EXHIBIT 10.18
CONSOLIDATED NOTE AND SECURITY AGREEMENT
THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THIS NOTE IS SECURED AS PROVIDED IN THE SECURITY AGREEMENT EXECUTED CONCURRENTLY
(THE "SECURITY AGREEMENT"). REFERENCE IS MADE TO THE SECURITY AGREEMENT FOR
DESCRIPTION OF THE ASSETS IN WHICH LIENS AND SECURITY INTERESTS HAVE BEEN
CONVEYED AND GRANTED AS COLLATERAL TO SECURE THIS NOTE, THE NATURE AND EXTENT OF
SUCH SECURITY, AND THE TERMS AND CONDITIONS UPON WHICH THE LIENS AND SECURITY
INTERESTS WERE GRANTED. THE PURPOSE OF THIS NOTE IS TO CONSOLIDATE VARIOUS
OBLIGATIONS WHICH THE BORROWER HAS WITH VARIOUS THIRD PARTIES AND WITH HOLDER.
THAT THIS NOTE SHALL INCLUDE ALL PAST AND PRESENT FUNDINGS. ALL FUTURE FUNDINGS
BEYOND THIS NOTE SHALL BE EVIDENCED BY A NEW PROMISSORY NOTE.
THIS NOTE DATED THIS 5TH OF JANUARY, 2007 IS INTENDED TO MEMORIALIZE THE
OBLIGATIONS OF NOT ONLY CURRENT LOANS, PAST CASH ADVANCES, WHICH WERE PAID BY
HOLDER, AS WELL AS OTHER CONSIDERATION BOTH CASH AND NONCASH, WHICH HAS BEEN
AGREED TO BY THE PARTIES, WHICH ARE DUE TO HOLDER.
THE NOTE IS TO SECURE FOR HOLDER SUCH SUMS AS SHALL BE NECESSARY TO PRESERVE AND
PROTECT THE COLLATERAL WHICH IS THE SUBJECT OF THIS NOTE AND THE SECURITY
AGREEMENT AND THE COLLECTION OF THE SUMS DUE UNDER THE NOTE SECURED HEREBY.
FURTHERMORE, IT IS ACKNOWLEDGED AND RATIFIED THAT THE SUMS DUE UNDER THIS NOTE
ARE FOR BOTH CASH ADVANCED TO BORROWER, SERVICES PERFORMED, AGREEMENTS ENTERED
INTO, AND OTHER CONSIDERATION WHICH IS DUE TO HOLDER.
FURTHERMORE, IT IS UNDERSTOOD THAT INCLUDED WITHIN THIS NOTE IS AN ADDITIONAL
CASH ADVANCE TO THE COMPANY OF FIFTY HUNDRED THOUSAND DOLLARS ($50,000) WHICH
WILL BE PAID UPON EXECUTION OF THIS AGREEMENT, THE DELIVERY OF THE SIGNED AND
EXECUTED BOARD OF DIRECTORS RESOLUTIONS AND ANY OTHER DOCUMENTS SO REQUESTED BY
HOLDER. THE BALANCE OF THE NOTE SHALL REFLECT SUMS WHICH ARE CURRENTLY OWING IN
BOTH CASH AND NON-CASH TRANSACTIONS BETWEEN THE PARTIES.
SECURED CONVERTIBLE NOTE
FOR VALUE RECEIVED, National Healthcare Technology, Inc., a Colorado corporation
(hereinafter called the "Borrower"), hereby promises to pay to ▇▇▇▇▇▇▇ Oil and
Gas Inc.,( or its assignee) a [Nevada] corporation, of ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "HOLDER") the sum of THREE
HUNDRED AND FIFTY THOUSAND DOLLARS ($350,000) with compound interest accruing at
the annual rate of TEN PERCENT (10%), on December 31, 2007 (the "Maturity
Date"). All payments shall be in lawful currency of the United States of
America.
The following terms shall apply to this Note:
ARTICLE I
PAYMENT DEMAND AND DEFAULT RELATED PROVISIONS
1.1 PAYMENT: DEFAULT RATE AND GRACE PERIOD. The Borrower shall make
monthly payments of interest only on the first day of each month following the
date hereof. On the Maturity Date, all unpaid interest and principal due under
this Note shall be payable. If any amount, whether of principal or interest on
this Note, is not paid when due (after giving effect to any applicable grace
period), then from and after such date the entire outstanding balance of the
Note shall bear interest at the Default Rate. The Borrower
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shall have a FIVE (5) DAY GRACE PERIOD to pay any monetary amounts due under
this Note after its due date, after which grace period a default interest rate
of EIGHTEEN PERCENT (18%) per annum shall apply to the amounts owed hereunder.
