY,
ACCELERATION OR OTHERWISE) FOR THE UNPAID BALANCE OF THIS NOTE AND INTEREST,
WITH COURT COSTS, EXPENSES DUE HEREON AND ATTORNEY'S FEES (EQUAL TO FIVE PERCENT
[5%] OF THE PRINCIPAL AND INTEREST DUE HEREON BUT NOT LESS THAN FIFTY THOUSAND
DOLLARS [$50,000.00] SAID SUM CONSIDERED TO BE REASONABLE RELATIVE TO THE
COLLECTION HEREOF) AND RELEASE ALL ERRORS, WITHOUT STAY OF EXECUTION, AND
INQUISITION AND EXTENSION UPON ANY LEVY ON REAL ESTATE IS HEREBY WAIVED AND
CONDEMNATION AGREED TO, AND THE EXEMPTION OF PERSONAL PROPERTY FROM LEVY AND
SALE IS ALSO HEREBY EXPRESSLY WAIVED AND NO BENEFIT OF EXEMPTION SHALL BE
CLAIMED UNDER ANY EXEMPTION LAW NOW IN FORCE OR WHICH MAY BE HEREAFTER ADOPTED.
MAKER CONSENTS TO VENUE IN THE CONFESSION JURISDICTION WITH RESPECT TO THE
INSTITUTION OF AN ACTION CONFESSING JUDGMENT HEREON, REGARDLESS OF WHERE VENUE
WOULD OTHERWISE BE PROPER. ANY JUDGMENT ENTERED AGAINST MAKER, WHETHER BY
CONFESSION OR OTHERWISE, SHALL BEAR INTEREST AT A RATE WHICH IS THE HIGHEST RATE
OF INTEREST BEING PAID BY MAKER ON THE DATE OF JUDGMENT. THE AUTHORITY AND POWER
TO APPEAR FOR AND ENTER JUDGMENT AGAINST MAKER SHALL NOT BE EXHAUSTED BY ONE OR
MORE EXERCISES THEREOF, OR BY ANY IMPERFECT EXERCISE THEREOF, AND SHALL NOT BE
EXTINGUISHED BY ANY JUDGMENT ENTERED PURSUANT THERETO; SUCH AUTHORITY AND POWER
MAY BE EXERCISED ON ONE OR MORE OCCASIONS, FROM TIME TO TIME, IN THE SAME OR
DIFFERENT JURISDICTIONS AS OFTEN AS THE PAYEE OR ITS ASSIGNS SHALL DEEM
NECESSARY OR ADVISABLE UNTIL ALL SUMS DUE HEREUNDER HAVE BEEN PAID IN FULL.
12
18. Miscellaneous Provisions. No waiver, amendment or modification of
any provision of this Security Agreement shall be valid unless in writing and
signed by Debtor and an officer of Secured Party. No waiver by Secured Party of
any Default shall operate as a waiver of any other Default or of the same
Default on a future occasion. All rights of Secured Party hereunder are freely
assignable, in whole or in part, and shall inure to the benefit of and be
enforceable by Secured Party, its successors, assigns and affiliates. Debtor may
not assign its obligations to any person, party or entity, whether affiliated or
otherwise with Debtor hereunder without the prior written consent of Secured
Party and any attempt by Debtor to assign without Secured Party's prior written
consent is null and void; provided, however, that Debtor may assign this
Security and Loan Agreement and all of its rights and obligations hereunder,
without secured Party's written consent in connection with a Permitted
Reorganization. No assignment, other than in connection with a Permitted
Reorganization, shall release Debtor from its obligations hereunder. Time shall
be strictly of the essence with respect to each and every term, condition and
provision of all of the Loan Documents. Debtor consents to the laws of the
Jurisdiction or wherever it shall have assets or does business. Debtor agrees
that venue may lie in the United States Federal Court for either the State of
Maryland or the State of Delaware or any local court therein, the defense under
the doctrine of forum non-conveniens being waived. All rights, powers, and
remedies of Secured Party provided for in the Loan Documents are cumulative and
concurrent and shall be in addition to and not exclusive of any appropriate
legal or equitable remedy provided by Law or contract. Exercise of any right,
