Document:

EXHIBIT 10.79

 

DEBT SECURITIES PURCHASE AND ASSUMPTION AGREEMENT &

SECURITIES ECHANGE AND SETTLEMENT AGREEMENT

 

THIS AGREEMENT is made as of the Effective Date below by and between the undersigned Seller ("Seller" or the "Company") and the undersigned assignee ("Assignee" and with Seller, the "Parties") and is joined in by the subject trading company, on the signature page hereof, for the express purpose stated.

 

WITNESETH:

 

WHEREAS, the Seller holds debt in the aggregate principal amount stated on the signature page (the "Debt") in the trading company identified below, which Debt arose over 6 months past and:

 

WHEREAS, the Seller wishes to assign and transfer its rights in the Debt to the Assignee and the Assignee wishes to accept such PURCHASE, all subject to the terms and conditions herein;

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, and for other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the Parties and trading company agree as follows:

 

	
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Nature of Debt, PURCHASE of Debt. A. The Seller represents that the Seller is not and has not been, an officer, Director or 10% or more shareholder of the trading company and in acting as a non affiliate is not restricted from assigning this Debt and also the Debt is a non contingent liquidated obligation owed to it that was created and became valid in excess of one year prior to this date and that there are no obligations or liabilities of any kind remaining due from the Seller that would be a condition to the validity or collection of the Debt and that the Assignee by purchasing such Debt does not become obligated to perform any of the past agreements, if any, of any nature, owed by the Seller to the trading company. Further, as part of the PURCHASE of the Debt, the Assignee acquires all contemplated conversion rights into common stock of the trading company, of the Seller, and the beneficial ownership and right to same relating back. Seller also represents that from the time the Debt was created, regardless of how it was documented at that time or subsequently, the Seller, with the cooperation of the trading company, could have obtained a consolidation of the Debt into a promissory note, debenture or similar instrument. Also, the Seller confirms that it was the understanding with the Company, that the Debt could be converted into shares of common stock in the Company to settle the Debt, over 6 months past. Subject to the terms and conditions set forth herein, Seller hereby assigns and transfers to Assignee, and Assignee hereby purchases and acquires from Seller, the Debt, confirmation of which is attached hereto as Attachment A, including all rights. As consideration for such PURCHASE, Assignee shall pay Seller the amount on the signature page hereof being the "PURCHASE Payment." As part of the Debt PURCHASE, Seller shall transfer all related supportive documents to the Assignee and all UCC and other financing rights, but in no event is the Assignee required to investigate or verify the Debt or supportive documents since it is a commercial representation by the Seller that the Debt is real and support is true and complete.

	
 

	 
	
2.

	
Seller Bound. Seller hereby accepts the foregoing PURCHASE and transfer and promises to be bound by and upon all the covenants, agreements, terms and conditions set forth therein.

	
 

	 
	
3.

	
Benefit and PURCHASEs. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns; provided that no party, except Assignee, shall assign or transfer all or any portion of this Agreement without the prior written consent of the other party, and any such attempted PURCHASE shall be null and void and of no force or effect.

 

	 
	
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Representations. Seller warrants and represents that it/he/she has good title to said Debt, full authority to sell and transfer same, that any shareholder or Board of Director approval of the Seller has been obtained and that said Debt is being sold free and clear of all liens, encumbrances, liabilities and adverse claims, of every nature and description. Seller further warrants that it shall fully defend, protect, indemnify and save harmless the Assignee and its lawful successors and assigns from any and all adverse claim, that may be made by any party against said Debt. Seller represents and understands that it assigns any and all Debentures and similar instruments and conversion rights that would be from the trading company to the Seller to the Assignee to use and hold as it determines.

	
 

	 
	
5.

	
Waiver. Any party hereto shall have the right to waive compliance by the other of any term, condition or covenant contained herein. Such waiver shall not constitute a waiver of any subsequent failure to comply with the same or any different term, condition or covenant. No waive, however, is valid unless in writing and the other Party is notified of same, except if the waiver is from the assignee and relates to any dealing between the trading company and the Assignee in which case notice to the Seller is not relevant.

	
 

	 
	
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Applicable Law and Venue. The laws of the State of Delaware, without reference to conflict of laws principles, shall govern this Agreement and the sole venue for any suit relating hereto shall be a court in Westchester County, New York.

