EXHIBIT 4.5
THIS NOTE AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER
THE SECURITIES ACT OF 1933 (THE "ACT") OR
ANY APPLICABLE STATE
SECURITIES LAWS.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE
OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH
ACT OR AN OPINION OF COUNSEL SATISFACTORY
TO THE BORROWER THAT SUCH REGISTRATION
IS NOT REQUIRED.
SECOND AMENDED AND RESTATED SENIOR SECURED CONVERTIBLE NOTE
$1,185,959
November 26, 2004
FOR VALUE
RECEIVED, PROVECTUS PHARMACEUTICALS, INC. (the "Borrower"),
promises to pay to the order of GRYFFINDOR CAPITAL PARTNERS I, L.L.C.
("Lender"), at the Lender's office at 150 North Wacker Drive, Suite 800,
Chicago, Illinois 60606, or such other
place as the holder hereof may from time
to time appoint in writing, in lawful money
of the United States of America, the
principal sum of One Million, One Hundred Eighty-Five Thousand, Nine Hundred
Fifty Nine Dollars ($1,185,959), or such lesser principal amount as may be
outstanding hereunder, together with interest payable
quarterly in arrears
on
the principal balance from time to time
unpaid at the rate of eight percent (8%)
per annum (the "Loan Rate") until maturity.
From and after the
occurrence of an
Event of Default (as hereinafter defined), the outstanding principal amount
hereof shall bear interest at the rate of twelve
percent (12%) per annum (the
"Default Rate"). Interest will be computed on the daily principal balance
outstanding during the period from the last
payment date to the current payment
date. Interest shall be the product resulting when multiplying the rate of
interest by the principal balance outstanding, dividing by 360, and then
multiplying by the actual number of days
interest has accrued.
This
Note is issued in
substitution
for, and in replacement of, that
certain Senior Secured Convertible Note dated November 26, 2002, as
amended by
that certain Amended and Restated Senior
Secured Convertible
Note dated January
31, 2003, by the Borrower and payable to the order
of Lender in the
principal
amount of One Million, Twenty-Five Thousand, Nine Hundred Fifty-Nine Dollars
($1,025,959) (collectively, the "Prior
Note"). The replacement of the Prior Note
with this Note shall not be construed (i) to deem paid or forgiven
the unpaid
principal amount, or unpaid accrued interest on, the
Prior Note outstanding at
the time of replacement or (ii) to release, cancel terminate or otherwise
adversely affect all or any part of any lien, mortgage, deed of trust,
assignment, security interest or other
encumbrance heretofore granted to or for
the benefit of the payee of the Prior Note which has not otherwise been
expressly released.
The following is a statement of the rights of Lender under this
Note and
the conditions to which this Note and the
Borrower are subject, and to which the
Borrower hereby agrees:
1
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1. Purchase Agreement. This Note is executed and delivered by the Borrower
pursuant to the
terms and conditions of the Convertible Secured Promissory
Note and Warrant
Purchase Agreement dated as of November 26, 2002, between,
among others,
the Borrower and Lender (the "Original Purchase Agreement"),
as amended by
Amendment No. 1 to Transaction Documents dated as of November
26, 2004 (the
"Purchase Agreement").
This Note is subject to the terms and
conditions of
the Purchase Agreement. Any capitalized term used herein
and
not otherwise defined herein shall have the meaning
given to it in the
Purchase
Agreement.
2. Repayment Terms. Subject to
Lender's conversion rights set forth below, the
Borrower shall
pay the outstanding
principal balance and all accrued and
unpaid interest
due hereunder on November 26, 2005 (the "Maturity Date").
Notwithstanding
anything to the
contrary contained
herein, if at any time
prior to the Conversion Start Date (as
hereinafter defined),
the Borrower shall
fail to make any quarterly payment of interest due hereunder (each, a
"Pre-Conversion Unmatured Interest Default"), the Borrower shall forfeit any
right to pay the amount of such
Pre-Conversion
Unmatured Interest Default (or
cause any other entity or affiliate of the
Borrower, including any guarantor, to
pay such amount) and the outstanding
principal amount hereof shall bear interest
at the Default Rate until such time as this Note
is repaid in full or the full
amount due under this Note is converted
in accordance with the terms herein;
provided, further, that, at any time after the Conversion Start Date, the
Borrower shall fail to make any
quarterly payment of interest due
hereunder,
such failure shall constitute an Event of
Default under Section 8(a) hereof.
3. Warrant Issuance. In consideration of Lender accepting this Note and
extending the
Maturity Date as set forth in the Prior Note, Lender shall be
issued a warrant
("Extension
Warrant"),
which shall
provide Lender the
right to
purchase Five Hundred
Twenty-Five Thousand
(525,000) fully
paid
nonassessable
shares of the
Borrower's Common Stock, $0.001 par value per
share ("Common
Stock"), at an exercise price of $1.00 per share, subject to
further
adjustment and other
terms as set forth in the Extension Warrant.