power, or remedy shall not preclude the simultaneous or subsequent exercise of
any other by the Secured Party. The terms, conditions and provisions of the
Letter of Intent shall survive the closing of the Loan and not be merged
therein. This Security Agreement shall be binding upon Debtor, and the heirs,
personal representatives, successors, and assigns of Debtor. This Security
Agreement shall be governed by and construed under the laws of the Jurisdiction
without regard to that Jurisdiction's conflict of laws principles, except to the
extent that the Uniform Commercial Code requires the application of the law of a
different jurisdiction. If any terms of this Security Agreement conflict with
the terms of any commitment letter or loan proposal, the terms of this Security
Agreement shall control. Debtor irrevocably agrees to non-exclusive personal
jurisdiction in the Jurisdiction. If any provision of this Security Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective but only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Security Agreement. Any notices to Debtor shall be sufficiently given, if in
writing and mailed or delivered to the address of Debtor shown above or such
other address as provided hereunder and to Secured Party, if in writing and
mailed or delivered to Secured Party's office address shown below such party's
signature or such other address as Secured Party may specify in writing from
time to time. In the event that Debtor changes Debtor's mailing address at any
time prior to the date the Obligations are paid in full, Debtor agrees to
promptly give written notice of said change of address by registered or
certified mail, return receipt requested, all charges prepaid. The parties waive
the doctrine of contra proferentem for purposes of all of the Loan Documents.
This Agreement may be signed in counterpart, which, when fully assembled, shall
constitute one complete instrument. Notwithstanding any rule of law nor any
action or representation to the contrary, whenever the discretion or prerogative
of Secured Party shall be given or granted, the same shall be as Secured Party
shall determine in its sole and absolute discretion and not under any objective
standard. The captions contained herein are inserted for convenience only and
shall not affect the meaning or interpretation of this Security and Loan
Agreement or any provision hereof. The use of the plural shall also mean the
singular, and vice versa. Debtor, by execution and Secured Party by acceptance
of this Security and Loan Agreement, agrees it is bound by all terms and
provisions of this Security and Loan Agreement.
13
19. Secured Party Consent. Notwithstanding the terms and conditions of
this Agreement, by executing this Agreement, Secured Party acknowledges, agrees
and consents to the transactions as contemplated by that certain Merger
Agreement and Plan of Reorganization, dated February 7, 2003 (the "Merger
Agreement"), by and between Hunapu, Inc. and IMAC, as such transaction is more
fully described in the Form SB-2 as filed with the United States Securities and
Exchange Commission. Secured Party acknowledges receipt of the Merger Agreement
and Form SB-2.
IN WITNESS WHEREOF, the undersigned have set their hand and seal
effective on the date first set forth above.
SECURED PARTY: XXXXXX X. XXXXXX, XX. SEAL
------------------------------------------
Xxxxxx X. Xxxxxx, Xx.