	
 

	 
	
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Further Representations. The Assignee and Seller represent they are both (1) an "accredited investor" within the meaning of Rule 501 of Regulation D promulgated in relation to the Securities Act of 1933, as amended, and (2) sophisticated and experienced in making investments, and (3) capable, by reason of their business and financial experience, of evaluating the relative merits and risks of an investment in the securities, and (4) they are able to afford the loss of investment in the securities. 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. From and after the date of this Agreement, Seller 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. 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. Except as otherwise provided herein, 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. This Agreement may only be amended or modified at any time, and from time to time, in writing, executed by the parties hereto. Any notice, communication, request, reply or advice (hereinafter severally and collectively called "Notice") in this Agreement provided or permitted to be given, shall 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. For all purposes of Notice, the addresses of the parties shall be the last known address of the party. Seller agree to co-operate 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 Seller shall survive the closing of this Agreement.

	
 

	 
	
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Headings. The paragraph headings of this Agreement are for convenience of reference only and do not form a part of the terms and conditions of this Agreement or give full notice thereof.

 

	 
	
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Severability. Any provision hereof that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability, without SIMH validating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not SIMH validate or render unenforceable such provision in any other jurisdiction.

	
 

	 
	
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Entire Agreement. This Agreement contains the entire understanding between the parties, no other representations, warranties or covenants having induced either party to execute this Agreement, and supersedes all prior or contemporaneous agreements with respect to the subject matter hereof. This Agreement may not be amended or modified in any manner except by a written agreement duly executed by the party to be charged, and any attempted amendment or modification to the contrary shall be null and void and of no force or effect.

	
 

	 
	
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Joint Drafting. The parties agree that this Agreement hereto shall be deemed to have been drafted jointly by all parties hereto, and no construction shall be made other than with the presumption of such joint drafting. This Agreement may be executed by the parties hereto in one or more counterparts, each of which shall be deemed an original and which together shall constitute one and the same instrument. In lieu of the original documents, a facsimile transmission or copy of the original documents shall also be as effective and enforceable as the original.

	
 

	 
	
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It is hereby agreed that in the event any Installment Payment noted above is not paid by Bank transfer within 10 days of the Due Date, for any reason, then at the option of the Seller this agreement may be immediately cancelled and sent to Beaufort Capital Partners, LLC in writing to reflect an PURCHASE amount of the amount actually paid to date of cancellation. Upon cancellation of PURCHASE made under this agreement, the Note and the debt under the note will revert back to the Seller and the Seller has the right to treat this Agreement as rescinded and to revert to all its rights under the Assigned Loan Agreement. Upon the rescission of this Agreement, any installments it has paid to the Seller shall be applied towards the Debt. The only recourse against Assignee for non-payment shall be rescission.

 

	 
	
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Each of the parties hereto has caused this Debt Securities Purchase and Assumption Agreement & Securities Exchange and Settlement Agreement to be executed as of Effective Date below.

 

Effective Date: 08/25/2014

 

Amount of Debt: $35,000.00

Payable as follows: $35,000.00 upon the Assignee's Clearing Firm's approval.

 

Name of Trading Company: Sanomedics International Holdings, Inc. ("SIMH")

 

Name of Seller: CLSS Holdings, LLC

 

Debt Conversion Feature: The Assignee shall be permitted to convert any portion of the assigned debt at any time after the Maturity Date until this Note is no longer outstanding, this Note, including interest and principal, shall be convertible into shares of Common Stock at a discount of 50% off of the lowest intra-day trade within 10 days prior submission of the conversion.

 

Name of Assignee: Beaufort Capital Partners, LLC

 

 

	Assignee:	 	Seller:	 
				
	
Beaufort Capital Partners, LLC

		CLSS Holdings, LLC	
	
 

			
	By:	/s/ Robert Marino	 	By:	/s/ Craig Sizer	 
	Print Name:	Robert Marino 	 	Print Name:	CLSS Holdings, LLC	 

 

The undersigned trading Company hereby joins in for the following express purposes: it hereby agrees and confirms the statements as to the past and current nature of the Debt and relationship with the Seller is true and complete, and that it approves of the PURCHASE stated above and has all necessary Board of Director and Shareholder approval, if any, needed.

