Document:

ex4-2.htm

Exhibit 4.2

 

MODIFICATION AGREEMENT

MODIFICATION AGREEMENT dated as of this 9th  day of December, 2010 between IMEDICOR, INC., a Nevada corporation formerly known as Vemics, Inc. (the “Company”), and SONORAN PACIFIC RESOURCES, LLP, an Arizona limited liability partnership (“Sonoran”).

WHEREAS, Sonoran is the registered holder of a secured convertible promissory note of the Company, dated April 17, 2009, which as of April 20, 2010 had a principal amount owing of $3,600,000 (the “Original Note”);

WHEREAS, $600,000 of principal and $300,000 of accrued interest with respect to the Original Note was exchanged on April 20, 2010 for 18,000,000 shares of the Company’s common stock;

WHEREAS, $1,800,000 of principal of the Original Note is to be exchanged for 28 shares of the Company’s Series A Preferred Stock as described herein;

WHEREAS, Sonoran and the Company desire to modify the payment terms of the remaining balance of the Original Note;

NOW THEREFORE, the parties hereto agree as follows:

1. Issuance of Preferred Shares.  Upon the Closing Date (as hereinafter described), the Company shall have created a series of preferred stock designated as Series A Convertible Preferred Stock with the voting powers, preferences, limitations, restrictions and relative rights described in Exhibit “A” attached hereto (the “Preferred Stock”).  Upon the Closing Date, the Company shall issue twenty-eight (28) shares of Preferred Stock to Sonoran (the “preferred Shares”).

2. Modification of Original Note.  Upon the Closing Date, the parties agree that the Original Note shall be modified to read as set forth in Exhibit “B” attached hereto (the “Modified Note”).

3. Closing.  The closing of the transactions described herein (the “Closing”), shall be deemed to be December 31, 2010 (the “Closing Date”) irrespective of when the actual closing occurs.

 

3.1  Documents to be delivered by Sonoran to the Company.

(i) The Original Note, marked to indicate that it has been modified, provided, however, that nothing herein shall be construed as satisfying or discharging the Original Note, rather only modifying it as described.

 

  

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3.2  Documents to be delivered by the Company to Sonoran.

(i) A stock certificate dated the Closing Date representing the Preferred Shares registered in the name of Sonoran.

 

(ii) The Modified Note

3.3  Form and Substance of Documents.  The documents and instruments referred to in Sections 3.1 and 3.2 shall be in form and substance satisfactory to counsel for the party to whom they are delivered.

4. Representations and Warranties of the Company.  The Company hereby represents and warrants to Sonoran as follows:

 

4.1  Organization.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.  The Company has full corporate power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby.

4.2  Authority.  The Company is duly organized and validly existing, and has the power, authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby; all necessary actions have been taken, and all necessary approvals and consents have been given, to authorize the execution, delivery and performance of this Agreement by the Company; this Agreement has been duly executed and delivered by the Company and constitutes the valid and legally binding obligation of the Company, fully enforceable against the Company in accordance with its terms; and the execution and delivery of this Agreement by the Company, and the Company’s performance of its obligations hereunder, will not conflict with the certificate of incorporation or bylaws or any other organizational document of the Company.

4.3  No Violation.  The execution and delivery by the Company of this Agreement do not, and the performance by the Company of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not, conflict with, result in any violation of or default under, result in any person or entity having the right to terminate or modify, or require any  consent under (i) any note, bond, mortgage, license, lease, contract, commitment, agreement or arrangement to which the Company is a party or by which any of its properties or assets are bound or (ii) any judgment, decree or order, or statute, law, ordinance, regulation or rule, applicable to the Company or to any of the property or assets of the Company.  No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, is required to be obtained or made by the Company in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

 

  

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4.4  Company Materials.  The Company Materials (as defined in section 5.3 below) (i) have been prepared in accordance with GAAP and Regulation S-X promulgated under the Securities Act of 1933 on a consistent basis for all periods, (ii) are complete and correct in all material respects, (iii) fairly present the consolidated financial condition of the Company as at reported dates, and the results of its operations for the periods stated, (iv) contain and reflect all necessary adjustments and accruals for a fair presentation of the Company’s consolidated financial condition and the results of its consolidated operations as of the dates of and for the periods covered by the Company Materials, and (v) make full and adequate provision, subject to and in accordance with GAAP, for the various assets and liabilities of the Company, fixed or contingent, and the results of its operations and transactions in its accounts, as of the dates and for the periods referred to therein.

 

4.5  The Preferred Shares.  The Preferred Shares when issued and delivered to Sonoran pursuant to this Agreement will be duly and validly issued, fully paid and nonassessable.

4.6  Brokers.  The Company has not entered into any agreement to pay any broker’s or finder’s fee to any person with respect to this Agreement or the transactions contemplated hereby.

5. Representations and Warranties of Sonoran.  Sonoran hereby represents and warrants to the Company as follows:

5.1  Authority.  Sonoran is duly organized and validly existing, and has the power, authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby; all necessary actions have been taken, and all necessary approvals and consents have been given, to authorize the execution, delivery and performance of this Agreement by Sonoran; this Agreement has been duly executed and delivered by Sonoran and constitutes the valid and legally binding obligation of Sonoran, fully enforceable against Sonoran in accordance with its terms; and the execution and delivery of this Agreement by Sonoran, and Sonoran’s performance of its obligations hereunder, will not conflict with the Certificate of Limited Partnership or Partnership Agreement or any other organizational document of Sonoran.