Address for Notices:
X.X. Xxx 000
00.00 Xxxxx Xxxx 00
Xxxxxxxxx, XX 00000
DEBTOR: InforMedix, Inc. SEAL
By:
-----------------------------------------
Title:
--------------------------------------
Attest by:
----------------------------------
Its Secretary SEAL
Address for Notices:
0000 Xxxxxxx Xxxxx, Xxxxxxxxx, XX 00000
Designated Party for InforMedix, Inc. means:
--------------------------------------------
whose address is at:
----------------------
--------------------------------------------
14
InforMedix Acquisition Corp. SEAL
By:
-----------------------------------------
Title:
--------------------------------------
Attest by:
----------------------------------
Its Secretary
Address for Notices:
0000 Xxxxxxx Xxxxx, Xxxxxxxxx, XX 00000
Designated Party for InforMedix, Inc. means:
--------------------------------------------
whose address is:
---------------------------
--------------------------------------------
15
THIS NOTE AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW,
AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION
WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
SECURED CONVERTIBLE PROMISSORY NOTE
WITH DETACHABLE WARRANT
$750,000.00 April ___, 2003
Xxxxxxxxxx County, Maryland
For value received and pursuant to the terms of that certain "Security and Loan
Agreement" made this date, InforMedix Acquisition Corp., a Delaware Corporation
("IMAC") and its wholly-owned subsidiary, InforMedix, Inc., a Delaware
corporation ("IMI"), their assigns and successors in interest (collectively, the
"Company"), promises to pay Xxxxxx X. Xxxxxx, Xx. or order, and any successors,
transferees and assignees thereof (together, "Holder"), the principal sum of
seven-hundred fifty thousand dollars ($750,000.00), plus interest, Costs and
Expenses, impositions, charges and fees or any other expense accruing and
entitled pursuant to the terms hereof. This Note evidences the loan ("Loan")
made by the Holder this date unto the Company and is subject to the following
terms and conditions:
1. Term. The term of this Note shall mature ("Maturity Date") on the
earlier of (i) October 7, 2003, or (ii) or the date on which any
Financing Event(s) is closed or (iii) any other date on which any
principal amount of, or accrued unpaid interest on, this Note becomes,
due and payable pursuant to its terms prior to its natural maturity.
The term "Financing Event(s)" means any date(s) on which debt or equity
financing or other funding is secured, cumulatively, commencing on the
date hereof and subsequent to the date hereof, in the cumulative total
of $2,000,000 or more (excluding all funds advanced under this Note).
2. Conversion. (a) Investment by Holder. The entire principal amount and
the accrued interest as well as any costs, fees and expenses having
accrued and all Costs and Expenses relative to this Note or any of the
Loan Documents, or any portion thereof, may be converted, if the Holder
so elects in writing to the Company, at any time prior to receipt of
full payment made, into shares of the Company's common stock ("Common
Stock"). Holder may make the foregoing election to convert on one
occasion only. The number of shares of Common Stock to be issued to the
Holder upon such conversion shall be equal to the number of shares
derived by the quotient obtained by dividing the outstanding principal
balance and accrued interest, together with any expenses, accruals,
fees or impositions, Costs and Expenses and otherwise on this Note by
one dollar ($1.00) ("Price Per Share"). The Price Per Share shall be
adjusted upon the occurrence of the events described in and in the
manner provided for adjustment to the warrant exercise price in Section
2 of Exhibit A hereto. (b) Mechanics and Effect of Conversion. No
fractional shares of the Company's capital stock will be issued upon
conversion of this Note and the accrued interest balance. In lieu of
any fractional share to which the Holder would otherwise be entitled,
upon full conversion of this Note, the Company will pay to the Holder,
in cash, the amount of the unconverted principal and accrued interest
balance, together with any Costs and Expenses relative to this Note.
The Holder shall surrender this Note, duly endorsed, at the principal
offices of the Company or any transfer agent of the Company, and shall
give written notice to the Company ("Exercise Notice") of the election
to convert same or the portion to be converted and shall state therein
the name or names in which the certificate or certificates for the
securities acquired hereunder are to be issued. At its expense, the
Company will, as soon as practicable thereafter but not later than five
(5) days therefrom, issue and deliver to such Holder, at such principal
office, a certificate or certificates for the number of shares to which
such Holder is entitled upon such conversion, together with any other
securities and property to which the Holder is entitled upon such
conversion under the terms of this Note, including a check payable to
the Holder for any cash amounts payable as described herein. Upon
conversion of this Note, and accrued interest balance, the Company will
be forever released from all of its obligations and liabilities under
this Note with regard to that portion of the principal amount being
converted included, without limitation, the obligation to pay future
interest on such portion of the principal amount.
3. Interest. Interest shall accrue from the effective date of this Note
("Note Date") until repayment of the Note on the unpaid principal
amount computed on the basis of a 360-day year and the actual number of
days elapsed. Interest shall be payable at a rate equal to twelve
percent (12.0%) per annum until the Note is repaid in full.
Notwithstanding anything to the contrary herein contained, repayment
under the preceding sentence shall be paid in preference to repayment
thereof and prior to the payment of any dividends or distributions on
any equity security issued by the Company or any interest or principal
on any other debt of the Company other pursuant to the Senior Lien
Instruments.
