Document:

pmbs_ex41.htm

EXHIBIT 4.1

 

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

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

 

REPLACEMENT, AMENDED AND RESTATED PROMISSORY NOTE

Effective Date: as of June 27, 2013

 

                          $368,756.67

 

FOR VALUE RECEIVED, PURAMED BIOSCIENCE, INC., a Minnesota corporation (the “Company” or “Borrower”), with an office located at 1326 Schofield Ave., Schofield, WI 33020, hereby promises to pay to the order of TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership located at 1404 Rodman Street, Hollywood, FL 33020, and its successors or assigns (the “Holder”), the principal amount of Three Hundred Sixty-Eight Thousand Seven Hundred Fifty-Six and 67/100 United States Dollars (US$368,756.67) on or prior to January 1, 2014 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of twelve percent (12%) per annum (the “Applicable Rate”) commencing as of June 15, 2013, all in accordance with the terms hereof.  This Promissory Note (this note, and all modifications, extensions, future advances, supplements, and renewals thereof, and any substitutions therefor, hereinafter referred to as the “Note”) shall be payable in accordance with the terms set forth below.

1. Payments.

(a) Payments at Effective Date.  Simultaneously with the execution of this Note, the Borrower shall make a payment to Holder in the amount of $7,000.00 (such amount comprising two (2) payments of unpaid interest under the “Original Obligations” (as hereinafter defined).

(b) Monthly Payments.  On August 1, 2013, and on the first (1st) day of each consecutive calendar month thereafter, the Company shall make payments of interest only for all accrued and unpaid interest due hereunder as of each of such payment dates, until the Maturity Date.

(c) Payment at Maturity.  The principal amount of this Note, together with all accrued and unpaid interest, and all other sums due and payable hereunder and/or under any other Transaction Documents, shall be due and payable in full to the Holder on the Maturity Date.

(d) Prepayment.  The Borrower, at its option, shall have the right to make full or partial prepayments under this Note without premium or penalty, at any time prior to the Maturity Date.

(e) Payment of Default Interest.  Any amount of principal, interest or other sums due on this Note which are not paid when due shall bear interest from the date due until such past due amount is paid in full at the highest non-usurious rate permitted by applicable law (the “Default Rate”).

(f) Late Fee. If all or any portion of the payments of principal, interest or other charges due hereunder are not received by the Holder within five (5) days of the date such payment is due, then the Borrower shall pay to the Holder a late charge (in addition to any other remedies that Holder may have) equal to one percent (1%) of each such unpaid payment or sum.  Any payments returned to Holder for any reason must be covered by wire transfer of immediately available funds to an account designated by Holder, plus a $100.00 administrative fee charge.  Holder shall have no responsibility or liability for payments purportedly made hereunder but not actually received by Holder; and the Borrower shall not be discharged from the obligation to make such payments due to loss of same in the mails or due to any other excuse or justification ultimately involving facts where such payments were not actually received by Holder.

 

 

  

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(g) General Payment Provisions.  Interest shall be calculated on the basis of a 360-day year, and shall accrue daily on the outstanding principal amount outstanding from time to time for the actual number of days elapsed, commencing as of the effective date hereof until payment in full of the outstanding principal, together with all accrued and unpaid interest and other amounts which may become due hereunder or under any Transaction Documents, has been made.  Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding Business Day. For purposes of this Note, “Business Day” shall mean any day other than a Saturday, Sunday or a day on which federal banks are authorized or required by law or executive order to remain closed.  All payments received and actually collected by Holder hereunder shall be applied first to any costs, fees and expenses due or incurred hereunder or under any other Transaction Documents, second to accrued and unpaid interest hereunder, and last to reduce the outstanding principal balance of this Note.  All payments on this Note shall be made in lawful money of the United States of America by wire transfer to the Holder’s wire instructions set forth below, or such other account as the Holder may designate by written notice to the Borrower from time to time in accordance with the provisions of this Note.  Wire Instructions for all sums due and payable hereunder are as follows:

TCA Global Credit Master Fund, LP (US Dollars)

Correspondent Bank:

Bank of New York

1 Wall Street

New York, New York 10286

ABA# 021-0000-18

SWIFT: IRVTUS3N

Beneficiary Bank:

Caledonian Bank Limited

A/C Number: 89-000-50977

SWIFT: CBTLKYKY

For Final Credit:

Account Name: Caledonian Fund Services (Cayman) Limited – Client Bank Account

Account Number: 0201420308681001

Beneficiary Reference: TCA Global Credit Master Fund, LP A/C # 0201420310849001

2.           Amended and Restated Note.  This Note is being issued in connection with a First Amendment to Certain Agreements dated of even date herewith (the “First Amendment”).  Capitalized terms used herein and not otherwise defined in this Note shall have the same meaning ascribed to such terms as set forth in the First Amendment, unless the context otherwise requires.  This Note amends, restates, replaces and supersedes, in its entirety, the “Note” (as such term is defined in the First Amendment), as well as certain other obligations of the Company as more specifically set forth and outlined in the First Amendment (the “Original Obligations”).  It is the intention of the Borrower and Holder that while this Note amends, restates, replaces and supersedes the Original Obligations, in their entirety, it is not in payment or satisfaction of the Original Obligations, but rather is the substitute of one evidence of debt for another without any intent to extinguish the old.  Should there be any conflict between any of the terms of the Original Obligations, and the terms of this Note, the terms of this Note shall control.  This Note is not a novation.

3.           Secured Nature of Note.  This Note is being issued in connection with the First Amendment and is also secured by the Security Agreement, the UCC, and all other Transaction Documents. All of the agreements, conditions, covenants, provisions, representations, warranties and stipulations contained in any of the Transaction Documents which are to be kept and performed by the Borrower are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein, and the Borrower covenants and agrees to keep and perform them, or cause them to be kept or performed, strictly in accordance with their terms.

 

 

  

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4.           Defaults and Remedies.

(a) Events of Default.  The occurrence of any of the following events shall constitute an “Event of Default” hereunder: (i) the Borrower shall fail to pay any installment of interest, principal or other sums due under this Note or any other Transaction Documents when any such payment shall be due and payable; (ii) the Borrower or any of its subsidiaries makes an assignment for the benefit of creditors; (iii) any order or decree is rendered by a court which appoints or requires the appointment of a receiver, liquidator or trustee for the Borrower or any of its subsidiaries, and the order or decree is not vacated within thirty (30) days from the date of entry thereof; (iv) any order or decree is rendered by a court adjudicating the Borrower or any of its subsidiaries, insolvent, and the order or decree is not vacated within thirty (30) days from the date of entry thereof; (v) the Borrower or any of its subsidiaries files a petition in bankruptcy under the provisions of any bankruptcy law or any insolvency act; (vi) the Borrower or any of its subsidiaries admits, in writing, its inability to pay its debts as they become due; (vii) a proceeding or petition in bankruptcy is filed against the Borrower or any of its subsidiaries, and such proceeding or  petition is not dismissed within thirty (30) days from the date it is filed; (viii) the Borrower or any of its subsidiaries files a petition or answer seeking reorganization or arrangement under the bankruptcy laws or any law or statute of the United States or any other foreign country or state; or (ix) the Borrower shall fail to perform, comply with or abide by any of the material stipulations, agreements, conditions and/or covenants contained in this Note or any other Transaction Documents on the part of the Borrower to be performed, complied with, or abided by, and such failure is not cured within fifteen (15) days after written notice of such failure is delivered by Holder to the Borrower, provided, however, if the failure is not capable of being cured in such fifteen (15) day period, as reasonably determined by Holder using commercially reasonable discretion, then such cure period shall be extended to an aggregate total of thirty (30) days, so long as the Borrower commences such cure immediately upon receipt of the default notice from Holder, and diligently and continuously pursues such cure.

(b) Remedies.  Upon the occurrence of one or more Events of Default, the Holder, at its option and without further notice, demand or presentment for payment to the Borrower or others, may declare the then outstanding principal balance of this Note, together with all other sums due under the Note and the other Transaction Documents, immediately due and payable, together with all accrued and unpaid interest thereon and thereafter all such sums shall bear interest at the Default Rate, together with all reasonable attorneys’ fees, paralegals’ fees and costs and expenses incurred by the Holder in collecting or enforcing payment thereof (whether such fees, costs or expenses are incurred in negotiations, all trial and appellate levels, administrative proceedings, bankruptcy proceedings or otherwise), and all other sums due by the Borrower hereunder and under the Transaction Documents, all without any relief whatsoever from any valuation or appraisement laws and payment thereof may be enforced and recovered in whole or in part at any time by one or more of the remedies provided to the Holder at law, in equity, or under this Note or the other Transaction Documents.

