Document:

EXHIBIT 10.5

  
 EXHIBIT 10.15
 

 NEITHER THIS SECURITY NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THE SECURITIES ARE RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION OR SAFE HARBOR THEREFROM.
 

 ISSUE DATE: July 25, 2016
 PRINCIPAL AMOUNT: $40,000.00
 

 EMS Find, INC.
 

 CONVERTIBLE PROMISSORY NOTE DUE MARCH 29, 2017
 

 THIS Note is a duly authorized issuance of $40,000.00 of EMS Find, Inc., a Nevada corporation (the "Company") designated as its Note.
 

 FOR VALUE RECEIVED, the Company promises to pay to OLD MAIN CAPITAL, LLC the registered holders hereof (the "Holder"), the principal sum of $40,000 on March 29, 2017 (the “Maturity Date”).  The principal of this Note is payable in United States dollars, at the address last appearing on the Note Register of the Company as designated in writing by the Holder.  The Company will pay the outstanding principal amount of this Note in cash on the Maturity Date to the registered holder of this Note.  The forwarding of such wire transfer shall constitute a payment hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented by such check or wire transfer plus any amounts so deducted.
 

 This Note is subject to the following additional provisions:
 

 1.
 The Note is exchangeable for an equal aggregate principal amount of Note of different authorized denominations, as requested by the Holder surrendering the same.  No service charge will be made for such registration or transfer or exchange.
 

 2.
 The Holder of this Note is entitled any time after January ___, 2017, subject to the following provisions, to convert all or a portion of the principal amount of this Note into shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a conversion price for each share of Common Stock equal to the Current Market Price multiplied by sixty-five (65%) (the “Conversion Price”). “Current Market Price” means the lowest trade price for the Common Stock as reported by Bloomberg, LP for the twenty (20) trading days ending on the trading day immediately before the relevant Conversion Date (as defined below).  The amount of shares issuable pursuant to a conversion shall equal the principal amount (or portion thereof) of the Note to be converted, divided by the Conversion Price.
 

 Conversion shall be effectuated by surrendering the Note to the Company, accompanied by or preceded by email or other delivery to the Company of the form of conversion notice attached hereto as Exhibit A, executed by the Holder evidencing such Holder's intention to convert a specified portion hereof.  No fractional shares of Common Stock or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share.  The date on which notice of conversion is given (the "Conversion Date") shall be deemed to be the date on which the Holder emails or otherwise delivers the conversion notice ("Notice of Conversion"), substantially in the form annexed hereto as Exhibit A, duly executed, to the Company.  Certificates representing Common Stock upon conversion will be delivered within two (2) business days from the Conversion Date (“Delivery Date”).
 

 The Company shall pay any payments incurred under this Section in immediately available funds upon demand as the Holder’s remedy for such delay.  Furthermore, in addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of the Shares by close of business on the Delivery Date, unless such failure is due to causes beyond the Company’s reasonable control or that 
 

 
 of its Transfer Agent, the Holder will be entitled to revoke the relevant Notice of Conversion by delivering a notice to such effect to the Company, whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to delivery of such Notice of Conversion; provided, however, that an amount equal to any payments contemplated by this Section which have accrued through the date of such revocation notice shall remain due and owing to the Converting Holder notwithstanding such revocation.  
 

 If, by the relevant Delivery Date, the Company fails, unless such failure is due to causes beyond the Company’s reasonable control or that of its Transfer Agent, for any reason to deliver the Shares and after such Delivery Date, the Holder of the Note being converted (a “Converting Holder”) purchases, in an arm’s-length open market transaction or otherwise, shares of Common Stock (the “Covering Shares”) in order to make delivery in satisfaction of a sale of Common Stock by the Converting Holder (the “Sold Shares”), which delivery such Converting Holder anticipated to make using the Shares to be issued upon such conversion (a “Buy-In”), the Converting Holder shall have the right, to require the Company to pay to the Converting Holder, in addition to and not in lieu of the amounts due hereunder (but in addition to all other amounts contemplated in other provisions of the Transaction Agreements, and not in lieu of any such other amounts), the Buy-In Adjustment Amount (as defined below).  The “Buy-In Adjustment Amount” is the amount equal to the excess, if any, of (x) the Converting Holder's total purchase price (including brokerage commissions, if any) for the Covering Shares over (y) the net proceeds  (after brokerage commissions, if any) received by the Converting Holder from the sale of the  Sold Shares.  The Company shall pay the Buy-In Adjustment Amount to the Company in immediately available funds immediately upon demand by the Converting Holder.  By way of illustration and not in limitation of the foregoing, if the Converting Holder purchases shares of Common Stock having a total purchase price (including brokerage commissions) of $11,000 to cover a Buy-In with respect to shares of Common Stock it sold for net proceeds of $10,000, the Buy-In Adjustment Amount which Company will be required to pay to the Converting Holder will be $1,000.
 

