Document:

exhibit4-1.htm

EXHIBIT 4.1

NOTE PURCHASE AGREEMENT

This NOTE PURCHASE AGREEMENT (the “Agreement”), dated as of August 14, 2012, is entered into by and between UNITED AMERICAN HEALTHCARE CORPORATION, a Michigan corporation (the “Company”), and ST GEORGE INVESTMENTS LLC, an Illinois limited liability company (the “Buyer”).

A. The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”);

B. The Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement (i) a 10% Secured Promissory Note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of $370,000.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, “Note #5”), convertible into shares of common stock of the Company (the “Common Stock”) upon the occurrence of an Event of Default (as defined in Note #5), and subject to the terms and subject to the limitations and conditions set forth in such Note #5.

C. The indebtedness under Note #5 is secured pursuant to the terms and conditions set forth in (i) that certain Security Agreement between the Company and the Buyer of even date herewith, in the form attached hereto as Exhibit B (the “Company Security Agreement”) and (ii) that Pledge and Security Agreement between the Company and the Buyer of even date herewith, in the form attached hereto as Exhibit C (the “Pledge Agreement”).

D. The Company has previously issued to the Buyer (i) that certain promissory note dated September 28, 2011, in the original principal amount of $400,000 (“Note #1”), (ii) that certain promissory note dated December 9, 2011, in the original principal amount of $300,000 (“Note #2”), (iii) that certain promissory note dated February 9, 2012, in the original principal amount of $350,000 (“Note #3”), and (iv) that certain promissory note dated May 16, 2012, in the original principal amount of $75,000 (“Note #4”) (all such previously issued promissory notes are collectively referred to as the “Prior Notes”).

E. Pulse Systems, LLC, a Delaware limited liability company (“Pulse”) is a wholly owned subsidiary of the Company. A substantial amount of the cash proceeds from the Prior Notes were contributed by the Company to Pulse to, among other things, pay certain contractual obligations of Pulse. All of the loan proceeds from Note #5 will be transferred from the Company to Pulse.

F. In connection with this Agreement, the Buyer requires that (i) each of the Prior Notes be amended pursuant to the Amendment to Note attached hereto as Exhibit D ( each a “Note Amendment”); thereby providing that the underlying indebtedness of each Prior Note is

  

  

  

 

 

G. secured pursuant to the terms of the Company Security Agreement, (ii) Pulse guarantees all of the Company’s obligations arising under the Prior Notes and the Transaction Documents (defined below) pursuant to the Guaranty Agreement attached hereto as Exhibit E (“Guaranty”), and (iii) Pulse executes and delivers to the Buyer that certain Security Agreement in the form attached hereto as Exhibit F (the “Pulse Security Agreement”).

H. This Agreement, Note #5, the Company Security Agreement, the Note Amendments, the Guaranty, the Pulse Security Agreement, and all other certificates, documents, agreements, resolutions and instruments delivered to any party under or in connection with this Agreement, as the same may be amended from time to time, are collectively referred to as the “Transaction Documents”.

I. Upon the terms and conditions stated in this Agreement, the Buyer wishes to purchase Note #5.

NOW THEREFORE, the Company and the Buyer hereby agree as follows:

1.           Purchase and Sale of Note #5.

a. Purchase of Note #5. At the Closing (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company Note #5.

b. Form of Payment. As consideration for the issuance and delivery of Note #5, the Buyer shall pay the sum of $370,000 (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions

c. Closing. Subject to the satisfaction of the conditions set forth in Section 1(d) below, the closing of the transactions contemplated by this Agreement (the “Closing”) shall occur at the time and at such location as may be agreed to by the parties. The Closing will occur upon mutual delivery of the fully executed Transaction Documents and the payment of the Purchase Price to the Company.

d. Additional Consideration. Delivery of the Purchase Price to the Company is expressly conditioned upon: (i) the delivery to the Buyer of a Note Amendment for each of the Prior Notes, thereby making each of the Prior Notes secured by all of the Company’s assets under the Company Security Agreement, (ii) the delivery to the Buyer of the Guaranty executed by Pulse, thereby providing for Pulse to unconditionally guarantee all the Company’s indebtedness arising under the Prior Notes and the Transaction Documents (“Indebtedness”), and (iii) delivery to the Buyer of the fully executed Pulse Security Agreement, thereby making Pulse’s obligations arising under the Guaranty to be secured by all of Pulse’s assets.

