ex1031.htm


EXHIBIT 10.31




 



CONVERTIBLE PROMISSORY NOTE


 



	$334,786.62.	 Dated: As of December 31, 2012





 


                                                                                  


FOR VALUE RECEIVED, the undersigned, Sanomedics International Holdings, Inc., a Delaware corporation ("Maker" or the “Company”), hereby promises to pay to the order of CLSS Holdings LLC, which is wholly owned by a former director and officer of Maker ("Holder") the principal sum of up to Three Hundred Thirty Four Thousand Seven Hundred Eighty Six and 62/100 Dollars ($334,786.62)(the “Principal Amount”), on or by October 1, 2012 (the "Maturity Date"), plus accrued and unpaid interest as set forth below.







1.Principal and interest shall be payable in lawful money of the United States of America in immediately available funds, without any deduction, setoff or counterclaim, at the address of Holder specified herein.







2. This Note shall bear interest on the unpaid principal amount hereof commencing on the date hereof at a rate of 7.5% per annum. Upon the occurrence and during the continuance of an Event of Default, interest shall accrue on the unpaid principal amount of this Note, from the date of such default until the earlier of the date the principal sum is paid in full or, if applicable, the date such default is cured, at the rate of 15% per annum (but not higher than the applicable maximum rate provided by law).  Accrued interest on the outstanding principal amount of this Note shall be payable on the Maturity Date, unless accelerated as a result of the occurrence of an Event of Default as set forth below.







3.The principal amount of this Note may not be prepaid.







4.(a)Prepayment Conversion.  Notwithstanding anything contained in this Note to the contrary, Holder of this Note is entitled, at his option, at any time after the issuance of this Note, to convert all or any lesser portion of the Principal Amount and accrued but unpaid interest into common stock of the Maker (“Common Stock”) at a conversion price for each share of Common Stock equal to at a price (the “Conversion Price”) which is equal to $0.50.  (The Common stock into which the Note is converted shall be referred to in this agreement as “Conversion Shares”)  The Maker will not be obligated to issue fractional Conversion Shares.  For purpose of this section, the closing bid price of the Common Stock shall be the closing bid price as reported by the Nasdaq Stock Market, or the closing bid price in the over-the-counter market or, if the Common Stock is listed on another stock market or exchange, the closing bid price on such exchange.  The Holder may convert this Note into Common Stock, in part or in full, by providing the Maker the form of conversion notice attached to the Note as Exhibit A, executed by the Holder of the Note evidencing such Holder’s intention to convert the Note.  


 


(b)The Company will not issue fractional shares or scrip representing fractions of shares of Common Stock on conversion, but the Company will round the number of shares of Common Stock issuable up to the nearest whole share.  The date on which a Notice of Conversion is given shall be deemed to be the date on which the Holder notifies the Company of its intention to so convert by delivery, by facsimile transmission or otherwise, of a copy of the Notice of Conversion.  Notice of Conversion may be sent by facsimile to the Company, Attn: Keith Houlihan, Fax.: 305-433-5129.  Upon receipt of the Notice of Conversion, the Company shall immediately cause the issuance of the shares of common stock subject to the notice.  The Holder will deliver this Note, together with original executed copy of the Notice of Conversion, to the Company within three (3) business days following the Conversion Date.  At the Maturity Date, the Company will pay any unconverted Outstanding Principal Amount and accrued Interest thereon, at the option of the Holder, in either (a) cash or (b) Common Stock valued at a price equal to the Conversion Price determined as if the Note was converted in accordance with its terms into Common Stock on the Maturity Date.


 




  





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(c)Adjustment Due to Dilutive Issuance.  If, at any time when the Note is issued and outstanding, the Company issues or sells, or in accordance with this Section 4(c) hereof is deemed to have issued or sold, any shares of Common Stock for no consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a “Dilutive Issuance”), then immediately upon the Dilutive Issuance, the Conversion Price will be reduced to the amount of the consideration per share received by the Company in such Dilutive Issuance.