 In lieu of delivering physical certificates representing the Shares issuable upon conversion, provided the Company’s Transfer Agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program, upon request of the Holder and its compliance with the provisions contained in this paragraph, so long as the certificates therefore do not bear a legend and the Holder thereof is not obligated to return such certificate for the placement of a legend thereon, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission system.
 

 The Holder of the Note shall be entitled to exercise its conversion privilege with respect to the Note notwithstanding the commencement of any case under 11 U.S.C. §101 et seq. (the “Bankruptcy Code”).  In the event the Company is a debtor under the Bankruptcy Code, the Company hereby waives, to the fullest extent permitted, any rights to relief it may have under 11 U.S.C. §362 in respect of such holder’s conversion privilege.  The Company hereby waives, to the fullest extent permitted, any rights to relief it may have under 11 U.S.C. §362 in respect of the conversion of the Note.  This Note has been issued subject to investment representations of the original purchaser hereof and may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended (the "Act"), and other applicable state and foreign securities laws.  In the event of any proposed transfer of this Note, the Company may require, prior to issuance of a new Note in the name of such other person, that it receive reasonable transfer documentation including legal opinions that the issuance of the Note in such other name does not and will not cause a violation of the Act or any applicable state or foreign securities laws. Prior to due presentment for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Company's Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note be overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.
 

 4.
 No provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of this Note at the time, place, and rate, and in the coin or currency, herein prescribed.  This Note is a direct obligation of the Company.
 

 5.
 The Holder of the Note, by acceptance hereof, agrees that this Note is being acquired for investment and that such Holder will not offer, sell or otherwise dispose of this Note or the shares of Common Stock issuable upon conversion thereof except under circumstances which will not result in a violation of the Act or any applicable state Blue Sky or foreign laws or similar laws relating to the sale of securities.
 

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 6.
 This Note shall be governed by and construed in accordance with the laws of the State of Florida. Each of the parties consents to the jurisdiction of the federal courts whose districts encompass any part of the City of Fort Lauderdale in connection with any dispute arising under this Note and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non coveniens, to the bringing of any such proceeding in such jurisdictions. Each of the parties hereby waives the right to a trial by jury in connection with any dispute arising under this Note.
 

 7.
 The following shall constitute an "Event of Default":
 

 a.
 The Company shall default in the payment of principal on this Note and same shall continue for a period of five (5) days; or
 

 b.
 Any of the representations or warranties made by the Company herein, in any certificate or financial or other written statements heretofore or hereafter furnished by the Company in connection with the execution and delivery of this Note shall be false or misleading in any material respect at the time made; or
 

 c.
 The Company shall fail to perform or observe, in any material respect, any other covenant, term, provision, condition, agreement or obligation of any Note and such failure shall continue uncured for a period of two (2) days after written notice from the Holder of such failure or for a period of five (5) days from when the Company should have known about the Event of Default; or
 

 d.
 The Company fails to authorize or to cause its Transfer Agent to issue the Shares upon exercise by the Holder through a Notice of conversion in accordance with the terms of this Note, fails to transfer or to cause its Transfer Agent to transfer any certificate for Shares issued to the Holder upon conversion of this Note and when required by this Note, and such transfer is otherwise lawful, or fails to remove any restrictive legend on any certificate or fails to cause its Transfer Agent to remove such restricted legend, in each case where such removal is lawful, as and when required by this Note, and any such failure shall continue uncured for five (5) business days; or
 

 e.
 The Company shall (1) make an assignment for the benefit of creditors or commence proceedings for its dissolution; or (2) apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its property or business; or
 

 f.
 A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after such appointment; or
 

 g.
 Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the whole or any substantial portion of the properties or assets of the Company and shall not be dismissed within sixty (60) days thereafter; or
 

 h.
 Any money judgment, writ or warrant of attachment, or similar process in excess of One Hundred Thousand ($100,000) Dollars in the aggregate shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of thirty (30) days or in any event later than five (5) days prior to the date of any proposed sale thereunder; or
 

 i.
 Bankruptcy, reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Company and, if instituted against the Company, shall not be dismissed within sixty (60) days after such institution or the Company shall by any action or answer approve of, consent to, or acquiesce in any such proceedings or admit the material allegations of, or default in answering a petition filed in any such proceeding; or
 

 j.
 The Company shall have its Common Stock suspended or delisted from an exchange from trading for in excess of fifteen trading days.
 

 k.
 The Company fails to file a registration statement with the Securities and Exchange Commission for the underlying common stock of the Note by October 28, 2016.
 

