Attached files
| file | filename |
|---|---|
| 8-K - HealthWarehouse.com, Inc. | v202094_8k.htm |
| EX-3.1 - HealthWarehouse.com, Inc. | v202094_ex3-1.htm |
| EX-4.1 - HealthWarehouse.com, Inc. | v202094_ex4-1.htm |
| EX-4.3 - HealthWarehouse.com, Inc. | v202094_ex4-3.htm |
| EX-3.2 - HealthWarehouse.com, Inc. | v202094_ex3-2.htm |
| EX-99.1 - HealthWarehouse.com, Inc. | v202094_ex99-1.htm |
| EX-10.1 - HealthWarehouse.com, Inc. | v202094_ex10-1.htm |
| EX-10.3 - HealthWarehouse.com, Inc. | v202094_ex10-3.htm |
| EX-10.2 - HealthWarehouse.com, Inc. | v202094_ex10-2.htm |
EXHIBIT
4.2
THIS NOTE
HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL
(i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”)
SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE
BORROWERS OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE BORROWERS TO
THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH
SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES
LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS
NOTE.
HEALTHWAREHOUSE.COM,
INC.
HWAREH.COM,
INC.
7%
Senior Secured Convertible Promissory Note
|
$500,000.00
|
As
of November 8, 2010
|
FOR VALUE
RECEIVED, Healthwarehouse.com,
Inc., a Delaware corporation (“Parent”),
and HWAREH.com, Inc. a
Delaware corporation (“Subsidiary”
and, collectively with Parent, the “Borrowers”)
with principal executive offices at 100 Commerce Blvd., Cincinnati, OH 45140,
jointly and severally promise to pay to the order of Milfam I L.P. (the “Holder”),
or registered assigns, on the earliest to occur of (the “Maturity
Date”) (i) December 31, 2012, (ii) an Event of Default or (iii) upon the
occurrence of a Liquidation Event (as defined in the Certificate of
Designation), the principal amount of five hundred thousand dollars ($500,000.00) (the “Principal
Amount”) in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and private
debts. Interest on this Note shall accrue on the Principal Amount outstanding at
a rate equal to seven percent (7.0%) per annum, compounded on the first day of
each calendar year during which this Note is outstanding, beginning January 1,
2011, and based on a 360 day year, and shall be payable on the Maturity
Date. Nothing in this paragraph shall be construed as the consent by
the Holder to any action otherwise prohibited by the terms of this Note or as a
waiver of any such prohibition. All capitalized terms used but not
otherwise defined herein have the meanings given to them in the Loan Agreement
(as hereinafter defined).
1. Loan and Security
Agreement. This Note is one of two Notes issued pursuant to
that certain Loan and Security Agreement dated as of November 8, 2010, by and
among Parent, Subsidiary, Holder and HWH Lending LLC (the “Loan
Agreement”). Reference is hereby made to the Loan Agreement
for a statement of all of the terms and conditions under which the Principal
Amount evidenced hereby is made and the Principal Amount and all accrued
interest pursuant hereto is to be repaid and of the Collateral securing the
Borrowers’ obligations hereunder. Notwithstanding any provision to
the contrary contained herein, this Note is subject and entitled to the terms,
conditions, covenants and agreements contained in the Loan Agreement. Any
transferee of this Note, by its acceptance hereof, assumes the obligations of
the Holder in the Loan Agreement with respect to the conditions and procedures
for transfer of this Note. Reference to the Loan Agreement shall in
no way impair the absolute and unconditional obligation of the Borrowers to pay
both the Principal Amount hereof and interest hereon as provided
herein.
-1-
2. Each
payment by the Borrowers pursuant to this Note shall be made without set-off or
counterclaim and in immediately available funds. With the prior
written consent of Holder the Borrowers may prepay (in whole or in part) without
penalty any amounts owing under this Note.
3. Borrowers
(i) waives presentment, demand, protest or notice of any kind in connection
with this Note and (ii) agrees, in the event of an Event of Default, to pay
to the Holder of this Note, on demand, all costs and expenses (including legal
fees and expenses) incurred in connection with the enforcement and collection of
this Note.
4. Conversion. At
any time when this Note is outstanding, the Note may be converted into shares of
Parent’s Series B Preferred Stock (the “Series B
Preferred Stock”) as follows:
A. Mandatory
Conversion. In the event that all shares of Series B Preferred
Stock are automatically converted into shares of Parent’s Common Stock (the
“Common
Stock”) pursuant to Section 7(l) of the Certificate of Designation of
Preferences, Rights and Limitations of Series B Preferred Stock (the “Certificate of
Designation”), immediately prior, but in any event contingent upon, such
automatic conversion, all principal owing under this Note and accrued and unpaid
interest shall automatically be converted into that number of shares of Series B
Preferred Stock as is determined by dividing (i) the aggregate principal owing
under this Note and accrued and unpaid interest by (ii) $9.45 (as the same may
be appropriately adjusted for any stock splits, stock dividends,
recapitalizations and the like with respect to the Series B Preferred
Stock).