5.2  No Violation.  The execution and delivery by Sonoran of this Agreement do not, and the performance by Sonoran of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not, conflict with, result in any violation of or default under, result in any person or entity having the right to terminate or modify, or require any  consent under (i) any note, bond, mortgage, license, lease, contract, commitment, agreement or arrangement to which Sonoran is a party or by which any of its properties or assets are bound or (ii) any judgment, decree or order, or statute, law, ordinance, regulation or rule, applicable to Sonoran or to any of the property or assets of Sonoran.  No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, is required to be obtained or made by Sonoran in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

 

  

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5.3  Company Materials.  Sonoran has read in its entirety this Agreement and each of the following documents in the offering package that this Agreement is a part of: (i) the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2010, (ii) the Company’s Quarterly Report on Form 10-Q filed for the quarter ended September 30, 2010 and (iii) all other public filings, filed with the Securities and Exchange Commission (“SEC”) by the Company prior to the date of this Agreement (the “Company Materials”). Sonoran has based its decision to invest on the information contained in the Company Materials, and has not otherwise relied upon any other offering literature or prospectus. Sonoran acknowledges that Sonoran has read, understood and is familiar with the Risk Factors made part of the Company Materials, is familiar with the nature of risks attending investments of this type, and has determined that a purchase of the Securities is consistent with Sonoran’s investment objectives.

5.4  Opportunity to Ask Questions.  Sonoran acknowledges that Sonoran has been given the opportunity to ask questions of, and receive answers from, representatives of the Company regarding the business and current plans of the Company and the securities issuable hereunder and has been given the opportunity to inspect such documents and obtain such additional information as Sonoran has requested so as more fully to understand the nature of the investment and to verify the accuracy of the information supplied to Sonoran.  Sonoran acknowledges that, except as set forth herein, no representations or warranties have been made to Sonoran, or to Sonoran’s advisors or representatives, by the Company or others with respect to the business of the Company and its financial condition.

5.5  Principal Office.  Sonoran maintains its principal office at 4385 north 75th Street suite 201, Scottsdale, AZ 85251.

5.6  Economic Risk.  Sonoran can bear the economic risks of this investment and can afford the loss of Sonoran’s entire investment in the Company. Sonoran has adequate means of providing for Sonoran’s current needs and possible contingencies, and has no present or anticipated need for liquidity of an investment in the Company.  The investment of Sonoran in the Company is reasonable in relation to Sonoran’s net worth and financial needs.

5.7  Value of Securities.  Sonoran understands that any value attributable to any of the securities to be issued hereunder (the “Securities”) would be arbitrarily determined and that no assurances have been given about any increase in value of the Securities.

5.8  Requisite Knowledge and Experience.  Sonoran has the requisite knowledge and experience in business and financial matters to be capable of evaluating the merits and risks of an investment in the Company and has determined that such an investment is a suitable investment.

 

  

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5.9  No Governmental Approval.  Sonoran understands that issuance of the Securities has not been passed upon, nor have the merits of this investment been endorsed or approved, by any state or federal authorities.

5.10  No View Toward Distribution.  Sonoran is investing in the Company for Sonoran’s own account as principal for investment and not with a view toward resale, transfer or distribution.  Sonoran understands that Sonoran must bear the economic risk of an investment in the Company for an indefinite period. Sonoran has been advised and is aware that: (i) there is a limited or no public market for the securities of the Company; (ii) the securities to be issued hereunder have not been registered under the Securities Act or the securities laws of any state or other jurisdiction, and, therefore, cannot be sold -- and Sonoran agrees not to sell or otherwise dispose of any of such securities -- unless such securities are subsequently registered under the Securities Act and such state securities laws as are applicable or unless there are available exemptions from such registrations that are supported by an opinion of counsel for Sonoran, which opinion is satisfactory to the Company.

 

5.11  Legends.  Sonoran hereby agrees that:

 

(a) the certificates representing the Preferred Shares, and any Common Shares issued upon conversion of the Preferred Stock, and the Modified Note may bear the following legend in addition to any other legends as may be agreed to by Sonoran or as may be required by law:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES STATUTES AND REGULATIONS.  SUCH SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933 UNLESS, IN THE OPINION (WHICH SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY) OF COUNSEL SATISFACTORY TO THE COMPANY, SUCH REGISTRATION IS NOT REQUIRED.  THE HOLDER ALSO ACKNOWLEDGES THAT THE HOLDERS OF PREFERRED STOCK OF THE COMPANY HAVE SPECIAL RIGHTS, AS DESCRIBED IN THE COMPANY’S RESTATED ARTICLES OF INCORPORATION.

 

  

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(b) the Modified Note may bear the following legend in addition to any other legends as may be agreed to by Sonoran or as may be required by law:

THE SECURITY REPRESENTED HEREBY, AND THE SECURITIES ISSUABLE UPON CONVERSION OR REDEMPTION HEREOF, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION SHALL BE  REASONABLY SATISFACTORY TO COUNSEL FOR THIS COMPANY, IS AVAILABLE.

5.12  Early Stage Company.  Sonoran recognizes that the Company is an early stage company with limited revenues. Sonoran is familiar with the business and financial condition, properties, operations and prospects of the Company. Sonoran acknowledges that it has read, understood and is familiar with the Risk Factors contained in the Company Materials, is familiar with the nature of risks attending investments of this type, and has determined that an acquisition of the Securities is consistent with Sonoran’s investment objectives. Sonoran is aware that an investment in the Company is a speculative investment involving a high degree of risk, and that there is no guarantee that it will realize any gain from an investment in the Company and that it could lose the total value of its investment.