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 l.
 The Company fails to maintain sufficient shares to reserve for the Holder.
 

 Then, or at any time thereafter, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder's sole discretion, the Holder may consider all obligations under this Note immediately due and payable within five (5) days of notice at a premium of one hundred and fifty percent (150%) of the then current balance of the Note, including interest and other fees and penalties, without presentment, demand, protest or notice of any kinds, all of which are hereby expressly waived, anything herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately enforce any and all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law.  Upon an Event of Default, the Conversion Price will become the Current Market Price multiplied by twenty five percent (25%)  (“Default Conversion Price”).
 

 8.
 The Holder may not convert this Note to the extent such conversion would result in the Holder, together with any affiliate thereof, beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder) in excess of 9.99% of the then issued and outstanding shares of Common Stock held by such Holder after application of this Section.  Since the Holder will not be obligated to report to the Company the number of shares of Common Stock it may hold at the time of a conversion hereunder, unless the conversion at issue would result in the issuance of shares of Common Stock in excess of 9.99% of the then outstanding shares of Common Stock without regard to any other shares which may be beneficially owned by the Holder or an affiliate thereof, the Holder shall have the authority and obligation to determine whether the restriction contained in this Section will limit any particular conversion hereunder and to the extent that the Holder determines that the limitation contained in this Section applies, the determination of which portion of the principal amount of Note are convertible shall be the responsibility and obligation of the Holder.  If the Holder has delivered a Conversion Notice for a principal amount of Note that would result in the issuance of in excess of the permitted amount hereunder, without regard to any other shares that the Holder or its affiliates may beneficially own, the Company shall notify the Holder of this fact and shall honor the conversion for the maximum principal amount permitted to be converted on such Conversion Date and, at the option of the Holder, either retain any principal amount tendered for conversion in excess of the permitted amount hereunder for future conversions or return such excess principal amount to the Holder.  The provisions of this Section may be waived by a Holder (but only as to itself and not to any other Holder) upon not less than thirty (30) days prior notice to the Company. Other Holders shall be unaffected by any such waiver.
 

 9.
 Nothing contained in this Note shall be construed as conferring upon the Holder the right to vote or to receive dividends or to consent or receive notice as a shareholder in respect of any meeting of shareholders or any rights whatsoever as a shareholder of the Company, unless and to the extent converted in accordance with the terms hereof.
 

 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by an officer thereunto duly authorized.
 

 Dated: July __, 2016  
 

 EMS FIND, INC. 
 

 By: 
 

 Name:  
 

 Title: 
 

 ATTESTOR
 

 By: __________________________________
 

 

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 EXHIBIT A - NOTICE OF CONVERSION
 

 The undersigned hereby elects to convert principal under the Note due March __28, 2017 of EMS FIND, INC., a Nevada corporation (the “Company”), into shares of common stock (the “Common Stock”), of the Company according to the conditions hereof, as of the date written below.  If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith.  No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.
 

 By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed the amounts specified under Section 8 of this Note, as determined in accordance with Section 13(d) of the Exchange Act.
 

 Conversion calculations:  _______________________
 

 Date to Effect Conversion:  _______________________
 

 Principal Amount of Debenture to be Converted:  _______________________
 

 Signature:  _______________________
 

 Name:  _______________________
 

 Shares to be issued to:  _______________________
 

 EIN:  _______________________
 

 Address for Delivery of Common Stock Certificates:  
 

 _______________________
 

 _______________________
 

 _______________________
 

 Or
 

 DWAC Instructions:  _______________________
 

 Broker No:  _______________________
 

 Account No:  _______________________
 

 

 

 

 

 5EXHIBIT 10.1

 

 

 

AMENDED AND RESTATED PROMISSORY NOTE

	
$1,200,000.00

	
August 15, 2016

	 	
("Effective Date")

FOR VALUE RECEIVED, the undersigned, HEALTHWAREHOUSE.COM, INC., a Delaware corporation, HWAREH.COM, INC., a Delaware corporation, and HOCKS.COM, INC., an Ohio corporation, jointly and severally, (collectively, "Borrower"), with an address at 7107 Industrial Road, Florence, Kentucky  41042, hereby promise to pay to the order of MELROSE CAPITAL ADVISORS, LLC, an Ohio limited liability company (together with its successors and assigns, "Lender"), in lawful money of the United States of America in immediately available funds with an address at c/o Statman, Harris & Eyrich, LLC, 441 Vine Street, 37th Floor, Cincinnati, Ohio  45202, or at such other location as the Lender may designate from time to time, the principal sum of ONE MILLION TWO HUNDRED THOUSAND AND 00/100 DOLLARS ($1,200,000.00) together with interest accruing from the date hereof at the rate or rates and in the manner hereinafter provided on the principal balance hereof from time to time outstanding, as provided below.

