SECURED PROMISSORY NOTE
ISSUE AMOUNT U.S. $255,000
FACE AMOUNT U.S. $306,000
INTEREST RATE 20% per year
ISSUANCE DATE February 23, 2006
FOR VALUE RECEIVED, Vital Products, Inc, a Delaware corporation
(the "Company"), hereby promises to pay On the Go Healthcare, Inc., a Delaware
corporation, (the "Holder") the Face Amount, subject to further adjustment as
described below, in such amounts, at such times and on such terms and
conditions as are specified herein (this "Note").
Article 1 Maturity
The full amount of this Note is payable one year from the date that the
Securities and Exchange Commission declares a registration statement filed
by the Company effective (the "Maturity Date").
Notwithstanding any provision to the contrary in this Note, the Company may
pay in full to the Holder the Face Amount, or any balance remaining thereof,
in readily available funds at any time and from time to time without penalty
("Prepayment").
Article 2 Interest
The outstanding Face Value of the Note shall increase by 20% on July 3, 2006.
The outstanding Face Value of the Note shall increase by another 20% on
July 3, 2007 and again on each one year anniversary of July 3, 2007 until
the Note has been paid in full.
Article 3 Collateral
The Holder may elect to secure a portion of the Company's assets not to exceed
200% of the Face Amount of the Note, including, but not limited to: accounts
receivable, cash, marketable securities, equipment, building, land or
inventory (the "Collateral").
Article 4 Defaults and Remedies
An "Event of Default" or "Default" occurs if (a) the Company does not pay
the Face Amount of this Note within five (5) business days after the
Maturity Date.
In case an Event of Default shall have occurred and be declared by the
Holder, the Holder may:
* Transfer any or all of the Collateral into its name, or into the
name of its nominee or nominees;
* Exercise all corporate rights with respect to the Collateral including,
without limitation, all rights of conversion, exchange, subscription
or any other rights, privileges or options pertaining to any shares of
the Collateral as if it were the absolute owner thereof, including, but
without limitation, the right to exchange, at its discretion, any or
all of the Collateral upon the merger, consolidation, amalgamation,
reorganization, recapitalization or other readjustment of the Issuer
thereof, or upon the exercise by the Issuer of any right, privilege
or option pertaining to any of the Collateral, and, in connection
therewith, to deposit and deliver any and all of the Collateral with
any committee, depository, transfer agent, registrar or other
designated agent upon such terms and conditions as it may determine,
all without liability except to account for property actually received
by it; and
* subject to any requirement of applicable law including, for greater
certainty, the Personal Property Security Act (Ontario), sell, assign
and deliver the whole or, from time to time, any part of the Collateral
at the time held by the Holder, at any private sale or at public
auction, with or without demand, advertisement or notice of the time
or place of sale or adjournment thereof or otherwise (all of which are
hereby waived, except such notice as is required by applicable law and
cannot be waived), for cash or credit or for other property for
immediate or future delivery, and for such price or prices and on such
terms as the Pledgee in its sole discretion may determine, or as may
be required by applicable law.
Article 5 Mergers
The Company shall not consolidate or merge into, or transfer all or
substantially all of its assets to, any person, unless such person assumes in
writing the obligations of the Company under this Note and immediately after
such transaction no Event of Default exists. Any reference herein to the
Company shall refer to such surviving or transferee corporation and the
obligations of the Company shall terminate upon such written assumption.
Failure to do so will constitute an Event of Default under this Agreement
and the Holder may immediately seek to take actions as described under
Article 3 of this Agreement.
Article 6 Notices
Any notices, consents, waivers or other communications required or permitted
to be given under the terms of this Note must be in writing and will be deemed
to have been delivered (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided a confirmation of transmission is
mechanically or electronically generated and kept on file by the sending
party); or (iii) one (1) day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same.
Article 7 Time
Where this Note authorizes or requires the payment of money or the performance
of a condition or obligation on a Saturday or Sunday or a holiday in which the
United States Stock Markets ("US Markets") are closed ("Holiday"), or
authorizes or requires the payment of money or the performance of a condition
or obligation within, before or after a period of time computed from a certain
date, and such period of time ends on a Saturday or a Sunday or a Holiday,
such payment may be made or condition or obligation performed on the next
succeeding business day, and if the period ends at a specified hour, such
payment may be made or condition performed, at or before the same hour of such
next succeeding business day, with the same force and effect as if made or
performed in accordance with the terms of this Note. A "business day" shall
mean a day on which the US Markets are open for a full day or half day of
trading.