5.           Lost or Stolen Note.  Upon notice to the Borrower of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of an indemnification undertaking by the Holder to the Borrower in a form reasonably acceptable to the Borrower and customary for similar circumstances in commercial lender/borrower circumstances, and, in the case of mutilation, upon surrender and cancellation of the Note, the Borrower shall execute and deliver a new Note of like tenor and date and in substantially the same form as this Note.

6.           Cancellation.  After all principal, accrued interest and all other sums at any time owed on this Note or any other Transaction Documents have been paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Borrower for cancellation and shall not be re-issued.

7.           Waivers.  Borrower hereby waives and releases all benefit that might accrue to the Borrower by virtue of any present or future laws exempting any property that may serve as security for this Note, or any other property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy, or sale under execution, exemption from civil process, or extension of time for payment, including, without limitation, any and all homestead exemption rights of the Borrower; and the Borrower agrees that any property that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued thereon, may be sold upon any such writ in whole or in part in any order or manner desired by Holder.  In addition, the Borrower and all others who are, or may become liable for the payment hereof: (i) severally waive presentment for payment, demand, notice of nonpayment or dishonor, protest and notice of protest of this Note or the other Transaction Documents, and all other notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note or the other Transaction Documents; (ii) expressly consent to all extensions of time, renewals or postponements of time of payment of this Note or the other Transaction Documents from time to time prior to or after the maturity of this Note without notice, consent or further consideration to any of the foregoing; (iii) expressly agree that the Holder shall not be required first to institute any suit, or to exhaust its remedies against the Borrower, or any other person or party to become liable hereunder or against any collateral that may secure this Note in order to enforce the payment of this Note; and (iv) expressly agree that, notwithstanding the occurrence of any of the foregoing (except the express written release by the Holder of any such person), the undersigned shall be and remain, directly and primarily liable for all sums due under this Note.

8.           Governing Law.  The Borrower irrevocably agrees that any dispute arising under, relating to, or in connection with, directly or indirectly, this Note or related to any matter which is the subject of or incidental to this Note (whether or not such claim is based upon breach of contract or tort) shall be subject to the exclusive jurisdiction and venue of the state and/or federal courts located in Broward County, Florida.  This provision  is intended to be a “mandatory” forum selection clause and governed by and interpreted consistent with Florida law.  Borrower hereby consents to the exclusive jurisdiction and venue of any state or federal court having its situs in said county, and each waives any objection based on forum non conveniens. Borrower hereby waives personal service of any and all process and consents that all such service of process may be made by certified mail, return receipt requested, directed to Borrower, as applicable, as set forth herein or in the manner provided by applicable statute, law, rule of court or otherwise.  Except for the foregoing mandatory forum selection clause, all terms and provisions hereof and the rights and obligations of the Borrower and Holder hereunder shall be governed, construed and interpreted in accordance with the laws of the State of Nevada, without reference to conflict of laws principles.

 

 

  

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9.           Indemnity and Expenses.  The Borrower agrees:

(a)           To indemnify and hold harmless the Holder and each of its partners, employees, agents and affiliates from and against any and all claims, damages, demands, losses, obligations, judgments, suits, actions, threats and liabilities (including, without limitation, attorneys’ fees and expenses) in any way arising out of or in connection with this Note; and

(b)           To pay and reimburse the Holder upon demand for all costs and expenses (including, without limitation, attorneys’ fees and expenses) that the Holder may incur in connection with (i) the exercise or enforcement of any rights or remedies (including, but not limited to, collection) granted hereunder or otherwise available to it (whether at law, in equity or otherwise), or (ii) the failure by the Borrower to perform or observe any of the provisions hereof.  The provisions of this Section 9 shall survive the execution and delivery of this Note, the repayment of any or all of the principal or interest owed pursuant hereto, and the termination of this Note.

10.           Waiver of Jury Trail.  THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED ON THIS NOTE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS NOTE OR ANY OTHER TRANSACTION DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF OR BETWEEN ANY PARTY HERETO, AND THE BORROWER AGREES AND CONSENTS TO THE GRANTING TO HOLDER OF RELIEF FROM ANY STAY ORDER WHICH MIGHT BE ENTERED BY ANY COURT AGAINST HOLDER AND TO ASSIST HOLDER IN OBTAINING SUCH RELIEF.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR HOLDER ACCEPTING THIS NOTE FROM THE BORROWER. THE BORROWER’S REASONABLE RELIANCE UPON SUCH INDUCEMENT IS HEREBY ACKNOWLEDGED.

11.           Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief.  The remedies of the Holder as provided herein, or the other Transaction Documents, shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of the Holder, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof.

12.           Specific Shall Not Limit General; Construction.  No specific provision contained in this Note shall limit or modify any more general provision contained herein.  This Note shall be deemed to be jointly drafted by the Borrower and the Holder and shall not be construed against any person as the drafter hereof.

13.           Failure or Indulgence Not Waiver.  Holder shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder or under any Transaction Documents, unless such waiver is in writing and signed by Holder, and then only to the extent specifically set forth in the writing.  A waiver on one event shall not be construed as continuing or as a bar to or waiver of any right or remedy to a subsequent event.

14.           Notice.  Notice shall be given to each party at the address indicated in the preamble hereto or at such other address as provided to the other party in writing, and such notice shall be deemed properly given in accordance with the notice provisions set forth in the Security Agreement.

15.           Usury Savings Clause.  Notwithstanding any provision in this Note or the other Transaction Documents, the total liability for payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions, or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction governing this Note or any other applicable law.  In the event the total liability of payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, shall, for any reason whatsoever, result in an effective rate of interest, which for any month or other interest payment period exceeds the limit imposed by the usury laws of the jurisdiction governing this Note, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice by, between, or to any party hereto, be applied to the reduction of the outstanding principal balance of this Note immediately upon receipt of such sums by the Holder hereof, with the same force and effect as though the Borrower had specifically designated such excess sums to be so applied to the reduction of such outstanding principal balance and the Holder hereof had agreed to accept such sums as a penalty-free payment of principal; provided, however, that the Holder of this Note may, at any time and from time to time, elect, by notice in writing to the Borrower, to waive, reduce, or limit the collection of any sums in excess of those lawfully collectible as interest rather than accept such sums as a prepayment of the outstanding principal balance.  It is the intention of the parties that the Borrower do not intend or expect to pay nor does the Holder intend or expect to charge or collect any interest under this Note greater than the highest non-usurious rate of interest which may be charged under applicable law.

16.           Binding Effect.  This Note shall be binding upon the Borrower and the successors and assigns of the Borrower and shall inure to the benefit of Holder and the successors and assigns of Holder.

 

  

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17.           Severability.  In the event any one or more of the provisions of this Note shall for any reason be held to be invalid, illegal, or unenforceable, in whole or in part, in any respect, or in the event that any one or more of the provisions of this Note operates or would prospectively operate to invalidate this Note, then and in any of those events, only such provision or provisions shall be deemed null and void and shall not affect any other provision of this Note.  The remaining provisions of this Note shall remain operative and in full force and effect and shall in no way be affected, prejudiced, or disturbed thereby.

18.           Participations.  Holder may from time to time sell or assign, in whole or in part, or grant participations in this Note and/or the obligations evidenced hereby, subject, however, to first obtaining the Company’s written consent, which consent shall not be unreasonably withheld, conditioned or delayed.  The holder of any such sale, assignment or participation, if the applicable agreement between Holder and such holder so provides, shall be: (a) entitled to all of the rights, obligations and benefits of Holder (to the extent of such holder’s interest or participation); and (b) deemed to hold and may exercise the rights of setoff or banker’s lien with respect to any and all obligations of such holder to the Borrower (to the extent of such holder’s interest or participation), in each case as fully as though the Borrower was directly indebted to such holder.

19.           Amendments.  The provisions of this Note may be changed only by a written agreement executed by the Borrower and Holder.

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

21.           Conversion of Note.  At any time and from time to time while this Note is outstanding, but only upon the occurrence of an Event of Default under any of the Transaction Documents, this Note may be, at the sole option of the Holder, convertible into shares of the common stock, par value $0.001 per share (the “Common Stock”) of the Company, in accordance with the terms and conditions set forth below.

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

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

 

 

  

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For purposes of this Note, the “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note.  The limitations contained in this Section shall apply to a successor holder of this Note.