 

 

	Sanomedics International Holdings, Inc	 
	 	 	 
	By:	/s/ Keith Houlihan	 
	Name:	Keith Houlihan	 
	Title:	President	 

 

Effective Date: 08/25/2014

 

	 
	
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Debt Securities Purchase and Assumption Agreement & Securities Echange and Settlement 

Agreement between Sanomedics International Holdings, Inc and Beaufort Capital Partners, LLC Dated 08/25/2014 

 

In connection with the above referenced agreement and exhibits and related agreements and instruments, herein the Agreement, and any present and any future conversion requests of Beaufort Capital Partners, LLC ("Beaufort") we irrevocably confirm:

 

	 	
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Sanomedics International Holdings, Inc ("SIMH") is not, and has not been, a shell issuer as described in Rule 144 promulgated with reference to the Securities Act of 1933, as amended (the "Securities Act") nor is or was a "shell" as otherwise commonly understood;

	 	
 

	 
	 	
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SIMH is, unless noted "Not Applicable," subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). This is not applicable to SIMH.

	 	
 

	 
	 	
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SIMH has to the extent it has been subject to Exchange Act requirements for filing reports, filed all reports and other materials required to be filed by Section 13 or 15(d) of the Exchange

	 	
 

	 
	 	
 

	
Act, as applicable, during the preceding 12 months and or has filed with the trading exchange or over the counter disclosure system all such reports and information to be deeded current in all public reporting;

	 	
 

	 
	 	
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The original Debts noted in the above referenced Agreement, and the contents of the above

	 	
 

	 
	 	
 

	
referenced Agreement, is accurate and said original Debts and related stock and conversion rights is greater than 12 months old and was owned and subject to PURCHASE and transfer to you by a non-affiliate which transfer has been made.

	 	
 

	 
	 	
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SIMH is now and will remain current with all obligations with its stock transfer agent, OTC Markets and its State of incorporation. Your company and officers and owners and affiliates are not officers, Directors or material shareholders of SIMH or affiliates of SIMH, Beaufort is not an affiliate.

	 	
 

	
 

	 	
 

	
Any and all approvals needed in relation to the above referenced Agreement, this letter, for the assistance of our transfer agent, etc., is obtained. The Agreement reflects, among other things, conversion rights we otherwise afford to the non-affiliate debt holders.

 

Representations herein survive the issuance or closing of any instrument or matter, and we will cooperate as needed to give effect to and protect your rights including as to the transfer agent and you may rely upon these promises and representations.

 

Effective Date: 08/25/2014

 

	 	Very truly yours,	 
	 	 	 	 
		By:	/s/ Keith Houlihan	 
	 	Name:	Keith Houlihan 	 
	 	Title:	President	 

 

 

5EXHIBIT 10.80

 

ORIGINAL ISSUE DISCOUNT CONVERTIBLE PROMISSORY NOTE

 

	
Face Amount: $45,000.00

	
August 12, 2014

Purchase Price: $30,000.00

 

FOR VALUE RECEIVED, SANOMEDICS INTERNATIONAL HOLDINGS, INC., a Delaware corporation (the "Maker or Company"), with its principal offices located at 444 Brickell Ave Suite 415 Miami, FL 33131 promises to pay to the order of BEAUFORT CAPITAL PARTNERS LLC, or its registered assigns (the "Payee"), upon the terms set forth below, the principal amount of Thirty Thousand Dollars ($30,000.00) (this "Note").

 

1. Payments.

 

(a) The purchase price ($30,000.00) of this Note shall be due on February 12, 2015 or such later date as is agreed to in writing by the Payee (the "Maturity Date"), unless due earlier in accordance with the terms of this Note (see Section c below).

 

(b) All overdue unpaid principal to be paid hereunder shall entail a late fee at the rate of 12% per annum (or such lower maximum amount of interest permitted to be charged under applicable law) which will accrue daily, from the date such principal is due hereunder through and including the date of payment.

 

(c) Absent the occurrence of an Event of Default (unless such Event of Default is waived in writing by the Payee), the Maker may prepay this Note for a net payment of $45,000.00 at any time prior to November 12, 2014. If the $45,000.00 is not pre-paid by November 12, 2014, payee has the right to refuse any further payments and choose to convert this note when it has matured 180 days after payment of this $30,000.00.

 

(d) Upon Closing, the Company will be obligated to pay Beaufort Fees in the amount of $1,000.00 to conduct due diligence and prepare documentation for the proposed transaction. This can be taken out of the funding.

 

2. Payment Schedule. $30,000.00 to the Company upon written proof that the transfer agent and corporate attorney have been paid and up to date and the execution by the Company of the warrant agreement, attached hereto as Exhibit A. Beaufort will make payments to these entities and deduct from the $30,000.00 to the Company if these entities are owed monies over $500 as of August 1, 2014.

 

	 
	
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3. Events of Default.

