Document:

simh_ex1072.htm

EXHIBIT 10.72

 

AMENDMENT AGREEMENT

 

THIS AMENDMENT AGREEMENT (this "Agreement"), dated and effective as of September 22, 2014 (the "Effective Date"), is executed by and between Redwood Management, LLC, a limited liability company organized and existing under the laws of the State of Florida ("Redwood"), and Sanomedics International Holdings, Inc., a Delaware corporation, Thermomedics, Inc., a Florida corporation, Anovent, Inc., a Florida corporation and Prime Time Medical, Inc., a Florida Corporation (collectively the "Company")

 

RECITALS

 

WHEREAS, on or about September 22, 2014, Redwood entered into that certain Debt Purchase Agreement (the "Debt Purchase Agreement") by and between Redwood, as purchaser, and TCA Global Credit Master Fund, LP, a limited partnership organized and existing under the laws of the Cayman Islands, as seller ("TCA"), pursuant to which Redwood acquired the rights to certain debt, including rights to conversion, evidenced by that certain Replacement Revolving Note A (the "Note") issued by the Company in favor of TCA on September 22, 2014 (the "Debt"), which replaced and superseded a portion of the original Revolving Convertible Promissory Note issued by the Company in favor of TCA on December 31, 2013 and effective as of January 9, 2014;

 

NOW, THEREFORE, in consideration of the premises set forth above, the covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

1. Obligations Owing. The Company hereby acknowledges and confirms that the Debt remains outstanding and is valid, due and owing. The Company ratifies and confirms the validity of that certain Debt Purchase Agreement, including the rights to shares of common stock, par value $0.001 per share, of the Company (the "Common Stock") and conversion rights of TCA transferred to Redwood.

 

2. Amendment. The Company and Redwood hereby amend the Note as follows (with reference to Rule 144 promulgated under the Securities Act of 1933, as amended (the "Securities Act"), the parties acknowledge that the amendment hereby is made without any additional consideration applicable):

 

(a) Payment. The Company promises to pay to Redwood One Hundred Seventeen Thousand Seventy Four Dollars and 91/100 United States Dollars (US$117,074.91) (the "Principal") plus twelve percent (12%) per annum (the "Interest"), on September 21, 2015 (the "Maturity Date"), or earlier if required hereby under the terms of the Note.

 

(b) Prepayment. Prior to the Maturity Date, upon seven (7) days written notice to Redwood and provided that an Event of Default has not occurred or is continuing, the Company may prepay the lesser of (i) any portion of the principal and accrued interest outstanding in an amount equal to one hundred thirty five percent (135%) of such amount of principal and accrued interest due and owing at such time or (ii) the maximum amount of principal and accrued interest allowable pursuant to applicable law.

  

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(c) Event of Default. "Event of Default," wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

 

	 	
1.  

	
any default in the payment of principal or interest as and when the same shall become due and payable (whether on a Conversion Date (as defined below) or the Maturity Date or upon acceleration or otherwise;

 

	
2.  

	
the Company or any of its subsidiaries or affiliates shall commence, or there shall be commenced against any of them, a case under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Company or any subsidiary thereof or there is commenced against the Company or any subsidiary thereof any such bankruptcy, insolvency or other proceeding; or the Company or any subsidiary thereof is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or the Company or any subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of five (5) Business Days (as defined below); or the Company or any subsidiary thereof makes a general assignment for the benefit of creditors; or the Company shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; or the Company or any subsidiary thereof shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of any debt or the Company or any subsidiary thereof shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing or any corporate or other action is taken by the Company or any subsidiary thereof for the purpose of effecting any of the foregoing or adverse to the Note. For the purposes of the Note, "Business Day" shall mean any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day;

 

	
3.  

	
the Company shall fail to timely file all reports required to be filed with the United States Securities and Exchange Commission (the "SEC") pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise required by the Exchange Act, or cease to be subject to the reporting requirements of the Exchange Act, or as required to be deemed a current public company as to disclosure including on any exchange or over the counter trading medium and or the Company is in, or accused of, being in violation of any law or regulation by written demand, court proceeding or otherwise;

 

	
4.  

	
the material breach of any promise or representation in this Agreement or the Note and or any related representation or agreement made by the Company and or any of its officers to Redwood, which shall include, without limitation, the failure to deliver shares of Common Stock due to Redwood upon a conversion within three (3) Business Days from the date of conversion or sooner, which delivery must be otherwise made per reasonable specifications of Redwood (e.g. to brokerage firm account);

 

  

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5.  

	
The Company or any subsidiary of the Company shall default in any of its obligations under any debenture, mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement of the Company or any subsidiary of the Company in an amount exceeding $25,000, whether such indebtedness now exists or shall hereafter be created and such default shall result in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

 

	
6.  

	
Any cessation of operations by the Company or if the Company discloses it is unable to pay its debts as such debts become due, provided, however, that any disclosure of the Company's ability to continue as a "going concern" shall not be an admission that the Company is unable pay its debts as they become due;

 

	
7.  

	
The failure by the Company to maintain any and all assets which are necessary to conduct its business (whether now or in the future);

 

	
8.  

	
The restatement of any financial statements filed by the Company with the SEC for any date or period from two years prior to the date of this Agreement and until all amounts due to Redwood is no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statements, have constituted a material adverse effect on the rights of Redwood with respect to the Note, this Agreement or the Debt Purchase Agreement; or

 

	
9.  