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

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

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

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

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

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

 

 

  

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

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

(e)           Adjustments to Conversion Price.

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

(2)           Fundamental Transaction. If, at any time while this Note is outstanding: (i) the Company effects any merger or consolidation of the Company with or into another Person, (ii) the Company effects any sale of all or substantially all of its assets in one transaction or a series of related transactions, (iii) any tender offer or exchange offer (whether by the 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 (iv) 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 Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one (1) share of Common Stock (the “Alternate Consideration”).  For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the 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 Section and insuring that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

 

 

  

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

(4)           Notice to Allow Conversion by Holder.  If: (A) the Company shall declare a dividend (or any other distribution in whatever form) 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 of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the 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, or (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 this Note, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Company’s records, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating: (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.  The Holder is entitled to convert this Note during the 10-day period commencing on the date of such notice through the effective date of the event triggering such notice.

[Signature page follows]

 

 

  

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IN WITNESS WHEREOF, the Borrower has caused this Note to be executed as of the Effective Date set forth above.

BORROWER:

PURAMED BIOSCIENCE, INC.,

a Minnesota corporation

By:________________________________

Name:______________________________

Title:_______________________________

Date:_______________________________

[ signature page to Promissory Note ]

 

 

  

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EXHIBIT “A”

NOTICE OF CONVERSION

The undersigned hereby elects to convert principal and/or interest under the Amended and Restated Note (the “Note”) of PURAMED BIOSCIENCE, INC., a Minnesota corporation (the “Company”), into shares of common stock, par value $0.001 per share (the “Common Shares”), of the Company in accordance with the conditions of the Note, as of the date written below.  

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

Conversion calculations

Effective Date of Conversion:                                                                                     _______________________

Principal Amount and/or Interest to be Converted:                                                 _______________________

Number of Common Shares to be Issued:                                                                  _______________________

[HOLDER]

By:  _____________________________

Name:  __________________________

Title:  ____________________________

Address:  _________________________

__________________________________

__________________________________

 

 

10pmbs_ex101.htm

EXHIBIT 10.1

 

FIRST AMENDMENT TO CERTAIN AGREEMENTS

This FIRST AMENDMENT TO CERTAIN AGREEMENTS (the “Amendment”) is dated effective as of the 27th day of June, 2013, by and between PURAMED BIOSCIENCE, INC., a Minnesota corporation (the “Company”), and TCA GLOBAL CREDIT MASTER FUND, LP, a Cayman Islands limited partnership (“TCA”).

RECITALS

WHEREAS, TCA made a loan (the “Loan”) to the Company in the amount of Three Hundred Fifty Thousand and No/100 Dollars ($350,000.00), which Loan is evidenced by that certain convertible promissory note dated as of June 29, 2012, but made effective as of July 10, 2012, made and executed by the Company in favor of TCA in the original principal amount of Three Hundred Fifty Thousand and No/100 Dollars ($350,000.00) (the “Note”); and

WHEREAS, the Company and TCA entered into and executed that certain Committed Equity Facility Agreement dated as of June 29, 2012 (the “CEF”), as well as that certain Registration Rights Agreement dated as of June 29, 2012 (the “Registration Rights Agreement”)(the CEF and the Registration Rights Agreement are sometimes hereinafter referred to as the “CEF Documents”), and pursuant to the CEF Documents, the Company owes to TCA certain funds and other obligations; and

WHEREAS, the Company’s obligations under the Note and the CEF Documents are secured by the following: (i) a Security Agreement dated as of June 29, 2012 (the “Security Agreement”) from the Company in favor of TCA, pursuant to which TCA has a continuing, first-priority, perfected security interest encumbering all of the “Collateral” (as defined in the Security Agreement) of the Company; and (ii) a UCC-1 Financing Statement listing the Company, as debtor, and TCA, as secured party, filed with the State of Minnesota under filing No. 201228914642 (the “UCC”) (the Note, the Security Agreement, the UCC, the CEF Documents, the Amended and Restated Note, this Amendment, and all other documents or instruments previously, now, or hereafter executed in connection with any of the foregoing, and all amendments, extensions, renewals, replacements, and future advances thereof, hereinafter referred to as the “Transaction Documents”); and

WHEREAS, the Company is currently in default of its obligations under the Transaction Documents (the “Existing Default”); and

WHEREAS, the parties desire to provide for the repayment of certain obligations due and owing by the Company to TCA as of the date hereof under the Transaction Documents, by aggregating all of such obligations into a newly issued promissory note in the form attached hereto as Exhibit “A” (the “Amended and Restated Note”), which Amended and Restated Note shall replace, amend and restate the Note in its entirety, and which Amended and Restated Note shall be for a principal amount equal to the aggregate amount of all such obligations, all as more specifically set forth in this Amendment;

NOW, THEREFORE, in consideration of the premises and the mutual covenants of the parties hereinafter expressed and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, each intending to be legally bound, agree as follows:

1. Recitals.  The recitations set forth in the preamble of this Amendment are true and correct and incorporated herein by this reference.

2. Conflicts.  In the event of any conflict or ambiguity by and between the terms and provisions of this Amendment and the terms and provisions of any of the Transaction Documents, the terms and provisions of this Amendment shall control, but only to the extent of any such conflict or ambiguity.

3. Outstanding Balance.  The Company acknowledges that the aggregate amount of certain obligations currently due and owing under the Transaction Documents, as of June 15, 2013, is $368,756.67 (the “Outstanding Balance”).  The Outstanding Balance is comprised of: (i) principal and accrued and unpaid interest under the Note as of June 15, 2013.  The Outstanding Balance shall be deemed and is agreed upon as the outstanding principal balance of the Amended and Restated Note, and the Company acknowledges and agrees that the Outstanding Balance shall accrue interest and otherwise shall be payable in accordance with the terms of the Amended and Restated Note.

 

 

  

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4. Representations and Warranties.  The Company hereby confirms and affirms that all representations and warranties made by the Company under any of the Transaction Documents (specifically including under Article IV of the CEF) are true, correct and complete as of the date of the Transaction Documents, and hereby confirms and affirms that, except for the Existing Default, all such representations and warranties remain true, correct and complete as of the date of this Amendment, and by this reference, the Company does hereby re-make each and every one of such representations and warranties herein as of the date of this Amendment, as if each and every one of such representations and warranties was set forth in its entirety in this Amendment, as same may be qualified by revised disclosure schedules attached to this Amendment, if any (if no revised disclosures are attached to this Amendment, then no such revised disclosure schedules shall be deemed to exist or to qualify any of the representations and warranties hereby re-made).

5. Affirmation.  The Company hereby affirms all of its obligations to TCA under all of the Transaction Documents and agrees and affirms as follows: (i) that as of the date hereof, the Company has performed, satisfied and complied in all material respects with all the covenants, agreements and conditions under each of the Transaction Documents to be performed, satisfied or complied with by the Company, except as may relate to the Existing Default; (ii) that the Company shall continue to perform each and every covenant, agreement and condition set forth in each of the Transaction Documents and this Amendment, and continue to be bound by each and all of the terms and provisions thereof and hereof; (iii) that as of the date hereof, no default or Event of Default has occurred or is continuing under any of the Transaction Documents, and no event has occurred that, with the passage of time, the giving of notice, or both, would constitute a default or an Event of Default under any of the Transaction Documents, except as may relate to the Existing Default; and (iv) that as of the date hereof, no event, fact, or other set of circumstances has occurred which could reasonably be expected to have a material adverse effect on the Company’s business, operations or prospects, the prospect for TCA to fully and punctually realize the full benefits conferred upon TCA by the Transaction Documents, or the prospect of repayment of all obligations of the Company due and owing to TCA, except as may relate to the Existing Default.

6. Ratification.  The Company hereby acknowledges, represents, warrants and confirms to TCA that: (i) each of the Transaction Documents executed by the Company are valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms; (ii) all obligations of the Company under all the Transaction Documents are, shall be and continue to be secured by and under the Security Agreement, the UCC, and all other Transaction Documents; (iii) there are no defenses, setoffs, counterclaims, cross-actions or equities in favor of the Company to or against the enforcement of any of the Transaction Documents, and to the extent the Company has any defenses, setoffs, counterclaims, cross-actions or equities against TCA and/or against the enforceability of any of the Transaction Documents, the Company acknowledges and agrees that same are hereby fully and unconditionally waived by the Company; and (iv) no oral representations, statements, or inducements have been made by TCA or any agents or representatives of TCA with respect to any of the Transaction Documents.

