Exhibit 10.5

 

AMENDMENT #5

 

This Amendment #5 (this “Amendment”) is entered into as of June 30, 2015, by and
between Tonaquint, Inc., a Utah corporation (“Lender”), and Guided Therapeutics,
Inc., a Delaware corporation (“Debtor”).

 

A. Debtor previously issued to Lender a Secured Promissory Note dated September
10, 2014 and in the principal amount of $1,275,000.00 (the “Note”).

 

B. The Note was issued pursuant to a Note Purchase Agreement dated September 10,
2014 between Lender and Debtor (the “Purchase Agreement,” and together with the
Note and all other documents entered into in conjunction therewith, the “Loan
Documents”).

 

C. Lender and Debtor previously agreed to extend the Maturity Date (as defined
in the Note) of the Note pursuant to the terms of that certain Amendment dated
March 10, 2015.

 

D. Lender and Debtor also previously agreed to extend the Maturity Date of the
Note pursuant to the terms of that certain Amendment #2 dated May 4, 2015.

 

E. Lender and Debtor also previously agreed to extend the Maturity Date of the
Note pursuant to the terms of that certain Amendment #3 dated June 1, 2015.

 

F. Lender and Debtor also previously agreed to extend the Maturity Date of the
Note pursuant to the terms of that certain Amendment #4 dated June 16, 2015
(“Amendment #4”).

 

G. Debtor has requested that Lender further extend the Maturity Date (“Extension
#5”).

 

H. Lender has agreed, subject to the terms, amendments, conditions and
understandings expressed in this Amendment, to grant Extension #5.

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

 

1.                  Recitals. Each of the parties hereto acknowledges and agrees
that the recitals set forth above in this Amendment are true and accurate and
are hereby incorporated into and made a part of this Amendment.

 

2.                  Amendment #4. This Amendment shall supersede and replace
Amendment #4 in its entirety.

 

3.                  Extension. The first sentence of Section 1 of the Note is
deleted in its entirety and replaced with the following:

 

“PAYMENT. Debtor shall pay to Lender the entire outstanding balance of this Note
on or before August 31, 2016.”

 

4.                  Interest. Section 2 of the Note is deleted in its entirety
and replaced with the following:

 

“INTEREST. Interest shall not accrue on the unpaid principal balance of this
Note until the date that is six (6) months from the date hereof unless an Event
of Default (as defined below) occurs prior to such date. Upon the earlier of (i)
the date that is six (6) months from the date hereof, and (ii) the occurrence of
an Event of Default, the outstanding balance of this Note shall bear interest at
the lesser of the rate of eighteen percent (18%) per annum simple interest or
the maximum rate permitted by applicable law, calculated on the basis of a
360-day year, actual days elapsed, from the date due until paid.”

 

5.                  Events of Default. The following events of default shall be
added to the end of Section 5 of the Note:

 

“(j) Required Market Capitalization. Debtor’s market capitalization (calculated
as the closing trade price of Debtor’s common stock on Debtor’s principal
trading market on the applicable date of measurement multiplied by Debtor’s
total number of issued and outstanding shares of common stock on the applicable
date of measurement) at any time shall fall below $7,500,000.00 or the closing
trade price of Debtor’s common stock on its principal trading market at any time
shall fall below $0.05.”

 

“(k) Trading. Trading in Debtor’s common stock shall be suspended, halted,
chilled, frozen, reach zero bid or otherwise cease on Debtor’s principal trading
market for a period of ten (10) consecutive days or for more than an aggregate
of thirty (30) days in any 365-day period.”

 

6.                  Acceleration; Remedies. The first two sentences in Section
6(a) of the Note shall be deleted and replaced in their entirety with the
following:

 

“(a) Thirty (30) calendar days following the occurrence of an Event of Default
(other than an Event of Default referred to in Sections 5(a), 5(d), 5(e), 5(j)
and 5(k)) and at any time thereafter, Lender may, by written notice to Debtor (a
“Default Notice”), declare all unpaid principal, plus all accrued interest and
other amounts due hereunder to be immediately due and payable at the Mandatory
Default Amount (as defined below) without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived, anything
contained herein to the contrary notwithstanding. Upon the occurrence or
existence of any Event of Default described in Sections 5(a), 5(d), 5(e), 5(j)
and 5(k), immediately and without notice, all outstanding unpaid principal, plus
all accrued interest and other amounts due hereunder shall automatically become
immediately due and payable at the Mandatory Default Amount, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived, anything contained herein to the contrary
notwithstanding.”