Commencing March
1, 2005, for each calendar month or portion thereof during
which this Note
remains unpaid,
Borrower shall also
issue to Lender (i) a
warrant which
provides Lender the right to purchase One
Hundred Thousand
(100,000) fully
paid nonassessable
shares of Borrower's Common Stock at an
exercise price
of $1.00 per share,
subject to further adjustment and other
terms as set
forth in such
warrant; and (ii) a warrant which provides
Lender the right
to purchase Seventy
Five Thousand (75,000) fully paid
nonassessable
shares of Borrower's
Common Stock,
at an exercise price
of
$1.25 per share,
subject to adjustment and other terms as set forth in such
Warrant
(collectively, the "Additional Warrants"). The terms and
provisions
of the
Additional
Warrants shall be the same as the Extension Warrant
except for the
number of shares,
the Date of
Issuance and the Exercise
Price. In no
event shall the total warrants issued pursuant to this Section
3 (including the
Extension Warrant) grant Lender the right to purchase more
than an
aggregate amount of 2,100,000 shares of Borrower's Common
Stock.
4. Optional Conversion. Subject to Lender's conversion right pursuant to
Section
4.1.6 of the
Shareholders'
Agreement,
dated as of November
26,
2002,
by and among the
Borrower, Lender and
certain other
shareholders,
commencing on
November 26, 2004 (the
"Conversion Start
Date") through and
including the
Maturity Date, Lender, in its sole discretion, shall have the
right to convert
the outstanding
principal and accrued and unpaid interest
on this Note,
in whole or in part,
into shares of the
Borrower's
Common
Stock as
follows:
2
<PAGE>
a) Principal. Lender shall have the right to convert
all or any portion
of the outstanding
principal amount under
this Note into that number
of shares of the Borrower's Common Stock equal to the amount of
principal to
be converted divided by the conversion price of
$0.73655655 (the "Principal Shares").
b) Interest. Lender also shall have the right to convert all or any
portion of the accrued and unpaid interest under this Note into that
number of shares of the Borrower's Common Stock equal to the amount
of
interest to be converted divided by the conversion price of $0.55
(the
"Interest Shares").
c) Mechanics of Conversion. Before Lender shall be entitled to
convert
this Note into the Principal Shares and/or the Interest Shares
(collectively, the "Acquired Securities"), as applicable, Lender
shall
surrender this Note, duly endorsed, at the office of the Borrower,
and
shall give written
notice to the Borrower at its principal corporate
office of the election to convert the same and shall state therein
the
name or names
in which the certificate or certificates for the
Acquired
Securities are
to be issued. The Borrower, promptly
thereafter, shall
issue and deliver to such persons at the address
specified by Lender, a
certificate or
certificates for the
Acquired
Securities to which the Holder is entitled. Such conversion shall be
deemed to have been made immediately prior to the close of business
on
the date of such surrender of this Note, and the persons entitled to
receive the Acquired Securities issuable upon such conversion shall
be
treated for all
purposes as the record holder or holders of such
Acquired Securities as
of such date. No
fractional
shares shall be
issued upon conversion of the principal and/or interest due under
this
Note and the number of
Acquired Securities to be issued shall be
rounded up to the nearest whole share.
d) Effect of Reorganization,
Reclassification,
Consolidation, Merger
or
Sale. If at any time while this Note is outstanding there shall be
any
reorganization or
reclassification
of the capital stock of the
Borrower or any
consolidation or
merger of the Borrower with another
corporation (other
than a consolidation or merger in which the
Borrower is the
surviving entity and which does not result in any
change in the Common Stock), or any sale or other disposition by the
Borrower of all or
substantially
all of its assets to any other
corporation, the
holder of this Note shall thereafter upon conversion
of this Note be
entitled to receive
the number of shares of stock or
other securities
or property of the
Borrower, or of the successor
corporation resulting
from such
consolidation or merger, as the case
may be, to which the Acquired Securities (and any other securities
and
property) of the
Borrower, deliverable upon the exercise of the
conversion rights
under this Note, would have been entitled upon such
reorganization,
reclassification of
capital stock, consolidation,
merger, sale or other
disposition
if this Note had been converted
immediately prior to such reorganization, reclassification of capital
stock, consolidation,
merger, sale or other
disposition. In any such
case, appropriate adjustment (as determined in good faith by the
Board
of Directors of the Borrower) shall be made in the application
of the
provisions set forth
in this Note with
respect to the rights and
interests thereafter
of the holder of this Note to the end
that the
provisions set
forth in this Note (including those relating to
adjustments of the
number of shares
issuable upon the
conversion of
this Note) shall
thereafter be applicable, as near as reasonably may
be, in relation to any shares or other property thereafter
deliverable
upon the conversion hereof as if this Note had been converted
immediately prior to such reorganization, reclassification of capital
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