AMENDMENT NUMBER 1 TO PROMISSORY NOTE (TO INCLUDE CONVERTIBLE LOAN TERMS ) Dated as of February 10, 2005
EXHIBIT
10.14
AMENDMENT
NUMBER 1 TO PROMISSORY NOTE
(TO
INCLUDE CONVERTIBLE LOAN TERMS )
Dated
as
of February 10, 2005
This
AMENDMENT
NUMBER 1 TO PROMISSORY NOTE (this
“Amendment”)
is
entered into by and between NUWAY MEDICAL, INC., a corporation organized
under
the laws of the state of Delaware (the “Borrower”),
and
▇▇▇▇▇ ▇▇▇▇, DDS, the “Investor”. The Investor shall be referred to herein as the
“Lender”. Capitalized terms used herein shall have the meanings ascribed to such
terms in Section 8
of this
Agreement.
On
November 20, 2003 lender loaned to Borrower $50,000 pursuant to that certain
Promissory Note of the same date (“Note”) . Payments on the Note were made
during 2004 by Borrower to Lender, reducing the amount due (including
outstanding interest) to approximately $35,000, which remains unpaid. The
parties hereto desire to extend the loan Maturity Date (all capitalized terms
have the meanings set forth in the Note) and add to the terms of the Note
the
option to convert the Note into common stock of NuWay Medical, Inc.
In
consideration of the mutual covenants and undertakings contained herein,
and for
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Borrower and the Lender hereby agree as
follows:
1. Maturity
Date. The Maturity Date, as that term is defined in the Note, shall be extended
up to and including February 3, 2006.
2. Interest. The
Borrower agrees to pay interest on the unpaid principal amount of the Term
Loan
from time to time outstanding hereunder at the following rates per year,
compounded annually:
| a. |
before
maturity of the Term Loan, whether by acceleration or otherwise,
at the
rate per annum equal to ten percent
(10%).
|
| b. |
after
the maturity of the Term Loan, whether by acceleration or otherwise,
until
paid, at a rate per annum equal to fifteen percent
(15%).
|
| c. |
Interest
Payment Date.
Accrued interest shall be paid in full on the Maturity
Date.
|
| d. |
Basis
Of Computation. Interest shall be computed for the actual number
of days
elapsed on the basis of a year consisting of 360 days, including
the date
the Term Loan is made and excluding the date the Term Loan or any
portion
thereof is paid or prepaid.
|
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3. Conversion.
The Borrower or Lender may, at its option, convert the principal amount of
this
Note or any portion thereof, and any accrued interest thereon, into 7,000,000
shares
of
fully paid and non assessable Common Stock of the Issuer (“Conversion
Shares”).
The
right to convert the Note may be exercised by telecopying an executed and
completed notice of conversion (the “Notice
of Conversion”)
to the
Borrower or Lender. Each business day on which a Notice of Conversion is
telecopied in accordance with the provisions hereof shall be deemed a
“Conversion Date”. The Borrower will transmit the certificates representing
Conversion Shares issuable upon such conversion of the Note (together with
the
certificates representing the Note not so converted) to the Lender via express
courier or otherwise within ten Business Days after the Conversion Date,
provided the Borrower has received the original Note being so converted from
the
Lender. The Conversion of this note may require that the Borrower amend its
charter to increase the number of common shares authorized and therefore,
in
such an event, the conversion will not be allowed prior to the Borrower’s
completion of that process. Borrower shall act promptly to affect such
amendments, if necessary.
a. The
number of Conversion Shares shall be adjusted as follows: If the Borrower
shall
at any time subdivide its outstanding shares of Common Stock into a greater
number of shares of Common Stock, the number of Conversion Shares in effect
immediately prior to such subdivision shall be proportionately increased,
and
conversely, in case the outstanding shares of Common Stock shall be combined
into a smaller number of shares of Common Stock, the Conversion Price in
effect
immediately prior to such combination shall be proportionately
reduced.
4. Lender
represents that it
is an
“Accredited
Investor”
as
that term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the “Securities
Act”)
5. The
Amendment and the Note it amends set for the entire understanding and agreement
of the parties hereto with respect to the subject matter hereof, and supersedes
all prior or contemporaneous oral or written agreements, arrangements,
representations or understandings of any kind relating to the subject matter
hereof.
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IN
WITNESS WHEREOF,
the
parties have caused this Amendment to be duly executed as of the day and
year
first above written.
BORROWER
NUWAY
MEDICAL, INC.
/s/▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇, President
LENDER
/s/▇▇▇▇▇
▇▇▇▇, DDS
▇▇▇▇▇
▇▇▇▇, DDS
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇
▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
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