7. Additional Confirmations.  The Company hereby represents, warrants and covenants that TCA’s security interests in all of the “Collateral” (as such term is defined in the Security Agreement) are and remain valid, perfected, first-priority security interests in such Collateral, and the Company has not granted any other liens, security interests, or other encumbrances of any nature or kind in favor of any other “Person” (as defined in the Note) affecting any of such Collateral.

8. TCA’s Conduct.  As of the date of this Amendment, the Company hereby acknowledges and admits that: (i) TCA has acted in good faith and has fulfilled and fully performed all of its obligations under or in connection with any of the Transaction Documents; and (ii) that there are no other promises, obligations, understandings or agreements with respect to the Transaction Documents, except as expressly set forth herein and the other Transaction Documents.

9. Redefined Terms.  The term “SEC Documents,” as defined in the CEF, shall be deemed to refer to and include all filings made by the Company with the SEC between the date of the CEF and the date of this Amendment.

 

 

  

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10. Representations and Warranties of the Company.  The Company hereby makes the following representations and warranties to TCA:

(a) Authority and Approval of Agreement; Binding Effect.  The execution and delivery by the Company of this Amendment, and the documents executed and delivered in connection herewith, and the performance by Company of all of its obligations hereunder and thereunder, have been duly and validly authorized and approved by the Company and its boards of directors pursuant to all applicable laws, and other than the corporate action or resolutions delivered by the Company in connection with this Amendment, no other corporate action or consent on the part of the Company, its board of directors, stockholders or any other Person is necessary or required by the Company to execute this Amendment, and the documents executed and delivered in connection herewith and therewith, to consummate the transactions contemplated herein and therein, or perform all of the Company’s obligations hereunder and thereunder.  This Amendment, and each of the documents executed and delivered in connection herewith and therewith, have been duly and validly executed by the Company (and the officer executing this Amendment and all such other documents is duly authorized to act and execute same on behalf of the Company) and constitute the valid and legally binding agreements of the Company, enforceable against the Company in accordance with their respective terms.

11. Indemnification.  The Company hereby indemnifies and holds the “Investor Indemnitees” (as defined in the CEF), and each of them, harmless from and against any and all “Indemnified Liabilities” (as defined in the CEF) payable by any of the Investor Indemnitees to any Person, including reasonable attorneys’ and paralegals’ fees and expenses, court costs, settlement amounts, costs of investigation and interest thereon from the time such amounts are due at the highest non-usurious rate of interest permitted by applicable law, through all negotiations, mediations, arbitrations, trial and appellate levels, as a result of, or arising out of, or relating to any matters relating to this Amendment or any other Transaction Documents.

12. Release.  As a material inducement for TCA to enter into this Amendment, the Company does hereby release, waive, discharge, covenants not to sue, acquits, satisfies and forever discharges each of the Investor Indemnitees and their respective successors and assigns, from any and all Indemnified Liabilities or any “Claims” (as defined in the CEF) whatsoever in law or in equity which the Company ever had, now has, or which any successor or assign of the Company hereafter can, shall or may have against any of the Investor Indemnitees, for, upon or by reason of any matter, cause or thing whatsoever related to the this Amendment or any other Transaction Documents, through the date hereof.  The Company further expressly agrees that the foregoing release and waiver agreement is intended to be as broad and inclusive as permitted by the laws of the jurisdiction governing the Transaction Documents. In addition to, and without limiting the generality of foregoing, the Company further covenants with and warrants unto TCA and each of the other Investor Indemnitees, that there exist no claims, counterclaims, defenses, objections, offsets or other Claims against TCA or any other Investor Indemnitees, or the obligation of the Company to comply with the terms and provisions of the Transaction Documents.

13. Effect on Agreement and Transaction Documents.  Except as expressly amended by this Amendment, all of the terms and provisions of the Transaction Documents shall remain and continue in full force and effect after the execution of this Amendment, are hereby ratified and confirmed, and incorporated herein by this reference.

14. Waiver of Existing Default.  Upon execution of this Amendment and all other documents required or requested by TCA in connection herewith by the Company, and payment by the Company of all fees required to be paid hereunder and thereunder, the Existing Default shall be deemed waived by TCA, provided, however, this waiver shall only apply to the Existing Default, and this Amendment shall not be deemed or construed in any manner as a waiver by TCA of any future Claims, defaults, “Events of Default,” (as such term may be used or defined in any of the Transaction Documents), breaches or misrepresentations by the Company under any Transaction Documents, or any of TCA’s rights or remedies in connection therewith, which may occur after the date hereof.

15. Execution.  This Amendment may be executed in one or more counterparts, all of which taken together shall be deemed and considered one and the same Amendment, and same shall become effective when counterparts have been signed by each party and each party has delivered its signed counterpart to the other party.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format file or other similar format file, such signature shall be deemed an original for all purposes and shall create a valid and binding obligation of the party executing same with the same force and effect as if such facsimile or “.pdf” signature page was an original thereof.

16. Intentionally Left Blank.

 

 

  

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17. Amendments to the CEF.  The Company and TCA hereby agree that the CEF is hereby amended as follows (any capitalized terms used in this Section 17 shall have the meanings ascribed to such terms as set forth in the CEF):

(a) Additional Definitions.  The following defined terms under the CEF are hereby modified, added, or deleted, as applicable, to Article I of the CEF:

(i) “Advance Notice Date” shall mean each date the Company delivers (in accordance with Section 2.1 of the Agreement) to the Investor an Advance Notice requiring the Investor to advance funds to the Company, subject to the terms of this Agreement.

(ii) “Clearing Date” shall mean the date on which the Estimated Advance Shares have been deposited into the Investor’s brokerage account and the Investor’s broker has confirmed with the Investor that such Estimated Advance Shares have cleared into Investor’s brokerage account and the Investor may execute trades of such Estimated Advance Shares.

(iii) “Market Price” shall mean, with respect to each Advance Notice, the VWAP of the Common Stock on the applicable Advance Notice Date.

(iv) “Purchase Price” shall mean, with respect to each Advance Notice, ninety-five percent (95%) of the net aggregate sales proceeds received by Investor from the sale of Estimated Advance Shares during an applicable Selling Period, less any fees, including the Advance Fee, which may be due and payable to Investor in connection with each Advance Notice.

(v) “Selling Period” shall mean the five (5) consecutive Trading Days immediately following the Clearing Date associated with the applicable Advance Notice.

(vi) “Shares” shall mean the shares of Common Stock to be issued from time to time hereunder pursuant to Advances, and shall include any Estimated Advance Shares issued and delivered under this Agreement from time to time.

(vii) The term “Advance Settlement Date” is hereby deleted in its entirety.  If such term is used in any other portion of the Agreement, such term is hereby replaced with the term “Closing Date” as defined below.

(viii) The term “Pricing Period” is hereby deleted in its entirety.

(b) Amendment to Mechanics for Advances.  Article II of the Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

“2.1           Advances; Mechanics. Subject to the terms and conditions of this Agreement (including, without limitation, the conditions of Article VII hereof), the Company, at its sole and exclusive option, may issue and sell to the Investor, and the Investor shall purchase from the Company, shares of Common Stock on the following terms:

(a)           Advance Notice.  At any time during the Commitment Period, the Company may require the Investor to purchase shares of Common Stock by delivering an Advance Notice to the Investor, subject to the conditions set forth in Article VII; provided, however, that: (i) the amount for each Advance as designated by the Company in the applicable Advance Notice shall not be more than the Maximum Advance Amount; (ii) the aggregate amount of the Advances pursuant to this Agreement shall not exceed the Commitment Amount; (iii) in no event shall the number of Shares issuable to the Investor pursuant to an Advance cause the aggregate number of Shares beneficially owned (as calculated pursuant to Section 13(d) of the Exchange Act) by the Investor and its Affiliates to exceed 4.99% of the then outstanding Common Stock (the “Ownership Limitation”); (iv) if the Common Stock is listed or quoted on The Nasdaq Stock Market or any other U.S. national securities exchange during the Commitment Period, in no event shall the number of shares of Common Stock issuable to the Investor pursuant to an Advance Notice cause the aggregate number of shares of Common Stock that would be issued pursuant to this Agreement, together with all shares of Common Stock issued pursuant to any transactions that may be aggregated with the transactions contemplated by this Agreement under applicable rules of The Nasdaq Stock Market or any other Principal Market on which the Common Stock may be listed or quoted, to exceed the Exchange Cap; and (v) in no event shall the aggregate offering price or number of Shares, as the case may be, exceed the aggregate offering price or number of Shares, as the case may be, available for issuance under the Registration Statement (the “Registration Limitation”).  In connection with each Advance Notice delivered by the Company, if any portion of the applicable Advance, or the Shares issuable to Investor pursuant to such Advance, would result in any of the limitations set forth in this Section 2.1(a) to be exceeded, such portion of such Advance shall be void ab initio and automatically be deemed to be withdrawn by the Company with no further action required by the Company or the Investor, and the amount of proceeds ultimately due to the Company under such Advance shall be reduced accordingly.  Upon the written or oral request of the Investor, the Company shall confirm orally or in writing to the Investor, within two (2) Trading Days of such request, the number of shares of Common Stock then issued and outstanding, or any other information the Investor may request, so that the Investor may properly analyze and make the determinations required to insure that none of the limitations set forth in this Section 2.1(a) shall ever be exceeded.