 

7.   Conversions.

 

(a)                During the period beginning on March 10, 2015 and ending on
August 31, 2016 (the “Exentension Period”), Lender shall have the right to
convert up to a certain amount of the outstanding balance of the Note (the
“Conversion Cap”) into shares of Debtor’s common stock (the “Conversion
Shares”). The Conversion Cap for the period beginning on March 10, 2015 and
ending on July 31, 2015 shall be $450,000.00. Beginning on August 1, 2015 and
continuing thereafter on the first day of each month, the Conversion Cap shall
increase by $75,000.00. For the avoidance of doubt, assuming no prior
conversions, the Conversion Cap as of August 1, 2015 shall be $525,000.00, the
Conversion Cap as of September 1, 2015 shall be $600,000.00, and so on until the
end of the Extension Period.

 

(b)               Lender may elect to make such a conversion (each, a
“Conversion”) by delivering a conversion notice in substantially the form
attached hereto as Exhibit A to Debtor (“Conversion Notice”). Debtor agrees to
deliver Conversion Shares on or prior to the date that is three (3) business
days after delivery of a Conversion Notice (the “Delivery Deadline”). For the
avoidance of doubt, Debtor further agrees that it will honor any Conversion
Notice delivered during the Extension Period, even if delivered on the final day
thereof. When a Conversion Notice or other notice hereunder is deemed to be
delivered shall be governed by the terms of Section 7.8 of the Purchase
Agreement.

 

(c)                The conversion price per share (the “Conversion Price”) for
each Conversion shall be the lower of (i) $0.25, and (ii) 75% of the lowest
daily volume weighted average price per share of Debtor’s common stock (as
reported by Bloomberg, L.P.) during the five (5) business days immediately prior
to the date of the applicable Conversion. Notwithstanding the foregoing, the
Conversion Price shall be subject to a conversion floor of $0.15 per share (the
“Conversion Floor”). If Lender submits a Conversion Notice with a Conversion
Price less than the Conversion Floor, then Debtor shall, within two (2) business
days of Lender’s delivery of such Conversion Notice, notify Lender in writing of
its election to either (i) pay the conversion amount in cash, or (ii) waive the
Conversion Floor and deliver the Conversion Shares. On or prior to the Delivery
Deadline, Debtor shall pay the aggregate Conversion Price in cash or deliver the
applicable Conversion Shares, as the case may be. If Debtor fails to deliver a
notice as required pursuant to this Section 5(c), then Debtor shall be deemed to
have elected to have waived the Conversion Floor and will be required to deliver
the applicable Conversion Shares on or before the Delivery Date.

 

(d)               If Debtor elects or is deemed to have elected to deliver
Conversion Shares and fails to deliver Conversion Shares on or prior to the
Delivery Deadline, a late fee equal to the greater of (a) $500.00 and (b) 2% of
the applicable Conversion Share Value (as defined below) rounded to the nearest
multiple of $100.00 will be assessed for each day after the Delivery Deadline
until Conversion Share delivery is made; and such late fee will be added to the
outstanding balance of the Note (such fees, the “Conversion Delay Late Fees”),
provided, however, that in no event will the cumulative amount of any Conversion
Delay Late Fees for each Conversion exceed 100% of the applicable Conversion
Share Value. For illustration purposes only, if Lender delivers a Conversion
Notice to Debtor pursuant to which Debtor is required to deliver 100,000
Conversion Shares to Lender and on the Delivery Deadline such Conversion Shares
have a Conversion Share Value of $20,000.00 (assuming a closing trade price on
the Delivery Deadline of $0.20 per share of common stock), then in such event a
Conversion Delay Late Fee in the amount of $500.00 per day (the greater of
$500.00 per day and $20,000.00 multiplied by 2%, which is $400.00) would be
added to the outstanding balance of the Note until such Conversion Shares are
delivered to Lender. For purposes of this example, if the Conversion Shares are
delivered to Lender twenty (20) days after the applicable Delivery Deadline, the
total Conversion Delay Late Fees that would be added to the outstanding balance
would be $10,000.00 (20 days multiplied by $500.00 per day). If the Conversion
Shares are delivered to Lender one hundred (100) days after the applicable
Delivery Deadline, the total Conversion Delay Late Fees that would be added to
the outstanding balance of the Note would be $20,000.00 (100 days multiplied by
$500.00 per day, but capped at 100% of the Conversion Share Value). For purposes
of this Amendment, “Conversion Share Value” means the product of the number of
Conversion Shares deliverable pursuant to any Conversion multiplied by the
volume weighted average price per share on the applicable Delivery Deadline.