 

(a) "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):

 

(i) [Intentionally omitted];

 

(iii) Maker or any of its subsidiaries shall fail to observe or perform any of their respective obligations owed to Payee under this Note or any other covenant, agreement, representation or warranty contained in, or otherwise commit any breach hereunder or in any other agreement executed in connection herewith and such failure or breach shall not have been remedied within ten days after the date on which notice of such failure or breach shall have been delivered;

 

(iv) Maker or any of its subsidiaries shall commence, or there shall be commenced against Maker or any subsidiary, a case under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or Maker or any subsidiary 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 Maker or any subsidiary, or there is commenced against Maker or any subsidiary any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of 60 days; or Maker or any subsidiary is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or Maker or any subsidiary 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 60 days; or Maker or any subsidiary makes a general assignment for the benefit of creditors; or Maker or any subsidiary shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or Maker or any subsidiary 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 Maker or any subsidiary for the purpose of effecting any of the foregoing;

 

(v) Maker or any subsidiary shall default in any of its respective obligations under any other note or any 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 Maker or any subsidiary, 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 except existing TCA Global default disclosed in SIMH's SEC Filings; or

 

	 
	
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(vi) Maker shall (a) be a party to any Change of Control Transaction (as defined below), (b) agree to sell or dispose all or in excess of 33% of its assets in one or more transactions (whether or not such sale would constitute a Change of Control Transaction), (c) redeem or repurchase more than a de minimis number of shares of Common Stock or other equity securities of Maker or (d) make any distribution or declare or pay any dividends (in cash or other property, other than common stock) on, or purchase, acquire, redeem, or retire any of Maker's capital stock, of any class, whether now or hereafter outstanding. "Change of Control Transaction"means the occurrence of any of: (i) an acquisition after the date hereof by an individual or legal entity or "group" (as described in Rule 13d-5(b)(1) promulgated under the Securities Exchange Act of 1934, as amended) of effective control (whether through legal or beneficial ownership of capital stock of Maker, by contract or otherwise) of in excess of 33% of the voting securities of Maker, (ii) a replacement at one time or over time of more than one-half of the members of Maker's board of directors which is not approved by a majority of those individuals who are members of the board of directors on the date hereof (or by those individuals who are serving as members of the board of directors on any date whose nomination to the board of directors was approved by a majority of the members of the board of directors who are members on the date hereof), (iii) the merger of Maker with or into another entity that is not wholly-owned by Maker, consolidation or sale of 33% or more of the assets of Maker in one or a series of related transactions, or (iv) the execution by Maker of an agreement to which Maker is a party or by which it is bound, providing for any of the events set forth above in (i), (ii) or (iii).

 

(vii) Failure to complete the preparation and filing of the financial statements with the SEC. Beaufort MUST be notified 7 business days ahead of failure to complete the preparation and filing of the financial statements with the SEC in a timely manner.

 

(b) If any Event of Default occurs (unless such Event of Default is waived in writing by the Payee), the full principal amount of this Note shall become, at the Payee's election, immediately due and payable in cash. Commencing 5 days after the occurrence of any Event of Default that results in the acceleration of this Note, the interest rate on this Note shall accrue at the rate of 12% per annum, or such lower maximum amount of interest permitted to be charged under applicable law. The Payee need not provide and Maker hereby waives any presentment, demand, protest or other notice of any kind, and the Payee may 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 Payee at any time prior to payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

4. Section 4. Conversion.

 

(a) (i) Holder's Conversion Right. At any time after the Maturity Date until this Note is no longer outstanding, this Note, including interest and principal, shall be convertible into shares of Common Stock at a discount of the lower of 50% off the average of the three(3) lowest traded prices during the prior 10 trading days. However, if the Company's share price, at any time before January 12, 2015 loses the bid (ex: .0004 on the ask with zero market makers on the bid on level 2), then the fixed conversion price resets to .0001. If the Company gets a "DTC chill", any time before January 12, 2015, then the discount is reset to 65% off the low of the previous 5 trading days.

 

	 
	
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The Holder shall effect conversions by delivering to the Company the form of Notice of Conversion attached hereto as Annex A (a "Notice of Conversion"), specifying the date on which such conversion is to be effected (a "Conversion Date"). 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, the Holder shall not be required to physically surrender Notes to the Company until the entire amount of this Note has been satisfied. The Company shall deliver any objection to any Notice of Conversion within TWO (2) Business Days of receipt of such notice. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. If the Company does not request the issuance of the shares underlying this Note after receipt of a Notice of Conversion within TWO (2) Business days following the period allowed for any objection, the Company shall be responsible for any differential in the value of the converted shares underlying this Note between the value of the closing price on the date the shares should have been delivered and the date the shares are delivered. In addition, if the Company fails to timely (within 72 hours, 3 business days), deliver the shares per the instructions of the Payee, if permitted under Rule 144 of the rules and regulations of the Securities and Exchange Commission, free and clear of all legends in legal free trading form, the Company shall allow Payee 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 72 hours, 3 business days)) deliver shares, on the next conversion.