2. Buyer’s Representations and Warranties. The Buyer represents and warrants to the Company that:

  

  

  

 

a. Binding Obligation. The Transaction Documents to which the Buyer is a party, and the transactions contemplated hereby and thereby, have been duly and validly authorized by the Buyer.  This Agreement has been executed and delivered by the Buyer, and this Agreement is, and each of the other Transaction Documents to which the Buyer is a party, when executed and delivered by the Buyer (if necessary), will be valid and binding obligations of the Buyer enforceable in accordance with their respective terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors’ rights generally.

b. Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Regulation D, as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act, and/or Section 4(2) of the 1933 Act.

3. Representations and Warranties of the Company. The Company represents and warrants to the Buyer that:

a. Organization and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated.

b. Authorization; Binding Obligations. The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Company Security Agreement, each of the Note Amendments, and all other Transaction Documents to which the Company is a party, and to consummate the transactions contemplated hereby and thereby and to issue Note #5, in accordance with the terms hereof and thereof. This Agreement has been executed and delivered by the Company, and this Agreement is, and each of the other Transaction Documents to which the Company is a party, when executed and delivered by the Company, will be valid and binding obligations of the Company enforceable in accordance with their respective terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors’ rights generally.

4.     Governing Law; Miscellaneous.

 

a. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of Illinois or in the federal courts located in Cook County, Illinois. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY

 

  

  

  

 

HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

b. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.

c. Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

d. Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

e. Entire Agreement; Amendments. This Agreement, the Transaction Documents, and the Prior Notes contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the Buyer.

f. Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received), or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

  

  

  

 

If to the Company, to:

UNITED AMERICAN HEALTHCARE CORPORATION

300 River Place, Suite 4950

Detroit, Michigan 48207

Attn: Robert T. Sullivan, CFO

If to the Buyer:

ST GEORGE INVESTMENTS LLC

303 E. Wacker Drive, Suite 1200

Chicago, IL 60601

Attn: John Fife

Facsimile: 312-819-9701

	
  

	
With a copy by fax only to (which copy shall not constitute notice): HANSEN BLACK ANDERSON PLLC

2940 West Maple Loop, Suite 103

Lehi, UT 84043

Attn: Jon Hansen

Facsimile: 801-922-5019

Each party shall provide notice to the other party of any change in address.

g. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, the Buyer may assign its rights hereunder to any person that purchases securities in a private transaction from the Buyer or to any of its “affiliates” (as that term is defined under the Securities Act of 1934, as amended), without the consent of the Company.

h. Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

i. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

j. Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or

  

  

  

 

in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

k. Buyer’s Rights and Remedies Cumulative.  All rights, remedies, and powers conferred in this Agreement and the Transaction Documents on the Buyer are cumulative and not exclusive of any other rights or remedies, and shall be in addition to every other right, power, and remedy that the Buyer may have, whether specifically granted in this Agreement or any other Transaction Document, or existing at law, in equity, or by statute; and any and all such rights and remedies may be exercised from time to time and as often and in such order as the Buyer may deem expedient.

l. Attorneys’ Fees and Cost of Collection. In the event of any action at law or in equity to enforce or interpret the terms of this Agreement or any of the other Transaction Documents, the parties agree that the party who is awarded the most money shall be deemed the prevailing party for all purposes and shall therefore be entitled to an additional award of the full amount of the attorneys’ fees and expenses  paid by such prevailing party in connection with the litigation and/or dispute without reduction or apportionment based upon the individual claims or defenses  giving rise to the fees and expenses.  Nothing herein shall restrict or impair a court’s power to award fees and expenses for frivolous or bad faith pleading.