 

  

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(b)           Date of Delivery of Advance Notice.  Advance Notices shall be delivered in accordance with the instructions set forth on the bottom of Exhibit “A”.  An Advance Notice shall be deemed delivered on: (i) the Trading Day it is received by the Investor, if such Advance Notice is received prior to 5:00 pm, Eastern Time; or (ii) the immediately succeeding Trading Day if such Advance Notice is received by Investor after 5:00 pm, Eastern Time, on a Trading Day or at any time on a day which is not a Trading Day.  No Advance Notice may be deemed delivered on a day that is not a Trading Day, or if positive receipt of such Advance Notice is not acknowledged by the Investor.  Unless the parties agree in writing otherwise, there shall be a minimum of five (5) Trading Days between a Closing Date and a subsequent Advance Notice Date.  Delivery of an Advance Notice by the Company shall be deemed a representation and confirmation from the Company for the benefit of Investor that: (x) the Company has obtained all permits and qualifications, if any, required for the issuance and transfer of the Shares applicable to such Advance, or shall have the availability of exemptions therefrom; (y) the sale and issuance of such Shares shall be legally permitted by all laws and regulations to which the Company is subject; and (z) all conditions to an Advance under Article VII have been fully satisfied in all material respects as of each Condition Satisfaction Date.

(c)           Delivery of Estimated Advance Shares. On an Advance Notice Date, the Company shall deliver to the Investor’s brokerage account (pursuant to instructions provided by the Investor) a number of Shares equal to: (x) the dollar amount of the Advance indicated in the applicable Advance Notice (the numerator); divided by (y) the Market Price (the denominator); multiplied by (z) two hundred percent (200%) (the “Estimated Advance Shares”). In lieu of delivering physical certificates representing the Estimated Advance Shares issuable in accordance with this Section 2.1(c), and provided that the Company’s transfer agent is then participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Investor, the Company shall cause the Company’s transfer agent to electronically transmit the applicable Estimated Advance Shares by crediting the account of the Investor’s prime broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system, and provide proof satisfactory to the Investor of such delivery.  No fractional shares shall be issued, and any fractional amounts shall be rounded to the next highest whole number of Shares.  Any certificates evidencing Shares delivered pursuant hereto shall be free of restrictive legends.  The Company acknowledges that a Closing may be delayed if Estimated Advance Shares are sent via physical delivery in certificate form.  The Company understands that if for any reason shares of its Common Stock are not able to be delivered electronically, then significant transaction delays may occur, impacting the ability of transfer agents, brokers, counterparties and intermediaries to deliver and clear shares promptly. This may ultimately delay any applicable Advance Notice Date, Clearing Date, and Closing Date related to an Advance Notice. Furthermore, the Company understands that additional costs may be associated with the delivery of shares of its Common Stock when issued and/or delivered in certificate form and acknowledges that any related reasonable fees will be borne by the Company in full. Upon request, the Investor shall deliver to the Company such evidence of any of said reasonable fees as may be requested by the Company.  The Company shall pay any reasonable payments incurred under this Section in immediately available funds upon demand.  On the Trading Day immediately following the Clearing Date applicable to the then applicable Advance Notice, the Investor shall acknowledge consideration by allocating funds in the Investor’s brokerage account in an amount equal to the par value of the Estimated Advance Shares (“Par Value Payment”), which Par Value Payment shall be held in the Investor’s brokerage account for the duration of the Selling Period and adjusted at the Closing as hereinafter set forth. Under no circumstances shall the Par Value Payment exceed the amount of the Advance specified in the Advance Notice and no Advance Notice shall be delivered to the Investor if the Company’s Common Stock is trading at or below its par value. The Company acknowledges and agrees that, notwithstanding anything contained in this Agreement to the contrary, the Investor may sell Shares of the Company’s Common Stock relating to a particular Advance Notice, including, without limitation, all of the Estimated Advance Shares in the Investor’s brokerage account on the Clearing Date with respect to such Advance Notice, at any time after the Advance Notice is received by the Investor. If the amount of Estimated Advance Shares due to be delivered to the Investor pursuant to a particular Advance Notice would result in the Investor exceeding the Ownership Limitation, then the amount of the Advance requested in the Advance Notice shall be automatically reduced and the Estimated Advance Shares shall be automatically reduced to an amount that would allow for delivery by the Company to Investor of Estimated Advance Shares for the full two hundred percent (200%) contemplated hereby, without exceeding the Ownership Limitation (such new Share amount, if applicable, shall replace the amount of “Estimated Advance Shares” determined above).

(d)           Exchange Cap.  If the Common Stock is listed or quoted on The Nasdaq Stock Market or any other U.S. national securities exchange during the Commitment Period, the Company shall not issue or sell any shares of Common Stock pursuant to this Agreement, and the Investor shall not purchase or acquire any shares of Common Stock pursuant to this Agreement, to the extent that after giving effect thereto, the aggregate number of all shares of Common Stock that would be issued pursuant to this Agreement, together with all shares of Common Stock issued pursuant to any transactions that may be aggregated with the transactions contemplated by this Agreement under applicable rules of The Nasdaq Stock Market or any other Principal Market on which the Common Stock may be listed or quoted, would exceed the maximum number of shares of Common Stock that the Company may issue pursuant to this Agreement and the transactions contemplated hereby without: (i) breaching the Company’s obligations under the applicable rules of The Nasdaq Stock Market or any other Principal Market on which the Common Stock may be listed or quoted; or (ii) obtaining stockholder approval under the applicable rules of The Nasdaq Stock Market or any other Principal Market on which the Common Stock may be listed or quoted (the “Exchange Cap”).  In such a circumstance, any portion of the applicable Advance, or the Shares issuable to Investor pursuant to such Advance, that would exceed the Exchange Cap to be exceeded shall be void ab initio and automatically be deemed to be withdrawn by the Company with no further action required by the Company or the Investor, unless and until the Company elects to solicit stockholder approval of the transactions contemplated by this Agreement and the stockholders of the Company have in fact approved the transactions contemplated by this Agreement in accordance with the applicable rules and regulations of The Nasdaq Stock Market, any other Principal Market on which the Common Stock may be listed or quoted, and the Certificate of Incorporation and Bylaws of the Company.

 

 

  

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2.2           Closings.  The Closing of a request for an Advance shall occur the “Closing Date” (as hereinafter defined).  Each Closing shall take place on a Closing Date in accordance with the procedures set forth below.  In connection with each Closing, the Company and the Investor shall fulfill each of its obligations as set forth below:

