THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THIS NOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO ON THE GO HEALTHCARE, INC.
THAT SUCH REGISTRATION IS NOT REQUIRED.
AMENDED AND RESTATED SECURED REVOLVING NOTE
FOR VALUE RECEIVED, ON THE GO HEALTHCARE, INC., a Delaware corporation
(the "Borrower") promises to pay to LAURUS MASTER FUND, LTD., c/o M&C
Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church
Street, George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080
(the "Holder") or its registered assigns or successors in interest, on
order, the sum of means Five Million Dollars United States currency
(US$5,000,000), without duplication of any amounts owing by Companies
to Holder under the Minimum Borrowing Note (as defined in the Security
Agreement referred to below), or, if different, the aggregate principal
amount of all Loans (as defined in the Security Agreement referred to below),
together with any accrued and unpaid interest hereon, on July 14, 2008 (the
"Maturity Date") if not sooner indefeasibly paid in full. This Note amends
and restates in its entirety (and is given in substitution for and not in
satisfaction of) that certain $5,000,000 Secured Revolving Note made by the
Company in favor of Holder on July 14, 2005 and amended and restated on
January 13, 2006.
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Security and Purchase Agreement between the
Company and the Holder dated as of the date hereof (as amended, modified
and/or supplemented from time to time, the "Security Agreement").
The following terms shall apply to this Amended and Restated Secured Revolving
Note (this "Note"):
Article I
CONTRACT RATE AND MINIMUM BORROWING NOTE
1.1 Contract Rate. Subject to Sections 2.2 and 3.10, interest payable on the
outstanding principal amount of this Note (the "Principal Amount") shall
accrue at a rate per annum equal to the "prime rate" published in The
Wall Street Journal from time to time (the "Prime Rate"), plus two percent
(2%) (the "Contract Rate"). The Contract Rate shall be increased or
decreased as the case may be for each increase or decrease in the Prime
Rate in an amount equal to such increase or decrease in the Prime Rate;
each change to be effective as of the day of the change in the Prime Rate.
The Contract Rate shall not at any time be less
than eight percent (8%). Interest shall be (i) calculated on the basis
of a 360 day year, and (ii) payable monthly, in arrears, commencing on
August 1, 2005 on the first business day of each consecutive calendar month
thereafter through and including the Maturity Date, and on the Maturity
Date, whether by acceleration or otherwise.
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1.2 Contract Rate Payments. The Contract Rate shall be
calculated on the last business day of each calendar month hereafter
(other than for increases or decreases in the Prime Rate which shall be
calculated and become effective in accordance with the terms of
Section 1.1) until the Maturity Date (each a "Determination Date")
1.3 Currency. All principal, interest and other amounts owing under this
Note, the Security Agreement or any Ancillary Agreement that, in accordance
with their terms, are to be paid in cash shall be paid in US dollars.
All amounts denominated in other currencies shall be converted to the
US dollar equivalent amount in accordance with the Exchange Rate on the
date of calculation. "Exchange Rate" means, in relation to any amount of
currency to be converted into US dollars pursuant to this Note, the
Security Agreement or any Ancillary Agreement, the US dollar exchange
rate as published in the Wall Street Journal on the relevant date of
calculation.
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1.4 Taxes.
(a) If permissible by law, any and all payments by the Borrower
hereunder, including any amounts received on a conversion or
redemption of this Note and any amounts on account of interest
or deemed interest, shall be made free and clear of and without
deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, charged, levied,
imposed or required to be deducted or withheld by any federal,
state or provincial government or other political subdivision
thereof, and any agency, department or other entity exercising
executive, legislative judicial, regulatory or administrative
functions of or pertaining to such government ("Government
Authority"), and all liabilities with respect thereto, excluding,
for certainty, taxes imposed on net income or profit and capital,
capital gains, sales or franchise taxes of the Holder (all such
non-excluded taxes, levies, imposts, deductions, charges
withholdings and liabilities, collectively or individually,
"Taxes"). Borrower hereby covenants and agrees that if Borrower
shall be required to deduct any Taxes from or in respect of any
sum payable hereunder to the Holder, (i) the sum payable shall
be increased by the amount (an "additional amount") necessary
so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 1.3) the
Holder shall receive an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) In addition, Borrower hereby agrees to pay to the relevant
Governmental Authority in accordance with applicable law any
present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies that arise from any
payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Note ("Other
Taxes"). Borrower hereby covenants and agrees that the Borrower
shall deliver to the Holder official receipts, if any, in respect
of any Taxes or Other Taxes payable hereunder promptly after
payment of such Taxes or Other Taxes or other evidence of payment
reasonably acceptable to the Holder.
