12% CONVERTIBLE NOTE

 

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Exhibit 4.12

 

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED

STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER

HEREOF, BY PURCHASING SUCH SECURITIES AGREES FOR THE BENEFIT OF THE COMPANY THAT

SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE

COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES

ACT, OR (C) IF REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE

SECURITIES LAWS. IN ADDITION, A SECURITIES PURCHASE AGREEMENT, DATED AS OF THE

DATE HEREOF, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL

EXECUTIVE OFFICE, CONTAINS CERTAIN ADDITIONAL AGREEMENTS AMONG THE PARTIES,

INCLUDING, WITHOUT LIMITATION, PROVISIONS WHICH (A) LIMIT THE CONVERSION RIGHTS

OF THE HOLDER, (B) SPECIFY VOLUNTARY AND MANDATORY REPAYMENT, PREPAYMENT AND

REDEMPTION RIGHTS AND OBLIGATIONS AND (C) SPECIFY EVENTS OF DEFAULT FOLLOWING

WHICH THE REMAINING BALANCE DUE AND OWING HEREUNDER MAY BE ACCELERATED.

 

 

No.   1                                                                 $1,250,000

 

                              12% CONVERTIBLE NOTE

                                       of

 

 

         Miracor Diagnostics, Inc., a Utah corporation (together with its

successors, the "Company"), for value received hereby promises to pay to:

 

                       GLOBAL CAPITAL FUNDING GROUP, L.P.

 

(the "Holder") and registered assigns, the principal sum of One Million Two

Hundred Fifty Thousand Dollars ($1,250,000) or, if less, the principal amount of

this Note then outstanding, on the Maturity Date by wire transfer of immediately

available funds to the Holder 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, and to pay interest, which shall begin to accrue on

the date of this Note, quarterly in arrears, on (i) the last day of March, June,

September and December of each year until the Maturity Date, commencing

September 30, 2003 (unless such day is not a Business Day, in which event on the

next succeeding Business Day) (each an "Interest Payment Date"), (ii) the

Maturity Date, (iii) each Conversion Date, as hereafter defined, and (iv) the

date the principal amount of the Convertible Note shall be declared to be or

shall automatically become due and payable, on the principal sum hereof

outstanding in like coin or currency, at the rates per annum set forth below,

from the most recent Interest Payment Date to which interest has been paid on

this Convertible Note, or if no interest has been paid on this Convertible Note,

from the date of this Convertible Note until payment in full of the principal

sum hereof has been made. The Maturity Date is June 17, 2007.

 

         The interest rate shall be twelve percent (12%) per annum (the

"Interest Rate") or, if less, the maximum rate permitted by applicable law. Past

due amounts (including interest, to the extent permitted by law) will also

accrue interest at the Interest Rate plus 2% per annum or, if less, the maximum

rate permitted by applicable law, and will be payable on demand ("Default

Interest"). Interest on this Convertible Note will be calculated on the basis of

a 360-day year of twelve 30 day months. All payments of principal and interest

hereunder shall be made in cash for the benefit of the Holder pursuant to the

terms of the Agreement (hereafter defined). At the option of the Holder,

interest may be paid in cash or in shares of Common Stock.

 

         This Convertible Note (this "Convertible Note") is one of a duly

authorized issuance of $1,250,000 aggregate principal amount Convertible Note

made by the Company referred to in that certain Securities Purchase Agreement

dated as of the date hereof between the Company and the Purchaser named therein

(the "Agreement"). The Agreement contains certain additional agreements among

the parties with respect to the terms of this Convertible Note, including,

 

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without limitation, provisions which (A) limit the conversion rights of the

Holder, (B) specify voluntary and mandatory redemption rights and obligations

and (C) specify Events of Default following which the remaining balance due and

owing hereunder may be accelerated. All such provisions are an integral part of

this Convertible Note and are incorporated herein by reference. This Convertible

Note is transferable and assignable to one or more Persons, in accordance with

the limitations set forth in the Agreement.

 

         The Company shall keep a register (the "Register") in which shall be

entered the names and addresses of the registered holder of this Convertible

Note and particulars of this Convertible Note held by such holder and of all

transfers of this Convertible Note. References to the Holder or "Holders" shall

mean the Person listed in the Register as registered holder of such Convertible

Notes. The ownership of this Convertible Note shall be proven by the Register.