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PURCHASE PRICE:

	
Principal Amount of Note:

	
$370,000.00

	
Purchase Price:

	
$370,000.00

IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

COMPANY:

UNITED AMERICAN HEALTHCARE CORPORATION,

a Michigan  corporation

                                                      By:           /s/ Robert T. Sullivan

                                                      Name:      Robert T. Sullivan

                                                      Title:        Chief Financial Officer

BUYER:

ST GEORGE INVESTMENTS LLC,

an Illinois limited liability company

By:           Fife Trading, Inc.,

an Illinois corporation,

its Manager

                                                                By:           /s/John M. Fife

                                                                Name:      John M. Fife

                                                                Title:        President

  

  

  

EXHIBIT A

NOTE #5

  

  

  

 

EXHIBIT B

COMPANY SECURITY AGREEMENT

  

  

  

 

PLEDGE AND SECURITY AGREEMENT

 

  

  

  

 

EXHIBIT D

NOTE AMENDMENT TO BE EXECUTED FOR EACH OF THE PRIOR NOTES

  

  

  

 

EXHIBIT E

GUARANTY

  

  

  

 

EXHIBIT F

PULSE SECURITY AGREEMENTexhibit4-2.htm

EXHIBIT 4.2

 

 

NEITHER THIS PROMISSORY NOTE NOR ANY OF THE SECURITIES ISSUABLE HEREUNDER HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES, OR DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE ACT OR UNLESS SOLD IN FULL COMPLIANCE WITH RULE 144 UNDER THE ACT.

 

UNITED AMERICAN HEALTHCARE CORPORATION

 

 

SECURED PROMISSORY NOTE

 

	
$370,000

	
August 14, 2012

United American Healthcare Corporation, a Michigan corporation (the “Company”), for value received, hereby promises to pay to St George Investments LLC, an Illinois limited liability company, or its assignee (the “Holder”), the principal amount of Three Hundred Seventy Thousand Dollars Exactly ($370,000.00) (such amount is referred to herein as the “Principal Amount”), together with simple interest on the unpaid amount thereof at ten percent (10.0%) per annum, computed on the basis of a 365-day year for the actual number of days elapsed from the date hereof until paid or converted in accordance with the terms hereof.

 

This Note is issued pursuant to the terms and conditions set forth in that certain Note Purchase Agreement between the Company and the Holder of even date herewith (the “Purchase Agreement”).

 

1. Promissory Note (this “Note”)

 

1.1 Payment.  The Principal Amount plus all accrued but unpaid interest thereon shall become due and payable on the date (the “Due Date”) that is the earlier of (a) December 31, 2014, or (b) the date of (i) the sale of all or substantially all of the assets of the Company or Pulse Systems, LLC, (ii) the merger of the Company or Pulse Systems, LLC, or (iii) the sale of all or substantially all of the equity of the Company or Pulse Systems, LLC (collectively, a “Company Sale”).  Provided that no Event of Default (as defined in Section 4) has occurred, the Company shall not be required to make any payments on this Note prior to the Due Date.  For purposes of this Note, a “business day” shall mean any day which is not a Saturday, Sunday, or a day on which commercial banks in Chicago, Illinois are required or permitted by law to be closed.

 

1.2 Payment Mode.  Payment of this Note shall be made by the Company to the Holder in U.S. Dollars in immediately available funds at the address of the Holder as set forth in the Company’s records or as otherwise directed by the Holder, unless this Note is converted upon an Event of Default into shares of the Company’s common stock (“Common Stock”) pursuant to Section 5 at the sole election of the Holder.