(a)           Settlement Document and Delivery of Share Proceeds.  Subject to the terms and conditions of this Agreement, the Investor shall promptly notify the Company in writing (which notification may be by e-mail) of the occurrence of the Clearing Date associated with an Advance Notice. The Selling Period with respect to such Advance Notice shall begin on the first (1st) Trading Day immediately following the applicable Clearing Date. During the Selling Period, the Investor shall use its good faith efforts to sell Estimated Advance Shares in an amount that would generate net sales proceeds of up to the Advance amount requested in the applicable Advance Notice, subject to then existing market circumstances and conditions and volume limitations resulting therefrom.  The Company acknowledges and agrees that the Investor shall have no liability of any nature or kind in connection with the number of Estimated Advance Shares sold or which Investor elects to sell or may be able to sell during the Selling Period.  In no event shall Investor sell Estimated Advance Shares during an applicable Selling Period which generate net sales proceeds in excess of the Advance amount requested in the applicable Advance Notice.  At the end of the Selling Period for any applicable Advance Notice and upon the completion of the settlement of all trades that occurred during the applicable Selling Period, the Investor shall deliver to the Company a written document (each a “Settlement Document”) setting forth: (i) the number of Estimated Advance Shares originally delivered to the Investor or the Investor’s brokerage account under the applicable Advance Notice; (ii) the aggregate number of such Estimated Advance Shares sold during the Selling Period (as supported by a reconciliation and/or brokerage account statement) applicable to such Advance Notice; and (iii) the net sales proceeds received by Investor from the sale of such Estimated Advance Shares sold during the Selling Period applicable to such Advance Notice.  The Settlement Document shall be in the form attached hereto as Exhibit “B”.  Within one (1) Trading Day after delivery of the Settlement Document for an applicable Advance Notice (each, a “Closing Date”), the Investor shall transfer and deliver to the Company, by wire transfer of immediately available funds to an account designated in writing by the Company: (y) the Purchase Price for the applicable Advance Notice; less (z) any Par Value Payment previously made to the Company.  In the event that the Investor is no longer able, due to time constraints beyond its control, to perform a wire on any particular Trading Day, then the wire will be promptly executed on the next following Trading Day.  To the extent the Purchase Price for any applicable Advance Notice is less than the amount of the Advance requested by the Company for such applicable Advance Notice, such applicable Advance Notice shall be automatically deemed to be modified and revised as of each Closing Date to an Advance amount equal to the Purchase Price.

(b)           Excess Estimated Advance Shares.  If the number of Estimated Advance Shares initially delivered to the Investor for an applicable Advance Notice pursuant to Section 2.1(c) is greater than the aggregate number of Shares sold by the Investor for such applicable Advance Notice, then the Investor shall deliver to the Company any excess Estimated Advance Shares associated with such requested Advance, unless the parties mutually agree for the Investor to retain such excess Estimated Advance Shares to apply to the next requested Advance.  Any excess Estimated Advance Shares retained by the Investor pursuant to the immediately preceding sentence shall only be applied by Investor to the next requested Advance, if any, and shall not be sold by the Investor for any other purpose.

(c)           Additional Documents.  On or prior to each Closing Date, each of the Company and the Investor shall deliver to the other all documents, instruments and writings required to be delivered by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein.

(d)           Outstanding Fees or Payments.  To the extent the Company has not paid any fees, expenses, or other amounts due to the Investor in accordance with this Agreement, then the amount of such fees, expenses, or other amounts due may be withheld by the Investor from the Purchase Price applicable to any Advance Notice and used to pay for any such fees, expenses or other amounts due. If in the event that on a Closing Date the amount of the requested Advance has been reduced to a dollar amount that does not exceed the initial Par Value Payment made by the Investor, then that difference, up to the full Par Value Payment, will be required to be returned and paid by the Company to the Investor on the next following Trading Day via wire transfer, if applicable.  If there are any fees, expenses, costs, or other amounts (including any portion of the Par Value Payment per the immediately preceding sentence) which are due by the Company to Investor in accordance with this Agreement, no subsequent Advance Notice(s) may be deemed delivered and the Investor has no obligation to accept subsequent Advance Notice(s) if any such fees, expenses, costs, or other amounts (including any portion of the Par Value Payment per the immediately preceding sentence) are then outstanding and due to the Investor in accordance with this Agreement.  Notwithstanding anything contained herein to the contrary, without the express written consent of the Company (which consent may have been provided by the Company prior to the date hereof), the Investor shall not withhold from the Purchase Price applicable to any Advance Notice any fees, expenses, interest, principal or any other amount whatsoever which may be otherwise owed to the Investor by the Company pursuant to any other agreement.  The Investor hereby acknowledges and agrees that the existence of any outstanding obligations owed under any other agreement are entirely separate and distinct from the obligations owed under the Agreement and the Registration Rights Agreement.”

18. Fees and Expenses.

(a) Facility Fee Shares under CEF.  The Company acknowledges that under the terms of the CEF Documents, the Company issued certain “Facility Fee Shares” (as defined in the CEF) to TCA, which Facility Fee Shares are intended to be monetized into $115,000.00 (such sum referred to in the CEF as the “Share Value”.  In that regard, the parties hereby agree that in the event TCA has not realized net proceeds from the sale of Facility Fee Shares equal to at least the Share Value by the “Maturity Date” (as defined in the Amended and Restated Note), then the Company shall, without any further notice or demand from TCA, redeem all Facility Fee Shares then in TCA’s possession for immediately available U.S. dollars equal to the Share Value, less any net proceeds received by TCA from any previous sales of Facility Fee Shares, if any, payable by wire transfer (to an account designated by TCA) on or prior to such Maturity Date.  The Company recognizes and agrees that the terms and provisions of Sections 18(c), 18(e) and 19 below shall be applicable to the Facility Fee Shares with the same force and effect as such provisions are applicable to the Amendment Fee Shares or any other shares of the Company’s Common Stock received by the TCA from time to time.

 

 

  

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(b) Fees for Amendment.  In consideration of TCA’s agreement to enter into this Amendment, the Company shall pay to TCA a fee equal to $75,000.00 (the “Amendment Fee”).  The Amendment Fee shall be initially paid by the issuance to TCA of restricted shares of the Company’s Common Stock (the “Amendment Fee Shares”) in accordance with the terms and provisions of this Section.  For purposes of determining the number of shares issuable to TCA under this Section 18(b), the Company’s Common Stock shall be valued at the average of the volume weighted average price for the Common Stock for the five (5) Business Days immediately prior to the date the Company executes this Amendment (the “Valuation Date”), as reported by Bloomberg or such other reporting service acceptable to TCA (the “VWAP”).  TCA shall confirm to the Company in writing, the VWAP for the Common Stock as of the Valuation Date, and the Company shall issue to TCA, simultaneously with the execution of this Amendment (the “Effective Date”), a number of Amendment Fee Shares equal to two hundred percent (200%) of the Amendment Fee, based on such VWAP as of the Valuation Date.  On the Effective Date, the Company shall instruct its transfer agent (the “Transfer Agent”) to issue certificates representing the Amendment Fee Shares issuable to TCA or its nominee hereunder, and shall cause its Transfer Agent to deliver such certificates to TCA or its nominee within seven (7) Business Days from the Effective Date.  In the event such certificates representing the Amendment Fee Shares issuable hereunder shall not be delivered to the TCA within said seven (7) Business Day period, same shall be an immediate default under this Amendment and the other Transaction Documents.  The Amendment Fee Shares, when issued, shall be deemed to be validly issued, fully paid, and non-assessable shares of the Company’s Common Stock. The Amendment Fee Shares shall be deemed fully earned as of the Effective Date.

(c) Adjustments.  It is the intention of the Company and TCA that TCA shall be able to sell the Amendment Fee Shares and generate net proceeds (net of all brokerage commissions and other fees or charges payable by TCA in connection with the sale thereof) from such sale equal to the Amendment Fee.  In this regard, TCA shall have the right to sell the Amendment Fee Shares at any time in accordance with applicable securities laws.  Upon: (A) the sale of all Amendment Fee Shares; (B) TCA receiving net proceeds from the sale of Amendment Fee Shares equal to the Amendment Fee; or (C) at any time TCA may elect, TCA shall deliver to the Company a reconciliation statement showing the net proceeds actually received by TCA from the sale of the Amendment Fee Shares (the “Sale Reconciliation”).  If, as of the date of the delivery by TCA of the Sale Reconciliation, TCA has not realized and received net proceeds from the sale of the Amendment Fee Shares equal to at least the Amendment Fee, as shown on the Sale Reconciliation, then the Company shall immediately take all required action necessary or required in order to cause the issuance of additional shares of Common Stock to TCA in an amount sufficient such that, when sold and the net proceeds thereof are added to the net proceeds from the sale of any of the previously issued and sold Amendment Fee Shares, TCA shall have received total net funds equal to the Amendment Fee.  If additional shares of Common Stock are issued pursuant to the immediately preceding sentence, and after the sale of such additional issued shares of Common Stock, TCA still has not received net proceeds equal to at least the Amendment Fee, then the Company shall again be required to immediately take all required action necessary or required in order to cause the issuance of additional shares of Common Stock to TCA as contemplated above, and such additional issuances shall continue until TCA has received net proceeds from the sale of such Common Stock equal to the Amendment Fee.  In the event TCA receives net proceeds from the sale of Amendment Fee Shares equal to the Amendment Fee before TCA has sold all Amendment Fee Shares issued to TCA hereunder, then TCA shall return all such remaining Amendment Fee Shares to the Company.  In the event additional Common Stock is required to be issued as outlined above, the Company shall instruct its Transfer Agent to issue certificates representing such additional shares of Common Stock to TCA or its nominee immediately subsequent to the TCA’s notification to the Company that additional shares of Common Stock are issuable hereunder, and the Company shall in any event cause its Transfer Agent to deliver such certificates to TCA or its nominee within seven (7) Business Days following the date TCA notifies the Company that additional shares of Common Stock are to be issued hereunder.  In the event such certificates representing such additional shares of Common Stock issuable hereunder shall not be delivered to TCA within said seven (7) Business Day period, same shall be an immediate default under this Amendment and the Transaction Documents.  Notwithstanding anything contained in this Section 18(b) to the contrary, at any time on or prior to the Maturity Date of the Amended and Restated Note, the Company shall have the right, at any time during such period, to redeem any Amendment Fee Shares then in TCA’s possession for an amount payable by the Company to TCA in immediately available U.S. dollars equal to the Amendment Fee, less any net proceeds received by TCA from any previous sales of Amendment Fee Shares.  Upon TCA’s receipt of such cash payment in accordance with the immediately preceding sentence, TCA shall return any then remaining Amendment Fee Shares in its possession back to the Company.