5.13  No Promises or Guarantees.  Sonoran acknowledges that it has never been promised, guaranteed, or warranted by the Company, its agents, employees, or any other person, expressly or by implication, any of the following: (i) the approximate or exact length of time that it will be required to remain as owner of any securities of the Company; (ii) any expected percentage of profit and/or amount of or type of consideration, profit or loss to be realized, if any, as a result of the investment; and (iii)  any expected amount of percentage of tax deduction or other tax benefit as a result of the investment.

5.14  No General Advertisement or Solicitation.  Sonoran acknowledges that the investment in the Company was not effected by any means of general advertising or general solicitation of an investment in the Company and that such investment is considered a private transaction.

 

  

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5.15  Brokers.  Sonoran has not entered into any agreement to pay any broker’s or finder’s fee to any person with respect to this Agreement or the transactions contemplated hereby.

6. Conditions to Sonoran’s Obligations.  The obligation of Sonoran to close the transactions contemplated by this Agreement is subject to the representations and warranties of the Company contained in Section 4 being true and correct in all material respects as of the Closing Date as though made as of the Closing Date.

7. Conditions to the Company's Obligations.  The obligation of the Company to close the transactions contemplated by this Agreement and issue the Securities is subject to the representations and warranties of Sonoran contained in Section 5 being true and correct in all material respects as of the Closing Date as though made as of the Closing Date.

8. Nomination of Director.  Sonoran shall be entitled to nominate one independent individual for election to the Board of the Company, subject to an appropriate background check and the approval of such individual by the Board of Directors of the Company and the management of the Company.  The Company neither makes any guarantees nor implies in any way whatsoever that any such individual will be approved or endorsed for election as a director of the Company by either the Board of Directors or the management of the Company.  This Section 8 shall not be construed as limiting in any way whatsoever the ability or the right of Sonoran to recommend for nomination another individual or individuals for election as a director of the Company. This provision will expire when either the Modified Note is paid in full or, all of the Preferred Shares are converted into common stock. Based on the ownership position in the Company, Sonoran shall have its normal rights to nominate representatives to the board of directors to be duly elected by the shareholders.

9. Registration Rights.  If at any time the Company has a class of securities registered under the Securities Exchange Act of 1934, as amended, and the Company proposes to register under the Securities Act of 1933 any shares of its Common Stock, it will notify Sonoran, and if so requested by Sonoran, will register as part of such registration such shares Common Stock and such shares of Common Stock underlying the Preferred Shares and the Modified Note as requested by the holders thereof.  Sonoran may request and participate in any such piggyback registrations of such shares of such Common Stock no more than two times. Sonoran’s piggyback registration rights hereunder will rank equal to any other piggyback registration rights of any holders of any securities of the Company existing on the date hereof and superior to any piggyback registration rights created after the date hereof. The Company shall immediately notify Sonoran of the proposed effective date of any registration of any of Sonoran’s shares of Common Stock acquired hereunder or upon the conversion of any of the Preferred Shares or the Modified Note. If, in the written opinion of any managing underwriter, the registration of all or any of the shares requested would unreasonably adversely affect the market for the Company’s shares of Common Stock, the Company and Sonoran shall negotiate a resolution in good faith. These rights attach to the shares of Common Stock owned or which may be owned by Sonoran upon exercise of its conversion rights and are assignable only with the sale, conveyance or transfer of such securities by Sonoran. Registration Rights shall be governed by current SEC regulations at the time of registration.

 

  

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10. Miscellaneous.

10.1  Further Documents.  The parties agree to execute any and all such further documents and instruments and to take any and all such further actions reasonably required to effectuate this Agreement and the intent and purposes hereof.

10.2  Independent Legal Advice.  Neither the Company Materials nor this Agreement is to be construed as personal legal, financial or tax advice.  The undersigned is encouraged to obtain independent legal, financial and tax counsel to advise the undersigned as to the legal and other consequences of investing in the Securities.

10.3  Binding Effect.  This Agreement shall be binding upon, and any action for a breach thereof may be brought against, the parties to this Agreement and their respective successors and assigns.

10.4  Severability.  The invalidity, illegality or unenforceability of one or more of the provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of this Agreement, including any such provision, in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

10.5  Entire Agreement.  This Agreement supersedes all prior discussions and agreements between the parties with respect to the subject matter hereof and contains the sole and entire agreement between the parties hereto with respect to the subject matter hereof.

10.6  Amendment.  This Agreement may be amended, supplemented or modified only by a written instrument duly executed by or on behalf of each party hereto.

10.7  No Third Party Beneficiaries.  The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors and assigns, and it is not the intention of the parties to confer, and no provision hereof shall confer, third-party beneficiary rights upon any other person.

10.8  No Transfer.  Sonoran may not transfer this Agreement, or any of Sonoran’s rights or obligations under this Agreement, without the written consent of the Company, except Sonoran may transfer or assign its rights in whole or part to any affiliate or partner in Sonoran without the Company’s prior consent.

 

  

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10.9  Survival.  This Agreement shall survive the bankruptcy, insolvency, dissolution or cessation of business of Sonoran or the Company.

10.10  Headings.  The headings used in this Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof.

10.11  Governing Law.  This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Arizona, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Arizona or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Arizona.

10.12  Counterparts.  This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

10.13  Recapitalization or Fundamental Change.  If any recapitalization or other transaction affecting the stock of the Company is effected, then any new, substituted or additional securities or other property which is distributed with respect to the Securities shall be immediately subject to this Agreement, to the same extent that the Securities, immediately prior thereto, shall have been at such time covered by this Agreement.

10.14  Specific Performance.  The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement were not performed in accordance with the terms hereof and that the parties, and any third party beneficiaries hereof, shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity.