 

  

  

  

1.3 Application of Payments.  Payments on this Note shall be applied first to accrued interest, and thereafter to the outstanding principal balance hereof.  Any and all payments by the Company to the Holder hereunder shall be made free and clear of, and without deducting or withholding for, any taxes, levies, assessments, imposes, duties, fees or similar charges, except where the Company is required by law to make such deduction or withholding.

 

1.4 Waiver of Presentment.  The Company waives presentment for payment, demand, protest and notice of protest for nonpayment of this Note, and consents to any extension or postponement of the time of payment or any other indulgence.

 

2. Authorized Shares.  As collateral security for this Note, the Company shall maintain in reserve a sufficient number of authorized but unissued shares of Common Stock for the Company to issue to the Holder all of the shares of Common Stock that would be issuable upon conversion of all of the Principal Amount and the accrued but unpaid interest thereon upon an Event of Default pursuant to Section 5 (such number, a “Sufficient Number of Authorized Shares”).  The Company shall take all necessary and desirable action to further amend its Amended and Restated Articles of Incorporation to increase the number of authorized but unissued shares of Common Stock, as may be necessary from time to time, in order to maintain a Sufficient Number of Authorized Shares.  If such amendment is not made within four (4) full calendar months after the time at which the Company first does not have a Sufficient Number of Authorized Shares, then the Principal Amount shall increase, by two percent (2%) of the sum of (a) the Principal Amount and (b) the amount of unpaid monthly interest thereon, each full month until such amendment is made and the Company again has a Sufficient Number of Authorized Shares.

 

3. Right of First Offer; Right of First Refusal.  The Company shall not solicit any equity investment, loan, or other financing without first requesting in writing that the Holder propose such financing (“First Offer”).  The Company shall send a written notice to the Holder requesting a First Offer, and then the Holder shall have thirty (30) days to respond.  If the Holder responds with a written financing offer, the Board of Directors of the Company shall negotiate in good faith with the Holder for a period of an additional thirty (30) days in order to reach an agreement on terms. If the parties are able to reach an agreement, the financing shall be consummated within thirty (30) days after the agreement is reached. If the parties are unable to reach agreement, or if the Holder declines to offer financing or does not respond in a timely manner, then the Company shall be free to solicit financing proposals from third parties. However, if a third party presents a “credible financing proposal” (as defined in the next sentence) to the Company (the “Third-Party Proposal”), the Board shall inform the Holder in writing within five (5) days after the Company’s receipt of the proposal, and the Holder shall then have thirty (30) days thereafter to consummate a financing on the same terms and conditions as in the Third-Party Proposal. A “credible financing proposal” is one in which the financing source has provided the Company with written assurances of its ability and willingness to consummate the proposed financing within thirty (30) days. If the Holder declines to provide financing on the same terms and conditions as in the Third-Party Proposal, and if the financing source fails to consummate the financing within thirty (30) days of the date of its proposal, then the Company shall consummate the financing proposed by the Holder, if any was proposed, within thirty (30) days after the financing contemplated by the Third-Party Proposal was

 

  

  

  

4. scheduled to occur, and the Company shall pay to the Holder a fee of $100,000 to compensate for the delay and expense.

 

5. Events of Default.  The Holder may declare all or a portion of the Principal Amount and accrued but unpaid interest thereon immediately due and payable, effective upon written notice to the Company, upon the occurrence of any of the following events occurs (each, an “Event of Default”):

 

(a) The Company defaults in the payment of this Note, whether the Principal Amount or the interest thereon, when due;

 

(b) The Company:

 

(i) Commences any proceeding or any other action relating to it in bankruptcy or seeks reorganization, arrangement, readjustment of its debts, dissolution, liquidation, winding-up, composition or any other relief under the United States Bankruptcy Act, as amended, or under any other insolvency, reorganization, liquidation, dissolution, arrangement, composition, readjustment of debt or any other similar act or law, of any jurisdiction, domestic or foreign, now or hereafter existing;

 

(ii) Admits its inability to pay its debts as they mature in any petition or pleading in connection with any such proceeding;