 

8.                  Volume Restriction.

 

(a)                Lender agrees that, with respect to the Conversion Shares, in
any given calendar week its Net Sales (as defined below) of such Conversion
Shares shall not exceed the greater of (i) fifteen percent (15%) of Debtor’s
weekly dollar trading volume in such week (which, for purposes hereof, means the
number of shares traded during such calendar week multiplied by the volume
weighted average price per share (as reported by Bloomberg L.P.) for such
calendar week), and (ii) $75,000 (the “Volume Restriction”). For purposes of
this Amendment, the term “Net Sales” means the gross proceeds from sales of
Conversion Shares sold in a calendar week minus the purchase price paid for any
shares of Debtor’s common stock purchased from persons other than Debtor in such
week. Lender hereby authorizes Debtor to request a trading activity report from
Lender’s broker with respect to Lender’s Net Sales during any calendar week.

 

(b)               Lender agrees that in the event it breaches the Volume
Restriction where its Net Sales during any calendar week exceed the dollar
volume it is permitted to sell in any calendar week (such excess, the “Excess
Sales”), then in such event Debtor’s sole and exclusive remedy shall be to
reduce the outstanding balance of the Note by the amount of the Excess Sales
upon delivery of written notice to Lender.

 

9.                  Trading Activities. During the Extension Period, Lender will
not directly or through an affiliate engage in any open market Short Sales (as
defined below) of Debtor’s common stock; provided; however, that unless and
until Debtor has affirmatively demonstrated by the use of specific evidence that
Lender is engaging in open market Short Sales, Lender shall be assumed to be in
compliance with the provisions of this Section and Debtor shall remain fully
obligated to fulfill all of its obligations under the Loan Documents; and
provided, further, that (a) Debtor shall under no circumstances be entitled to
request or demand that Lender either (i) provide trading or other records of
Lender or of any party (other than as set forth in Section 6(a) above), or (ii)
affirmatively demonstrate that Lender or any other party has not engaged in any
such Short Sales in breach of these provisions as a condition to Debtor’s
fulfillment of its obligations under any of the Loan Documents, (b) Debtor shall
not assert Lender’s or any other party’s failure to demonstrate such absence of
such Short Sales or provide any trading or other records of Lender or any other
party as all or part of a defense to any breach of Debtor’s obligations under
any of the Loan Documents, and (c) Debtor shall have no setoff right with
respect to any such Short Sales. As used herein, “Short Sale” has the meaning
provided in Rule 3b-3 under the Securities Exchange Act of 1934, as amended.

 

10.              Representations and Warranties of Debtor. In order to induce
Lender to enter into this Amendment, Debtor, for itself, and for its affiliates,
successors and assigns, hereby acknowledges, represents, warrants and agrees as
follows:

 

(a) Debtor has full power and authority to enter into this Amendment and to
incur and perform all obligations and covenants contained herein, all of which
have been duly authorized by all proper and necessary action. No consent,
approval, filing or registration with or notice to any governmental authority is
required as a condition to the validity of this Amendment or the performance of
any of the obligations of Debtor hereunder.

 

(b) There is no fact known to Debtor or which should be known to Debtor which
Debtor has not disclosed to Lender on or prior to the date of this Amendment
which would or could materially and adversely affect the understanding of Lender
expressed in this Amendment or any representation, warranty, or recital
contained in this Amendment.

 

(c) Except as expressly set forth in this Amendment, Debtor acknowledges and
agrees that neither the execution and delivery of this Amendment nor any of the
terms, provisions, covenants, or agreements contained in this Amendment shall in
any manner release, impair, lessen, modify, waive, or otherwise affect the
liability and obligations of Debtor under the terms of the Loan Documents.