1.          Interest.  Interest will be charged on the unpaid principal balance of this Note until the full amount of principal has been paid at a floating rate equal to the Prime Rate plus 4.25% per annum.  As used herein, "Prime Rate" means the rate publicly announced by PNC Bank, N.A. from time to time as its prime rate.  The Prime Rate is determined from time to time by PNC Bank, N.A. as a means of pricing some loans to its borrowers.  The Prime Rate is not tied to any external rate of interest or index, and does not necessarily reflect the lowest rate of interest actually charged by PNC Bank, N.A. to any particular class or category of customers.  If and when the Prime Rate changes, the rate of interest on this Note will change automatically without notice to the Borrower, effective on the date of any such change.  In no event will the rate of interest hereunder exceed the maximum rate allowed by law.

2.          Payments.  Borrower will make monthly payments of accrued interest on the first day of every month, beginning on September 1, 2016, and continuing on the first day of each month thereafter.

On September 30, 2016 ("Maturity Date"), the entire unpaid principal balance of this Note and all accrued and unpaid interest shall be due and payable in full.

3.          Loan Documents; Restatement.  This Note is executed in connection with and is secured by any and all documents and instruments now or in the future given to the Lender to evidence or secure the loans hereunder (collectively, the "Loan Documents"), including but not limited to the following: (i)  Security Agreement from HEALTHWAREHOUSE.COM, INC., HWAREH.COM, INC. and HOCKS.COM, INC., dated March 28, 2013, covering all business assets, including but not limited to accounts, inventory, equipment and general intangibles, and (ii) Deposit Account Control Agreement dated October 22, 2015 between Borrower, Lender and Cheviot Savings Bank with respect to Borrower's deposit accounts, as restated by a Deposit Account Control Agreement dated July 8, 2016 between MainSource Bank, successor in interest to Cheviot Savings Bank, Borrower and Lender, with respect to Borrower's deposit accounts at MainSource Bank  ((i) and (ii), collectively, the "Collateral").

This Note amends and restates, and is in substitution for, that certain Amended and Restated Promissory Note dated January 14, 2016, to be effective as of December 31, 2015, as amended, in the original principal amount of $1,000,000.00 payable to the order of the Lender (the "Existing Note").  However, this Note shall in no way extinguish, cancel or satisfy Borrower's unconditional obligation to repay all indebtedness evidenced by the Existing Note or constitute a novation of the Existing Note.  Nothing herein is intended to extinguish, cancel  or impair the lien priority or effect of any security agreement with respect to the Borrower's obligations hereunder and under any other document relating hereto.

 

 

 

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4.          Representations.In order to induce Lender to extend the credit accommodations provided in this Note, Borrower hereby represents and warrants to Lender the following:

(a)          Each Borrower is duly incorporated, validly existing and in good standing under the laws of the State of its incorporation and has the power and authority to own and operate its assets and to conduct its business as now or proposed to be carried on, and is duly qualified, licensed and in good standing to do business in all jurisdictions where its ownership of property or the nature of its business requires such qualification or licensing and failure to be so qualified or licensed could reasonably be expected to materially adversely affect Borrower (on a consolidated basis).  Borrower is duly authorized to execute and deliver the Loan Documents, all necessary action to authorize the execution and delivery of the Loan Documents has been properly taken, and the Loan Documents, when executed and delivered by Borrower, will constitute the legal, valid and binding obligations of Borrower enforceable in accordance with their terms except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors' rights generally.

(b)          There are no actions, suits, arbitrations, investigations, claims, inquiries, or proceedings pending or threatened against or affecting Borrower or its property, and no proceedings before any governmental body are pending or threatened against Borrower or its property, except as set forth on Schedule 4(b).  None of such proceedings listed on Schedule 4(b) (if any) are reasonably expected to have a material adverse effect on Borrower (on a consolidated basis).

(c)          Borrower is in compliance with all material laws, regulations, rulings, orders, injunctions, decrees, conditions or other requirements applicable to or imposed upon Borrower by any law or by any governmental authority, court or agency with jurisdiction over Borrower.  Borrower has filed all required tax returns and reports that are now required to be filed by it in connection with any federal, state and local tax, duty or charge levied, assessed or imposed upon him or his assets, including unemployment, social security, and real estate taxes.  Borrower has paid all taxes which are now due and payable except those which currently are being contested in good faith by appropriate proceedings and for which Borrower has set aside adequate reserves or made other adequate provision with respect thereto.  No taxing authority has asserted or assessed any additional tax liabilities against Borrower which are outstanding on the Effective Date, and Borrower has not filed for any extension of time for the payment of any tax or the filing of any tax return or report.