(d) Mandatory Redemption.  Notwithstanding anything contained in this Amendment to the contrary, in the event TCA has not realized net proceeds from the sale of Amendment Fee Shares equal to at least the Amendment Fee by a date that is twelve (12) months from the Effective Date, then at any time thereafter, TCA shall have the right, upon written notice to the Company, to require that the Company redeem all Amendment Fee Shares then in TCA’s possession for immediately available U.S. dollars equal to the Amendment Fee, less any net proceeds received by TCA from any previous sales of Amendment Fee Shares, if any.  In the event such redemption notice is given by TCA, the Company shall redeem the then remaining Amendment Fee Shares in TCA’s possession for an amount of immediately available U.S. dollars equal to the Amendment Fee, less any net proceeds received by TCA from any previous sales of Amendment Fee Shares, if any, payable by wire transfer to an account designated by TCA within five (5) Business Days from the date TCA delivers such redemption notice to the Company.

(e) Surviving Obligations. The Company agrees and acknowledges that notwithstanding the payment in full of all of the Company’s obligations under the Amended and Restated Note, the Company’s obligations and liability under the Transaction Documents, and TCA’s liens and security interests on all Collateral (as such term is used and defined in the Security Agreement) or under any of the other Transaction Documents, shall survive, shall remain valid and effective and shall not be released or terminated, until the Company has fully complied with all of its obligations with respect to payment of the Amendment Fee, and TCA has generated and received net proceeds from the sale of the Amendment Fee Shares (or otherwise received equivalent payment thereof in cash as permitted hereunder) equal to the Amendment Fee.

(f) Document Review and Legal Fees.  Simultaneously with the execution by the Company of this Amendment, the Company shall pay to TCA or its counsel a legal fee equal to Four Thousand Five Hundred and No/100 Dollars ($4,500.00) for the preparation, negotiation and execution of this Amendment and all other documents in connection herewith, together with costs of $550.00 associated with this transaction, which fees and costs shall be due and payable upon execution of this Amendment by wire transfer to an account designated by TCA or its counsel.

 

 

  

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19. Matters with Respect to Common Stock.

(a) Issuance of Conversion Shares.  The parties hereto acknowledge that pursuant to the terms of the Amendment and Restated Note, TCA has the right, at its discretion, to convert amounts due under the Amended and Restated Note into Common Stock in accordance with the terms of the Amended and Restated Note.  In the event, for any reason, the Company fails to issue, or cause the Transfer Agent to issue, any portion of the Common Stock issuable upon conversion of the Amended and Restated Note (the “Conversion Shares”) to TCA in connection with the exercise by TCA of any of its conversion rights under the Amended and Restated Note, then the parties hereto acknowledge that TCA shall irrevocably be entitled to deliver to the Transfer Agent, on behalf of itself and the Company, a “Conversion Notice” (as defined in the Amended and Restated Note) requesting the issuance of the Conversion Shares then issuable in accordance with the terms of the Amended and Restated Note, and the Transfer Agent, provided they are the acting transfer agent for the Company at the time, shall, and the Company hereby irrevocably authorizes and directs the Transfer Agent to, without any further confirmation or instructions from the Company, issue the Conversion Shares applicable to the Conversion Notice then being exercised, and surrender to a nationally recognized overnight courier for delivery to TCA at the address specified in the Conversion Notice, a certificate of the Common Stock of the Company, registered in the name of TCA or its nominee, for the number of Conversion Shares to which TCA shall be then entitled under the Amended and Restated Note, as set forth in the Conversion Notice.

(b) Issuance of Additional Common Stock Under Section 18.  The parties hereto acknowledge that pursuant to Sections 18(a) and 18(b) above, the Company has agreed to issue, simultaneously with the execution of this Amendment and possibly in the future, certain shares of the Company’s Common Stock in accordance with the terms of Section 18(a) and 18(b) above.  In the event, for any reason, the Company fails to issue, or cause its Transfer Agent to issue, any portion of the Common Stock issuable to TCA under Sections 18(a) and 18(b), either now or in the future, then the parties hereto acknowledge that TCA shall irrevocably be entitled to deliver to the Transfer Agent, on behalf of itself and the Company, a written instruction requesting the issuance of the shares of Common Stock then issuable in accordance with Sections 18(a) and 18(b) above, and the Transfer Agent, provided they are the acting transfer agent for the Company at the time, shall, and the Company hereby irrevocably authorizes and directs the Transfer Agent to, without any further confirmation or instructions from the Company, issue such shares of the Company’s Common Stock as directed by TCA, and surrender to a nationally recognized overnight courier for delivery to TCA at the address specified in the TCA’s notice, a certificate of the Common Stock of the Company, registered in the name of TCA or its nominee, for the number of shares of Common Stock issuable to TCA in accordance with Sections 18(a) and 18(b).

(c) Removal of Restrictive Legends.  In the event that TCA has any shares of the Company’s Common Stock bearing any restrictive legends, and TCA, through its counsel or other representatives, submits to the Transfer Agent any such shares for the removal of the restrictive legends thereon, whether in connection with a sale of such shares pursuant to any exemption to the registration requirements under the Securities Act of 1933, as amended, or the laws or rules of any governmental authority, or otherwise, and the Company and or its counsel refuses or fails for any reason to render an opinion of counsel or any other documents, certificates or instructions required for the removal of the restrictive legends, then: (A) to the extent such legends could be lawfully removed under applicable laws, the Company’s failure to provide the required opinion of counsel or any other documents, certificates or instructions required for the removal of the restrictive legends shall be an immediate event of default under this Amendment and all other Transaction Documents; and (B) the Company hereby agrees and acknowledges that TCA is hereby irrevocably and expressly authorized to have counsel to TCA render any and all opinions and other certificates or instruments which may be required for purposes of removing such restrictive legends, and the Company hereby irrevocably authorizes and directs the Transfer Agent to, without any further confirmation or instructions from the Company, issue any such shares without restrictive legends as instructed by TCA, and surrender to a common carrier for overnight delivery to the address as specified by TCA, certificates, registered in the name of TCA or its nominee, representing the shares of Common Stock to which TCA is entitled, without any restrictive legends and otherwise freely transferable on the books and records of the Company.

(d) Authorized Agent of the Company.  The Company hereby irrevocably appoints TCA and its counsel and its representatives, each as the Company’s duly authorized agent and attorney-in-fact for the Company for the purposes of authorizing and instructing the Transfer Agent to process issuances, transfers and legend removals upon instructions from TCA, or any counsel or representatives of TCA, as specifically contemplated herein.  The authorization and power of attorney granted hereby is coupled with an interest and is irrevocable so long as any obligations of the Company under this Amendment or any other Transaction Documents remain outstanding, and so long as TCA owns or has the right to receive, any shares of the Company’s Common Stock hereunder or under any other Transaction Documents.  In this regard, the Company hereby confirms to the Transfer Agent and the TCA that it can NOT and will NOT give instructions, including stop orders or otherwise, inconsistent with the terms of this Amendment with regard to the matters contemplated herein, and that the TCA shall have the absolute right to provide a copy of this Amendment to the Transfer Agent as evidence of the Company’s irrevocable authority for TCA and Transfer Agent to process issuances, transfers and legend removals upon instructions from TCA, or any counsel or representatives of TCA, as specifically contemplated herein, without any further instructions, orders or confirmations from the Company.