	
The Depository Trust Company ("DTC") places a "chill" on the deposit of additional securities of the Company with DTC.

 

	
10.  

	
The Company fails to maintain it's listing on the OTCQB.

 

	
11.   

	
The Company effectuates a reverse split of its Common Stock without giving Redwood 30 day's prior written notice.

 

(d) Remedies. If the Company fails to perform hereunder by delivering shares of Common Stock or paying Principal and/or Interest within three (3) Business Days of said being due, the Company shall pay, for the first thirty (30) calendar days from the due date of said performance or payment, an amount equal to $1,000 per day, in cash, per day, payable immediately, as a reasonable late fee (the "Late Fee"). Such Late Fee shall be in addition to any other damages and reasonable attorney fees and costs payable, to cover, on a non-accountable basis, the time, expense, efforts and or distress of Redwood causing Redwood to focus its management, advisors, and counselors on the matter of the Company failing to honor its written obligations, and said figure is deemed a reasonable liquidated damages provision and is not an election of remedy and is non-exclusive thereby allowing Redwood to pursue any and all rights and remedies set forth in this Agreement.

 

  

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If any Event of Default occurs and is continuing, Principal, plus Interest and Late Fees and other amounts owing in respect thereof, shall become immediately due and payable in cash, provided, however, Redwood may elect any part thereof to be paid in shares of Common Stock as part of any conversion hereunder in which case such shares of Common Stock shall be due. The Default Conversion Price will equal 50% of the VWAP for the 10 trading days prior to conversion.

 

Redwood is not required to provide and the Company hereby waives any presentment, demand, protest or other notice of any kind, and Redwood shall be permitted to, immediately and without expiration of any grace period, enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by Redwood only in writing at any time prior to payment hereunder and Redwood shall have all rights and elections it is entitled to hereunder and or under law. Unless otherwise noted expressly herein in writing, no grace period applies.

 

(e) Conversion. At any time until both the Principal and Interest is paid in full and all conversions have been honored by the Company and the Note is no longer outstanding, the Principal and Interest, shall be convertible into shares of Common Stock of the Company at the lesser of (i) sixty two and one half percent (62.5%) of the lowest traded volume weighted average price ("VWAP") in the five (5) trading days prior to conversion or (ii) at a fixed price equal to a ten percent (10%) premium on the VWAP on the day prior to the Execution Date (the "Set Price"). Redwood shall effect conversions by delivering to the Company the form of Notice of Conversion attached hereto as Exhibit C (a "Notice of Conversion"), specifying the date on which such conversion is to be effected (a "Conversion Date") and shall require the shares of Common Stock to be delivered by the Company within three (3) Business Days. If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is provided hereunder. To effect conversions hereunder, Redwood shall not be required to otherwise physically surrender anything to the Company. If the Company does not request, from its transfer agent, the issuance of the shares underlying the Note after receipt of a Notice of Conversion within three (3) Business Days following the date of Notice of Conversion, or fails to timely deliver the shares of Common Stock per the instructions of Redwood, within three (3) Business Days, free and clear of all legends and in legal free trading form, the Company shall be responsible to immediately reimburse Redwood for any differential in the value of the converted shares of Common Stock between the value of the closing price on the date the shares of Common Stock should have been delivered and the date the shares of Common Stock are delivered. Redwood and any assignee, by acceptance of the Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of the Note, the unpaid and unconverted Principal may be less than the amount stated on the face hereof. The parties hereby agree that the Company shall reimburse Redwood for all legal costs associated with the issuance of an opinion(s) of counsel to the Transfer Agent and other costs, expenses and liabilities incurred in connection with the conversion and issuance of the shares of Common Stock. When possible, the Company must pay these fees directly, otherwise the Company must make immediate payment for reimbursement to Redwood for all fees and expenses immediately upon written notice by Redwood or the submission of an invoice by Redwood. In addition, if the Company fails to timely (within three (3) Business Days), deliver the shares of Common Stock per the instructions of Redwood, free and clear of all legends and in legal free trading form, the Company shall allow Redwood to add two (2) days to the look back (the mechanism used to obtain the conversion price along with discount) for each day the Company fails to timely (within three (3) Business Days)) deliver shares of Common Stock, on the next two (2) conversions. If an Event of Default shall occur, the conversion price shall be reduced without any action on the part of Redwood, to fifty percent (50%) of the VWAP for the ten trading days immediately prior to conversion.

 

  

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Notwithstanding anything to the contrary herein contained, Redwood may not convert under the Note to the extent such conversion would result in Redwood, together with any affiliate thereof, beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder) in excess of 4.99% of the then issued and outstanding shares of Common Stock, including shares issuable upon such conversion and held by Redwood after application of this section. The provisions of this section may be waived by Redwood, in whole or part, upon sixty-one (61) days prior written notice. Any successor to Redwood shall be unaffected by any such waiver.

 

(f) Authorized Shares. The Company covenants that during the period the conversion right exists, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion under the Note. The Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion (based on the lowest conversion price in effect from time to time) (the "Reserved Amount"). The Reserved Amount shall be increased from time to time in accordance with the Company's obligations pursuant to the Note. The Company represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. The Company (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion under the Note, and (ii) agrees that its execute of the Note and this Agreement shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Agreement. If, at any time the Company does not maintain the Reserved Amount it will be considered an Event of Default.