4. Security. To secure the full and complete performance of the
obligations of the Company under this Note the Company hereby grants to
the Holder, a perfected lien on all of its right, title and interest in
and to, whether now owned or hereafter acquired (together
"Collateral")": all of its property on Exhibit A to the Security and
Loan Agreement. The Holder's interest in the Collateral shall be as a
secured lender pursuant to the terms of the Security and Loan Agreement
as publicized by one or more financing statement(s) dated of even date
with subject only to Senior Lien Instruments as such term is defined in
the Security and Loan Agreement of even date herewith.
2
5. Payment. (a) All payments shall be made in lawful currency of the
United States of America at such place as the Holder hereof may from
time to time designate in writing to the Company, all payments shall be
credited first to Costs and Expenses, fees, expenses and impositions,
if any, then to accrued interest then due and payable and the remainder
applied to principal, except that, after the occurrence and during the
continuation of any default under this Note, all amounts received shall
be applied in such order as the Holder, in its sole discretion, may
elect. In order for a payment to be timely received as of the date
sought to be made, it shall be received not later than 2:00pm Eastern
Time on a Business Day and if not made by such time or on such business
day, then it shall be deemed to be received on the next business day.
The term "Business Day" shall mean any banking day that SunTrust Bank,
NA is open for business and during which it may both accept and credit
wire transfers. Prior to any payment, the Company shall provide the
Holder at least ten (10) business days advance notice of its intention
to make such payment. Except with respect to prepayment made at the
Company's election in connection with a Permitted Reorganization (as
defined in the Security and Loan Agreement), payment hereon may only be
made in full on the Maturity Date.
6. No Waiver. The acceptance by the Holder of any payment under this Note
after the date that such payment is due shall not constitute a waiver
of the right to require prompt payment when due of future or succeeding
payments or to declare a default as herein provided for any failure to
so pay. The acceptance by the Holder of a portion of any payment at any
time that such payment is due and payable in its entirety shall neither
cure nor excuse the default caused by the failure to pay the whole of
such payment and shall not constitute a waiver of the Holder's right to
require full payment when due of all future or succeeding payments
7. Registration. If at any time the Company shall determine to register
for its own account or the account of others under the Securities Act
of 1933, as amended (including without limitation pursuant to the
registration of any shareholder of the Company), any of its equity
securities, other than on Form S-8 or Form S-4 or their then
equivalents (a "Piggyback Registration"), it shall send the Holder
written notice of such determination and, if within fifteen (15) days
after receipt of such notice, Holder shall so request in writing, the
Company shall use its diligent efforts to include in such registration
statement all or any part of the shares of Common Stock or other
securities issued or issuable upon conversion of this Note
("Registrable Shares") that Holder requests to be registered, except
that if, in connection with any offering involving an underwriting of
Common Stock to be issued by the Company the managing underwriter shall
impose a limitation on the number of shares of Common Stock which may
be included in the registration statement because, in its judgment,
such limitations necessary to effect an orderly public distribution,
then the Company shall be obligated to include in such registration
statement only such limited portion (or none, if so required by the
managing underwriter) of the Registrable Shares with respect to which
such holder has requested inclusion hereunder. Except as specifically
provided herein, all Registration Expenses incurred in connection with
any registration under this Section shall be borne by the Company. All
Selling Expenses incurred in connection with any registrations
hereunder, shall be borne by the holders of the securities so
registered pro rata on the basis of the number of shares so registered.
For purposes of this Section, "Registration Expenses" means all
expenses incurred by the Company in complying with this Section,
including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent
public accountants for the company, fees and expenses of listing the
securities with the securities exchange, fees and expenses (including
counsel fees) incurred in connection with complying with state
securities or "blue sky" laws, fees and expenses of one designated
counsel for the Holder in connection with the registration of
Registrable Shares, transfer taxes, fees of transfer agents and
registrars, costs of any insurance which might be obtained, but
excluding any Selling Expenses. For purposes of this Section, "Selling
Expenses" means all underwriting discounts and selling commissions
applicable to the sale of Registrable Shares and the fees and expenses
of more than one counsel for the Holder in connection with the
registration of Registrable Shares.
