Exhibit 10.07
JOINDER AGREEMENT
AND FIRST AMENDMENT
This JOINDER AGREEMENT
AND FIRST AMENDMENT (this “ Agreement ”) is
entered into as of March 25, 2005 by and among the following
parties: (i) Howard R. Baer, an individual with a residence at 6451
East El Maro Circle, Paradise Valley, Arizona 85253, as holder
(“ Holder ”) under that certain Demand
Promissory Note dated as of February 15, 2005 (the “
Demand Promissory Note ”), made by Health Enhancement
Products, Inc., a Nevada corporation with a principal place of
business at 7740 E. Evans Rd., Scottsdale, Arizona 85260 (“
Maker ”) in favor of Holder; (ii) Maker; and (iii)
Health Enhancement Corporation, a Nevada Corporation with a chief
executive office and principal place of business at 7740 E. Evans
Rd., Scottsdale, Arizona 85260 (“ Additional
Maker ”), and is delivered in connection with each of the
following:
1)
Demand Promissory
Note;
2)
Security Agreement dated
as of February 15, 2005 between made by Maker in favor of Holder
(the “ Security Agreement ”);
3)
Patent Security
Agreement dated as of February 15, 2005 made by Maker in favor of
Holder; and
4)
Any and all other Loan
Documents.
All capitalized terms
used but not defined herein shall have the meanings given such
terms in the Security Agreement.
WHEREAS, the Maker
executed and delivered all of the Loan Documents to the Holder and,
in connection therewith, the Holder has extended and may in the
future extend loans and other credit accommodations to the Maker
(collectively, the “ Loans ”);
WHEREAS, the Maker owns
100% of the issued and outstanding stock in the Additional Maker in
consideration of which, together with the benefits accruing to the
Additional Maker from the Maker, the Additional Maker has agreed,
among other things, to assume liability under the Loan Documents
for the repayment of the Loans, together with all interest,
charges, and fees thereon, together with all other Secured
Obligations of the Maker under the Loan Documents, jointly and
severally and as co-maker with the Maker, and the Additional Maker
has agreed to itself become a Maker under the Loan
Documents;
WHEREAS, the Maker
desires that that the Additional Maker assume the Secured
Obligations under each of the Loan Documents as if it was party
thereto, jointly and severally with the Maker;
NOW, THEREFORE, in
consideration of the mutual conditions and agreements set forth
herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Maker, the
Additional Maker, and the Holder hereby agree as
follows:
A.
Joinder
Provisions
1.
The Additional Maker
hereby assumes each of the Loan Documents as a “Maker”,
“Borrower” and “Company” thereunder, as
applicable, and each and every Secured Obligation thereunder as a
“Maker”, “Company” and
“Borrower” thereunder, jointly and severally with the
Maker. The Maker hereby ratifies that it remains bound by the Loan
Documents, jointly and severally with the Additional
Maker.
2.
The Additional Maker
agrees to execute an endorsement to the Demand Promissory Note in
the form attached hereto as Exhibit A .
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3.
The Additional
Maker grants to Holder a continuing security interest in and to all
of Additional Maker’s right, interest and title in any and
all of its assets or properties that constitute Collateral, whether
now owned or hereafter acquired, and all products, proceeds,
substitutions and accessions of or to any of the foregoing,
pursuant to and as more completely defined in Section 2 of the
Security Agreement. The Additional Maker hereby authorizes
the filing of UCC-1 financing statements (at Additional
Maker’s expense) naming the Additional Maker as debtor and
the Holder as secured party and all such other agreements,
instruments, and documents as Holder may require so as to evidence
the Additional Maker becoming a Maker, Company and Borrower.
4.
Each of the
representations and warranties of the Maker under the Loan
Documents shall be deemed made by the Additional Maker. Each
of the Additional Maker and the Maker confirm that the
representations and warranties of the Maker set forth in the Loan
Documents remain true and correct in all material respects as of
the date of this Agreement after giving effect to the joinder of
the Additional Maker as a “Maker”,
“Borrower” and “Company”.