(c) The Company hereby indemnifies and agrees to hold the Holder
harmless from and against Taxes and Other Taxes (including, without
limitation, Taxes and Other Taxes imposed on any amounts payable
under this Section 1.3) paid by the Holder, whether or not such
Taxes or Other Taxes were correctly or legally asserted. Such
indemnification shall be paid within ten (10) days from the date
on which the Holder makes written demand therefor specifying in
reasonable detail the nature and amount of such Taxes or Other
Taxes.
(d) The obligations of the Company under this Section 1.3 shall
survive the termination and the payment of this Note and all
other amounts payable hereunder.
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Article II
EVENTS OF DEFAULT AND DEFAULT RELATED PROVISIONS
2.1 Events of Default. The occurrence of an Event of Default under the
Security Agreement shall constitute an event of default ("Event of
Default") hereunder.
2.2 Default Interest. Following the occurrence and during the continuance
of an Event of Default, the Company shall pay additional interest on the
outstanding principal balance of this Note in an amount equal to two
percent (2%) per month, and all outstanding Obligations, including
unpaid interest, shall continue to accrue interest at such additional
interest rate from the date of such Event of Default until the date such
Event of Default is cured or waived.
2.3 Default Payment. Following the occurrence and during the continuance of
an Event of Default, the Holder, at its option, may elect, in addition to
all rights and remedies of the Holder under the Security Agreement and
the other Ancillary Agreements and all obligations and liabilities of the
Borrower under the Security Agreement and the other Ancillary Agreements,
to require the Borrower to make a Default Payment ("Default Payment").
The Default Payment shall be 130% of the outstanding principal amount of
the Note, plus accrued but unpaid interest, all other fees then remaining
unpaid, and all other amounts payable hereunder. The Default Payment shall
be applied first to any fees due and payable to the Holder pursuant to the
Notes , the Security Agreement and/or the Ancillary Agreements, then to
accrued and unpaid interest due on the Notes and then to the outstanding
principal balance of the Notes. The Default Payment shall be due and
payable immediately on the date that the Holder has exercised its rights
pursuant to this Section 2.3.
Article III
MISCELLANEOUS
3.1 Cumulative Remedies. The remedies under this Note shall be cumulative.
3.2 Failure or Indulgence Not Waiver. No failure or delay on the part of the
Holder hereof in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights
and remedies existing hereunder are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
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3.3 Notices. Any notice herein required or permitted to be given shall be in
writing and shall be deemed effective given (a) upon personal delivery to
the party notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next
business day, (c) five days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one day
after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt. All
communications shall be sent to the Company at the address provided
for such Company in the Security Agreement executed in connection
herewith, and to the Holder at the address provided in the Security
Agreement for such Holder, with a copy to John E. Tucker, Esq., 825 Third
Avenue, 14th Floor, New York, New York 10022, facsimile number
(212) 541-4434, or at such other address as the Company or Holder
may designate by ten days advance written notice to the other parties
hereto. A Notice of Conversion shall be deemed given when made to the
Borrower pursuant to the Purchase Agreement.
3.4 Amendment Provision. The term "Note" and all references thereto, as
used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented, and any successor instrument as such successor instrument
may be amended or supplemented.
3.5 Assignability. This Note shall be binding upon each Borrower and its
successors and assigns, and shall inure to the benefit of the Holder and
its successors and assigns, and may be assigned by the Holder in
accordance with the requirements of the Security Agreement. No Borrower
may not assign any of its obligations under this Note without the
prior written consent of the Holder, any such purported assignment
without such consent being null and void.
3.6 Cost of Collection. In case of any Event of Default under this Note,
the Company shall pay the Holder the Holder's reasonable costs of
collection, including reasonable attorneys' fees.