The Company shall be deemed to have issued or sold shares of Common Stock if the Company in any manner issues or grants any warrants, rights or options (not including employee stock option plans), whether or not immediately exercisable, to subscribe for or to purchase Common Stock or other securities convertible into or exchangeable for Common Stock (“Convertible Securities”) (such warrants, rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as “Options”) and the price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share.  For purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon the exercise of such Options” is determined by dividing (i) the total amount, if any, received or receivable by the Company as consideration for the issuance or granting of all such Options, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the exercise of all such Options, plus, in the case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration payable upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming full conversion of Convertible Securities, if applicable).  No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon the exercise of such Options or upon the conversion or exchange of Convertible Securities issuable upon exercise of such Options.







Additionally, the Company shall be deemed to have issued or sold shares of Common Stock if the Company in any manner issues or sells any Convertible Securities, whether or not immediately convertible (other than where the same are issuable upon the exercise of Options), and the price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share.  For the purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon such conversion or exchange” is determined by dividing (i) the total amount, if any, received or receivable by the Company as consideration for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities.  No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.


 




  





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6.The unpaid principal amount of this Note, the accrued interest thereon and all other obligations of Maker hereunder (collectively, the "Obligations"), at the option of Holder, shall become immediately due and payable upon the occurrence of any of the following events of default ("Events of Default"):







(a)Maker shall fail to pay: (i) any principal or accrued interest under this Note within ten (10) days after the Maturity Date; or (ii) any of the other monetary Obligations to be paid by it under this Note within ten (10) days of the due date for payment of same.







(b)Maker shall default in the observance or performance of any material agreements, covenants or conditions contained in: (i) this Note or in any other document or instrument referred to herein or therein (except the failure to pay monetary Obligations); or (ii) any agreement by and between the Maker and the Holder; and fail to cure such default within ten (10) business days of the date Maker obtains notice thereof whether from Holder or otherwise.







(c)Any present or future representation or warranty made by or on behalf of Maker whether contained herein or in any of the other document shall be false or incorrect in any material respect when such representation or warranty is made.







(d)The occurrence of any of the following with respect to Maker: dissolution; termination of existence; insolvency; business cessation; calling of a meeting of creditors; appointment of a receiver for any property; assignment for the benefit of creditors or admit in writing its inability to pay its debts as they become due; voluntary commencement of any proceeding under any bankruptcy or insolvency law; commencement of any involuntary proceeding under any bankruptcy or insolvency law and if any such involuntary proceeding is not dismissed within 45 days or the relief requested is granted; entry of a court order which enjoins or restrains the conduct of business in the ordinary course.







7.Maker shall reimburse Holder for all costs and expenses incurred by Holder and shall pay the reasonable fees, disbursements and out of pocket expenses of counsel to Holder in connection with the enforcement of Holder's rights hereunder.  Maker shall also pay any and all taxes (other than taxes on or measured by net income of the holder of this Note) recording fees, filing charges, search fees or similar items incurred or payable in connection with the execution and delivery of this Note.







8.Maker waives demand, presentment, protest and notice of any kind and consents to the release, surrender or substitution of any and all security or guarantees for the Obligations evidenced hereby or other indulgence with respect to this Note, all without notice.







9.Maker shall indemnify, defend and save Holder harmless from and against any and all claims, liabilities, losses, costs and expenses (including, without limitation, reasonable attorneys' fees, disbursements and out of pocket expenses) of any nature whatsoever which may be asserted against or incurred by Holder arising out of or in any manner occasioned by or any failure by Maker to perform any of its Obligations hereunder.







10.Maker agrees to do such further acts and to execute and deliver to Holder such additional agreements, instruments and documents as Holder may reasonably require or deem advisable to effectuate the purposes of this Note, or to confirm to Holder its rights, powers and remedies under this Note.