5.
The execution, delivery
and performance of this Agreement are within the power of the Maker
and the Additional Maker; have been duly authorized by all
necessary or proper action; are not in contravention of, do not
result in a breach of, or constitute (with due notice or lapse or
both) a default under, any material contractual obligation to which
the Additional Maker or the Maker is/are a party or by which any
property of the Additional Maker or the Maker is/are bound; do not
and will not result in or require the creation or imposition of any
material lien (other than the Holder’s lien) upon any of the
assets or properties of the Additional Maker or the Maker; are not
in contravention of any provision of any law; and do not require
the consent or approval of any governmental body, agency, authority
or any other person that has not been obtained and a copy thereof
furnished to Holder.
B.
Appointment of
Lead Maker
Each of the
Additional Maker and the Maker hereby designates the Maker as
that party’s agent to obtain Loans and receive notices under
the Loan Documents (in such agency capacity Maker is referred to
herein as the “Lead Maker”). As the disclosed
principal for its agent, each Maker (including, without limitation,
the Additional Maker) shall be obligated to the Holder on account
of the Loans and Secured Obligations as if made directly by the
Holder to that Maker, notwithstanding the manner by which such
Loans are recorded on the books and records of the Lead Maker and
of any other Maker.
The proceeds of the
Loans shall be deposited in the Lead Maker’s account or as
otherwise indicated by the Lead Maker. The Holder shall have
no obligation as to the application of such proceeds.
C.
Amendment to
Security Agreement
Section 3(c) of the
Security Agreement is hereby deleted and replaced with the
following effective as of the date of this Agreement:
“(c)
as of March 4, 2005 both
the Company’s principal place of business and chief executive
office are located at 7740 E. Evans Rd., Scottsdale, Arizona 85260
(the “ Main Location ”) and the Main Location is
and shall be the only location where Collateral is located or
maintained, unless Company shall have provided to Secured Party
thirty (30) days prior written notice of any alternative location
where Collateral shall at any time be located or maintained and
shall have delivered to Secured Party a Landlord Waiver Agreement
(defined below) with respect to any such alternative location.
In addition, Company hereby acknowledges and agrees that
Company shall deliver to Secured Party a Landlord Waiver Agreement
with respect to the Main Location within thirty (30) days of
Secured Party’s written request for the same, which written
request may be made by Secured Party at any time in Secured
Party’s sole discretion. Any failure to comply with the
provisions of this Section 3(c) shall constitute an Event of
Default hereunder and under the other Loan Documents. For
purposes of this Section 3(c), the term “Landlord Waiver
Agreement” shall mean a written agreement, in form and
substance reasonably satisfactory to Secured Party, from any
applicable landlord pursuant to which such landlord shall
subordinate its liens and claims against the Company and authorize
Secured Party to enter and remain on the applicable premises for a
period of sixty (60) days following Secured Party’s entry
thereon in order to collect, remove, sell or otherwise dispose of
the Collateral (at Company’s expense) in connection with the
exercise of Secured Party’s rights and/or remedies hereunder
or under any of the other Loan Documents.”
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D.
Miscellaneous
1.
This Agreement shall be
binding and deemed effective when executed by the Additional Maker
and Maker and accepted and executed by the Secured
Party.
2.
This Agreement shall
bind and inure to the benefit of the respective successors, heirs
and assigns of each of the parties; provided ,
however , that neither the Additional Maker nor the Maker
may assign this Agreement or any of their rights or duties
hereunder without the Holder’s prior written consent and any
prohibited assignment shall be absolutely void. The Secured
Party may assign this Agreement and its rights and duties hereunder
and no consent or approval by the Additional Maker or the Maker is
required in connection with any such assignment.
3.
Except as
expressly provided to the contrary in this Agreement, all the
terms, conditions, and provisions of the Loan Documents shall
continue in full force and effect. If in this
Agreement’s description of an agreement between the parties,
rights and remedies of Holder or obligations of any
“Maker”, “Company” or
“Borr