10.15  Waiver.  No failure or delay by any party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

10.16  Notices.  All notices, requests, claims, demands and other communications given or made pursuant to this Agreement shall be in writing and shall be given or made by delivery in person, by courier service or by telecopy or e-mail to the respective parties at the following addresses and facsimile numbers (or at such other address or facsimile number or e-mail address for a party as shall be specified in a notice given in accordance with this Section):

 

  

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(i)           if to the Company:

iMedicor, Inc.

523 Avalon Gardens Drive

Nanuet, New York 10954

(845) 371-7380

Attention:  Fred Zola, CEO

Phone:  (845)371-7380

Fax: (845) 215-0132

Email: fzolla@imedicor.com

With a copy to:

Samuel B. Fortenbaugh III, Esq.

630 Fifth Avenue, Suite 1401

New York, NY 10111

Office Phone: (212) 596-3379

Fax: (212) 596-3391

E-mail:  sam@sfortenbaugh.com

(ii)           if to Sonoran:

Sonoran Pacific Resources, LLP

4385 North 75th Street, Suite 201

Scottsdale, AZ 85251

Attention: Jerry D. Smith

Phone: (480) 348-7901

Fax: (480) 348-7902

Email: jsmith@spgaz.com

With a copy to:

Steven P. Oman, Esq.

8664 E. Chama Road

Scottsdale, AZ 85255

Phone: (480) 348-1470

Fax: (480) 348-1471

E-mail: soman@omanlaw.net

 

  

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All such notices shall be deemed to have been duly given when delivered by hand, if personally delivered; when receipt is acknowledged, if sent by telecopy or sent via e-mail; on the next Business Day (as hereinafter defined), if timely delivered to an air courier guaranteeing overnight delivery; and on the third Business Day if delivered by regular mail.  A “Business Day” shall mean any day that is not a Saturday, a Sunday, or any other day on which banks are required or authorized by law to be closed in the City of Phoenix, Arizona.

10.17  Waiver of Jury Trial.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF EITHER PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.  EACH OF THE PARTIES HERETO ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF SUCH PARTY.  EACH OF THE PARTIES HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

10.18  Confidentiality.  Sonoran agrees to maintain the secrecy and confidentiality of any Trade Secrets and any Confidential Information which is provided to Sonoran for purposes of evaluating its purchase of the Securities.  As used herein, “Trade Secrets” shall include, without limitation, all formulae, patterns, compilations, programs, devices, methods, techniques, processes and all other information used in the conduct of the Company’s business that would be deemed “trade secrets” within the meaning of the Uniform Trade Secrets Act.  Sonoran acknowledges that the Trade Secrets are of independent economic value to the Company because they are not generally known and are the subject of efforts by the Company to maintain their secrecy.  As used herein, “Confidential Information” shall mean any and all technical or business information of the Company furnished or disclosed, in whatever form or medium, by the Company to Sonoran or discovered by Sonoran, including but not limited to computer programs, source code, object code, reports, documentation, product/service specifications, marketing plans, financial data and personnel statistics. Sonoran acknowledges that all Trade Secrets, all Confidential Information and all books, documents, lists and records pertaining to the Company's business (collectively, the “Records”), whether the Records are written, typed, printed, contained on microfilm, contained on computer disc, contained on tape or set forth in some other medium of expression, are the sole and exclusive property of the Company.  Sonoran agrees not to (i) divulge, furnish or make accessible to anyone or in any way use, for Sonoran’s benefit or for the benefit of any other person, firm or entity, any Trade Secret or any Confidential Information; (ii) take or permit any action to be taken which would reduce the value of any of the Trade Secrets or the Confidential Information to the Company; or (iii) otherwise misappropriate or suffer the misappropriation of the Trade Secrets or the Confidential Information.  Notwithstanding anything herein to the contrary, the obligations of secrecy and confidentiality set forth herein shall not apply to any information which is now generally publicly known or which subsequently becomes generally publicly known other than as a direct or indirect result of the breach of this Agreement by Sonoran.

 

  

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10.19  Indemnification.  The Company hereby agrees to indemnify Sonoran and its officers, agents, attorneys and partners and hold them harmless from and against any and all loss, damage, liability or expense (including costs and reasonable attorney’s fees) to which they may be subject or which they may incur by reason of or in connection with any misrepresentation made by the Company, any breach of any of the Company’s representations or warranties, or the Company’s failure to fulfill any of the Company’s covenants or agreements, under this Agreement, or any other document furnished by the Company hereunder. This Agreement and the representations and warranties and indemnification contained herein shall be binding upon the Company and the Company’s heirs, executors, administrators, successors and assigns, and shall survive the modification of the Original Note and issuance of the Securities hereunder.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK –

SIGNATURE PAGE FOLLOWS

 

 

 

 

 

 

 

 

 

  

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.

IMEDICOR, INC.

 

 

By   /s/Fred Zolla                                        

Name: Fred Zolla

Title:  CEO

SONORAN PACIFIC RESOURCES, LLP

 

By   JD Investments, Inc.

General Partner

 

 

By   /s/Jerry D. Smith                                 

Name: Jerry D. Smith

Title: President

 

  

13ex4-3.htm

Exhibit 4.3

 

EXHIBIT “B”

THE SECURITY REPRESENTED HEREBY, AND THE SECURITIES ISSUABLE UPON CONVERSION OR REDEMPTION HEREOF, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO COUNSEL FOR THIS COMPANY, IS AVAILABLE.

 

IMEDICOR, INC.