(d)          All financial information relating to Borrower which has been or may hereafter be delivered by Borrower or on its behalf to Lender is true and correct and Borrower's financial statements have been prepared in accordance with generally acceptable accounting principles consistently applied (except in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments).  Borrower has no material obligations or liabilities of any kind not disclosed in that financial information, and there has been no material adverse change in the financial condition of Borrower nor has Borrower suffered any damage, destruction or loss which has adversely affected its business or assets since the submission of the most recent financial information to Lender.

(e)          There does not exist any Event of Default under this Note or any default or violation by Borrower of or under any of the terms, conditions or obligations of:  (i) its organizational documents; (ii) any indenture, mortgage, deed of trust, franchise, permit, contract, agreement, or other instrument to which it is a party or by which it is bound that is material to Borrower; or (iii) any law, ordinance, regulation, ruling, order, injunction, decree, condition or other requirement applicable to or imposed upon it by any law, the action of any court or any governmental authority or agency that could reasonably be expected to have a material adverse effect on Borrower (on a consolidated basis); and the consummation of the transactions set forth herein will not result in any such default or violation or Event of Default.

 

 

 

 

 

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(f)          Borrower has good and marketable title to the assets reflected on the most recent financial statements provided to Lender, free and clear of all liens and encumbrances, except for the following ("Permitted Liens"):  (i) current taxes and assessments not yet due and payable, (ii) liens to Amerisourcebergen Drug Corporation which are subordinated to the liens to Lender pursuant to a lien subordination agreement acceptable to Lender, (iii) liens to Smart Fill Management Group, Inc. which are junior to the liens to Lender, (iv) liens to Wells Fargo Bank, N.A. on specific equipment, and (v) liens to The Mission Bank on specific equipment.

(g)          None of the Loan Documents contains any untrue statement of material fact or omits a material fact necessary in order to make the statements contained in this Note or the Loan Documents not misleading.  There is no fact known to Borrower which materially adversely affects or, so far as Borrower can now reasonably foresee, could reasonably be expected to materially adversely affect the business, assets, operations,  condition (financial or otherwise) or results of operation of Borrower (on a consolidated basis) and which has not otherwise been fully set forth in this Note.

5.          Financial Information.  Borrower shall maintain books and records in accordance with generally accepted accounting principles consistently applied ("GAAP"), except in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments, and shall give representatives of the Lender access thereto at all reasonable times, including permission to examine, copy and make abstracts from any of such books and records and such other information as the Lender may from time to time reasonably request, and Borrower will make available to the Lender for examination copies of any reports, statements and returns which Borrower may make to or file with any federal, state or local governmental department, bureau or agency. Borrower shall deliver the following to Lender during the entire time during which any amount is due under this Note:

(a)          As soon as practicable after the end of each calendar month in each year, beginning March 31, 2015, and in any event within thirty  (30) days after the end of each calendar month, an internally prepared balance sheet of Borrower as of the end of such month, and statements of cash flows, shareholders' equity of Borrower for such month and income statements, certified as complete and correct by the principal financial officer of Borrower, subject to changes resulting from year-end adjustments;

(b)          As soon as practicable after the end of each calendar quarter beginning March 31, 2015, and in any event within forty five  (45) days after the end of each calendar quarter, a consolidated balance sheet of Borrower as of the end of such quarter, and consolidated statements of cash flows, shareholders' equity of Borrower  for such quarter, certified as complete and correct by the principal financial officer of Borrower, subject to changes resulting from year-end adjustments; provided, however, that Borrower may deliver its Form 10-Q filed with the SEC at the time required herein to satisfy this requirement.

(c)          As soon as practicable after the end of each fiscal year, beginning with the fiscal year ending December 31, 2014, and in any event within one hundred twenty (120) days after the end of each fiscal year, audited financial statements of Borrower, including, a balance sheet of Borrower as of the end of such year, and statements of cash flows, owners' equity of Borrower for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and accompanied by an audit report of independent certified public accountants, selected by Borrower and reasonably satisfactory to Lender, which report and opinion shall be prepared in accordance with generally accepted auditing standards; provided, however, that Borrower may deliver its Form 10-K filed with the SEC at the time required herein to satisfy this requirement.