 

(g) Adjustments.

 

1. If the Company, at any time while the Note is outstanding: (A) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its common stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company pursuant to the Note, including as interest thereon), (B) subdivide outstanding shares of Common Stock into a larger number of shares, (C) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issue by reclassification of shares of the Common Stock any shares of capital stock of the Company, then the Set Price shall be either (i) as agreed in writing by Redwood in its discretion or if not agreed to by Redwood or reasonably objected to by the Company in writing to Redwood promptly before any such corporate change, (ii) be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stock as to such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. Whenever the Set Price is adjusted as noted above in this paragraph the Company shall promptly, within one (1) Business Day, deliver to Redwood a notice setting forth the Set Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

  

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2. If, at any time while the Note is outstanding: (A) the Company effects any merger or consolidation of the Company with or into another Person (as defined below), (B) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (C) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which Redwood is permitted to tender or exchange their shares for other securities, cash or property, or (D) the Company effects any reclassification of its Common Stock or any compulsory share exchange pursuant to which its Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a "Fundamental Transaction"), then Redwood may declare the Note in default or, if it elects in writing to the Company, upon any subsequent conversion, Redwood shall have the right to receive, for each underlying share that would have been issuable upon such conversion absent such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, converted one share of Common Stock of the Company (the "Alternate Consideration"). For purposes of any such conversion, the determination of the Set Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock of the Company in such Fundamental Transaction, and the Company shall apportion the Set Price among the Alternate Consideration in a reasonable manner, but only if consented to in writing by Redwood, reflecting the relative value of any different components of the Alternate Consideration. If shareholders of the Company's Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then Redwood shall be given the same choice as to the Alternate Consideration it receives upon any conversion permitted under the Note following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to Redwood a new agreement consistent with the foregoing provisions and evidencing Redwood's right to convert under such agreement into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is affected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph and insuring that the Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. If any Fundamental Transaction constitutes or results in a Change of Control Transaction, then at the request of Redwood delivered before the 90th calendar day after such Fundamental Transaction, the Company (or any such successor or surviving entity) will purchase the Note from Redwood for a purchase price, payable in cash within ten (10) business days of such request, equal to the less of (i) 125% or (ii) the maximum amount permitted by law, of the remaining unconverted Principal on the date of such request, plus all accrued and unpaid Interest thereon, plus all other accrued and unpaid amounts due hereunder. For purposes of the Note and this Agreement, "Person" shall mean a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof or a governmental agency.

 

(h)Indebtedness. So long as any portion of the Debt is outstanding, the Company shall not and shall not permit any of its subsidiaries to, directly or indirectly, enter into, create, incur, assume or suffer to exist any new indebtedness of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom that is senior in any respect to the Company's obligations under the Note without the prior consent of Redwood. All consents of required of Redwood pursuant to the Note shall be in the sole and absolute discretion of Redwood.

 

  

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(i) Usury. If it shall be found by court that the Interest or other amount deemed interest due or aggregated hereunder violates applicable laws governing usury, the amount shall automatically be lowered to equal the maximum permitted under law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Note as contemplated herein, or otherwise not honor the Note, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impeded the execution of any power herein granted to Redwood, but will suffer and permit the execution of every such as though no such law has been enacted.

 

3. Representations of Redwood. Redwood represents to the Company and the Company confirms such representation, as follows:

 

(a) Affiliate Status. To the best of its knowledge, Redwood is not an affiliate, now or upon execution of this Agreement, and relies upon the representations made by the Company's officers and directors, in such regard. By execution of this Agreement, the Company hereby represents that Redwood is not and will not be, upon execution of this Agreement, an affiliate of the Company and the Company hereby acknowledges that Redwood has executed this Agreement solely on the reliance of such representation; and

 

(b) Accredited Investor Status. Redwood is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D (an "Accredited Investor").

 

4. Other Concerns. Redwood has no responsibility for any action or inaction by the Company. The parties recognize and acknowledge that they have entered into a confidential relationship as to this Agreement, subject to the requirements of law to the contrary, and the parties have negotiated and entered into this Agreement in good faith and without any duress. Company has, notwithstanding anything, obtained counsel of its own choosing on the legality of the subject including the issuance of the shares of Common Stock hereby without legend or restriction. The Company hereby indemnifies and holds harmless Redwood and its affiliates, including the counselors and advisors of Redwood, for any breach of any provision or representation by Company herein.

 

  

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5. Miscellaneous.

 

(a) Gender. Wherever the context shall require, all words herein in the masculine gender shall be deemed to include the feminine or neuter gender, all singular words shall include the plural, and all plural shall include the singular.

 

(b) Severability. If any provision hereof is deemed unenforceable by a court of competent jurisdiction, the remainder of this Agreement, and the application of such provision in other circumstances shall not be affected thereby.

 

(c) Further Cooperation. From and after the Effective Date, each of the parties hereto agrees to execute whatever additional documentation or instruments as are necessary to carry out the intent and purposes of this Agreement or to comply with any law; provided, however, Redwood shall not be required to execute any additional documents or perform any additional acts in order for Redwood to obtain and dispose of the shares of Common Stock.

 

(d) Waiver. No waiver of any provision of this Agreement shall be valid unless in writing and signed by the waiving party. The failure of any party at any time to insist upon strict performance of any condition, promise, agreement or understanding set forth herein, shall not be construed as a waiver or relinquishment of any other condition, promise, agreement or understanding set forth herein or of the right to insist upon strict performance of such waived condition, promise, agreement or understanding at any other time.