 

(iii) Applies for, or consents to or acquiesces in, an appointment of a receiver, conservator, trustee or similar officer for it or for all or substantially all of its assets and properties;

 

(iv) Makes a general assignment for the benefit of creditors; or

 

(v) Admits in writing its inability to pay its debts as they mature;

 

(c) Any proceeding is commenced or any other action is taken against the Company in bankruptcy or seeking reorganization, arrangement, readjustment of its debts, dissolution, liquidation, winding-up, composition or any other relief under the United States Bankruptcy Act, as amended, or under any other insolvency, reorganization, liquidation, dissolution, arrangement, composition, readjustment of debt or any other similar act or law, of any jurisdiction, domestic or foreign, now or hereafter existing; or a receiver, conservator, trustee or similar officer for the Company or for all or substantially all of its assets and properties is appointed; and in each such case, such event continues for ninety (90) days undismissed, unbonded and non-discharged;

 

(d) The Company (or any wholly owned subsidiary of the Company) materially breaches (or fails to cure any continuing breach for a period of more than 30 days) any obligation set forth in (i) this Note, (ii) the Purchase Agreement or any of the other Transaction Documents (as defined in the Purchase Agreement), (iii) the Security Agreement (defined below), (iv) any other agreement between the Company (or any wholly owned subsidiary of the Company) and the Holder, or (v) any material agreement, including but not limited to any loan

 

  

  

  

(e) agreement, between the Company (or any wholly owned subsidiary of the Company) and any other party;

 

(f) A “change in ownership” (as defined in Section 382 of the Internal Revenue Code) occurs; or

 

(g) The Company fails, within four (4) full calendar months after the time at which the Company does not have a Sufficient Number of Authorized Shares, to further amend its Amended and Restated Articles of Incorporation to increase the number of authorized but unissued shares of Common Stock in an amount necessary to maintain a Sufficient Number of Authorized Shares, as provided in Section 2.

 

Upon the occurrence and continuation of an Event of Default, regardless of whether the Holder declares the Principal Amount and accrued but unpaid interest thereon to be immediately due and payable, interest on this Note will increase to an annual rate of eighteen percent (18%) from the date the Event of Default first occurred until the earlier of the dates on which (i) the Event of Default is cured to the sole reasonable satisfaction of the Holder, (ii) all outstanding principal and interest on this Note is paid in full, or (iii) this Note is converted upon an Event of Default pursuant to Section 5 at the sole election of the Holder.

 

Conversion Upon the Occurrence of an Event of Default.  Upon the occurrence and continuation of an Event of Default, at any time and from time to time until the repayment in full of the Principal Amount and all accrued but unpaid interest thereon to the Holder, the Holder may, in its sole discretion and as a remedy, convert all or part of the Principal Amount and the accrued but unpaid interest thereon into newly issued shares of Common Stock.  Subject to adjustment pursuant to the next paragraph, the conversion price is $0.010277667

6.  per share of the Common Stock, which conversion price is based on one hundred ten percent (110%) of the average of the closing bid prices for the Common Stock on the Thirty (30) trading days ending August 14, 2012, which is the date on which the Company’s Board of Directors adopted resolutions approving the terms of this Note and the transactions contemplated hereby.  The Holder may exercise this conversion remedy by providing the Company with written notice of the Holder’s intent to convert and of the amount of the Principal Amount and accrued interest thereon subject to conversion.  The conversion shall then occur on the next business day following the date of the notice.  The Company agrees that the Common Stock reserved for issuance upon conversion is a pledge and a security interest in collateral for the benefit of the Holder.