 

REPLACEMENT SECURED CONVERTIBLE PROMISSORY NOTE

 

US $1,395,452.05

Date: December 31, 2010

FOR VALUE RECEIVED, IMEDICOR, INC., a corporation duly organized and validly existing under the laws of the state of Nevada (the “Company”), promises to pay to SONORAN PACIFIC RESOURCES, LLP, an Arizona limited liability partnership (“Sonoran”), the registered holder of this secured convertible promissory note (“Note”) and its successors and assigns (the “Holder”), the principal sum of One Million Three Hundred Ninety-Five Thousand Four Hundred Fifty-Two Dollars and Five cents ($1,395,452.05) in accordance with the terms hereof, and interest on the principal amount outstanding in accordance with the terms hereof. Accrual of interest on the outstanding principal amount shall commence on the date hereof, i.e., the Replacement Date, and shall continue until payment in full of the outstanding principal amount has been paid, or until the entire outstanding principal amount of this Note has been converted into securities of the Company as described below.

 

This Note has been issued pursuant to that certain Modification Agreement dated December 31, 2010, between the Company and Sonoran and capitalized terms not defined herein shall have the meanings ascribed to them in such Modification Agreement.

 

  

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The following is a statement of the rights of the Holder of this Note and the terms and conditions to which this Note is subject, and to which the Holder, by its acceptance of this Note, agrees:

 

1. Principal Repayment.  The outstanding principal amount of this Note shall be payable commencing the month following the month in which the Company begins to generate revenue. Payments will be equal to 10% of the Company’s gross revenue, less any partner / strategic alliance revenue share, and be paid by the 15th of each month for all cash receipts collected by the Company in the previous month. All such payments shall be applied first to unpaid interest due under section 2 below, if any, and then to principal. The “Maturity Date” of this Note shall be September 30, 2013 unless this Note has been converted at the election of the Holder, or fully paid prior to the Maturity Date by the Company. The Company may prepay all or any portion of this Note at any time.

 

2. Interest.  The Holder shall receive interest on the outstanding principal amount of this Note at the rate of eight percent (8%) per annum. Interest shall be due and payable on the last day of each calendar quarter beginning with the third calendar quarter of 2010. If any payment is not paid when due, the entire outstanding principal balance shall bear interest at a rate (the “Default Rate”) which shall be eighteen percent (18%) per annum instead of and not in addition to eight percent (8%) per annum, such interest being due from the due date of the delinquent payment until the date of receipt by Holder of the delinquent payment.  Interest shall be payable in cash, or at the option of the Company, in shares of the Company’s common stock with such shares valued at eighty-five percent (85%) of the average closing price for shares of the Company’s Common Stock for the ten (10) trading days immediately preceding the interest payment date. If for any trading day the trading market does not list a closing price, then the closing price shall be the average of the last bid and asked prices for such day.

 

3. Conversion.  The primary intent of the Company and the Holder is that this Note is to be repaid in cash, together with all accrued and unpaid interest thereon, by the Company or the outstanding principal amount of this Note, together with accrued and unpaid interest thereon, can be converted, in part or in whole, into shares of Common Stock based on the average closing price for shares of the Company’s Common Stock during the period of ten (10) consecutive trading days immediately preceding the date on which the Company receives from the Holder its written election of exercise of its conversion right. In the case of the exercise of the conversion right set forth herein the conversion privilege shall be deemed to have been exercised and the shares issuable upon such conversion shall be deemed to have been issued upon the date of receipt by the Company of the notice of conversion.  The Holder shall be treated for all purposes as the record holder of such Common Stock, unless the Holder provides the Company written instructions to the contrary.  If the Company at any time shall, by reclassification or otherwise, change its Common Stock into the same or a different number of securities of any class or classes, this Note, as to the unpaid principal amount and accrued and unpaid interest thereon, shall thereafter be deemed to evidence the right to convert into the number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change.

 

  

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4. Mechanics of Conversion.  Upon any conversion of all or any portion of the outstanding principal amount of this Note, (i) such principal amount converted shall be converted and such converted portion of this Note shall be fully paid and satisfied, and (ii) the Holder shall surrender and deliver the original Note, together with its written election of exercise of its conversion right including a statement as to the portion of this Note being converted, to the Company’s principal office or such other address which the Company shall designate.

 

5. Rights upon Liquidation, Dissolution or Winding Up.  In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the Holder shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Company to the holder or holders of any equity security of the Company, an amount equal to the unpaid and unconverted principal amount of this Note and any accrued and unpaid interest.

 

6.  Security Interest.  The existing security interest previously granted to the Holder in connection with the Original Note in and to all of the Company’s property and assets continues without interruption or modification to secure the payment of all amounts owing under this Note.

 

7. Affirmative Covenants of the Company.  The Company hereby agrees that, so long as all or any portion of this Note remains outstanding and unpaid, the Company will:

 

(a) Corporate Existence and Qualification.  take the necessary steps to preserve its corporate existence and its right to conduct business in all states in which the nature of its business requires qualification to do business.

 

(b) Books of Account.  keep its books of account in accordance with generally accepted accounting practices (“GAAP”).

 

(c) Insurance.  maintain insurance with responsible and reputable insurance companies or associations, as determined by the Company in its sole but reasonable discretion, in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which the Company operates.

 

(d) Preservation of Properties; Compliance with Law.  maintain and preserve all of its properties that are used or that are useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted and comply with its certificate of incorporation and bylaws or other organizational or governing documents, and any law, treaty, rule or regulation, or determination of an arbitrator or a court or other governmental authority, in each case applicable to or binding upon the Company or any of its property or to which either the Company or any of its property is subject.