(d)          As soon as practicable after the end of each calendar month in each year, beginning January 31, 2016, and in any event within thirty  (30) days after the end of each calendar month, a report on the status of the licenses held by HEALTHWAREHOUSE.COM, INC. or any other Borrower, showing each state in which licenses are held and the status of the licenses, i.e., active, inactive, suspended, notifications received, etc.

(e)          With reasonable promptness, such other data and information as from time to time may be reasonably requested by Lender.

 

 

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6.           Affirmative Covenants.  Borrower agrees that from the date of execution of this Note until this Note is repaid in full Borrower will:

(a)          Pay and discharge when due all indebtedness and all taxes, assessments, charges, levies and other liabilities imposed upon Borrower, its income, profits, property or business, except those which currently are being contested in good faith by appropriate proceedings and for which Borrower shall have set aside adequate reserves or made other adequate provision with respect thereto acceptable to the Lender in its reasonable discretion.

(b)          Do all things necessary to (i) maintain, renew and keep in full force and effect its organizational existence and all rights, permits and franchises necessary to enable it to continue its business as currently conducted; (ii) continue in operation in substantially the same manner as at present; (iii) keep its properties in good operating condition and repair (normal wear and tear excepted); and (iv) make all necessary and proper repairs, renewals, replacements, additions and improvements thereto.

(c)          Maintain, with insurers reasonably satisfactory to Lender, insurance with respect to its property and business against such casualties and contingencies, of such types and in such amounts,  as is customary for established companies engaged in the same or similar business and similarly situated.

(d)          Comply in all material respects with all laws applicable to Borrower and to the operation of its business (including without limitation any statute, ordinance, rule or regulation relating to employment practices, pension benefits or environmental, occupational and health standards and controls).

(e)          Borrower will direct its credit card processor to pay the proceeds of its credit card receipts to a cash collateral account at MainSource Bank controlled by Lender by September 15, 2016.

7.          Negative Covenants.  Borrower agrees that from the date of execution of this Note until this Note is repaid in full Borrower will not, without the Lender's prior written consent:

(a)          Create, incur, assume or suffer to exist any indebtedness for borrowed money other than:  (i) this Note; (ii) open account trade debt incurred in the ordinary course of business and not past due; (iii) existing indebtedness secured by the Permitted Liens; and (iv) indebtedness in respect of purchase money financings of equipment in an amount not in excess of $250,000.00 in the aggregate outstanding.

(b)          Create, assume, incur or permit to exist any mortgage, pledge, encumbrance, security interest, lien or charge of any kind upon any of its property, now owned or hereafter acquired, or acquire or agree to acquire any kind of property subject to any conditional sales or other title retention agreement, except for Permitted Liens and liens securing purchase money indebtedness permitted pursuant to Section 7(a) above, with the liens limited to the equipment purchased.

(c)          Guarantee, endorse or become contingently liable for the obligations of any person, firm, corporation or other entity, except in connection with the endorsement and deposit of checks in the ordinary course of business for collection.

(d)          Purchase or hold beneficially any stock, other securities or evidences of indebtedness of, or make or have outstanding, any loans or advances to, or otherwise extend credit to, or make any investment or acquire any interest whatsoever in, any other person, firm, corporation or other entity; provided, however, that Borrower may do so with regards to any Borrower.

(e)          Liquidate or dissolve, or merge or consolidate with or into any person, firm, corporation or other entity, or sell, lease, transfer or otherwise dispose of all or any substantial part of its property, assets, operations or business, whether now owned or hereafter acquired.

 

 

 

 

 

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(f)          Make or permit any change (i) in its form of organization or (ii) in the nature of its business as carried on as of the date hereof.

(g)          Declare or pay any dividends on or make any distribution with respect to any class of its equity or ownership interest, or purchase, redeem, retire or otherwise acquire any of its equity.

(h)          Make acquisitions of all or substantially all of the property or assets of any person, firm, corporation or other entity.

8.          Intentionally Deleted.

9.          Events of Default.The following events shall constitute events of default under this Note (each, an "Event of Default"):

(i)          Borrower fails to make any payment of principal and/or interest when and as the same shall become due and payable and such amount remains unpaid five (5) days thereafter;

(ii)         any representation or warranty made by Borrower herein or in any of the other Loan Documents is incorrect in any material respect when made or reaffirmed;

(iii)        the filing by or against Borrower of any proceeding in bankruptcy, reorganization, debt adjustment or receivership, or any assignment by Borrower for the benefit of creditors; provided, that any involuntary bankruptcy filed against Borrower shall not be an Event of Default unless such involuntary bankruptcy case is not dismissed within 60 days.