3
8. Stock Purchase Warrants. (a) Contemporaneous with the making of this
Note, IMAC has issued warrants ("Warrants") in connection herewith to
purchase from IMAC, at any time on or before the fifth anniversary of
the Note date, shares of IMAC's Common Stock at an exercise price of
one dollar and fifty cents ($1.50) per share ("Warrant Exercise
Price"). The Warrants may be exercised by the holder, in whole only,
with the purchase form appended to the Warrant duly executed by the
holder at the principal office of IMAC, or at such other office or
agency as IMAC may designate, accompanied by payment in full of the
purchase price as set forth herein. (b) A certificate representing the
warrant fully executed by IMAC shall be delivered to the holder upon
the making of the Note.
9. Transfer; Successors and Assigns. The terms and conditions of this Note
shall inure to the benefit of and be binding upon the respective heirs,
successors and assigns of the parties. Notwithstanding the foregoing,
the Company may not assign, pledge or otherwise transfer this Note
without the prior written consent of the Holder. Subject to the
preceding sentence, this Note may be transferred by the Company only
upon surrender of the original Note for registration of transfer, duly
endorsed, or accompanied by a duly executed written instrument of
transfer in terms satisfactory to the Holder. This Note may be
transferred by the Holder only upon surrender of the original Note for
registration of transfer, duly endorsed, or accompanied by a duly
executed written instrument of transfer, a form of which has been given
to the Holder. Thereupon, a new note for the same principal amount and
interest will be issued to, and registered in the name of, the
transferee. Interest and principal are payable only to the registered
Holder of this Note.
10. Attorneys' Fees and Costs and Expenses. In the event it becomes
necessary for the Holder to utilize legal counsel for the enforcement
of this Note or any of the other of the Loan Documents or any of said
terms, and, irrespective of whether or not suit is filed or otherwise,
the Company shall pay or reimburse as the case may be, on demand, the
Holder immediately for all of the Holder's accrued attorney's fees and
other Costs and Expenses; Company shall likewise pay Holder on demand
for any of the foregoing incurred in connection with the representation
of the Holder in any bankruptcy, insolvency, reorganization or other
debtor-relief or similar proceeding of or relating to the Company.
4
11. Waivers; Time. The maker of this Note hereby waives diligence, demand,
presentment, notice of non-payment or dishonor, protest and notice of
protest, and expressly agrees that the time for performance of any
obligation under this Note may be extended from time to time, and
consents to the release of any party liable hereon or herefor, consents
to the acceptance of further security for this Note, including other
types of security, all without in any way affecting liability, and
waives the right to plead any and all statutes of limitations as a
defense to any demand on this Note, or to any agreements to pay the
same, to the fullest extent permissible by law. Time is strictly of the
essence with respect to all terms, condition and provisions hereof.
12. Governing Law. This Note and all acts and transactions pursuant hereto
and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of
Maryland, without giving effect to principles of conflicts of law.
13. Severability. Every provision hereof is intended to be severable. If
any provision of this Note is determined by a court of competent
jurisdiction to be illegal, invalid or unenforceable, such illegality,
invalidity or unenforceability shall not affect the other provisions
hereof, which shall remain binding and enforceable.
14. Notices. Any notice required by this Note shall be in writing and shall
be deemed sufficient when delivered personally or by a nationally
recognized delivery service (such as Federal Express or UPS) or when
delivery is attempted to be made and addressed to the party to be
notified at such party's address as set forth below or as subsequently
modified by written notice. No notice need be given if payment is due
on the Maturity Date.
15. Amendments and Waivers. Any term of this Note may be amended only with
the mutual written consent of the Company and the Holder. Any amendment
or waiver effected in accordance with this Section shall be binding
upon the Company, the Holder and each transferee of the Note.