In the event of an Event of Default, defined below, such default interest shall
accrue against all previously accrued but unpaid interest and outstanding
principal at the Default Rate, and all such principal and interest shall be
immediately due and payable upon demand by the Holder to Borrower. All payments
to be made under this Note shall be made to Holder at its office stated on the
first page of this Note, or at such other address or, if by wire, such other
bank account, as may be designated in writing by Holder from time to time.
1.2 CONVERSION PRIVILEGES. The Conversion Privileges set forth in Article
II shall remain in full force and effect immediately from the date hereof and
until the Note is paid in full.
1.3 INTEREST RATE. Interest payable on this Note shall accrue from and
after the first advance hereunder, and only on the amount so advanced plus any
accrued but unpaid interest, at the annual rate OF TEN PERCENT (10%) and be
payable in arrears on the first day of each month following the date hereof, and
on the Maturity Date, accelerated or otherwise, when the principal and all
accrued but unpaid interest shall be due and payable, or sooner as described
below. Interest shall accrue from the date hereof, on the full amount of
principal advanced hereunder and any accrued but unpaid interest, until this
Note is paid in full. Interest and any fees and charges payable under this Note
shall be calculated on the basis of a 360-day year for the actual days elapsed.
1.4 NO SETOFF OR COUNTERCLAIM. All payments (including prepayments) by the
undersigned on account of principal and interest and fees, if any, shall be made
to Holder without set-off, recoupment or counterclaim. If any payment becomes
due and payable on a day other than a Business Day, the due date of such payment
shall be extended t the next succeeding Business Day and, with respect to
payments of principal, interest thereon shall be payable at the then applicable
rate during such extension.
1.5 WAIVER OF PRESENTMENT AND ENFORCEMENT. All parties now or subsequently
liable with respect to this Note, whether maker, principal, surety, guarantor,
endorser or otherwise, hereby waive presentation for payment, demand, notice of
nonpayment or dishonor, protest and notice of protest and any and all lack of
diligence or delay in collection or enforcement hereof.
ARTICLE II
CONVERSION RIGHTS
At any time during the term of this Note and continuing until this Note is paid
in full, the Holder may deliver a written notification (the "NOTICE OF
CONVERSION") to the Borrower setting forth the portion of the principal amount
of the Note and/or interest due and payable (the "INVESTMENT AMOUNT") that the
Holder exercises its conversion rights with respect thereto, subject to the
terms and provisions set forth below.
2.1. CONVERSION INTO THE BORROWER'S COMMON STOCK.
(a) The Holder shall have the right, but not the obligation, from
and after the Borrower's receipt of a Notice of Conversion or the occurrence of
any Event of Default, as the case may be, and then at any time and from time to
time until this Note is fully paid, to convert all or any portion of the
principal of this Note and/or interest due and payable set forth in each such
Notice of Conversion or the entire or a portion of the principal portion of this
Note and/or interest due and payable following the occurrence or an Event of
Default, as the case may be, into fully paid and nonassessable shares of common
stock of the Borrower as such stock exists on the date of issuance of this Note,
or any shares of capital stock of the Borrower into which such stock shall
hereafter be changed or reclassified or exchanged for (the "COMMON STOCK") at
the conversion price as defined in Section 2.1(b) hereof (the
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"CONVERSION PRICE"), determined as provided herein. Upon delivery to the
Borrower of the Holder's written request for conversion (a "Notice of
Conversion", the date of giving such notice of conversion being a (CONVERSION
DATE), the Borrower shall issue and deliver to the Holder within seven business
days from the Conversion Date that number of shares of Common Stock for the
portion of the Note converted in accordance with the foregoing. The number of
shares of Common Stock to be issued upon each conversion of this Note shall be
determined by dividing that portion of the principal of the Note to be converted
and accrued interest, if any, by the Conversion Price.