B. Voluntary
Conversion. All principal owing under this Note and accrued
and unpaid interest may be converted at the option of the Holder into that
number of shares of Series B Preferred Stock as is determined by dividing (i)
the aggregate principal owing under this Note and accrued and unpaid interest by
(ii) $9.45 (as the same may be appropriately adjusted for any stock splits,
stock dividends, recapitalizations and the like with respect to the Series B
Preferred Stock). The shares of Series B Preferred Stock issuable
upon the conversion of this Note will, upon such issuance be validly issued,
fully paid and nonassessable and free from all taxes, liens and charges in
respect of the issue thereof.
C. Mechanics of
Conversion.
(1) In
connection with a Mandatory Conversion pursuant to Section 4A, Parent
shall give Holder written notice of the occurrence of the mandatory conversion
of the Series B Preferred Stock and the shares of Series B Preferred Stock
issuable pursuant to Section 4A shall be
automatically converted into shares of Common Stock without further action by
Holder pursuant to the terms of the Certificate of Designation.
-2-
(2) The
Holder shall give the Parent at least three (3) business days prior written
notice of Holder’s intention to convert this Note in accordance with Section
4B. The Holder shall provide written notice thereof to the
Parent of its election to convert the Note and shall state therein the name or
names in which the certificate or certificates for the shares of Series B
Preferred Stock are to be issued. Parent shall, as soon as
practicable after receipt of such notice and the original executed version of
this Note, take such actions necessary to issue the shares of Series B Preferred
Stock and deliver to the Holder, or to the nominee or nominees of the
Holder, a certificate or certificates for the number of shares of Series B
Preferred Stock to which the Holder shall be entitled against surrender to it of
the Note to be converted. Such conversion shall be deemed to have
been made on the date of such written notice, and the party or parties entitled
to receive the shares of Series B Preferred Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of Series B
Preferred Stock as of such date.
D. No
Impairment. Borrowers will not, by amendment of its
organizational or governing documents or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms hereunder applicable to it, but
will at all times in good faith assist in the carrying out of all the provisions
of this section and in the taking of all such action as may be necessary or
appropriate in order to protect the Holders’ conversion rights against
impairment.
E. No Fractional
Shares. No fractional shares shall be issued upon the
conversion of the Note, and the aggregate number of shares of Series B Preferred
Stock to be issued to Holder shall be rounded down to the nearest whole share
and the Borrowers shall pay in cash the fair market value (as determined in good
faith by its Board of Directors) of any fractional shares as of the time when
entitlement to receive such fractions is determined. Whether or not
fractional shares would be issuable upon such conversion shall be determined on
the basis of all Notes that the Holder is at the time converting into shares of
Series B Preferred Stock and the number of shares of Series B Preferred Stock
issuable upon such conversion.
5. Other
Terms.
A. All
covenants, agreements and undertakings in this Note binding upon the Borrowers
or the Holder shall bind and inure to the benefit of the successors and
permitted assigns of the Borrowers and the Holder, respectively, whether so
expressed or not.
B. The
Borrowers and the Holder hereby expressly and irrevocably agree that this Note
shall be governed by and construed solely and exclusively in accordance with the
laws of the State of New York without regard to the conflicts of laws principles
thereof. The Borrowers and the Holder hereby expressly and
irrevocably agree that any suit or proceeding arising directly and/or indirectly
pursuant to or under this instrument or the consummation of the transactions
contemplated hereby, shall be brought solely in a federal or state court located
in the City, County and State of New York. By its execution hereof, the parties
hereby covenant and irrevocably submit to the in personam jurisdiction
of the federal and state courts located in the City, County and State of New
York and agrees that any process in any such action may be served upon any of
them personally, or by certified mail or registered mail upon them or their
agent, return receipt requested, with the same full force and effect as if
personally served upon them in New York City. The parties hereto waive any claim
that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense or lack of in personam jurisdiction
with respect thereto.
-3-
C. All
notices and other communications from the Borrowers to the Holder of this Note
shall be mailed by first class, registered or certified mail, postage prepaid,
and/or a nationally recognized overnight courier service to the Holder’s address
listed in the Loan Agreement or such other address furnished to the Borrowers in
writing by the Holder.
D. THE
HOLDER AND THE BORROWERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE OR ANY OTHER
DOCUMENT OR INSTRUMENT EXECUTED AND DELIVERED IN CONNECTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR
ACTIONS OF THE HOLDER OR THE BORROWERS. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE HOLDER’S PURCHASE OF THIS NOTE.
E. Upon
an Event of Default, the Holder of this Note shall have all of the rights set
forth in section of the Loan Agreement titled “Events of Default” which is
incorporated herein by reference.
F. No
terms of this Note may be amended, waived or modified except by the express
written consent of the Borrowers and the Holder.
G. All
the covenants, agreements, representations and warranties contained in this Note
shall bind the parties hereto and their respective heirs, executors,
administrators, distributes, successors, assigns, and transferees.
H. In
the event any one or more of the provisions contained in this Note shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof, and this Note shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
-4-
IN WITNESS WHEREOF, this Note
has been executed and delivered on the date specified above by the duly
authorized representatives of the Borrowers.
|
HEALTHWAREHOUSE.COM,
INC.
|
|
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By:
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/s/ Lalit Dhadphale
|
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Name:
|
Lalit Dhadphale
|
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Title:
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President and CEO
|
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HWAREH.COM,
INC.
|
|
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By:
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/s/ Lalit Dhadphale
|
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Name:
|
Lalit Dhadphale
|
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Title:
|
President and
CEO
|
-5-