16. Securities Act of 1933. Upon conversion of this Note, the persons
entitled to receive the securities may be required to execute and
deliver to the Company an instrument, in form satisfactory to the
Company, representing that such person is an accredited investor as
defined in Securities and Exchange Commission Rule 501(a) under the
Securities Act of 1933, as amended (the "Act") and the securities are
being acquired for investment, and not with a view to distribution,
within the meaning of the Act.
17. Shareholder Status. Nothing contained in this Note shall be construed
as conferring upon the Holder the right to vote or to receive dividends
or to consent, or any rights whatsoever as a shareholder of the Company
prior to conversion hereof.
18. Default - Penalty Rate - Acceleration. If Company fails to make any
payment under this Note when due, or otherwise breaches (beyond any
available notice and cure period) any obligation, term, conditions or
provision hereunder or under any of the Loan Documents, then the entire
principal sum, together with all accrued and unpaid interest and costs
thereon, including any Costs and Expenses, shall at Holder's option be
immediately due and payable. Further, upon the failure of the Company
to comply with any of the requirements embraced herein or in any of the
Loan Documents then, in such event and in addition to any other remedy
the Lender may exercise, the interest rate accruing on the unpaid
principal balance of this Note shall be increased by 500 basis points
(5%) (said adjusted interest rate being the "Penalty Rate"), regardless
of whether the Holder elects to accelerate the unpaid principal balance
as a result of such default.
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19. Confession of Judgment Provisions. THE MAKER HEREBY IRREVOCABLY
CONSTITUTES AND APPOINTS (WHICH APPOINTMENT SHALL BE DEEMED TO BE
COUPLED WITH AN INTEREST) XXXXX XXXX XXXXX OR HIS DESIGNEE, AN ATTORNEY
ADMITTED TO PRACTICE BEFORE THE COURTS OF THE STATE OF MARYLAND, AS THE
MAKER'S TRUE AND LAWFUL ATTORNEY IN FACT, TO APPEAR FOR THE MAKER
BEFORE THE CLERK OF THE CIRCUIT COURT OF XXXXXXXXXX COUNTY, MARYLAND OR
THE TRIAL OR SUPERIOR COURT OF ANY COUNTY IN SAID STATE OF MARYLAND OR
THE STATE OF DELAWARE OR ANY FEDERAL DISTRICT COURT (EACH, THE
"CONFESSION JURISDICTION") AND AFTER ONE OR MORE DECLARATIONS FILED,
CONFESS JUDGMENT AGAINST THE MAKER AS OF ANY TIME AFTER ANY SUM IS DUE
HEREUNDER (WHETHER BY DEMAND, STATED MATURITY, ACCELERATION OR
OTHERWISE) FOR THE UNPAID BALANCE OF THIS NOTE AND INTEREST, WITH COURT
COSTS, EXPENSES DUE HEREON AND ATTORNEY'S FEES (EQUAL TO FIVE PERCENT
[5%] OF THE PRINCIPAL AND INTEREST DUE HEREON BUT NOT LESS THAN FIFTY
THOUSAND DOLLARS [$50,000.00] SAID SUM CONSIDERED TO BE REASONABLE
RELATIVE TO THE COLLECTION HEREOF) AND RELEASE ALL ERRORS, WITHOUT STAY
OF EXECUTION, AND INQUISITION AND EXTENSION UPON ANY LEVY ON REAL
ESTATE IS HEREBY WAIVED AND CONDEMNATION AGREED TO, AND THE EXEMPTION
OF PERSONAL PROPERTY FROM LEVY AND SALE IS ALSO HEREBY EXPRESSLY WAIVED
AND NO BENEFIT OF EXEMPTION SHALL BE CLAIMED UNDER ANY EXEMPTION LAW
NOW IN FORCE OR WHICH MAY BE HEREAFTER ADOPTED. MAKER CONSENTS TO VENUE
IN THE CONFESSION JURISDICTION WITH RESPECT TO THE INSTITUTION OF AN
ACTION CONFESSING JUDGMENT HEREON, REGARDLESS OF WHERE VENUE WOULD
OTHERWISE BE PROPER. ANY JUDGMENT ENTERED AGAINST MAKER, WHETHER BY
CONFESSION OR OTHERWISE, SHALL BEAR INTEREST AT A RATE WHICH IS THE
HIGHEST RATE OF INTEREST BEING PAID BY MAKER ON THE DATE OF JUDGMENT.