3.7 Governing Law, Jurisdiction and Waiver of Jury Trial.
(a) THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
(b) EACH BORROWER HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL
HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN ANY BORROWER, ON THE ONE HAND, AND THE HOLDER,
ON THE OTHER HAND, PERTAINING TO THIS NOTE, THE SECURITY AGREEMENT
OR ANY OF THE OTHER ANCILLARY AGREEMENTS OR TO ANY MATTER ARISING
OUT OF OR RELATED TO THIS NOTE, THE SECURITY AGREEMENT OR ANY OF
THE OTHER ANCILLARY AGREEMENTS PROVIDED, THAT EACH BORROWER
ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE
OF NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN THIS NOTE SHALL
BE DEEMED OR OPERATE TO PRECLUDE THE HOLDER FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE
OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY
FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
IN FAVOR OF THE HOLDER. EACH BORROWER EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND EACH BORROWER HEREBY WAIVES ANY
OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL
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JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. EACH
BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT
AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES
THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY
BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE COMPANY
AT THE ADDRESS SET FORTH IN THE SECURITY AGREEMENT AND THAT
SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF
THE COMPANY'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER
DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID
(c) EACH BORROWER DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE
APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST
COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, EACH BORROWER HERETO WAIVES ALL RIGHTS TO TRIAL
BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE
ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE
BETWEEN THE HOLDER, AND/OR ANY BORROWER ARISING OUT OF,
CONNECTED WITH, RELATED OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE, THE
SECURITY AGREEMENT, ANY OTHER ANCILLARY AGREEMENT OR THE
TRANSACTIONS RELATED HERETO OR THERETO.
3.8 Judgment Currency.
(a) If for the purpose of obtaining or enforcing judgment against
one or more of the Borrower in any court in any jurisdiction
it becomes necessary to convert into any other currency (such
other currency being hereinafter in this Section 3.8 referred
to as the "Judgment Currency") an amount due in US dollars under
this Note, the conversion shall be made at the Exchange Rate
prevailing on the business day immediately preceding:
(i) the date actual payment of the amount due, in the case of
any proceeding in the courts of New York or in the courts
of any other jurisdiction that will give effect to such
conversion being made on such date: or
(ii) the date on which the foreign court determines, in the
case of any proceeding in the courts of any other
jurisdiction (the date as of which such conversion is
made pursuant to this Section 3.8 (ii) being
hereinafter referred to as the "Judgment Conversion
Date")
(b) If in the case of any proceeding in the court of any jurisdiction
referred to in Section 3.8(a)(ii) above, there is a change in
the Exchange Rate prevailing between the Judgment Conversion
Date and the date of actual payment of the amount due, the
applicable party (being in the case of one or more Borrower,
the Companies on a joint and several basis) shall pay such
adjusted amount as may be necessary to ensure that the amount
paid in the Judgment Currency, when converted at the Exchange
Rate prevailing on the date of payment, will produce the amount
of US dollars which could have been purchased with the amount
of Judgment Currency stipulated in the judgment or judicial order
at the Exchange Rate prevailing on the Judgment Conversion Date.
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(c) Any amount jointly and severally due from the Companies under this
provision shall be due as a separate debt and shall not be affected
by judgment being obtained for any other amounts due under or in
respect of this Note.
3.9 Severability. In the event that any provision of this Note 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 this Note.
3.10 Maximum Payments. Nothing contained herein shall be deemed to establish
or require the payment of a rate of interest or other charges in excess of
the maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum
rate permitted by such law, any payments in excess of such maximum rate
shall be credited against amounts owed by the Companies to the Holder
and thus refunded to the Companies.
3.11 Security Interest. The Holder has been granted a security interest in
certain assets of the Borrower as more fully described in the Security
Agreement and pursuant to each of the Master Security Agreement, the
Subsidiary Guarantee, and the Stock Pledge Agreement, each dated as of
the date hereof.
3.12 Registered Obligation. This Note is intended to be a registered
obligation within the meaning of Treasury Regulation Section
1.871-14(c)(1)(i) and the Company (or its agent) shall register this
Note (and thereafter shall maintain such registration) as to both
principal and any stated interest. Notwithstanding any document,
instrument or agreement relating to this Note to the contrary, transfer
of this Note (or the right to any payments of principal or stated
interest thereunder) may only be effected by (i) surrender of this
Note and either the reissuance by the Company of this Note to the new
holder or the issuance by the Company of a new instrument to the new
holder, or (ii) transfer through a book entry system maintained by the
Company (or its agent), within the meaning of Treasury Regulation
Section 1871-14(c)(1)(i)(B).
3.13 Construction. Each party acknowledges that its legal counsel participated
in the preparation of this Note and, therefore, stipulates that the rule
of construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor
any party against the other.
[Balance of page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, each Borrower has caused this Amended and Restated Secured
Revolving Note to be signed in its name effective as of this 14th day of
July, 2005.
ON THE GO HEALTHCARE, INC.
By: /s/Stuart Turk
------------------------
Name: Stuart Turk
Title: CEO:
I/We have the authority to bind the corporation.
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