(b) Subject to adjustment as set forth in section 2.1, the Note
(including for all purposes herein accrued interest thereon) is convertible in
whole or in part at any time prior to receipt by Holder of payment in full, into
common stock of the Borrower at the conversion rate equal to $.01 (one) cent
(the "FIXED CONVERSION PRICE") per share of Common Stock. It is understood that
the shares be to issued to Holder shall be restricted, and that there is little
to no liquidity or resale market in the shares, that the shares will not be
registered.
A. MERGER, SALE OF ASSETS, ETC. If the Borrower at any time
shall consolidate with or merge into or sell or convey all or substantially all
its assets to any other person or entity, this Note, as to the unpaid principal
portion thereof and accrued interest thereon, shall thereafter be deemed to
evidence the right to purchase such number and kind of shares or other
securities and property as would have been issuable or distributable on account
of such consolidation, merger, sale or conveyance, upon or with respect to the
securities subject to the conversion or purchase right immediately prior to such
consolidation, merger, sale or conveyance. The foregoing provision shall
similarly apply to successive transactions of a similar nature by any such
successor or purchaser. Without limiting the generality of the foregoing, the
anti-dilution provisions of this Section shall apply to such securities of such
successor or purchaser after any such consolidation, merger, sale or conveyance.
It is agreed that the borrower will not issue more than ten percent of the
issued and outstanding stock of the company without the prior written consent of
Holder.
B. RECLASSIFICATION, ETC. If the Borrower at any time shall,
by reclassification or otherwise, change the Common Stock into the same or a
different number of securities of any class or classes, this Note, as to the
unpaid principal portion thereof and accrued interest thereon, shall thereafter
be deemed to evidence the right to purchase an adjusted number of such
securities and kind of securities as would have been issuable as the result of
such change with respect to the Common Stock immediately prior to such
reclassification or other change.
C. STOCK SPLITS, COMBINATIONS AND DIVIDENDS. If the shares of
Common Stock are subdivided or combined into a greater number of shares of
Common Stock, or if a dividend is paid on the Common Stock in shares of Common
Stock, the Conversion Price shall be proportionately reduced in case of
subdivision of shares or stock dividend or proportionately increased in the case
of combination of shares, in each such case by the ratio which the total number
of shares of Common Stock outstanding immediately after such event bears to the
total number of shares of Common Stock outstanding immediately prior to such
event. In the event that the number of shares is reduced to a smaller number of
shares as in a stock reverse, the conversion price shall remain the same
pursuant to the provisions of 2.1(b).
(d) During the period the conversion right exists, the Borrower will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of Common Stock upon the full conversion of
this Note. The Borrower represents that upon issuance, such shares will be duly
and validly issued, fully paid and non-assessable. The Borrower agrees that its
issuance of this Note shall constitute full authority to its officers, agents,
and transfer agents who are charged with the duty of executing and issuing stock
certificates to execute and issue the necessary
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certificates for shares of Common Stock upon the conversion of this Note.
2.2 METHOD OF CONVERSION. This Note may be converted by the Holder in
whole or in part as described in Section 2.1(a). Upon partial conversion of this
Note, in which case the remaining balance of the note will remain in full force
and effect for the principal balance of this Note and interest which shall not
have been converted or paid.
ARTICLE III
EVENT OF DEFAULT
The occurrence of any of the following events of default ("EVENT OF
DEFAULT") shall, at the option of the Holder hereof, make all sums of principal
and interest then remaining unpaid hereon and all other amounts payable
hereunder immediately due and payable, all without demand, presentment or
notice, or grace period, all of which hereby are expressly waived, except as set
forth below:
3.1 FAILURE TO PAY PRINCIPAL OR INTEREST. The Borrower fails to pay ANY
portion of the principal or interest due under this Note when due and such
failure continues for a period of five (5) calendar days after the due date.
3.2 BREACH OF COVENANT. The Borrower breaches any material covenant or
other term or condition of this Note in any material respect and such breach, if
subject to cure, continues for a period of five (5) calendar days after written
notice to the Borrower from the Holder.
3.3 BREACH OF REPRESENTATIONS AND WARRANTIES. Any material representation
or warranty of the Borrower made herein, or in any agreement, statement or
certificate given in writing pursuant hereto or in connection therewith shall be
false or misleading. It is agreed that Borrower will not issue more than ten
percent of the issued and outstanding shares of the company unless the note has
been paid in full.