 

(e) Expenses. Except as otherwise provided herein, or agreed in writing, each party hereto shall bear all expenses incurred by each such party in connection with this Agreement and in the consummation of the transactions contemplated hereby and in preparation thereof. In the event Redwood shall refer this Agreement to an attorney for collection in the Event of Default, the Company hereby agrees to pay any and all reasonable costs and expenses incurred in attempting or effecting collection hereunder or enforcement of the terms of this Agreement, including, but not limited to, reasonable attorney's fees, whether or not suit is instituted.

 

(f) Amendment. This Agreement may only be amended or modified at any time, and from time to time, in writing, executed by the parties hereto.

 

  

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(g) Notices. Any notice, communication, request, reply or advice (hereinafter severally and collectively called "Notice") in this Agreement provided or permitted to be given, may be made or be served by delivering same by overnight mail or by delivering the same by a hand-delivery service, such Notice shall be deemed given when so delivered or sooner as stated within this Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, (ii) the date after the date of transmission, if such notice or communication is delivered via facsimile, (iii) the first Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be:

 

	
If to the Company, to:

Sanomedics International Holdings, Inc.

444 Brickell Avenue, Suite 415 Miami, FL 33131

Attention: David C. Langle,                 

	 
	 	 
	
If to Redwood:

 

Redwood Management, LLC

16850 Collins Avenue, Suite #112-341

Sunny Isles Beach, Florida 33160

Attn: Gary Rogers

Facsimile: [__________________]

	 

 

(h) Captions. Captions herein are for the convenience of the parties and shall not affect the interpretation of this Agreement.

 

  

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(i) Counterpart Execution. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument and this Agreement may be executed by fax. If this Agreement shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver another original of this Agreement.

 

(j) Assignment. This Agreement is not assignable without the written consent of the parties, provided, however, Redwood has the right to assign the obligations, this Note, this Agreement, and the shares of Common Stock owed to it under the Note as it may determine in its sole absolute discretion without the consent of the Company.

 

(k) Parties in Interest and Affiliates. Provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties, their heirs, executors, administrators, other permitted successors and assigns, if any. Nothing contained in this Agreement, whether express or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any persons other than the parties to it and their respective successors and assigns. For this Agreement, affiliated or affiliate, either word being capitalized or not herein, shall mean controlling, controlled by or under direct or indirect common control with such person and includes shareholders, officers, directors, advisors, employees, attorneys, accountants, auditors, subsidiaries, parent companies, related companies and founders, to broadly defined, to be interpreted to protect Redwood, beyond just persons and firms customarily considered affiliated under Federal securities laws and regulations.

 

Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties on the subject matter hereof and supersedes all prior recent settlement discussions and verbal agreements and understandings, provided, however, this Agreement does not change or eliminate the terms of financial and related obligations to Redwood per past agreements and instruments except as strictly modified in writing above.

 

(m) Construction and Miscellaneous. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of or in the federal courts located in Broward County, Florida. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The parties hereby waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any related agreement by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. No failure or delay on the part of Redwood in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. The obligations to Redwood and this Agreement cannot be set off against any real or alleged claim against Redwood.

 

  

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(n) Cooperation and Representations. The parties hereto agree to cooperate with one another in respect of this Agreement, including reviewing and executing any document necessary for the performance of this Agreement, to comply with law or as reasonably requested by any party hereto, or legal counsel to any party hereto. Representations of the Company shall survive the signing and closing of this Agreement.

 

(o) Independent Legal Counsel. The parties hereto agree that (i) each has retained independent legal counsel in connection with the preparation and of this Agreement, (ii) each has been advised of the importance of retaining legal counsel, and (iii) by the execution of this Agreement, each has retained or waived retaining counsel except as otherwise stated above.

 

(p) Rights and Remedies. The Company agrees that all of the rights and remedies of Redwood hereto whether established hereby or by any other agreements, instruments or documents or by law shall be cumulative and may be exercised singly or concurrently. Redwood further waives the right to any notice and hearing prior to the execution, levy, attachment or other type of enforcement of any judgment obtained hereunder. Company shall reflect the obligation of this Agreement in all financial statements and related disclosures.

 

(q) Debt Obligation. Except as expressly provided herein, no provision of this Agreement shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the Principal plus Interest and any and all liquidated damages at the time, place, and rate, and in the coin or currency, herein prescribed. This Agreement is a direct debt obligation of the Company. This Agreement ranks pari passu on most favored terms to benefit Redwood with all other related agreements now or hereafter issued under the terms set forth herein but shall be treated superior to all other obligations of the Company. As long as this Agreement is outstanding, the Company shall not and shall cause it subsidiaries not to, without the consent of Redwood, (a) amend its certificate of incorporation, bylaws or other charter documents so as to adversely affect any rights of Redwood; (b) repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of Common Stock or other equity securities; or (c) enter into any agreement with respect to any of the foregoing.

 

[signature page follows]

 

  

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IN WITNESS WHEREOF, the Company and Redwood have executed this Agreement as of the Effective Date.

 

	REDWOOD MANAGEMENT, LLC	 
	 	 	 
	By:	 /s/ Garry Rogers	 
	Name:	
Garry Rogers

	 
	Title:	
 
President

	 
	 	 	 
	SANOMEDICS INTERNATIONAL HOLDINGS, INC.
	 	 	 