Article 8 No Assignment
This Note shall not be assigned.
Article 9 Rules of Construction
In this Note, unless the context otherwise requires, words in the singular
number include the plural, and in the plural include the singular, and words
of the masculine gender include the feminine and the neuter, and when the
tense so indicates, words of the neuter gender may refer to any gender. The
numbers and titles of sections contained in the Note are inserted for
convenience of reference only, and they neither form a part of this Note nor
are they to be used in the construction or interpretation hereof. Wherever,
in this Note, a determination of the Company is required or allowed, such
determination shall be made by a majority of the Board of Directors of the
Company and, if it is made in good faith, it shall be conclusive and binding
upon the Company and the Holder.
Article 10 Governing Law
The validity, terms, performance and enforcement of this Note shall be
governed and construed by the provisions hereof and in accordance with the
laws of the State of Delaware applicable to agreements that are negotiated,
executed, delivered and performed solely in the State of Delaware.
Article 11 Waiver
The Holder's delay or failure at any time or times hereafter to require strict
performance by Company of any undertakings, agreements or covenants shall not
waiver, affect, or diminish any right of the Holder under this Agreement to
demand strict compliance and performance herewith. Any waiver by the Holder of
any Event of Default shall not waive or affect any other Event of Default,
whether such Event of Default is prior or subsequent thereto and whether of
the same or a different type. None of the undertakings, agreements and
covenants of the Company contained in this Agreement, and no Event of
Default, shall be deemed to have been waived by the Holder, nor may this
Agreement be amended, changed or modified, unless such waiver, amendment,
change or modification is evidenced by an instrument in writing specifying
such waiver, amendment, change or modification and signed by the Holder.
Article 12 Senior Obligation
The Company shall cause this Note and all other existing Notes with the
Holder ("Holder's Debt") to be senior in right of payment to all other
Indebtedness of the Company.
Article 13 Miscellaneous
a. All pronouns and any variations thereof used herein shall be deemed to
refer to the masculine, feminine, impersonal, singular or plural, as the
identity of the person or persons may require.
b. Neither this Note nor any provision hereof shall be waived, modified,
changed, discharged, terminated, revoked or canceled, except by an
instrument in writing signed by the party effecting the same against
whom any change, discharge or termination is sought.
c. This Note may be executed in two or more counterparts, all of which
taken together shall constitute one instrument. Execution and delivery
of this Note by exchange of facsimile copies bearing the facsimile
signature of a party shall constitute a valid and binding execution
and delivery of this Note by such party. Such facsimile copies shall
constitute enforceable original documents.
d. This Written Agreement represent the FINAL AGREEEMENT between the
Company and the Holder and may not be contradicted by evidence of prior,
contemporaneous, or subsequent oral agreements of the parties, there
are no unwritten oral agreements among the parties.
E, The execution, delivery and performance of this Note by the Company and
the consummation by the Company of the transactions contemplated hereby
and thereby will not (i) result in a violation of the Articles of
Incorporation, any Certificate of Designations, Preferences and Rights
of any outstanding series of preferred stock of the Company or the
By-laws or (ii) conflict with, or constitute a material default (or an
event which with notice or lapse of time or both would become a material
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement, contract,
indenture mortgage, indebtedness or instrument to which the Company
or any of its Subsidiaries is a party, or result in a violation of
any law, rule, regulation, order, judgment or decree, including United
States federal and state securities laws and regulations and the rules
and regulations of the principal securities exchange or trading market
on which the Common Stock is traded or listed (the "Principal Market"),
applicable to the Company or any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries is bound or
affected.
Any misrepresentations shall be considered a breach of contract and Default
under this Agreement and the Holder may seek to take actions as described
under Article 3 of this Agreement.
*****
IN WITNESS WHEREOF, the Company has duly executed this Note as of the date
first written above.
VITAL PRODUCTS, INC.
By: /s/ Michael Levine
-------------------------------
Name: Michael Levine
Title: Chief Executive Officer
ON THE GO HEALTHCARE, INC.
By /s/ Stuart Turk
-------------------------------
Name: Stuart Turk
Title: Chief Executive Officer