(iv)        Borrower fails to observe or perform any covenant, undertaking or agreement set forth herein or in any of the other Loan Documents and such failure is not remedied within 10 days;

(v)         Borrower defaults under any other debt, liability or obligation to the Lender, or fails to pay or to otherwise observe and perform any obligations imposed upon Borrower under any indebtedness in excess of $100,000.00 ("Material Indebtedness"), if such default shall continue for more than the period of grace, if any, specified therein;

(vi)        if any other Event of Default (said term being defined in this Note as it is defined in the Loan Documents) should occur and shall continue for more than the period of grace, if any specified therein;

(vii)       any event occurs which could reasonably be expected to have a material adverse effect on the Collateral or on Borrower's financial condition, operations, assets or prospects;

(viii)      the entry of any judgment or lien against Borrower by or in favor of any third person in excess of $10,000.00 which judgment or lien is not satisfied, discharged or bonded off or the subject of an appeal filed by Borrower in connection with same within thirty (30) days from the date of entry of said judgment or lien and/or which is not otherwise stayed; and

(ix)         Borrower shall transfer assets to others (excluding any Borrower) for less than fair value or in other than the ordinary course of business, without Lender's prior written consent.

10.          Remedies.  Upon the occurrence of an Event of Default, in addition to any other action permitted to be taken by Lender hereunder or under any other of the Loan Documents:  (a) at the option of Lender for so long as any Event of Default shall continue to exist, the unpaid principal balance of this Note shall, for the period beginning with the date of the occurrence of the Event of Default and continuing for so long as any Event of Default exists, bear interest at a rate (the "Default Rate") equal to eight percent (8.0%) per annum above the otherwise applicable interest rate; and (b) Lender may, at its option, and regardless of whether Lender shall have exercised the option provided for in clause (a) of this paragraph, declare the entire unpaid principal balance of this Note and all accrued but unpaid interest hereon any other sums then payable in accordance with this Note to be immediately due and payable, whereupon all such sums shall be immediately due and payable and shall thereafter bear interest at the Default Rate and Lender shall have the remedies of a secured party under the laws of the State of Ohio with respect to all property mortgaged or pledged as security for this Note and all of the rights and remedies available under the Loan Documents.  No delay or omission on the Lender's part to exercise any right or power arising hereunder will impair any such right or power or be considered a waiver of any such right or power, nor will the Lender's action or inaction impair any such right or power.  All remedies provided for herein upon any default by Borrower shall be cumulative and not exclusive.

 

 

 

 

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Borrower hereby agrees that:  (a) in addition to any other right, after any Event of Default, Borrower will pay to Lender upon demand any and all reasonable costs, expenses and fees, including without limitation reasonable attorneys' fees incurred before or after suit is commenced in enforcing payment hereof; (b) Borrower waives all setoffs and any and all applicable exemption rights; and (c) the acceptance by Lender of any late payment or other performance which does not strictly comply with the terms of this Note or of any Loan Document shall not be deemed to be a waiver of any rights of Lender arising as a result of such failure to comply.

11.          Waivers.  Borrower, and any endorsers and guarantors hereof, and all others who may become liable for all or any part of the indebtedness evidenced by this Note, severally waive diligence, presentment for payment, protests, notice of dishonor and of nonpayment and protest, and do hereby consent to any number of forbearances, renewals or extensions of the time of payment hereof, releases or substitutions of all or any part of the security for the payment hereof or release of any party liable for this obligation and waive all defenses based upon suretyship or impairment of collateral.  Any such extension or release may be made without notice to any of said parties and without discharging their liability. Borrower hereby waives all relief from any and all appraisement or exemption laws now in force or hereafter enacted.

12.          Release.  Borrower hereby releases and/or forever discharges Lender, including its members, managers, employees, agents, attorneys, officers, directors, representatives and affiliates, (collectively "Lender Parties") from any and all claims, demands, actions, causes of action, liabilities, losses or costs, whether known or unknown, which they have, may have, claim to have or allege to have against Lender Parties as of the date this Note is executed, which relate to this Note or the terms of this Note, or any instrument executed prior to the date this Note is executed, including the Loan Documents, and/or any other actions taken or not taken by the Lender Parties in connection with the Obligations prior to the date this Note is executed.

13.          General.

If any provision of this Note is found to be invalid by a court, all the other provisions of this Note will remain in full force and effect.  In no event shall the interest rate charged on this Note exceed the maximum rate of interest permitted under applicable state and/or federal usury laws.  Any payment of interest that would be deemed unlawful under applicable laws for any reason shall be deemed received on account of, and will automatically be applied to reduce, the principal sum outstanding and any other sums (other than interest) due and payable to Lender under this Note, and the provisions hereof shall be deemed amended to provide for the highest rate of interest permitted under applicable law.