	By: 	/s/ Keith Houlihan	 
	Name:	Keith Houlihan	 
	Title:	President	 
	 	 	 
	THERMOMEDICS, INC.	 
	 	 	 
	
By:

	/s/ Keith Houlihan 	 
	Name:	Keith Houlihan	 
	Title: 	President	 
	 	 	 
	ANOVENT, INC.	 
	 	 	 
	By:	/s/ Keith Houlihan 	 
	Name:	Keith Houlihan 	 
	Title:	President	 
	 	 	 
	PRIME TIME MEDICAL, INC.	 
	 	 	 
	
By:

	/s/ Keith Houlihan	 
	Name:	Keith Houlihan	 
	Title:	
President

	 

 

 

12simh_ex1073.htm

EXHIBIT 10.73

 

NEITHER THIS NOTE NOR THE SECURITIES THAT ARE ISSUABLE TO THE HOLDER UPON CONVERSION HEREOF (COLLECTIVELY, THE "SECURITIES") HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THE SECURITIES NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED: (I) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT OR APPLICABLE STATE SECURITIES LAWS; OR (II) IN THE ABSENCE OF AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE ISSUER, THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT OR; (HI) UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.

 

BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANTS THAT IT IS NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC 6049(B)(4) OF THE INTERNAL REVENUE CODE AND REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF OF A UNITES STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC. 6049(B)(4) OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).

 

REPLACEMENT REVOLVING NOTE A

 

	$117,074.91	Issuance Date: as of September 22, 2014

 

FOR VALUE RECEIVED, SANOMEDICS INTERNATIONAL HOLDINGS, INC., a Delaware corporation (the "Issuing Borrower"), THERMOMEDICS, INC., a Florida corporation, ANOVENT, INC., a Florida corporation and PRIME TIME MEDICAL, INC., a Florida corporation, whose address is 444 Brickell Avenue, Suite 415, Miami, FL 33131 (each of the foregoing, including the Issuing Borrower, hereinafter sometimes individually referred to as a "Borrower" and all such entities sometimes hereinafter collectively referred to as "Borrowers"), jointly, severally and collectively, promise to pay to the order of TCA GLOBAL CREDIT MASTER FUND, LP (hereinafter, together with any holder hereof, "Lender"), whose address is 3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169, on or before the Revolving Loan Maturity Date, One Hundred Seventeen Thousand Seventy Four Dollars and 91/100 ($117,074.91), together with interest (computed on the actual number of days elapsed on the basis of a 360 day year) thereon and all other fees and charges due and payable in accordance with the terms of that certain Credit Agreement dated as of December 31, 2013, but made effective as of January 9, 2014, executed by and among Borrowers and Lender, as amended from time to time (as amended, supplemented or modified from time to time, the "Credit Agreement"). Capitalized words and phrases not otherwise defined herein shall have the meanings assigned thereto in the Credit Agreement.

 

  

1

  

 

This Replacement Revolving Note A ("Note"), along with the Replacement Revolving Note B being executed by Borrower simultaneously herewith ("Note B"), evidences the Revolving Loans and other Obligations incurred by Borrower under and pursuant to the Credit Agreement, to which reference is hereby made for a statement of the terms and conditions under which the Revolving Loan Maturity Date or any payment hereon may be accelerated. The holder of this Note is entitled to all of the benefits and security provided for in the Credit Agreement and all other Loan Documents executed by and between Borrower and Lender. All Revolving Loans and all other Obligations shall be repaid by Borrower on the Revolving Loan Maturity Date, unless payable sooner pursuant to the provisions of the Credit Agreement.

 

This Note, along with Note B being executed and delivered simultaneously herewith, are being both executed in substitution for and to supersede the original Revolving Note issued by Borrower to Lender under the Credit Agreement (the "Original Note"), in its entirety. It is the intention of the Borrower and Lender that while this Note and Note B replace and supersede the Original Note, in its entirety, it is not in payment or satisfaction of the Original Note, but rather is the substitute of one evidence of debt for another without any intent to extinguish the old. Nothing contained in this Note or Note B shall be deemed to extinguish the indebtedness and obligations evidenced by the Original Note or constitute a novation of the indebtedness evidenced by the Original Note.

 

Principal, interest and other fees and charges shall be paid to Lender as set forth in the Credit Agreement, or at such other place as the holder of this Note shall designate in writing to Borrower. Each Revolving Loan made by Lender, and all payments on account of the principal and interest thereof shall be recorded on the books and records of Lender and the principal balance as shown on such books and records, or any copy thereof certified by an officer of Lender, shall be rebuttably presumptive evidence of the principal amount owing hereunder.

 

Except for such notices as may be required under the terms of the Credit Agreement, each Borrower waives presentment, demand, notice, protest, and all other demands, or notices, in connection with the delivery, acceptance, performance, default, or enforcement of this Note, and assents to any extension or postponement of the time of payment or any other indulgence.

 

Borrower shall be solely responsible for the payment of any and all documentary stamps and other taxes applicable to the full face amount of this Note.

 

This Note shall be governed and construed in accordance with the laws of the State of Nevada, and shall be binding upon Borrower and their legal representatives, successors, and assigns. Wherever possible, each provision of the Credit Agreement and this Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Credit Agreement or this Note shall be prohibited by or be invalid under such law, such provision shall be severable, and be ineffective to the extent of such prohibition or invalidity, without invalidating the remaining provisions of the Credit Agreement or this Note.