 

(d) Debtor has no defenses, affirmative or otherwise, rights of setoff, rights
of recoupment, claims, counterclaims, actions or causes of action of any kind or
nature whatsoever against Lender, directly or indirectly, arising out of, based
upon, or in any manner connected with, the transactions contemplated hereby,
whether known or unknown, which occurred, existed, was taken, permitted, or
begun prior to the execution of this Amendment and occurred, existed, was taken,
permitted or begun in accordance with, pursuant to, or by virtue of any of the
terms or conditions of the Loan Documents. To the extent any such defenses,
affirmative or otherwise, rights of setoff, rights of recoupment, claims,
counterclaims, actions or causes of action exist or existed, such defenses,
rights, claims, counterclaims, actions and causes of action are hereby waived,
discharged and released. Debtor hereby acknowledges and agrees that the
execution of this Amendment by Lender shall not constitute an acknowledgment of
or admission by Lender of the existence of any claims or of liability for any
matter or precedent upon which any claim or liability may be asserted.

 

(e) Debtor represents and warrants that as of the date hereof no Events of
Default (as defined in the Note) exist under the Loan Documents or have occurred
prior to the date hereof.

 

11.              Representations and Warranties of Lender. In order to induce
Debtor to enter into this Amendment, Lender, for itself, and for its affiliates,
successors and assigns, hereby acknowledges, represents, warrants and agrees as
follows:

 

(a) Lender has full power and authority to enter into this Amendment and to
incur and perform all obligations and covenants contained herein, all of which
have been duly authorized by all proper and necessary action. No consent,
approval, filing or registration with or notice to any governmental authority is
required as a condition to the validity of this Amendment or the performance of
any of the obligations of Lender hereunder.

 

(b) (i) Lender is an “accredited investor” as that term is defined in Rule
501(a) of Regulation D; (ii) Lender is experienced, sophisticated and
knowledgeable in trading in securities of private and public companies and by
reason of its respective business or financial experience or its own independent
investigation, Lender is capable of evaluating the merits and risks of the
transaction contemplated by the Transaction Documents; (iii) Lender will only
acquire the Note or the Conversion Shares for investment, for its own account
and not for the interest of any other person and not for distribution or resale
to others; and (iv) Lender is familiar with Debtor and has been given the
opportunity to ask questions of the officers and directors of Debtor and to
obtain (and has received to its satisfaction) such information about the
business and financial conditions of Debtor as it has reasonably requested.
Notwithstanding the foregoing, nothing in this Section 11 shall be construed to
modify, undermine or act as a defense to Debtor’s unconditional obligation to
repay the Note. 

 

12.              Certain Acknowledgments. Each of the parties acknowledges and
agrees that: (a) no property or cash consideration of any kind whatsoever has
been or shall be given by Lender to Debtor in connection with this Amendment or
other amendments to the Loan Documents granted herein and (b) the Note and the
Conversion Shares (i) have not been and will not be registered under the
Securities Act or the securities laws of any state, nor is any such registration
contemplated and (ii) are subject to restrictions on transferability and resale,
and may not be transferred or resold except as permitted under the Securities
Act of 1933 and applicable state securities laws, whether pursuant to
registration thereunder or an exemption therefrom.

 

13.              Other Terms Unchanged. The Loan Documents, as amended by this
Amendment, remain and continue in full force and effect, constitute legal,
valid, and binding obligations of each of the parties, and are in all respects
agreed to, ratified, and confirmed. Any reference to any Loan Document after the
date of this Amendment is deemed to be a reference to such Loan Document as
amended by this Amendment. If there is a conflict between the terms of this
Amendment and any Loan Document, the terms of this Amendment shall control. No
forbearance or waiver may be implied by this Amendment. Except as expressly set
forth herein, the execution, delivery, and performance of this Amendment shall
not operate as a waiver of, or as an amendment to, any right, power, or remedy
of Lender under any Loan Document, as in effect prior to the date hereof.

 

14.              Headings. The headings contained in this Amendment are for
reference purposes only and do not affect in any way the meaning or
interpretation of this Amendment.

 

15.              Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument. The parties hereto confirm that any
electronic copy of another party’s executed counterpart of this Amendment (or
such party’s signature page thereof) will be deemed to be an executed original
thereof.

 

16.              Further Assurances. Each party shall do and perform or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Amendment and the consummation of the
transactions contemplated hereby.

 

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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date
set forth above.

 

  DEBTOR       GUIDED THERAPEUTICS, INC.       By:  /s/ Gene S. Cartwright  
Name:  Gene S. Cartwirght   Title:  CEO           LENDER:       TONAQUINT, INC.
      By:  /s/ John M. Fife   John M. Fife, President