 

         1) CERTAIN TERMS DEFINED. All terms defined in the Agreement and not

otherwise defined herein shall have for purposes hereof the meanings provided

for in the Agreement.

 

         2) COVENANTS. The Company covenants and agrees to observe and perform

each of its covenants, obligations and undertakings contained in the Agreement,

which obligations and undertakings are expressly assumed herein by the Company

and made for the benefit of the holder hereof.

 

         3) PAYMENT OF PRINCIPAL.

 

         a)        PREPAYMENT OF NOTE. For so long as no Event of Default shall

                  have occurred and is continuing and the Company is not in

                  receipt of a Notice of Conversion from the Holder of the Note,

                  the Company may, at its option, prepay, in whole or in part,

                  this Convertible Note for a pre-payment price (the "Prepayment

                  Price") equal to the outstanding principal amount of the Note,

                  plus all accrued and unpaid interest. The Company shall not be

                  entitled to send any notice of prepayment and begin the

                  prepayment procedure unless it has (i) the full amount of the

                  Prepayment Price, in cash, available in a demand or other

                  immediately available account in a bank or similar financial

                   institution or (ii) immediately available credit facilities,

                  in the full amount of the Prepayment Price, with a bank or

                  similar financial institution on the date the prepayment

                  notice is sent to the Holders of this Convertible Note.

                  Provided, however, the Company will process any Notice of

                  Conversion received prior to the issuance of a notice of

                  prepayment; and further provided that, after a notice of

                  prepayment has been issued, the Holder may issue a Notice of

                  Conversion which will not be honored unless the Company fails

                  to make the prepayment payment when due. In the event of such

                   failure, the Notice of Conversion will be honored as of the

                  date of the Notice of Conversion

 

         b)        PAYMENT ON MATURITY DATE. The Company shall repay the

                  remaining unpaid balance of this Convertible Note along with

                  any unpaid interest on the Maturity Date.

 

         4) CONVERSION.

 

         a) CONVERSION OF CONVERTIBLE NOTE. Subject to Section 5 hereof, the

         Holder shall have the right, at its option, at any time from and after

          the third anniversary of the date of issuance of this Convertible Note,

         convert the principal amount of this Convertible Note, or any portion

         of such principal amount, into that number of fully paid and

         nonassessable shares of Common Stock (as such shares shall then be

         constituted) determined pursuant to this Section 4.1; provided,

         however, this Convertible Note shall be immediately convertible, at the

         option of the Holder, upon an Event of Default. The number of shares of

         Common Stock to be issued upon each conversion of this Convertible Note

         shall be determined by dividing the Conversion Amount (as defined

         below) by the Conversion Price in effect on the date (the "Conversion

         Date") a Notice of Conversion is delivered to the Company, as

         applicable, by the Holder by facsimile or other reasonable means of

         communication dispatched prior to 5:00 p.m., E.S.T. The term

         "Conversion Amount" means, with respect to any conversion of this

         Convertible Note, the sum of (1) the principal amount of this

         Convertible Note to be converted in such conversion plus (2) accrued

 

 

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         and unpaid interest, if any, on such principal amount at the interest

         rates provided in this Convertible Note to the Conversion Date plus (3)

         Default Interest, if any, on the interest referred to in the

         immediately preceding clause (2) plus (4) at the Holder's option, any

         amounts owed to the Holder pursuant to Section 4.3 hereof, Section 10.1

         of the Agreement or Section 10.4 of the Agreement.

 

         b) CONVERSION PRICE. At the option of the Holder, any portion or all of

         the outstanding principal amount of this Convertible Note shall be

         converted into a number of shares of Common Stock at the conversion

         price (the "Conversion Price") equal to $0.25.

 

         c) AUTHORIZED SHARES.

 

                   i) Consistent with Section 7.11 of the Agreement, the Company

         (i) shall promptly irrevocably instruct the Company's transfer agent to

         issue certificates for the Common Stock issuable upon conversion of

         this Convertible Note and (ii) agrees that its issuance of this

         Convertible Note shall constitute full authority to its officers and

         agents who are charged with the duty of executing stock certificates to

         execute and issue the necessary certificates for shares of Common Stock

         in accordance with the terms and conditions of this Convertible Note.

 

                  ii) If at any time a Holder of this Convertible Note submits a

         Notice of Conversion (x) the Company do