 

The Holder 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. Any Opinion Letter required to effectuate the issuance of the shares pursuant to this Paragraph4 (a) and the Notice of Conversion shall be provided and issued by BEAUFORT CAPITAL PARTNERS LLC. The parties hereby agree that the Payee will cover all reasonable legal costs associated with the issuance of the Opinion Letter to the Transfer Agent.

 

(ii) [Intentionally omitted]

 

(iii) Whenever the Set Price is adjusted pursuant to any of Section 4, the Company shall promptly mail to each Holder a notice setting forth the Set Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

(iv) If (A) the Company shall declare a dividend (or any other distribution) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize the granting to all holders of the Common Stock 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 Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of the Notes, and shall cause to be mailed to the Holders at their last addresses as they shall appear upon the stock books of the Company, at least 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 mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. Holders are entitled to convert Notes during the 20-day period commencing the date of such notice to the effective date of the event triggering such notice.

 

	 
	
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(v) If, at any time while this Note is outstanding, (A) the Company effects any merger or consolidation of the Company with or into another Person, (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 holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (D) the Company 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 Holder 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, the holder of one share of Common Stock (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 in such Fundamental Transaction, and the Company shall apportion the Set 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 Holder 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 Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new note consistent with the foregoing provisions and evidencing the Holder'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 paragraph and insuring that this 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 the Holder delivered before the 90th day after such Fundamental Transaction, the Company (or any such successor or surviving entity) will purchase the Note from the Holder for a purchase price, payable in cash within 5 trading days after such request (or, if later, on the effective date of the Fundamental Transaction), equal to the 200% of the remaining unconverted principal amount of this Note on the date of such request, plus all accrued and unpaid interest thereon, plus all other accrued and unpaid amounts due hereunder.

 

(b) The Company covenants that it will at all times; reserve and keep available out of its authorized and unissued shares of Common Stock solely for the purpose of issuance upon conversion of this Note.

 

	 
	
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(c) Any and all notices or other communications or deliveries to be provided by the Holders hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth or such other address or facsimile number as the Company may specify for such purposes by notice to the Holders delivered in accordance with this Section. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile telephone number or address of such Holder appearing on the books of the Company, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:30 p.m. (New York City time), (ii) the date after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the second 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.

 

(d) Notwithstanding anything to the contrary herein contained, the Holder may not convert this Note to the extent such conversion would result in the Holder, together with any affiliate thereof, beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (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 the Holder after application of this section. The provisions of this section may be waived by the Holder (but only as to itself and not to any other Holder) upon not less than 61 days prior notice to the Company. Other Holders shall be unaffected by any such waiver.

 

5. Negative Covenants. So long as any portion of this Note is outstanding, the Maker will not and will not permit any of its Subsidiaries to directly or indirectly, unless consented to in writing by the Payee:

 

i. amend its certificate of incorporation, bylaws or other charter documents so as to adversely affect any rights of the Payee;

 

6. No Waiver of Payee's Rights. All payments of principal and interest shall be made without setoff, deduction or counterclaim. No delay or failure on the part of the Payee in exercising any of its options, powers or rights, nor any partial or single exercise of its options, powers or rights shall constitute a waiver thereof or of any other option, power or right, and no waiver on the part of the Payee of any of its options, powers or rights shall constitute a waiver of any other option, power or right. Maker hereby waives presentment of payment, protest, and all notices or demands in connection with the delivery, acceptance, performance, default or endorsement of this Note. Acceptance by the Payee of less than the full amount due and payable hereunder shall in no way limit the right of the Payee to require full payment of all sums due and payable hereunder in accordance with the terms hereof.

 

	 
	
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7. Modifications. No term or provision contained herein may be modified, amended or waived except by written agreement or consent signed by the party to be bound thereby.

 

8. Cumulative Rights and Remedies; Usury. The rights and remedies of Payee expressed herein are cumulative and not exclusive of any rights and remedies otherwise available under this. The election of Payee to avail itself of any one or more remedies shall not be a bar to any other available remedies, which Maker agrees Payee may take from time to time. If it shall be found that any interest due hereunder shall violate applicable laws governing usury, the applicable rate of interest due hereunder shall be reduced to the maximum permitted rate of interest under such law.