3.4 RECEIVER OR TRUSTEE. The Borrower shall make an assignment for the
benefit of creditors, or apply for or consent to the appointment of a receiver
or trustee for it or for a substantial part of its property or business; or such
a receiver or trustee shall otherwise be appointed.
3.5 JUDGMENTS. Any money judgment, writ or similar final process shall be
entered or filed against the Borrower or any of its property or other assets for
more than $50,000, and shall remain unvacated, unbonded or unstayed for a period
of forty-five (45) days.
3.6 BANKRUPTCY. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower.
3.7 CONCESSION. A concession by the Borrower, after applicable notice and
cure periods, under any one or more obligations in an aggregate monetary amount
in excess of $50,000.
3.8 FAILURE TO DELIVER COMMON STOCK OR REPLACEMENT NOTE. The Borrower's
failure to timely deliver Common Stock to the Holder pursuant to and in the form
required by this Note or if required a replacement Note.
3.9 DEFAULT UNDER SECURITY AGREEMENT. An Event of Default occurs under and
as defined in the Security Agreement dated as of the date hereof between the
Borrower and the Holder as
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such agreement may be amended, modified and supplemented from time to time, and
such Event of Default is not cured during any applicable cure or grace period.
3.10 REMEDIES OF HOLDER ARE CUMULATIVE. The remedies of Holder as provided
herein and in the Security Agreement, and any one or more of them, whether in
law or in equity, shall be cumulative and concurrent, and may be pursued
singularly, successively or together at Holder's sole discretion, and may be
exercised as often as Holder may decide in its sole and absolute discretion.
ARTICLE IV
MISCELLANEOUS
4.1 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.
4.2 NOTICES. Any notice herein required or permitted to be given shall be
in writing and shall be deemed effectively 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) three 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
Borrower and Holder at the addresses on the first page of this Note or at such
other address as the Borrower or the 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.
4.3 AMENDMENT PROVISION. The term "Note" and all reference 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.
4.4 ASSIGNABILITY. This Note shall be binding upon the 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.
4.5 COST OF COLLECTION. If default is made in the payment of this Note,
the Borrower shall pay the Holder hereof reasonable costs of collection,
including reasonable attorneys' fees.
4.6 GOVERNING LAW. This Note shall be governed by and construed in
accordance with the laws of the State of California, 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 or in the federal courts located in the
State of California, city of Santa ▇▇▇▇▇▇. Both parties and the individual
signing this Note on behalf of the Borrower agree to submit to the jurisdiction
of such courts. The prevailing party shall be entitled to recover from the other
party its reasonable attorney's fees and costs. 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 unenforceability of any other provision
of this Note.
4.7 MAXIMUM PAYMENTS. Nothing contained herein shall be deemed to
establish or
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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 permitted by
such law, any payments in excess of such maximum shall be credited against
amounts owed by the Borrower to the Holder and thus refunded to the Borrower.
4.8 PREPAYMENT. This Note may be paid (in whole or in part) prior to the
Maturity Date without the consent of the Holder subject to Holder's conversion
rights (section 2.1).
4.9 SECURITY INTEREST. The holder of this Note has been granted a security
interest in all the assets of the Borrower as more fully described in the
Security Agreement.
4.10 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 public
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 public
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 banks in New York are not required or allowed to be closed.
Time is of the essence as to all matters in and related to this Note and the
concurrently executed Security Agreement.
4.11 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.
IN WITNESS WHEREOF, the Borrower has caused this Note to be signed in its
name by its Chief Executive Officer on this 11th day of January 2007.
NATIONAL HEALTHCARE TECHNOLOGY, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
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NOTICE OF CONVERSION
(To be executed by the Holder in order to convert the Note)
The undersigned hereby irrevocably elects, as of the Date of Conversion
stated below, to convert $___________ of the principal and interest due on the
Note issued by NATIONAL HEALTHCARE TECHNOLOGY, INC. on ________ into Shares of
Common Stock of NATIONAL HEALTHCARE TECHNOLOGY, INC. (the "Company") according
to the conditions set forth in such Note, as of the date written below.
Date of Conversion: _______________
Conversion Price: One Cent
Number of Shares To Be Delivered:
Signature:______________________________________
Print Name:_____________________________________
Print Title:______________________________________
Print Name of Current Note Holder:__________________
Address:______________________________________________________________
______________________________________________________________________
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