 

(e) Taxes.  duly pay and discharge all taxes and other claims, which might become a lien upon any of its property except to the extent that any thereof are being in good faith appropriately contested with adequate reserves provided therefor.

 

  

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(f) Reservation of Shares.  have authorized, and reserved for issuance, a sufficient number of shares of Common Stock issuable upon conversion of this Note to provide for the issuance of all shares issuable upon the conversion of this Note. Prior to complete conversion of this Note, the Company shall not reduce the number of shares of Common Stock reserved for issuance hereunder without the written consent of the Holder except for a reduction proportionate to a reverse stock split effected for a business purpose of the Company which shall not affect the requirements of this Section 7(f), which reverse stock split shall affect all shares of Common Stock equally.

 

(g) Use of Proceeds.  use the proceeds of this Note for working capital purposes.

 

(h) Financial Information.  Make all filings with the Securities and Exchange Commission required to be made pursuant to Section 13 or Section 15(d) of the Exchange Act of 1934, as amended.

 

8. Negative Covenants of the Company.  The Company hereby agrees that, so long as all or any portion of this Note remains outstanding and unpaid, it will not, nor will it permit any of its subsidiaries, if any, without the consent of the Holder (as defined in the first paragraph of this Note), to:

 

(a) Indebtedness for Borrowed Money.  incur, or permit to exist, any new Indebtedness (as defined below) for borrowed money in excess of $500,000 during any fiscal year of the Company, except in the ordinary course of the Company’s business. For purposes of this Note, “Indebtedness” shall mean (a) all obligations of the Company for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of the Company evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of the Company for the deferred purchase price of property or services, except current accounts payable arising in the ordinary course of business and not overdue beyond such period as is commercially reasonable for the Company’s business, (d) all obligations of the Company under conditional sale or other title retention agreements relating to property purchased by the Company, (e) all payment obligations of the Company with respect to interest rate or currency protection agreements, (f) all obligations of the Company as an account party under any letter of credit or in respect of any bankers’ acceptance, (g) all obligations of any third party secured by property or assets of such Person (regardless of whether or not the Company is liable for repayment of any such obligation), except for obligations to secure Indebtedness incurred within the limitations of this Section 8(a), (h) all guarantees of the Company and (i) the redemption price of all redeemable preferred stock of the Company (other than the Preferred Stock owned by the Holder), but only to the extent that such stock is redeemable at the option of the holder thereof or requires sinking fund or similar payments at any time prior to the Maturity Date.  For purposes of this Note, the term “Person” shall mean any individual, firm, group, corporation, company, joint stock company, limited liability company, partnership, joint venture, trust, association, governmental authority, labor union or other organization, entity or enterprise.

 

(b) Mergers, Sale of Assets and Certain Other Transactions.  enter into any merger or sale of assets or other transaction that requires the Company to make any sinking fund or similar payment at any time prior to the Maturity Date, consolidation or liquidate, windup or dissolve itself or sell, transfer or lease or otherwise dispose of all or any substantial part of its assets or technologies (other than sales of inventory and obsolescent equipment in the ordinary course of business); except: (i) if the Company is the surviving corporation and a change in control has not occurred, (ii) that any subsidiary of the Company may merge into or consolidate with any other subsidiary which is wholly-owned by the Company, and (iii) any subsidiary which is wholly-owned by the Company may merge with or consolidate into the Company provided that the Company is the surviving corporation.

 

  

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(c) Loans.  lend or advance money, credit or property to (by capital contribution, loan, purchase or otherwise) any firm, corporation, or other Person except (i) investments in United States Government obligations, (ii) certificates of deposit of any banking institution with combined capital and surplus of at least $200,000,000, (iii) accounts receivable arising out of sales in the ordinary course of business, and (iv) loans to subsidiaries, if any.

 

(d) Dividends and Distributions. pay dividends or make any other distributions on shares of the capital stock of the Company except for dividends or distributions on any shares of preferred stock of the Company issued and outstanding and required by their terms.

 

(e) Liens. create, assume or permit to exist, any lien on any of its property or assets now owned or hereafter acquired except (i) liens in favor of the Holder, (ii) liens granted to secure Indebtedness incurred within the limitations of Section 8(a) hereof, (iii) liens incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of advances or credit and which do not materially impair the use thereof in the operation of its business, (iv) liens for taxes or other governmental charges which are not delinquent or which are being contested in good faith and for which a reserve shall have been established in accordance with generally accepted accounting principles, and (v) purchase money liens granted to secure the unpaid purchase price of any fixed assets purchased within the limitations of Section 8(h) hereof.

 

(f) Contingent Liabilities.  assume, endorse, be or become liable for or guarantee the obligations of any Person, contingently or otherwise, excluding however, the endorsement of negotiable instruments for deposit or collection in the ordinary course of business or guarantees of the Company made within the limitations of Section 8(a) hereof.

 

(g) Sales of Receivables; Sale - Leasebacks.  sell, discount or otherwise dispose of notes, accounts receivable or other obligations owing to the Company, with or without recourse, except for the purpose of collection in the ordinary course of business, or sell any asset pursuant to an arrangement to thereafter lease such asset from the purchaser thereof.