 

Nothing herein contained, nor in any instrument or transaction relating hereto, shall be construed or so operate as to require any Borrower, or any person liable for the payment of this Note, to pay interest in an amount or at a rate grater than the highest rate permissible under applicable law. By acceptance hereof, Lender hereby warrants and represents to Borrower that Lender has no intention of charging a usurious rate of interest. Should any interest or other charges paid by Borrower, or any parties liable for the payments made pursuant to this Note, result in the computation or earning of interest in excess of the highest rate permissible under applicable law, any and all such excess shall be and the same is hereby waived by the holder hereof. Lender shall make adjustments in the Note or Credit Agreement, as applicable, as necessary to ensure that Borrower will not be required to pay further interest in excess of the amount permitted by applicable law. All such excess shall be automatically credited against and in reduction of the outstanding principal balance. Any portion of such excess which exceeds the outstanding principal balance shall be paid by the holder hereof to the Lender and any parties liable for the payment of this Note, it being the intent of the parties hereto that under no circumstances shall Borrower, or any party liable for the payments hereunder, be required to pay interest in excess of the highest rate permissible under applicable law.

 

  

2

  

 

THE HOLDER IS A NON-U.S. PERSON AS THAT TERM IS DEFINED IN THE UNITED STATES INTERNAL REVENUE CODE. IT IS HEREBY AGREED AND UNDERSTOOD THAT THE OBLIGATIONS HEREUNDER MAY BE SOLD OR RESOLD ONLY TO NON-U.S. PERSONS. THE INTEREST PAYABLE HEREUNDER IS PAYABLE ONLY OUTSIDE THE UNITED STATES. ANY U.S. PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAW.

 

Conversion of Note. At any time and from time to time while this Note is outstanding, but only upon the occurrence of an Event of Default under the Credit Agreement or any other Loan Documents, this Note may be, at the sole option of the Lender, convertible into shares of the common stock, par value $0.001 per share (the "Common Stock") of Borrower, in accordance with the terms and conditions set forth below.

 

(a) Voluntary Conversion. At any time while this Note is outstanding, but only upon the occurrence of an Event of Default under the Credit Agreement or any other Loan Documents, the Lender may convert all or any portion of the outstanding principal, accrued and unpaid interest, and any other sums due and payable hereunder or under the Credit Agreement (such total amount, the "Conversion Amount") into shares of Common Stock of the Borrower (the "Conversion Shares") at a price equal to: (i) the Conversion Amount (the numerator); divided by (ii) eighty-five percent (85%) of the lowest daily volume weighted average price of the Borrower's Common Stock during the five (5) Business Days immediately prior to the Conversion Date, which price shall be indicated in the conversion notice (in the form attached hereto as Exhibit "A", the "Conversion Notice") (the denominator) (the "Conversion Price"). The Lender shall submit a Conversion Notice indicating the Conversion Amount, the number of Conversion Shares issuable upon such conversion, and where the Conversion Shares should be delivered.

 

(b) The Lender's Conversion Limitations. The Borrower shall not affect any conversion of this Note, and the Lender shall not have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the Conversion Notice submitted by the Lender, the Lender (together with the Lender's Affiliates and any Persons acting as a group together with the Lender or any of the Lender's Affiliates) would beneficially own shares of Common Stock in excess of the Beneficial Ownership Limitation (as defined herein). To ensure compliance with this restriction, prior to delivery of any Conversion Notice, the Lender shall have the right to request that the Borrower provide to the Lender a written statement of the percentage ownership of the Borrower's Common Stock that would be beneficially owned by the Lender and its Affiliates in the Borrower if the Lender converted such portion of this Note then intended to be converted by Lender. The Borrower shall, within two (2) Business Days of such request, provide Lender with the requested information in a written statement, and the Lender shall be entitled to rely on such written statement from the Borrower in issuing its Conversion Notice and ensuring that its ownership of the Borrower's Common Stock is not in excess of the Beneficial Ownership Limitation. The restriction described in this Section may be waived by Lender, in whole or in part, upon notice from the Lender to the Borrower to increase such percentage.

 

For purposes of this Note, the "Beneficial Ownership Limitation" shall be 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note. The limitations contained in this Section shall apply to a successor holder of this Note. For purposes of this Note, "Person" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization or a government or any department or agency thereof.

 

  

  

  

 

(c) Mechanics of Conversion. The conversion of this Note shall be conducted in the

following manner:

 

(1) To convert this Note into shares of Common Stock on any date set forth in the Conversion Notice by the Lender (the "Conversion Date"), the Lender shall transmit by facsimile or electronic mail (or otherwise deliver) a copy of the fully executed Conversion Notice to the Borrower (or, under certain circumstances as set forth below, by delivery of the Conversion Notice to the Borrower's transfer agent).