THE AUTHORITY AND POWER TO APPEAR FOR AND ENTER JUDGMENT AGAINST MAKER
SHALL NOT BE EXHAUSTED BY ONE OR MORE EXERCISES THEREOF, OR BY ANY
IMPERFECT EXERCISE THEREOF, AND SHALL NOT BE EXTINGUISHED BY ANY
JUDGMENT ENTERED PURSUANT THERETO; SUCH AUTHORITY AND POWER MAY BE
EXERCISED ON ONE OR MORE OCCASIONS, FROM TIME TO TIME, IN THE SAME OR
DIFFERENT JURISDICTIONS AS OFTEN AS THE PAYEE OR ITS ASSIGNS SHALL DEEM
NECESSARY OR ADVISABLE UNTIL ALL SUMS DUE HEREUNDER HAVE BEEN PAID IN
FULL.
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20. Definitions - Construction - Enforcement - Miscellany. The term "Loan
Documents" shall mean any instrument, agreement or writing relative to
the credit extended as evidenced by this instrument, including but not
limited to the following documents executed of even date herewith:
Security and Loan Agreement, Financing Statement(s), Warrants and any
other agreement in writing executed on or after the date hereof. Except
as may be specifically provided for in the Loan Documents, no terms,
condition or provision shall survive the closing of the Loan and the
Loan Documents, all of the same being merged therein. Any other defined
term herein shall be defined consistent with the terms of any of the
other Loan Documents. The term "Costs and Expenses" shall mean all
costs, expenses, fees and actual impositions that Holder may accrue or
pay relative to the enforcement of any term, condition or provision of
this Note or any of the Loan Documents. Construction and enforcement of
this instrument or under any of the other of the Loan Documents shall
be, at the option of the Holder, pursuant to this instrument or any of
the other of the Loan Documents or relative to enforcement or
litigation pursuant to or relative to arbitration or court action
pursuant to the Loan Documents References to the singular, plural and
gender shall be read as the context shall plainly require. Paragraphs
and juxtaposition is purely for convenience sake and no particular
meaning shall be ascribed thereto. The Company represents and warrants
that the proceeds of the loan evidenced by this instrument are for
business and mercantile purposes and not for personal or consumer
purposes and thereby exempt from all usury limitations under applicable
law. All terms, conditions and provisions of all of the other Loan
Documents, including, but not limited to the Security and Loan
Agreement, to the extent such provisions are not inconsistent herewith,
are incorporated herein by this reference and any remedies or
provisions of the Holder hereof are likewise incorporated herein such
that the Holder may exercise such other remedies. This instrument may
be signed in counterpart which, when fully assembled, shall constitute
one instrument. The doctrine of contra proferentem shall not apply to
this instrument or any of the other of the Loan Documents. This Note is
made under seal.
Made on April ___, 2003 under seal in Xxxxxxxxxx County, Maryland.
MAKER:
INFORMEDIX, INC.
By:
-----------------------------------------------------------
Name:
-------------------
Title:
--------------------------------------------------
Address for notices: 0000 Xxxxxxx Xxxxx, Xxxxxxxxx, XX 00000
Attest:
-------------------------------------------------------
SECRETARY Seal
7
INFORMEDIX ACQUISITION CORP.
By:
-----------------------------------------------------------
Name:
-------------------
Title:
--------------------------------------------------
Address for notices: 0000 Xxxxxxx Xxxxx, Xxxxxxxxx, XX 00000
Attest:
-------------------------------------------------------
SECRETARY Seal
8
HOLDER:
XXXXXX X. XXXXXX, XX.
---------------------------------
Xxxxxx X. Xxxxxx, Xx.
Address for Notices:
X.X. Xxx 000
00.00 Xxxxx Xxxx 00
Xxxxxxxxx, XX 00000
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EXHIBIT A - SECTION 2 OF WARRANT
RES 90648v1
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