(e) Injunction and Specific Performance.  The Company specifically acknowledges and agrees that in the event of a breach or threatened breach by the Company of any provision of this Section 19(e), TCA will be irreparably damaged and that damages at law would be an inadequate remedy if this Amendment was not specifically enforced.  Therefore, in the event of a breach or threatened breach of any provision of this Section 19(e) by the Company, TCA shall be entitled to obtain, in addition to all other rights or remedies TCA may have, at law or in equity, an injunction restraining such breach, without being required to show any actual damage or to post any bond or other security, and/or to a decree for specific performance of the provisions of this Section 19(e).

 

 

  

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(f) Rule 144.  With a view to making available to TCA the benefits of Rule 144 under the Securities Act of 1933, as amended (“Rule 144”), or any similar rule or regulation of the SEC that may at any time permit TCA to sell the Amendment Fee Shares or other shares of Common Stock issuable to TCA under any Transaction Documents to the public without registration, the Company represents and warrants that: (i) the Company is, and has been for a period of at least ninety (90) days immediately preceding the date hereof, subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); (ii) the Company has filed all required reports under Section 13 or 15(d) of the Exchange Act during the twelve (12) months preceding the Effective Date (or for such shorter period that the Company was required to file such reports); and (iii) the Company is not an issuer defined as a “Shell Company” (as hereinafter defined).  For the purposes hereof, the term “Shell Company” shall mean an issuer that meets that description defined under Rule 144.  In addition, so long as TCA owns, legally or beneficially, any securities of the Company, the Company shall, at its sole expense:

(i) Make, keep and ensure that adequate current public information with respect to the Company, as required in accordance with Rule 144, is publicly available;

(ii) furnish to TCA, promptly upon reasonable request: (A) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the Securities Act, and the Exchange Act; and (b) such other information as may be reasonably requested by TCA to permit TCA to sell any of the Amendment Fee Shares or other shares of Common Stock acquired hereunder or under and other Transaction Documents pursuant to Rule 144, without limitation or restriction; and

(iii) promptly at the request of TCA, give the Transfer Agent instructions to the effect that, upon the Transfer Agent’s receipt from TCA of a certificate (a “Rule 144 Certificate”) certifying that TCA’s holding period (as determined in accordance with the provisions of Rule 144) for any portion of the Amendment Fee Shares or shares of Common Stock which TCA proposes to sell (or any portion of such shares which TCA is not presently selling, but for which TCA desires to remove any restrictive legends applicable thereto) (the “Securities Being Sold”) is not less than six (6) months, and receipt by the Transfer Agent of the “Rule 144 Opinion” (as hereinafter defined) from the Company its counsel (or from TCA and its counsel as permitted below), the Transfer Agent is to effect the transfer (or issuance of a new certificate without restrictive legends, if applicable) of the Securities Being Sold and issue to TCA or transferee(s) thereof one or more stock certificates representing the transferred (or re-issued) Securities Being Sold without any restrictive legend and without recording any restrictions on the transferability of such shares on the Transfer Agent’s books and records.  In this regard, upon TCA’s request, the Company shall have an affirmative obligation to cause its counsel to promptly issue to the Transfer Agent a legal opinion providing that, based on the Rule 144 Certificate, the Securities Being Sold may be sold pursuant to the provisions of Rule 144, even in the absence of an effective registration statement, or re-issued without any restrictive legends pursuant to the provisions of Rule 144, even in the absence of an effective registration statement (the “Rule 144 Opinion”). If the Transfer Agent requires any additional documentation in connection with any proposed transfer (or re-issuance) by TCA of any Securities Being Sold, the Company shall promptly deliver or cause to be delivered to the Transfer Agent or to any other Person, all such additional documentation as may be necessary to effectuate the transfer (or re-issuance) of the Securities Being Sold and the issuance of an unlegended certificate to TCA or any transferee thereof, all at the Company’s expense.  Any and all fees, charges or expenses, including, without limitation, attorneys’ fees and costs, incurred by TCA in connection with issuance of any such shares, or the removal of any restrictive legends thereon, or the transfer of any such shares to any assignee of TCA, shall be paid by the Company, and if not paid by the Company, TCA may, but shall not be required to, pay any such fees, charges or expenses, and the amount thereof, together with interest thereon at the highest non-usurious rate permitted by law, from the date of outlay, until paid in full, shall be due and payable by the Company to TCA immediately upon demand therefor, and all such amounts advanced by TCA shall be additional obligations due under the Amended and Restated Note and secured under the Transaction Documents.  In the event that the Company and/or its counsel refuses or fails for any reason to render the Rule 144 Opinion or any other documents, certificates or instructions required to effectuate the transfer (or re-issuance) of the Securities Being Sold and the issuance of an unlegended certificate to TCA or any transferee thereof, then: (A) to the extent the Securities Being Sold could be lawfully transferred (or re-issued) without restrictions under applicable laws, the Company’s failure to promptly provide the Rule 144 Opinion or any other documents, certificates or instructions required to effectuate the transfer (or re-issuance) of the Securities Being Sold and the issuance of an unlegended certificate to TCA or any transferee thereof shall be an immediate event of default under this Amendment and all other Transaction Documents; and (B) the Company hereby agrees and acknowledges that TCA is hereby irrevocably and expressly authorized to have counsel to TCA render any and all opinions and other certificates or instruments which may be required for purposes of effectuating the transfer (or re-issuance) of the Securities Being Sold and the issuance of an unlegended certificate to TCA or any transferee thereof, and the Company hereby irrevocably authorizes and directs the Transfer Agent to, without any further confirmation or instructions from the Company, transfer or re-issue any such Securities Being Sold as instructed by TCA and its counsel.

20. Governing Law.  Notwithstanding anything contained in any of the Transaction Documents to the contrary, the Company irrevocably agrees that any dispute arising under, relating to, or in connection with, directly or indirectly, any of the Transaction Documents or related to any matter which is the subject of or incidental to any of the Transaction Documents (whether or not such claim is based upon breach of contract or tort) shall be subject to the exclusive jurisdiction and venue of the state and/or federal courts located in Broward County, Florida.  This provision  is intended to be a “mandatory” forum selection clause and governed by and interpreted consistent with Florida law.  The Company hereby consents to the exclusive jurisdiction and venue of any state or federal court having its situs in said county, and each waives any objection based on forum non conveniens. The Company hereby waives personal service of any and all process and consents that all such service of process may be made by certified mail, return receipt requested, directed to the Company, as applicable, as set forth herein or in the manner provided by applicable statute, law, rule of court or otherwise.  Except for the foregoing mandatory forum selection clause, notwithstanding anything contained in any of the Transaction Documents to the contrary, all terms and provisions hereof and the rights and obligations of the Company and TCA under any of the Transaction Documents shall be governed, construed and interpreted in accordance with the laws of the State of Nevada, without reference to conflict of laws principles.

 

 

  

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21. CEF Advances.  The Company hereby agrees that in addition to the payments required to be made under the Amended and Restated Note, for each Advance taken by the Company under the CEF, fifty percent (50%) of any net proceeds otherwise payable to the Company from any sale of its Common Stock under the CEF shall be retained by TCA and applied to sums due under the Amended and Restated Note, in accordance with the terms and provisions of the Amended and Restated Note.

22. Additional Equity.  In the event the Company at any time raises funds through the sale of any of its Common Stock, or any security convertible into or exchangeable into Common Stock, for an aggregate total of $50,000.00 or more, then fifty percent (50%) of such funds raised shall immediately and automatically be payable to TCA towards sums due and payable under the Amended and Restated Note; provided, however, the Company shall notify TCA, in writing, of all such fund raises, including all fund raises for less than $50,000.00, each time such a fund raise is closed.

[Signatures on the following page]

 

 

  

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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the day and year first above written.

	  	  COMPANY:
	  	 	  
	  	  PURAMED BIOSCIENCE, INC., a Minnesota corporation
	  	 	  
	  	By:	 	
 

	  	Name:	 	
 

	  	Title:	 	
 

	  	Date:	 	
 

	  	 	  
	  	 	  
	  	TCA:	
 

	  	 	  
	  	TCA GLOBAL CREDIT MASTER FUND, LP
	  	 	  
	  	By:   TCA Global Credit Fund GP, Ltd.,
	  	          Its general partner
	  	 	  
	  	 	  
	  	By:	 	
 

	  	 	Robert Press, Director	
       

	  	Date:	 	
 

	  	 	  
	  	 	  

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