 

(2) Borrower's Response. Upon receipt by the Borrower of a copy of a Conversion Notice, the Borrower shall as soon as practicable, but in no event later than two (2) Business Days after receipt of such Conversion Notice, send, via facsimile or electronic mail (or otherwise deliver) a confirmation of receipt of such Conversion Notice (the "Conversion Confirmation") to the Lender indicating that the Borrower will process such Conversion Notice in accordance with the terms herein. In the event the Borrower fails to issue its Conversion Confirmation within said two (2) Business Day time period, the Lender shall have the absolute and irrevocable right and authority to deliver the fully executed Conversion Notice to the Borrower's transfer agent, and pursuant to the terms of the Credit Agreement, the Borrower's transfer agent shall issue the applicable Conversion Shares to Lender as hereby provided. Within five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Borrower fails to issue the Conversion Confirmation), provided that the Borrower's transfer agent is participating in the Depository Trust Borrower ("DTC") Fast Automated Securities Transfer ("FAST") program, the Borrower shall cause the transfer agent to (or, if for any reason the Borrower fails to instruct or cause its transfer agent to so act, then pursuant to the Credit Agreement, the Lender may request and require the Borrower's transfer agent to) electronically transmit the applicable Conversion Shares to which the Lender shall be entitled by crediting the account of the Lender's prime broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system, and provide proof satisfactory to the Lender of such delivery. In the event that the Borrower's transfer agent is not participating in the DTCFAST program and is not otherwise DWAC eligible, within five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Borrower fails to issue the Conversion Confirmation), the Borrower shall instruct and cause its transfer agent to (or, if for any reason the Borrower fails to instruct or cause its transfer agent to so act, then pursuant to the Credit Agreement, the Lender may request and require the Borrower's transfer agent to) issue and surrender to a nationally recognized overnight courier for delivery to the address specified in the Conversion Notice, a certificate, registered in the name of the Lender, or its designees, for the number of Conversion Shares to which the Lender shall be entitled. To effect conversions hereunder, the Lender shall not be required to physically surrender this Note to the Borrower unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Lender and the Borrower shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Lender, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.

 

  

4

  

 

(3) Record Lender. The Person(s) entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder(s) of such shares of Common Stock as of the Conversion Date.

 

(4) Failure to Deliver Certificates. If in the case of any Conversion Notice, the certificate or certificates are not delivered to or as directed by the Lender by the date required hereby, the Lender shall be entitled to elect by written notice to the Borrower at any time on or before its receipt of such certificate or certificates, to rescind such Conversion Notice, in which event the Borrower shall promptly return to the Lender any original Note delivered to the Borrower and the Lender shall promptly return to the Borrower the Common Stock certificates representing the principal amount of this Note unsuccessfully tendered for conversion to the Borrower.

 

(5) Obligation Absolute; Partial Liquidated Damages. The Borrower's obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Lender to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any person or entity or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Lender or any other person or entity of any obligation to the Borrower or any violation or alleged violation of law by the Lender or any other person or entity, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Lender in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Borrower of any such action the Borrower may have against the Lender. In the event the Lender of this Note shall elect to convert any or all of the outstanding principal amount hereof and accrued but unpaid interest thereon in accordance with the terms of this Note, the Borrower may not refuse conversion based on any claim that the Lender or anyone associated or affiliated with the Lender has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Lender, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained, and the Borrower posts a surety bond for the benefit of the Lender in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Lender to the extent it obtains judgment. In the absence of such injunction, the Borrower shall issue Conversion Shares upon a properly noticed conversion. If the Borrower fails for any reason to deliver to the Lender such certificate or certificates representing Conversion Shares pursuant to timing and delivery requirements of this Note, the Borrower shall pay to such Lender, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $1.00 per day for each day after the date by which such certificates should have been delivered until such certificates are delivered. Nothing herein shall limit a Lender's right to pursue actual damages or declare an Event of Default pursuant to the Credit Agreement, this Note or any agreement securing the indebtedness under this Note for the Borrower's failure to deliver Conversion Shares within the period specified herein and such Lender shall have the right to pursue all remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Lender from seeking to enforce damages pursuant to any other Section hereof or under applicable law. Nothing herein shall prevent the Lender from having the Conversion Shares issued directly by the Borrower's transfer agent in accordance with the Credit Agreement, in the event for any reason the Borrower fails to issue or deliver, or cause its transfer agent to issue and deliver, the Conversion Shares to the Lender upon exercise of Lender's conversion rights hereunder.

 

  

5

  

 

(6) Transfer Taxes. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Lender hereof for any documentary stamp or similar taxes, or any other issuance or transfer fees of any nature or kind that may be payable in respect of the issue or delivery of such certificates, any such taxes or fees, if payable, to be paid by the Borrower.

 