Borrower agrees that there are no conditions or understandings which are not expressed in this Note and the documents referred to herein.  No modification, amendment or waiver of, or consent to any departure by Borrower from, any provision of this Note will be effective unless made in a writing signed by the Lender and Borrower and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.

Any and all references in this Note to any other document or documents shall be references to such other document or documents as the same may from time to time be modified, amended, renewed, consolidated or extended.

The term "Borrower" as used herein shall include the undersigned and its successors and assigns; provided, however, that Borrower may not assign its obligations hereunder and Lender may assign this Note at any time (i) to a person or entity related to Lender; (ii) with the prior written consent of Borrower, as long as no Event of Default exists and (iii) without the consent of Borrower if any Event of Default exists, but with prior written notice to Borrower (unless Lender is prohibited by law from sending such notice).  If there is more than one Borrower hereunder, their obligations shall be joint and several.

14.          Jurisdiction.  This Note shall be governed by Ohio law.  Borrower hereby submits to personal jurisdiction in the federal and state courts in Hamilton County, Ohio; waives any and all personal rights under the laws of any state or country to object to jurisdiction within the State of Ohio for the purposes of litigation to enforce this Note, or any other Loan Document; and consents to be sued in the federal and state courts in Hamilton County, Ohio. Nothing contained in this Note, however, shall prevent Lender from bringing any action or exercising any rights under this Note within any other state or country.  Borrower agrees that service of process may be made, and personal jurisdiction over Borrower obtained, by serving a copy of the Summons and Complaint upon Borrower at its address set forth in this Note in accordance with the applicable laws of the State of Ohio.

 

 

 

 

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15.          WAIVER OF JURY TRIAL.  BORROWER HEREBY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS NOTE.

16.          CONFESSION OF JUDGMENT.  Borrower authorizes any attorney to appear in any court of record in or of the State of Ohio, after this Note becomes due and payable, whether by its terms or upon default, to waive service of process and enter judgment by confession against Borrower in favor of the Lender or any holder hereof for the outstanding principal of and accrued but unpaid interest on this Note, plus all costs of collection, including, without limitation, court costs and reasonable attorney's fees, and thereby to waive and release all errors in the proceedings and judgment, and all rights of appeal from such judgment and stay of execution.  Stay of execution and all exemptions are hereby waived.  Borrower also agrees that the attorney acting for Borrower as set forth in this paragraph may be compensated by Lender for such services, and Borrower waives any conflict of interest caused by such representation and compensation arrangement.  If an obligation is referred to an attorney for collection, and the payment is obtained without the entry of a judgment, the obligors will pay to Lender its attorneys' fees.

WARNING - BY SIGNING THIS PAPER, YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.  IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT OR ANY OTHER CAUSE.

	
HEALTHWAREHOUSE.COM, INC.

	
HWAREH.COM, INC.

	 	 
	 	 
	 	 
	 	 
	
By: /s/           Lalit Dhadphale                                  

	
By: /s/            Lalit Dhadphale                                    

	
Print Name:  Lalit Dhadphale

	
Print Name:    Lalit Dhadphale

	
Title:             President & CEO

	
Title:                President & CEO

	 	 
	 	 
	
HOCKS.COM, INC.

	 
	 	 
	 	 
	 	 
	 	 
	
By: /s/           Lalit Dhadphale                                    

	 
	
Print Name:  Lalit Dhadphale

	 
	
Title:             President & CEO

	 

 

 

 

  

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SCHEDULE 4(b)

	
1.

	
A lawsuit was filed against the Borrower by Taft Stettinius & Hollister LLP in the Hamilton County Court of Common Pleas seeking payment for legal fees and expenses in the amount of $936,777.61, plus interest, and was moved to the U.S. District Court for the Southern District of Ohio, Western Division.

	
2.

	
Creditor Northlich obtained judgment against Healthwarehouse.com, Inc. in the Boone County, Kentucky Circuit Court (the "Court") in Case No. 14-CI-01212 (the "Lawsuit") on July 24, 2015, in the amount of $83,766.21 plus interest at the rate of 12% per annum accruing from August 5, 2015, plus the costs of the action (the "Judgment").  On August 27, 2015, the Court issued an Order of Garnishment (the "Garnishment Order") to BB&T, which was then Borrower's depositary bank, to collect the Judgment.  Lender intervened in the Lawsuit and on November 30, 2015, the Court ruled that Lender's security interest in the Deposit Accounts had priority over Northlich's Garnishment Order.  Northlich's Judgment remains outstanding and unpaid.

  

 

 

 

 

 

 

 

 

 

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Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00261-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00261-of-00352.parquet"}]]