 




  





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11.(a)  Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered or transmitted personally by messenger, by recognized overnight courier, telecopied or mailed (by registered or certified mail, postage prepaid) as follows:  







(i)If to Maker, one copy to:







Sanomedics International Holdings, Inc.


80 SW 8th St. Suite 2180


Miami FL 33130








(ii)     If to the Holder: 









CLSS Holdings LLC


80 SW 8th St. Suite 2180


Miami FL 33130









(b)Each such notice or other communication shall be effective: (i) if given by telecopier, when such telecopy is transmitted to the telecopier number specified in Section 11(a) (with confirmation of transmission received by the sender); or (ii) if given by any other means, when received at the address specified in Section 11(a).  Any party by notice given in accordance with this Section 11 to the other party may designate another address (or telecopier number) or person for receipt of notices hereunder.


 


12.This Note contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with respect thereto.







13.This Note may be amended, superseded, cancelled, renewed or extended only by a written instrument signed by Holder and Maker.  Any provisions hereof may be waived by a party but any such waiver must be in writing signed by such party and any such waiver shall be effective only in the specific instance and for the specific purpose for which given.  No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any such right, power or privilege, nor any single or partial exercise of any such right, power or privilege, preclude any further exercise thereof or the exercise of any other such right, power or privilege.  The rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies that any party may otherwise have at law or in equity. 







14.This Agreement shall be governed by and construed in accordance with the laws of the State of Florida applicable to agreements made and to be performed entirely within such State, without regard to the conflict of laws rules thereof.







15.Maker irrevocably: (a) agrees that any suit, action or other legal proceeding arising out of this Agreement may be brought in the courts of the State of Florida or the courts of the United States located in Dade County, Florida; (b) consents to the jurisdiction of each court in any such suit, action or proceeding; (c) waives any objection which it may have to the laying of venue of any such suit, action or proceeding in any of such courts; (d) waives the right to assert any counterclaim in any such suit, action and proceeding; and (e) waives the right to a trial by jury in any such suit, action or other legal proceeding.  







16.This Note and all of its provisions, rights and Obligations shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, assigns and legal representatives.  Nothing herein express or implied is intended or shall be construed to confer upon or to give anyone other than the parties hereto and their respective heirs, legal representatives and successors any rights or benefits under or by reason of this Agreement and no other party shall have any right to enforce any of the provisions of this Agreement.  This note may be transferred or assigned by the Holder, in full or in part.







17.If any provision of this Note for any reason shall be held to be illegal, invalid or unenforceable, such illegality shall not affect any other provision of this Note, but this Note shall be construed as if such illegal, invalid or unenforceable provision had never been included herein.






  





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IN WITNESS WHEREOF, the undersigned has executed this Secured Promissory Note as of the date first written above.







ATTEST:


 




	

Sanomedics International Holdings, 


Inc.,

	 	

MAKER:


Sanomedics International Holdings, 


Inc.,

	 
	 	 	 	 	 
	 	 	By:	
/s/ Keith Houlihan

	 
	
 

	 	 	
Name:Keith Houlihan

	 
	 	 	 	
Title:President and by resolution of the members of the Board of Directors) 

	 





















  





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Exhibit A


Conversion Notice


NOTICE OF CONVERSION 












The undersigned hereby elects to convert $____________ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of Sanomedics International Holdings, Inc., a Delaware corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of June 30, 2010 (the “Note”), as of the date written below.  No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.  







Box Checked as to applicable instructions:








	
  

	
[ ] The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).












Name of DTC Prime Broker:   


Account Number:  








	
  

	
[  ] The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:







 


Date of Conversion:  


Applicable Conversion Price: 


Number of Shares of Common Stock to be Issued Pursuant to


Conversion of the Notes:  


Amount of Principal Balance Due on Note being Converted: 












BY_____________________________


Name:







Date: _________


Address:









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