 

(h) Capital Expenditures; Capitalized Leases.  expend in the aggregate for the Company and all its subsidiaries in excess of $100,000 in any fiscal year for Capital Expenditures (as defined below), including payments made on account of Capitalized Leases (as defined below). For purposes of this Note, the term “Capital Expenditures” shall mean for any period, the aggregate amount of all payments made by any Person directly or indirectly for the purpose of acquiring, constructing or maintaining fixed assets, real property or equipment which, in accordance with generally accepted accounting principles, would be added as a debit to the fixed asset account of such Person, including, without limitation, all amounts paid or payable with respect to Capitalized Lease Obligations and interests which are required to be capitalized in accordance with generally accepted accounting principles. “Capitalized Lease” shall mean any lease the obligations to pay rent or other amounts under which constitute Capitalized Lease Obligations. For purposes of this Note, the term “Capitalized Lease Obligations” shall mean as to any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) real and/or personal property which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under generally accepted accounting principles and, for purposes of this Note, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with generally accepted accounting principles.

 

  

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(i) Nature of Business.  materially alter the nature of the Company’s business or otherwise engage in any business other than the business engaged in or proposed to be engaged in on the date of this Note.

 

(j) Stock of Subsidiaries.  sell or otherwise dispose of any subsidiary, if any, or permit a subsidiary, if any, to issue any additional shares of its capital stock except pro rata to its stockholders.

 

(k) ERISA:  (i) terminate any plan (“Plan”) of a type described in Section 402l(a) of the Employee Retirement Income Security Act of l974, as amended from time to time (“ERISA”) in respect of which the Company is an “employer” as defined in Section 3(5) of ERISA so as to result in any material liability to the Pension Benefit Guaranty Corporation (the "PBGC') established pursuant to Subtitle A of Title IV of ERISA, (ii) engage in or permit any person to engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1954, as amended) involving any Plan which would subject the Company to any material tax, penalty or other liability, (iii) incur or suffer to exist any material “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, involving any Plan, or (iv) allow or suffer to exist any event or condition, which presents a material risk of incurring a material liability to the PBGC by reason of termination of any Plan.

 

(l) Accounting Changes.  make, or permit any subsidiary to make any change in its accounting treatment or financial reporting practices except as required or permitted by generally accepted accounting principles in effect from time to time.

 

(m) Transactions with Affiliates.  directly or indirectly, purchase, acquire or lease any property from, or sell, transfer or lease any property to, or enter into any other transaction, with any Affiliate (as defined below) except in the ordinary course of business and at prices and on terms not less favorable to it than those which would have been obtained in an arm’s-length transaction with a non-affiliated third party. For purposes of this Note, the term “Affiliate” as applied to any Person, shall mean any other Person directly or indirectly through one or more intermediaries controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including with correlative meanings, the terms “controlling,” “controlled by" and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

 

  

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9. Events of Default.  This Note shall become immediately due and payable at the option of the Holder, without notice or demand, upon any one or more of the following events or occurrences (“Events of Default”):

(a) if any portion of this Note is not paid within five (5) days of when due;

 

(b) if any representation or warranty of the Company made in this Note, or in any certificate, report or other financial statement or other instrument or document delivered pursuant hereto, or any notice, certificate, demand or request delivered to the Holder pursuant to this Note or any other document proves to be false or misleading in any material respect as of the time when the same is made;

 

(c) if the Company consummates a transaction which would cause this Note or any exercise of any Holder’s rights under this Note (i) to constitute a non­exempt prohibited transaction under ERISA, (ii) to violate a state statute regulating governmental plans or (iii) otherwise to subject the Company to liability for violation of ERISA or such state statute;

 

(d) if any final judgment for the payment of money is rendered against the Company and the Company does not discharge the same or cause it to be discharged or vacated within one hundred twenty (120) days from the entry thereof, or does not appeal therefrom or from the order, decree or process upon which or pursuant to which said judgment was granted, based or entered, and does not secure a stay of execution pending such appeal within one hundred twenty (120) days after the entry thereof;

 

(e) subject to the provisions of Section 8(e) hereof, if any taxes are not paid before delinquency;

 

(f) if the Company makes an assignment for the benefit of creditors or if the Company generally does not pay its debts as they become due;

 

(g) if a receiver, liquidator or trustee of the Company is appointed or if the Company is adjudicated a bankrupt or insolvent, or if any petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law, is filed by or against, consented to, or acquiesced in, by the Company or if any proceeding for the dissolution or liquidation of the Company is instituted; however, if such appointment, adjudication, petition or proceeding is involuntary and is not consented to by the Company, upon the same not being discharged, stayed or dismissed within 60 days;

 

(h) if the Company defaults under any other mortgage or security agreement covering any part of its property;

 

  

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(i) except for specific defaults set forth in this Section 9, if the Company defaults in the observance or performance of any other term, agreement or condition of this Note, and the Company fails to remedy such default within thirty (30) days after notice by the Holder to the Company of such default, or, if such default is of such a nature that it cannot with due diligence be cured within said thirty (30) day period, if the Company fails, within said thirty (30) days, to commence all steps necessary to cure such default, and fails to complete such cure within ninety (90) days after the end of such thirty (30) day period; and

 

(j) if any of the following exist uncured for forty-five (45) days following written notice to the Company: (i) the failure of any representation or warranty made by the Company to be true and correct in all material respects or (ii) the Company fails to provide the Holder with the written certifications and evidence referred to in this Note.

 

10. Holder Not Deemed a Stockholder.  No Holder, as such, of this Note shall be entitled (prior to conversion of this Note into Common Stock, and only then to the extent of such conversion) to vote or receive dividends or be deemed the holder of shares of the Company for any purpose, nor shall anything contained in this Note be construed to confer upon the Holder hereof, as such, any of the rights at law of a stockholder of the Company prior to the issuance to the holder of this Note of the shares of Common Stock which the Holder is then entitled to receive upon the due conversion of all or a portion of this Note. Notwithstanding the foregoing, the Company will provide the Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.