 

If, at any time and from time to time while any amount is owed by the Company on this Note, the Company issues equity (or debt or other instruments convertible into equity) at a price per share of Common Stock or Common Stock equivalent (or with a conversion price per share of Common Stock or Common Stock equivalent) lower than the conversion price set forth in the previous paragraph, then the conversion price set forth in the previous paragraph shall be reduced to such lower price, regardless of whether the Company subsequently issues equity (or debt or other instruments convertible into equity) at a price per share of Common Stock or Common Stock equivalent (or with a conversion price per share of Common Stock or Common Stock equivalent) higher than the conversion price set forth in the previous paragraph.

 

  

  

  

Notwithstanding anything to the contrary in this Note, no conversion of all or part of the Principal Amount and the accrued but unpaid interest thereon into Common Stock shall be permitted if such conversion would cause an “ownership change” as defined in Section 382 of the Internal Revenue Code; provided, however, that the foregoing shall not apply if such an “ownership change” has occurred at any time prior to such conversion.

 

7. Security. This Note is secured by that certain Security Agreement dated August 14, 2012, as the same may be amended from time to time, executed by the Company in favor of the Holder encumbering all of the assets of the Company (the “Security Agreement”), all the terms and conditions of which are hereby incorporated into and made a part of this Note. This Note is also secured by that certain Pledge and Security Agreement dated August 14, 2012, as the same may be amended from time to time, executed by the Company in favor of the Holder pledging as collateral for repayment of this Note the membership units held by the Company in Pulse Systems, LLC, a Delaware limited liability company (the “Pledge Agreement”), all the terms and conditions of which are hereby incorporated into and made a part of this Note. Upon the occurrence of an Event of Default, the Holder may pursue all of its rights and remedies at law or in equity, including without limitation, foreclosure upon the collateral described in Security Agreement and the Pledge Agreement.

 

8. Miscellaneous.

 

8.1 Transfer of Note, Etc.  This Note is transferable and assignable by the Holder, subject to the requirement that any such assignment or transfer be, in the reasonable opinion of the counsel of the Holder, in full compliance with applicable state and federal securities laws; provided that no such opinion of counsel shall be necessary for a transfer by the Holder to an affiliated entity or to a stockholder, member or partner of the Holder, or transfers by gift, will or intestate succession to any spouse or lineal descendants or ancestors, if all transferees agree in writing to be subject to the terms hereof to the same extent as if they were the original Holder hereof.  All covenants, agreements and undertakings in this Note by or on behalf of any of the parties shall bind and inure to the benefit of the respective successors and assigns of the parties whether so expressed or not.  This Note may not be assigned by the Company without the written consent of the Holder.

 

8.2 Attorneys’ Fees. In the event of any dispute between the parties hereto in connection with this Note, the prevailing party shall be entitled to recover from the losing party all of its costs and expenses, including, without limitation, court costs and reasonable attorneys’ fees.

 

8.3 Amendments and Waivers.  The right to the payment of the Principal Amount and all accrued but unpaid interest thereon, and any provision of this Note, may be amended or waived only with the written consent of the Holder, which consent may be withheld for any reason.  Any amendment effected in accordance with this Section 6.3 shall be binding upon any Holder of this Note (and of any securities into which this Note is convertible), each future holder of all such securities, and the Company, even if such Holder of this Note or such future holder has not executed such amendment.  This Note may not be prepaid in full or in part prior to the Due Date.

 

  

  

  

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

 

8.5 Governing Law.  This Note shall be governed by and construed and enforced in accordance with the laws of the State of Illinois, without giving effect to its conflicts of laws principles.

 

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Date:  August 14, 2012

UNITED AMERICAN HEALTHCARE CORPORATION,

	
  

	
a Michigan  corporation

By:           /s/ Robert T. Sullivan

Name:      Robert T. Sullivan

Title:        Chief Financial Officer

 

ACKNOWLEDGED AND AGREED:

ST GEORGE INVESTMENTS LLC,

an Illinois limited liability company

By:           Fife Trading, Inc.,

an Illinois corporation,

its Manager

By:           /s/ John M. Fife

Name:      John M. Fife

Title:        President

 

 

 

 

 

 

 

 

 

 

	  

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