(d) Make-Whole Rights. Upon liquidation by the Lender of Conversion Shares issued pursuant to a Conversion Notice, provided that the Lender realizes a net amount from such liquidation equal to less than the Conversion Amount specified in the relevant Conversion Notice (such net realized amount, the "Realized Amount"), the Borrower shall issue to the Lender additional shares of the Borrower's Common Stock equal to: (i) the Conversion Amount specified in the relevant Conversion Notice; minus (ii) the Realized Amount, as evidenced by a reconciliation statement from the Lender (a "Sale Reconciliation") showing the Realized Amount from the sale of the Conversion Shares; divided by (iii) the average volume weighted average price of the Borrower's Common Stock during the five (5) Business Days immediately prior to the date upon which the Lender delivers notice (the "Make-Whole Notice") to the Borrower that such additional shares are requested by the Lender (the "Make-Whole Stock Price") (such number of additional shares to be issued, the "Make-Whole Shares"). Upon receiving the Make-Whole Notice and Sale Reconciliation evidencing the number of Make-Whole Shares requested, the Borrower shall instruct its transfer agent to issue certificates representing the Make-Whole Shares, which Make whole Shares shall be issued and delivered in the same manner and within the same time frames as set forth in Subsection (c)(2) above. Subsections (c)(3), (c)(4), (c)(5) and (c)(6) above shall be applicable to the issuance of the Make-Whole Shares. The Make-Whole Shares, when issued, shall be deemed to be validly issued, fully paid, and non-assessable shares of the Borrower's Common Stock. Following the sale of the Make-Whole Shares by the Lender: (i) in the event that the Lender receives net proceeds from such sale which, when added to the Realized Amount from the prior relevant Conversion Notice, is less than the Conversion Amount specified in the relevant Conversion Notice, the Lender shall deliver an additional Make-Whole Notice to the Borrower following the procedures provided previously in this paragraph, and such procedures and the delivery of Make-Whole Notices shall continue until the Conversion Amount has been fully satisfied; (ii) in the event that the Lender received net proceeds from the sale of Make-Whole Shares in excess of the Conversion Amount specified in the relevant Conversion Notice, such excess amount shall be applied to satisfy any and all amounts owed hereunder in excess of the Conversion Amount specified in the relevant Conversion Notice.

 

  

6

  

 

(e) Adjustments to Conversion Price.

 

(1) Stock Dividends and Stock Splits. If the Borrower, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on outstanding shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of Common Stock, any shares of capital stock of the Borrower, then the Conversion Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock (excluding any treasury shares of the Borrower) outstanding immediately before such event, and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination, or re-classification.

 

(2) Fundamental Transaction. If, at any time while this Note is outstanding: (i) the Borrower effects any merger or consolidation of the Borrower with or into another Person, (ii) the Borrower effects any sale of all or substantially all of its assets in one transaction or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Borrower or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Borrower effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a "Fundamental Transaction"), then upon any subsequent conversion of this Note, the Lender shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one (1) share of Common Stock (the "Alternate Consideration"). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Borrower shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Lender shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Borrower or surviving entity in such Fundamental Transaction shall issue to the Lender a new note consistent with the foregoing provisions and evidencing the Lender's right to convert such note into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section and insuring that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

 

  

7

  

 

(3) Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Note, the Borrower shall promptly deliver to Lender a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

(4) Notice to Allow Conversion by Lender. If: (A) the Borrower shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Borrower shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Borrower shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Borrower shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Borrower is a party, any sale or transfer of all or substantially all of the assets of the Borrower, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Borrower shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Borrower, then, in each case, the Borrower shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Lender at its last address as it shall appear upon the Borrower's records, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating: (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. Provided the Lender has the right to convert this Note in accordance with the terms hereof, the Lender is entitled to convert this Note during the 10-day period commencing on the date of such notice through the effective date of the event triggering such notice.

[SIGNATURE PAGE FOLLOWS]

 

  

8

  

IN WITNESS WHEREOF, the Borrower has executed this Note as of the date set forth above.

 

	 	BORROWERS:	 
	 	 	 
	 	
SANOMEDICS INTERNATIONAL HOLDINGS, INC.,

a Delaware corporation

	 
	 	 	 	 
	
  

	
By: 

	/s/ Keith Houlihan	 
	 	Name:	
Keith Houlihan

	 
	 	
Title:

	
President

	 
	 	 	 	 
	 	
THERMOMEDICS, INC.,

a Florida corporation

	 
	 	 	 	 
	 	
By: 

	
/s/ Keith Houlihan

	 
	 	Name:	
Keith Houlihan

	 
	 	
Title:

	
President

	 
	 	 	 	 
	 	
ANOVENT, INC.,

a Florida corporation

	 
	 	 	 	 
	 	
By: 

	
/s/ Keith Houlihan

	 
	 	Name:	
Keith Houlihan

	 
	 	
Title:

	
President

	 
	 	 	 	 
	 	
PRIME TIME MEDICAL, INC.,

a Florida corporation

	 
	 	 	 	 
	 	
By: 

	
/s/ Keith Houlihan

	 
	 	Name:	
Keith Houlihan

	 
	 	
Title:

	
President

	 

 

  

9

  

 

EXHIBIT "A"

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal and/or interest under the Revolving Note (the "Note") of SANOMEDICS, INC., a Delaware corporation (the "Issuing Borrower"), THER1VIOMEDICS, INC., a Florida corporation, ANOVENT, INC., a Florida corporation, and PRIME TIME MEDICAL, INC., a Florida corporation, into shares of common stock, par value $0.001 per share (the "Common Shares"), of the Issuing Borrower in accordance with the conditions of the Note, as of the date written below.

 

Based solely on information provided by the Company to Holder, the undersigned represents and warrants to the Company that its ownership of the Common Shares does not exceed the Beneficial Ownership Limitation determined in accordance with Section 13(d) of the Exchange Act of 1934, as amended, as specified under the Note.

 

	Conversion calculations	 	 	 
	 
Effective Date of Conversion:

	 	 	 
	Principal Amount and/or Interest to be converted:	 	 	 
	Number of Common Shares to be issued:	 	 	 
	 	 	 	 
	 	[HOLDER]	 	 
	 	 	 	 
	 	By: 	 	 
	 	Name: 	 	 
	 	Title:	 	 
	 	Address:	 	 
	 	 	 	 
	 	 	 	 

 

 

10

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