 

11. Confidential Information.  The Holder agrees that it will keep confidential and will not disclose, divulge or use for any purpose, other than to monitor its investment in the Company, any confidential information obtained from the Company pursuant to the terms of this Agreement, unless such confidential information (i) is known or becomes known to the public in general (other than as a result of a breach of this Section 11 by the Holder), (ii) is or has been independently developed or conceived by the Holder without use of the Company's confidential information or (iii) is or has been made known or disclosed to the Holder by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that the Holder may disclose confidential information to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company or as may be required by law, provided that the Holder takes reasonable steps to minimize the extent of any such required disclosure.

 

12. Waiver of Demand, Presentment, Etc.  The Company hereby expressly waives demand and presentment for payment, notice of nonpayment, protest, notice of protest, notice of dishonor, default and nonpayment, notice of acceleration or intent to accelerate, bringing of suit and diligence in taking any action to collect amounts called for hereunder, and all rights of set-off, defenses, deduction or counterclaim with respect to any amount owing hereunder, and shall be directly and primarily liable for the payment of all amounts owing and to be owing hereunder, regardless of and without any notice, diligence, act or omission as or with respect to the collection of any amount called for hereunder.

 

  

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13. Payment.  Except as otherwise provided for herein, all payments with respect to this Note shall be made in lawful currency of the United States of America, at the option of the Holder, (i) at the principal office of the Holder, located at 4385 north 75th street suite 201, Scottsdale, AZ 85251, or such other place or places as may be reasonably specified by the Holder of this Note in a written notice to the Company at least ten (10) business days before a given payment date, or (ii) by mailing a good check in the proper amount to the Holder at least two days prior to the due date of each payment or otherwise transferring funds so as to be received by the Holder on the due date of each such payment; provided, however, that the Company shall make payment by wire transfer to an account such Holder may specify in writing to the Company at least two days prior to the due date of each payment. Payment shall be credited first to late fees and costs, if any, then accrued interest then due and payable and the remainder applied to principal. The Holder shall keep a record of each payment of principal and interest with respect thereto.

 

14. Assignment.  The rights and obligations of the Company and the Holder of this Note shall be binding upon, and inure to the benefit of, the permitted successors, assigns, heirs, administrators and transferees of the parties hereto. Notwithstanding the foregoing, neither the Company nor the Holder may assign, pledge or otherwise transfer this Note without the prior written consent of the other, except Holder may assign its rights hereunder in whole of in part to the partners in Holder without the prior consent of the Company. Interest and principal are payable only to the registered Holder of this Note in the Company’s Note Register.

 

15. Waiver and Amendment.  Any provision of this Note, including, without limitation, the due date hereof, and the observance of any term hereof, may be amended, waived or modified (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Holder.

 

16. Notices.  Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or mailed by registered or certified mail, postage prepaid, or delivered by hand-delivery, facsimile transmission or e-mail, to the Company or Holder at the address,  facsimile number or e-mail address set forth herein or in the Modification Agreement. Any party hereto may by notice so given change its address for future notice hereunder. Notice shall conclusively be deemed to have been given as set forth in the Modification Agreement.

 

17. Governing Law; Jurisdiction.  This Note, and all matters arising directly or indirectly here from, shall be governed by and construed in accordance with the laws of the State of Arizona, notwithstanding the choice of law or conflicts of law principles thereof. Each of the parties hereto hereby (i) irrevocably consents and submits to the jurisdiction of the Arizona state courts having venue in Maricopa County, Arizona and of the United States District Court for the District of Arizona (and of the appropriate appellate courts therefrom) in connection with any suit, action or other proceeding arising out of or relating to this Note, (ii) irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum, and (iii) agrees that service of any summons, complaint, notice or other process relating to such suit, action or other proceeding may be effected in the manner provided by the rules of such courts.

 

  

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18. Severability.  If one or more provisions of this Note are held to be unenforceable under applicable law, such provisions shall be excluded from this Note, and the balance of this Note shall be interpreted as if such provisions were so excluded and shall be enforceable in accordance with its terms.

 

19. Headings.  Section headings in this Note are for convenience only, and shall not be used in the construction of this Note.

 

20. Collection Costs.  In the event that the Holder shall place this Note in the hands of an attorney for collection during the continuance of any Event of Default, the Company shall further be liable to the Holder for all costs and expenses (including reasonable attorneys’ fees) which may be incurred by the Holder in enforcing this Note, all of which costs and expenses shall be obligations under and part of this Note; and the Holder may take judgment for all such amounts in addition to all other sums due hereunder.

 

21. Prior Note.  This Note amends, restates and supersedes in its entirety the Original Note dated April 17, 2009 issued by the Company to Holder, provided that this Note does not effect a novation of any obligations under such Original Note (all of which obligations shall henceforth be evidenced by this Note).

 

22. Preference Payments.  The Company agrees that, to the extent the Company makes any payment to Holder in connection with the indebtedness evidenced by this Note, and all or any part of such payment is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid by Holder or paid over to a trustee, receiver or any other entity, whether under any bankruptcy act or otherwise (a “Preferential Payment”), then the indebtedness of the Company and any other party liable under this Note shall continue or shall be reinstated, as the case may be, and the obligation underlying such Preferential Payment shall be revived and continue in full force and effect as if no Preferential Payment had been made.

 

IN WITNESS WHEREOF, the Company has caused this Note to be issued as of the date first above written.

 

IMEDICOR, INC.

 

By:  /s/ Fred Zolla                      

Name:         Fred Zolla

Title:           CEO

 

  

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