 

9. Use of Proceeds. Maker shall use the proceeds from this Note hereunder for general working capital purposes.

 

10. Collection Expenses. If Payee shall commence an action or proceeding to enforce this Note, then Maker shall reimburse Payee for its costs of collection and reasonable attorney's fees incurred with the investigation, preparation and prosecution of such action or proceeding.

 

11. Severability. If any provision of this Note is declared by a court of competent jurisdiction to be in any way invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder shall violate applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest.

 

12. Successors and Assigns. This Note shall be binding upon Maker and its successors and shall inure to the benefit of the Payee and its successors and assigns. The term "Payee" as used herein, shall also include any endorsee, assignee or other holder of this Note.

 

13. Lost or Stolen Promissory Note. If this Note is lost, stolen, mutilated or otherwise destroyed, Maker shall execute and deliver to the Payee a new promissory note containing the same terms, and in the same form, as this Note. In such event, Maker may require the Payee to deliver to Maker an affidavit of lost instrument and customary indemnity in respect thereof as a condition to the delivery of any such new promissory note.

 

14. Due Authorization. This Note has been duly authorized, executed and delivered by Maker and is the legal obligation of Maker, enforceable against Maker in accordance with its terms except as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally. No consent of any other party and no consent, license, approval or authorization of, or registration or declaration with, any governmental authority, bureau or agency is required in connection with the execution, delivery or performance by the Maker, or the validity or enforceability of this Note other than such as have been met or obtained. The execution, delivery and performance of this Note and all other agreements and instruments executed and delivered or to be executed and delivered pursuant hereto or thereto or the securities issuable upon conversion of this Note will not violate any provision of any existing law or regulation or any order or decree of any court, regulatory body or administrative agency or the certificate of incorporation or by-laws of the Maker or any mortgage, indenture, contract or other agreement to which the Maker is a party or by which the Maker or any property or assets of the Maker may be bound.

 

	 
	
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15. Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each of Maker and Payee agree that all legal proceedings concerning the interpretations, enforcement and defense of this Note shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the "New York Courts"). Each of Maker and Payee hereby irrevocably submit to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder (including with respect to the enforcement of this Note), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper. Each of Maker and Payee hereby irrevocably waive personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to the other at the address in effect for notices to it under this Note 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 manner permitted by law. Each of Maker and Payee hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby.

 

16. Notice. Any and all notices or other communications or deliveries to be provided by the Payee hereunder, including, without limitation, any conversion notice, shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service or sent by certified or registered mail, postage prepaid, addressed to the Maker, or such other address or facsimile number as the Maker may specify for such purposes by notice to the Payee delivered in accordance with this paragraph. Any and all notices or other communications or deliveries to be provided by the Maker hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service or sent by certified or registered mail, postage prepaid, addressed to the Payee at the address of the Payee appearing on the books of the Maker, or if no such address appears, at the principal place of business of the Payee. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission if delivered by hand or by telecopy that has been confirmed as received by 5:00 p.m. on a business day, (ii) one business day after being sent by nationally recognized overnight courier or received by telecopy after 5:00 p.m. on any day, or (iii) five business days after being sent by certified or registered mail, postage and charges prepaid, return receipt requested.

 

17. Equity Blocker. The Holder shall not convert this debenture into shares of common stock in an amount greater than 4.99% (9.99% if the Company is not a fully reporting company under the Securities Exchange Act of 1934 ("Non-Reporting")) of the total issued and outstanding shares of common stock of the Company, at any time during the term of this Debenture. Any attempt to do so by the Holder or Payee shall not be effectuated. The calculation of the Holder's 4.99% (9.99% if the Company is Non-Reporting) holding shall include any and all shares of common stock beneficially held by the Holder at such time or within the next 60 days.

 

	 
	

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The undersigned signs this Note as a maker and not as a surety or guarantor or in any other capacity.

 

 

	 	SANOMEDICS INTERNATIONAL HOLDINGS, INC.	 
	 	 	 	 
		By:	/s/ Keith Houlihan	 
	 	Name:	Keith Houlihan	 
	 	Title:	President	 
	 	 	 	 
		BEAUFORT CAPITAL PARTNERS LLC	
		 		
		By:	/s/ Robert Marino	
		Name:	Robert Marino	
		Title:	MANAGING MEMBER	

 

 

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